COUNTYWIDE : Suit Clouds Future of Measure M Funds

Transportation officials Monday drastically scaled back plans to expedite some highway projects to be funded by Measure M tax revenues because of a lawsuit challenging the ballot measure.

Within hours of Measure M’s electoral victory last November, local officials announced plans to speed up construction on six rail and highway projects by borrowing $100 million against future Measure M revenue.

But with a lawsuit clouding prospects for such revenue, members of the Orange County Transportation Commission were advised that future Measure M proceeds could not be used as collateral for the sale of bonds. OCTC wants to use proceeds from the bonds to pay for construction now rather than wait for Measure M sales tax revenue to accumulate. The tax does not take effect until April 1.

Without discussion, OCTC members approved a plan Monday to borrow $55 million from existing revenues to serve as collateral for a $49-million bond sale.

That money will pay for work on the Orange Freeway car-pool lanes, scheduled to start in March; improvements to Beach Boulevard, also scheduled in March, and a partial purchase of the old Pacific Electric trolley line right of way, which OCTC plans to pay for in part through the Los Angeles Transportation Commission. Some of the money also will be used for design work on the El Toro “Y,” the Orange-Riverside freeway interchange, and the widening of Interstate 5 south of the “Y.”

Bumped off the list of priority projects were the widening of the Riverside Freeway, the purchase of right of way for the massive Santa Ana Freeway widening project, design work on the Riverside Freeway widening project west of the Orange Freeway, and the purchase of new rail equipment.

Those projects are scheduled to get under way later this year once the lawsuit is resolved, officials said.

OCTC Project Director Kia Mortazavi said Monday’s decision has no practical effect because those projects scratched from the list were not going to need Measure M dollars right away.

Clayton H. Parker, OCTC’s lawyer, said the Supreme Court could decide as early as this week whether to hear the Measure M suit, which was filed three weeks ago by Drivers for Highway Safety, Citizens Against Unfair Taxation and the Libertarian Central Committee.

The suit claims that Measure M should have been subject to passage by a two-thirds majority instead of a simple majority. The measure, which is expected to raise $3.1 billion for transportation projects over a 20-year period, received 54.4% of the votes cast.

In a response filed with the state Supreme Court on Jan. 4, county transportation officials argued that the two-thirds vote requirement applies only to levies on real or personal property, not levies such as sales taxes.