Road Work Funds May Be Found

The state plans to avert a shutdown of 200 highway construction projects, in part by diverting $372 million in federal highway money that had been intended for use by local cities and counties.

The money is part of a last-minute solution to California’s looming financial crunch, which could shut down hundreds of highway projects as early as next week. Because the Legislature has not agreed on a state budget, transportation officials have said they would run out of money by Monday to pay contractors on $6.7-billion worth of road and bridge projects.

California Department of Transportation Director Jeff Morales said Friday that he and colleagues had stayed up all night Thursday, putting together a plan to keep the state’s road projects moving.

Even with the bailout, he said, as many as 1,000 construction jobs would be lost, and 50 upcoming state road projects would be postponed.

The money, $450 million per month for the roadwork and other Caltrans operations, would be obtained from a variety of sources, Morales said. Contractors on 99 projects said they would work without pay for an unspecified length of time, which Morales estimated would save $50 million over the next few weeks. Several counties promised to loan the state money interest-free, providing another $60 million.

Most of the rest would come from federal funds earmarked for cities and counties, although the state has not released details and, in some cases, has not notified the local governments.

Morales said the decision was necessary to keep state projects going. He said that the cities and counties had not yet begun work or hired contractors for the affected projects, and that the state hoped to pay the money back.

“We’ve talked with most of them,” Morales said. “I don’t want to suggest that they like it.”

Officials of several Southern California cities and counties said they had not heard about the state’s plan and therefore could not comment.

Pat DeChellis, assistant deputy director of the Los Angeles County Department of Public Works, said he had been assured that any county money used by the state would be paid back. He said his department did not have any pending projects that would be affected.

David Nicol, chief operating officer for the Federal Highway Administration in California, said Caltrans officials had the authority to spend the money as they wished. Any change in plan, he said, was between the state and the local agencies.

The California Transportation Commission is set to discuss the bailout plan at its Tuesday meeting in Sacramento.

“The department has made us aware of this plan that they have to deal with their short-term cash needs,” said Diane Eidam, the commission’s executive director. Tuesday’s hearing, she said, would “give everyone in the transportation community an opportunity to talk about it.”

Morales, who referred to the plan as “a house of cards,” said that, even with contributions from local agencies and contractors who are willing to work without pay, the deal could fall apart if the budget is not completed “within a week or 10 days.”