COUNTYWIDE : Panel OKs Issuance of Measure M Bonds

County transportation officials gave final approval Monday to the issuance of $525 million in bonds to help finance major highway and transit projects.

The bonds will be repaid from Measure M, the half-cent, countywide sales tax approved by voters in November, 1990.

Most of the money will be used to buy rights of way for the massive Santa Ana Freeway widening project, the reconstruction of the Santa Ana-San Diego freeway interchange, the installation of more car-pool lanes and several so-called “super-street” projects.

Moody’s and Standard & Poor’s, the nation’s two leading bond-rating firms, have given the first $350 million in bond debt an AA rating, and the second $175 million an A+ grade.

The AA is a higher rating, because it’s a senior debt. That means that the OCTA is obligated to repay it first. The rest of the debt is secondary, and thus slightly less reliable until OCTA demonstrates promptness in paying off the senior debt. Higher ratings mean lower interest payments.

Stan Oftelie, chief executive officer of the Orange County Transportation Authority, said the ratings were the highest ever given in connection with a transportation sales-tax measure.

The ratings reflect “faith in Orange County’s ability to rebound from the recession,” Oftelie said. The bond sale is the county’s largest since the Irvine Ranch Water District’s $500-million issue in 1988. “This is a lot of money,” he said.

Firms such as Irvine-based Fluor Daniel, Willdan Associates of Anaheim and San Francisco-based Bechtel Corp. began lining up for Measure M contracts more than a year ago.

The bonds will be repaid with future Measure M sales tax revenue. Supervisor Thomas F. Riley was the lone dissenter at Monday’s OCTA meeting. He objected to a provision that exempts from bond collateral requirements the 14.6% of Measure M sales tax proceeds that are automatically turned back to cities each year for their own traffic programs.

In other action, OCTA board members approved plans for public outreach workshops on the future of the county’s rail service, and for developing a 20-year “vision” statement that will attempt to unify Measure M projects with OCTA long-range policy goals and projects funded from other sources.