CA budget holds up payment for projects

February 17, 2009 6:28:20 PM PST
Without a budget, the state can't sell bonds. And if it can't sell bonds, it cannot pay for a long list of infrastructure projects. In fact, on Tuesday the governor put the brakes on hundreds of projects around California. So far Bay Area projects have been able to keep moving, but the clock is ticking.

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The contractor on the I-680 Sunol Grade Project is staying on the job, despite warnings from the state that he might not get paid.

Caltrans Director Will Kempton sent out letters to bond-funded projects in December and January saying without a budget, there's no guarantee they'll get paid and if they do and there's no telling when.

So far alternative funding has been found for the Bay Area's 10 bond-funded projects now underway.

"We're able thus far, the state and the locals, have been able to postpone the day of reckoning," says Randy Rentschler, from the Metropolitan Transportation Commission.

But Rentschler says that day is coming. The threat is real.

You can read Heather Ishimaru's back story here: MTC Spokesman talks about significance of projects

Ninety-eight road projects across the state, and all the jobs that go with them, hang in the balance.

So the MTC offered to buy $200 million in state bonds to keep 16 current or coming Bay Area projects afloat, but the state has yet to close the deal.

"I'm sure they're very distracted with many things going on in Sacramento. We do need to negotiate terms that the monies from the Bay Area stay in the Bay Area," says Rentschler.

Caltrans says the offer is making its way through bureaucratic channels.

"It is still working. We're going through those discussions and those negotiations," says Lauren Wonder, from Caltrans.

Among the threatened projects are those with great value for the taxpayer, where bids have come in 20 to 30 percent below estimates. Without the cash to act on them, those bargain basement prices might be lost.

The state board that issues bonds meets on Thursday. If there's a signed budget by then, the MTC's offer to buy bonds probably won't be needed. Without a budget it could be the alternative funding that keeps Bay Area projects going, while others around the state stop.

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