Plan in O.C. to Put Rails in Trench Is in Own Rut
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Six years after embarking on an ambitious project to hide beneath ground level a stretch of railroad tracks that run through its historic downtown, Placentia is beginning to look like the little city that couldn’t.
The town’s $460-million OnTrac project, which supporters boast is in the vanguard of a national effort to improve vital rail corridors, is essentially broke.
Officials of the city, located five miles east of Disneyland, have little to show for about $33 million they have spent thus far on consultants, conceptual plans and right-of-way purchases.
Work on a grand plan to also rebuild 11 intersections along the track has come to a standstill except for a lone underpass under construction.
The city has cut funding for the project, and a variety of high-priced consultants, including OnTrac’s executive director, have agreed to take half their pay until more government money can be found.
There is so little work that the OnTrac office in Brea is staffed only part time.
Supporters of the project defend it as an enterprising effort to improve the movement of cargo and rescue the city from a busy rail line that all but cuts the city in half as noisy trains rumble through town. They remain steadfast that funding for the project will be secured eventually.
Others aren’t so sure.
“We knew this was going to be a big project, but we let ourselves be [talked] into thinking we could do this although we were small,” said Placentia Councilwoman Connie Underhill. “Maybe we were just naive about controlling costs and perhaps too trusting. Had we been more sophisticated, we might not have fallen into this trap.”
At its heart, OnTrac is the story of a small city that bought into a big dream: pushing a bothersome rail line into a concrete trench so its quaint but aging downtown could be redeveloped into a stylish business and shopping district.
Placentia is a bedroom community of about 50,000 people with a $26-million annual budget. Its downtown is a hodgepodge of small businesses bisected by the bustling east-west line for the Burlington Northern Santa Fe Railway Co.
The train corridor through northern Orange County is one of three major rail lines that move freight to and from the ports of Los Angeles and Long Beach. About 50 to 100 freight and passenger trains a day travel the route, a number expected to increase to 250 by 2030, according to projections from the Southern California Assn. of Governments.
Placentia launched the project in 1998 and, after two years of preliminary work, formed the OnTrac joint-powers authority. Officials confidently predicted that several cities along the rail corridor would join, boosting the project’s political heft in Sacramento and Washington.
So far, however, the agency has only one member: Placentia. Put off by the high costs of OnTrac, neighboring cities decided to proceed with their own rail crossing improvement projects.
Nevertheless, Placentia plunged ahead with the effort, hiring consultants to handle such tasks as management, lobbying, engineering, landscape architecture and public relations at rates of up to $300 an hour.
At the time, state funding was flush, and city officials continued to move forward with optimism. But the state budget crisis changed the picture dramatically. The flow of vehicle license revenue to Placentia was interrupted, and a $28-million grant to OnTrac was cut nearly in half.
To make up the difference, Placentia tapped municipal reserves and money set aside for parks.
The city raised more money by selling $3 million in parkland and issuing $24 million in bonds to investors. It even tried to eliminate its Police Department as a cost-saving measure.
All of this has taken a toll.
When the undertaking began, Placentia City Hall was in the black and had a healthy cash reserve of more than $1 million. Now the town is $22 million in debt, partly because of $12 million in city payments to OnTrac. Cash reserves have dwindled to less than $300,000, a level municipal officials described as dangerously low.
The project is facing its own debt problems as well. It owes $5.6 million to Office Depot for property near Placentia Avenue needed for rail improvements, and Burlington is owed $5.1 million for track work.
Project officials insist the financial bind is temporary. About $14 million in emergency funding from the federal government is on the way, city officials say, and the Orange County Transportation Authority is considering a $5.8-million loan to help OnTrac pay its bills.
Earlier this month, Gov. Schwarzenegger restored $163 million to a gutted state fund for transportation projects. OnTrac is part of that program, which lost more than $1 billion because of budget cuts. Projects from around the state will compete for those funds.
Ultimately, project officials are confident that state funding will be fully restored and that Congress will authorize an additional $225 million for the project this year. The balance of OnTrac’s costs will be sought from Congress in the decade ahead.
“I would not change any decision we’ve made on the project,” said Wally Baker, a senior vice president of the Los Angeles County Economic Development Corp., a nonprofit organization that has been paid $1.2 million to supply consultants, lobbyists and studies to OnTrac. “There are always going to be some bumps. You cannot forecast them. It will all come back for Placentia.”
But this may be wishful thinking, said Rep. Gary Miller (R-Diamond Bar), who sits on the House Committee on Transportation and Infrastructure. Though he supports OnTrac, he said, there is no way of knowing how or when Congress will act.
“It’s not a slam dunk,” Miller said. “I’m fighting with 434 other members [of Congress], and they all have projects they think are the most important.”
For the pending transportation bill, Congress has yet to choose which of its members will attempt to reconcile differences between the funding requirements for projects approved separately by the House and Senate and the spending proposed by the Bush administration. Tens of billions of dollars separate the Bush and congressional spending proposals.
If a consensus cannot be reached in Congress, it will doom the transportation bill for this year, Miller said, which means OnTrac would not get the $14 million in emergency funding he fought so hard to get.
Just as significant, the amount of federal money set aside for major projects, including OnTrac, has been cut from $17.6 billion to about $6.6 billion.
A group of community activists, however, says it’s more than a matter of persuading state and federal governments to bail out the project. They fault the city for lavish spending.
Project expenditures became an issue early last year when the city proposed contracting out its police services to the Orange County Sheriff’s Department to save money. Community activists quickly zeroed in on the lucrative contract of OnTrac Executive Director Christopher Becker, a former public works director for the city who turned private consultant.
His contract guaranteed him $450,000 a year for the 10-year life of the project, plus 15% administrative fees for overseeing consulting contracts awarded by OnTrac. The compensation package made him one of the highest paid transportation officials in the nation.
Spending on other consultants also has attracted controversy. At least $9.2 million, city records show, has been spent on financial advisors, administrators, strategists, grant writers, public relations representatives, lobbyists, video producers and web-page managers.
Placentia Councilman Scott Brady and OnTrac officials defended the extensive use of consultants, saying that Placentia is a small city that lacks the political clout and staffing necessary to finance and oversee a major rail project.
But as they ran out of money, Placentia council members reduced Becker’s pay to about $290,000 a year, initiated a review of OnTrac expenses and scaled back the city’s contribution to the project to $77,000 a month.
Nine of OnTrac’s private consultants, including Becker, have agreed to take half their pay until $50 million more in government funding can be found.
City activists agree that rail improvements are needed in Placentia, but not the gold-plated proposal pushed by OnTrac supporters.
“The projects are fine,” said Craig Green of Citizens for a Better Placentia, a group of local watchdogs with an office in the middle of the redevelopment zone. But the way OnTrac has been run is “the biggest mistake the city has made.”Despite the mounting political and financial pressures, some city officials remain optimistic that the investment in OnTrac will pay off.
“No doubt critical times are coming. A lot of balls are in the air,” said Councilman Brady. “I’m confident we will get the state and federal funding. We will secure the OCTA loan and have a redevelopment project underway in the next few years.”
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