LOS ANGELES -- Continuing a steady recovery from the nation's worst urban brush fire, Oakland, Calif., yesterday priced three series of assessment bonds to help finance the rebuilding underground of utilities that were destroyed in the 1991 blaze.

The $48 million project, including $8.2 million in taxable and tax-exempt bonds, is the most recent of numerous efforts to revive the burned-out Oakland Hills area, where 25 lives were lost and 3,000 homes destroyed.

"This is another milestone of a recovery process that has been ongoing since the day after the fire," said Jan Mazyck, the city's treasury manager.

Pricing information on the bonds was not available at press time.

In a rare action, Standard & Poor's Corp. assigned a BBB-plus rating to the bonds. Assessment bonds generally are not rated at all, because of a lack of excess debt service coverage.

The credit agency said the investment-grade bonds are more stable than most California assessment bonds, largely because of the wealthy residents of Oakland Hills, where the median home value -- even after the fire -- is more than $450,000.

"The district consists of primarily single-family homes, many of which have views of San Francisco and the bay, and, as a result, are among the most expensive in the Bay Area," said Robert Rifkin, an associate director with Standard & Poor's.

Because of the high property values, most of the damaged homes are expected to be rebuilt, and many already have been.

Other advantages for the affected area include a low assessment burden, good taxpayer diversity, and a strong debt service reserve fund, Standard & Poor's said in its Nov. 21 credit report.

The bonds are secured by two different assessment districts.

The first district will generate revenue to pay back a $3.94 million issue of tax-free bonds, and a $3.43 million issue of taxable bonds. The proceeds will pay for the removal of temporary overhead power lines, and the rebuilding underground of utilities.

The taxable bonds were issued because of the involvement of private utility companies that have agreed to help pay for the $48 million project.

The second assessment district will generate revenue to pay back an $876,000 issue of tax-free bonds to finance water pressure improvements at fire hydrants.

About one-fifth of the total square-footage of the two districts overlaps. Residents living in that overlapping area must pay both assessments.

In the first district, each of the 2,008 single-family home owners will be responsible for an annual assessment of $357.74 through 2024. In the second, 566 property owners will pay $134 annually through 2024.

In addition to paying the levy, treasury manager Mazyck said she believes some of the homeowners may also invest in the project.

"In dealing with the property owners through the formation of the district, I saw some interest in purchasing the bonds," Mazyck said. "Some of the smaller maturities are clearly more retail products. So I hope the property owners will participate."

Celeste Davis, first vice president with Rauscher Pierce Refnes Inc., underwriter for the transactions, said there has been some interest from institutional buyers.

"But because the deal is relatively small," Davis said, "I still think it's going to be a fairly retail product."

City officials expect the project to be completed within three years.

The city currently has about $500 million of debt outstanding, much of which has been the result of bond issuances prompted by two major disasters within a three-year period -- the fire and the 1989 Loma Prieta earthquake.

In 1992, voters overwhelmingly approved a $50 million bond issue to enhance the city's emergency response capabilities, and to seismically reinforce city facilities. The bonds are being paid back through a property tax of $14 per $100,000 of assessed valuation.

The city's longer-term plans call for the construction of a new fire station in the hills near the line between Oakland and Berkeley. The station would cut Oakland's response time to hillside fires -- which now averages eight to nine minutes because of the steep roads engines must climb to reach the homes.

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