Villaraigosa wants to borrow future tax money to fix L.A. streets
Looking to end his tenure at City Hall with a burst of public works projects, Los Angeles Mayor Antonio Villaraigosa has been quietly assembling a plan to borrow 27 years worth of tax revenue and spend it repairing nearly one-fourth of the city’s streets.
Villaraigosa, who leaves office in 2013, hopes to spend as much as $800 million on accelerated road repairs using proceeds from Measure R, a half-cent sales tax passed by county voters in 2008. The money could fix some 1,500 miles of streets within two to three years, mayoral aides said.
The initiative — known as L.A. Road Works —- would consume much of the city’s allotment of Measure R funds, which run out in 2039 and are designed to pay for various transportation projects. In addition to funding rail and bus programs, Measure R provides every city in Los Angeles County monthly revenue based on population size.
The city is expected to receive a total of more than $2 billion over three decades, money that can be used to repair streets, repave alleys and fix sidewalks, among other transportation improvements. The mayor is proposing to finance the fast-tracked street repairs with borrowed money that would be repaid, with interest, from future years’ revenues.
As they made the rounds in City Hall in recent days, the mayor’s allies said the proposal could create 1,000 jobs and address one of the public’s top priorities: paving roads and eliminating potholes.
But Councilman Bernard C. Parks, who heads the budget committee, voiced concern about using up so much money in such a short period. And he pointed to the borrowing costs, which would probably exceed $600 million.
“If you are going to consciously use 27 years of funding in two years, not only are you obligated to tell people what you’re using it for, you’re also obligated to tell people what’s not going to be available going forward,” said Parks, who was briefed on the proposal last week.
“People should be fully aware that [L.A.'s share of] the Measure R money is effectively gone after this current project is done,” he said.
Villaraigosa aides defended the administration’s proposal, saying it would take advantage of favorable interest rates and avoid construction and material price increases in later years. It also offers a way to fix roads that have been decaying for decades, they said.
“By borrowing against this revenue, we would be able to pave more streets over two to three years than we would over 27, given the increasing costs,” said mayoral Deputy Chief of Staff Matt Szabo. “It not only makes every bit of sense to do it, but it would almost be foolish not to do it.”
Details of the plan are still being finalized, but briefings have been given to at least a third of the council’s 15 members. Backers say they would like to see it approved before the end of the year. A formal announcement is scheduled for next week, they said.
The initiative bears a strong resemblance to Villaraigosa’s 30-10 plan, which would compress 30 years of Measure R rail projects, such the Westside subway extension and a Crenshaw Boulevard light rail line, into a single decade. That plan relies on federal loans and needs congressional approval.
The streets proposal is more of a 27-2 concept, covering Villaraigosa’s remaining 18 months as mayor — and possibly a year beyond that, depending on the plan’s final details. “This administration has put together this plan to let L.A. know we don’t need to wait for Congress to transform our streets,” said Deputy Mayor Sarah Sheahan.
The mayor’s office said it has no current plans to borrow against an additional $600 million of local Measure R money earmarked for bicycle, pedestrian and other city transit projects.
Martin Wachs, a researcher and professor at Rand Corp. in Santa Monica, said the proposal comes at an opportune time. L.A. streets are in poor shape and the construction industry, hit hard by a recession, would probably charge less than during an economic boom.
Nevertheless, he warned that the proposal would also restrict the ability of policy makers — Villaraigosa’s successors and future City Councils — to use future Measure R money for other purposes. “I don’t think it’s in any way an outrageous or inappropriate plan,” he said. “But voters should be aware.”
Bill Robertson, who ran the city’s Bureau of Street Services until February, estimated that 1,000 of the city’s 6,500 miles of streets are “failed” and in need of total reconstruction. That work typically costs $300,000 to $450,000 a mile, he said, or about $1 million a mile if curbs and gutters are included.
“Any time you can get more money for roads and streets, it’s huge,” he added. “They’ve been neglected for 50 years.”
Still, Councilman Mitch Englander said he fears that too much of the money will be devoted to “cosmetic” fixes on streets — such as adding a 1-inch coating of sealer to a road’s surface —- and not major street reconstruction. He also said too little is being done to share the plan with the public.
“This is their money,” he said. “I’d like to see the public’s take on this before we take any drastic decision to tie us to 30 years of debt.”
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