Laguna Beach planning commissioners approved a portion of the South Coast Water District's project to repair a deteriorating 2-mile-long underground tunnel that houses a sewer pipe in South Laguna.

The commission voted unanimously at its Dec. 11 meeting to approve the conditional use permit and coastal development permit for the portion of the project that is within Laguna Beach's local coastal zone.

A portion of the project under Three Arch Bay (4,140 feet) still needs Coastal Commission approval, though the district can proceed with the rest of the project while awaiting the commission's response, district spokesman Steve Greyshock said.

The nearly 60-year-old tunnel runs parallel to South Coast Highway from Three Arch Bay north to Aliso Beach Park and handles 1 million gallons of sewage daily from Dana Point and South Laguna, according to the district.

Commissioners affirmed the district's changes, made in response to residents' concerms raised at the last public meeting in October regarding potential noise, dust and traffic.

"I'm glad the water district has addressed the noise and they are working with the contractors on emission controls," Commissioner Linda Dietrich said. "I'm very impressed with the efforts the district has taken to work with the neighbors and protect them as much as possible in a really challenging situation."

The district will erect sound walls surrounding a staging area at Fourth Avenue and South Coast Highway. The walls will be 12-feet-tall in some spots, while a small part of a side facing Virginia Way will have 12-foot beams with a 10-foot wall.

The district, has also requested that construction vehicles enter the staging area from Fourth Avenue or South Coast Highway, not Virginia Way.

Caltrans must still approve the revised traffic pattern, a city staff report said.

Commissioners agreed with the district's proposal to align a portion of the pipeline under the oceanside bluffs at Three Arch Bay and not add to a portion scheduled to go under South La Senda Drive.

Bud Smull, a resident on South La Senda Drive, suggested in the fall the district align a greater portion of the pipeline under the street rather than under the ocean bluffs at Three Arch Bay, as the district desires.

Smull, who hired a geotechnical engineer to study bluff stability, claimed moving more of the pipeline under South La Senda Drive would make it less likely a sewage spill would reach the ocean.

Planning Commissioner Ken Sadler supported the district's proposal.

"We got a letter from attorneys who represent him [Smull] talk about CEQA [California Environmental Quality Act] and us being the responsible agency considering feasible alternatives," Sadler said. "I spent a lot of time considering that alternative all over again and I believe the district is correct in their preferred alternative. The concept about geological stability of the bluff, as far as I'm concerned, bedrock is bedrock. The current geotechnical information says it meets the typical standards. I'm going to support the project."

The project, which calls for widening the tunnel from 6 feet to 9 feet and reinforcing its interior with a type of spray-on concrete, is expected to take five years from its anticipated September 2014 start, Greyshock wrote in an email.

Residents looked ahead to when the project is done and suggested uses for the staging area.

"We are going to be feeling the impact and negative disruption with dust and dirt," South Laguna Civic Assn. board member Barbara Miller said. "We would love and ask the district to please commit that property to a park or a garden as a goodwill effort. It would be a thank you of sorts."

The South Laguna Civic Assn. is a nonprofit founded in 1946 to protect quality of life, according to an organization newsletter available on the website http://www.southlaguna.org.

The district has met with residents and listened to their ideas for the site, but the organization needs those spaces so workers can get into the tunnel for repairs if needeed, , said Betty Burnett, the district's legal counsel.

"The district will make a determination about that future use in the future," Burnett said. "It isn't part of the application in front of the city at this point to make that determination. We have to get in there, that's why we bought the property in the first place. We do appreciate the idea that something that helps the neighbors accept the project are the things we wanted to do with a landscape plan."

The district will keep the public informed about the project's status by mailing 30-day notices to residents within 500 feet of the four staging areas before major construction; sending notices of important project events or special meetings to residents within 500 feet of the activity area; holding quarterly community meetings and emailing neighbors in surrounding areas, the city staff report said.

District officials anticipate funding the estimated $90-million project through state loans, grants and district resources, according to Greyshock.

The district will not know if ratepayers will foot a portion of the bill until after the competitive bidding process, Greyshock said.

District and county officials are working together on construction plans for temporary staging areas at Aliso Beach Park, Thousand Steps Beach and Camel Point Beach, Greyshock said.

The staging areas would be used for 12 months each in the third, fourth and fifth years of the project, respectively, according to an Oct. 23 city staff report.

A fifth staging area will be at a service yard off Country Club Drive (near Aliso Creek Golf Course), the Oct. 23 staff report said.