Transit Officials to Decide Fate of Measure M Funds

When voters passed Measure M in 1990, they thought that a wide assortment of tantalizing highway and transit improvements would be underway by now, from new, streamlined “super-streets” to expanded commuter rail services.

Instead, county transportation officials have paid $250,000 in legal fees successfully defending the half-cent sales tax against court challenges, with resolution possibly a year away if the California Supreme Court reviews the matter.

Transportation officials argue that delays caused by the litigation mean millions of dollars in escalating construction costs, lost jobs and lost benefits to drivers.

But the plaintiffs, among them San Juan Capistrano rancher Tom Rogers, for example, contend that delays were an unintended blessing for taxpayers because the recession has lowered construction costs. Moreover, interest rates for any borrowing--which would be repaid from future Measure M tax receipts--have been reduced. Regardless of who wins that debate, transportation officials will meet today to decide whether to spend $100 million in already-collected Measure M tax revenue on freeway rights of way or begin building roads to increase employment in the recession-plagued construction industry.

“I want to pump this money into the Orange County economy to create as many jobs as possible,” said Dana W. Reed, a Costa Mesa lawyer who serves as the public’s at-large representative on the Orange County Transportation Authority board. “I think we should do this even if it means changing our spending priorities and loaning money to other agencies, such as the (county tollway agency) to start construction on the San Joaquin Hills Corridor.”

The controversial, long-delayed 15-mile tollway between San Juan Capistrano and Newport Beach is expected to be under construction later this year, after a court challenge from environmentalists recently failed. But the tollway agency has been strapped for cash, borrowed money from OCTA last year and has been seeking other loans.

Stanley T. Oftelie, OCTA chief executive officer, is known to favor spending the money to buy rights of way, partly to avoid escalating land prices when the economy rebounds. He is especially concerned about the massive, $1.6-billion project to widen the Santa Ana Freeway because that freeway is considered to be Orange County’s “Main Street” and its most critical artery.

In a court affidavit filed last August, Oftelie alleged that, despite the recession, taxpayers could lose $20 million to $40 million in spiraling land and construction prices if legal delays last through the summer.

And immediately after the state’s 4th District Court of Appeal on Tuesday upheld the constitutionality of Measure M, Oftelie announced that his top priority was to use the $100 million to buy rights of way for three projects: widening the Santa Ana Freeway through Anaheim, converting Beach Boulevard into a streamlined super-street with additional lanes, bus turnouts, synchronized signals and additional turn pockets, and remodeling the Santa Ana-San Diego Freeway interchange in Irvine known as the El Toro Y.

Reed persuaded Oftelie to modify today’s meeting agenda to include a discussion of spending options.

Anaheim Councilman Irv Pickler, OCTA’s vice chairman, is adamant that purchase of rights of way proceed.

“We have to look at the larger picture farther down the road and not succumb to the immediate (temptation),” Pickler said. “I think we have to keep our focus. . . . These rights of way involve bigger projects that will employ more people for years to come.”

Other board members have not taken a position.

“I’m just going to listen and observe and then make my mind up,” said Roger R. Stanton, chairman of the County Board of Supervisors.

Oftelie said the issue is one of timing, not substance, since it is possible to fund some projects with the $100 million now and others in just a few months with proceeds from bond sales if the Supreme Court refuses to hear an appeal on Measure M.

Oftelie said much of the $100 million could go to city street rehabilitation projects throughout the county because they are the quickest and easiest to do. But he said he has no list of such projects yet and could not identify them. He said such a list would be available by April 13.

But Supervisor Harriett M. Wieder, who is also an OCTA board member, said she may vote to hold off spending any of the money until it is known whether there will be a Supreme Court case.

“I want to hear the arguments for not waiting the 120 days it might take to know the answer to that,” she said.

Measure M is expected to raise $3.1 billion for highway and transit projects over 20 years.

So far, projects worth more than $49 million in projects have been funded by Measure M: the purchase of the old Red Car trolley right of way in North County, the installation of car-pool lanes on the Orange Freeway and preliminary design work on the remodeling of the El Toro Y.

Measure M revenues were pledged last year as collateral for bonds sold to finance those projects. But due to the court challenge at that time, OCTA also had to pledge one of its own reserve accounts used for local street improvements as back-up collateral.

Measure M, however, was not the only target of courtroom opposition.

The start of construction on the San Joaquin Hills tollway was delayed by an environmental challenge, but officials said Thursday that construction costs probably were not affected because the project was awarded to a contractor for a fixed price of $778 million.

Tollway agency spokesman Mike Stockstill said the agency has not yet tallied the costs of defending the project in court.