Orange County Voices : Forget a ‘Bait and Switch’ Raid on Measure M Money for County : Attempts to tap the transportation fund as the way out of bankruptcy will only deepen the disaster.

Attempts are being made by some Orange County officials to raid the Measure M half-cent sales tax transportation fund as the way out of the Orange County bankruptcy. Any success with this raid would have a disastrous impact on the county and would only make the problem much worse.

Approved by Orange County voters in 1990, Measure M raises about $135 million per year for specific transportation programs.

The Measure M spending plan for the expected $3.1 billion raised over the 20-year life of the tax targets freeways, regional street and road projects, local streets and roads, as well as specific transit projects.

A total of $1.3 billion is planned for freeway projects, including widening the Santa Ana Freeway, rebuilding the El Toro “Y” and “Orange Crush” interchanges and widening the Costa Mesa, Orange and Riverside freeways.

These projects are under construction, with $278 million expended to date.

Of the $1 billion dedicated to street and road projects, both local and regional, $116 million has been spent since the passage of Measure M.

This includes smart streets, interchange improvements, local street maintenance/improvements and signal coordination.

These projects were very specifically delineated in Measure M to ensure the voters that no “bait-and-switch” tactics could be used to redirect this tax money. A Citizens Oversight Committee was established by Measure M to ensure that funds were spent according to the plan.

Any change of spending within the Measure M categories must be approved by the oversight committee.

Any redirection of funds outside the plan would require a new ballot measure which would require a majority vote of the OCTA directors, a two-thirds vote of the oversight committee, as well as approval by the county and a majority of the cities. This could not be accomplished until the 1996 general election. Redirecting these funds to pay for the bankruptcy would probably require a two-thirds vote by the electorate.

It would be possible, although extremely difficult, to divert future urban rail funds through this process. However, these funds will not be available until after the year 2000. Too little and too late.

In order to jump-start $1.2 billion in freeway projects planned for the first 10 years, $740 million in bonds were issued to initiate projects and take advantage of lower acquisition and construction costs due to the economic recession in the early ‘90s.

This enabled OCTA to start construction on the El Toro “Y” and “Orange Crush” interchanges, as well as purchasing right-of-way and widening of Orange County’s “Main Street,” the Santa Ana Freeway along with the Riverside Freeway improvements.

Almost all of the $704 million recently released as part of the settlement agreement is dedicated to continue these projects and Measure M money for the next 15 years is dedicated to these bonds.

Since, constitutionally, sales tax allocations must be made in quarter-cent increments, diverting any part of the Measure M revenue stream would immediately cause these bonds to be in default.

Also, as is normal for all bonds of this type, bond covenants are set up to make it illegal to divert or in any way change the revenue stream dedicated to pay these bonds unless the bonds are paid off.

Any attempt to even put this issue on the ballot would put these bonds into immediate default.

Default by the Orange County Transportation Authority on these bonds to save the county bankruptcy would only worsen the current financial disaster for Orange County.

In addition to the loss of future credit by any Orange County agency, all freeway projects would be immediately halted, with little hope for restarting.

These include the “Orange Crush” interchange, the El Toro “Y,” Santa Ana and Riverside freeway widening, as well as other interchanges and freeway projects.

Commuter rail, which now carries 2,000 passengers per day, would stop rolling and most local and regional street projects in our cities would stop.

The impact on Orange County’s economy would be devastating.

It has also been requested that all agencies, including OCTA, simply forgive the county a portion of the debt.

The portion of the debt to be forgiven is the portion that is least likely to be paid and would be of no help to the county under any circumstances.

In any event, legal counsel has determined that this would constitute a gift of public funds from one public agency to another and would be both illegal and in violation of the Constitution.