The Kern County Board of Supervisors decided Tuesday to borrow millions of dollars for road projects. The consensus is that the best way to go, even in this time of financial uncertainty, is a bond issue to cover some $146-million in road and freeway projects.
But that type of financing comes with a hefty price tag for taxpayers and it will come without their approval.
Saying the time is right to push forward with their plan to borrow against the county's general fund, supervisors voted unanimously to pursue a bond issue for upcoming road and freeway projects.
The biggest chunk is $72-million for the Centennial Corridor project, linking Highway 58 and Highway 99 to the Westside Parkway.
$48-million will go for local road repairs and improvements not eligible for state or federal funds. $16-million will pay to widen 7th Standard Road. There's another $10-million in the package for the Hageman Road flyover.
County Roads Director Craig Pope says despite an uncertain fiscal future, it makes sense to borrow money and keep these projects moving forward. "We think there's no better time to bond than right now. Stimulate the local economy. We can get great value for our money. We've got a lot of contractors who are hungry. We get those materials here. We get the labor here," Pope reasons.
The Supervisors decision to finance road projects with a bond issue effectively bypasses the voters of Kern County. Deputy County Counsel Steve Shuett says it's allowed by law.
"The county is actually issuing certificates of participation which are an exception to the constitutional requirement for a vote of the people on a bond issue," said Shuett. And while bond financing produces needed revenue faster than other sources, such as traffic impact fees, it's more expensive in the long run.
At the end of its 25-year life span, assuming an interest rate of four-percent, a $146-million bond issue will have a steep price for taxpayers. "Roughly double the cost with interest and issuance costs. So you're looking at around $290-million," added Shuett.
But county supervisors were in agreement Tuesday, that a bond issue may be their last viable option to move road projects forward in a timely manner.
"We're not going to get anywhere unless we have local matching dollars for state and federal funds and in view of the fact that we've never been able to pass a half-cent transportation tax, I do feel very strongly that we should be bonding. We have an obligation as a county to make sure we have a transportation network that works," said 4th District Supervisor Ray Watson.
Supervisors have directed the county's administrative office to formalize the list of construction projects that will be funded by that bond issue.
There could be additional money coming from President Obama's economic stimulus plan to upgrade the nation's infrastructure.
