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Placentia Borrows Again for OnTrac

The city mortgages two more parks to help fund the project to lower rail lines downtown.

August 25, 2004|Jean O. Pasco | Times Staff Writer

In a scramble for money, civic leaders in Placentia voted Tuesday to mortgage two more city parks to help fund an ambitious project to lower the rail lines through the city's downtown.

The City Council pledged the parks -- two of 16 in the city -- as collateral for borrowing $6.9 million to help pay for the OnTrac rail job. Councilwoman Constance Underhill was the lone dissenter.

Two other city parks and a maintenance yard were mortgaged in earlier borrowings for the rail project.

City officials continue to blame the financial troubles of the OnTrac project on the state and federal governments. An anticipated $28-million state grant, for instance, was reduced by $12 million.

As a result, the city has struggled to keep OnTrac alive in the face of a city budget crunch that compelled officials to sell surplus land, close City Hall every other Friday, and lay off staff.

At one point, the city considered eliminating its police force.

Councilman Scott P. Brady said the city remained financially sound despite a $23-million budget deficit and about $7 million owed by OnTrac -- most of which should be covered by the new loan.

"Here we have people gladly willing to give us the money until we get out of this jam," Brady said.

On Monday, city officials declined the offer of a loan from the Orange County Transportation Authority, which agreed to loan funds based on the city's share of tax proceeds.

The $460-million rail project would rebuild 11 intersections and lower the rails through the city's downtown, which is bisected by the Burlington Northern Santa Fe rail line.

The project began in 2000 under a joint-powers agency, though Placentia remains its only member. Federal and state funding has lagged.

The council last week approved a $7.9-million budget for OnTrac through February, with Underhill again the lone dissenter.

The city has spent about $17 million of its own money so far on the project and $18 million more in grant funds.

Council members on Tuesday refused to rescind their vote deferring payments to a group of consultants and lobbyists who have worked on the OnTrac project.

The council last week removed from the budget $338,000 for administrative and lobbying expenses, ordering the money held back until additional state or federal money materialized.

OnTrac financial advisor Jim Preusch, who also advises the city, said the failure to cover several minor expenses in coming months could jeopardize the new round of borrowing or delay the purchase of an Office Depot site needed for the rail project.

He included payments to himself in the list of expenses.

All five council members said they wanted a complete list of what must be paid before they unlocked the money. The council meets again Sept. 7.

The borrowing approved Tuesday will go toward purchasing the Office Depot property, which officials said is needed so traffic can be diverted while Melrose Street and Placentia Avenue are being rebuilt.

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