Finances plague OC city over failed Alameda Corridor-like project
The city of Placentia may be facing financial ruin for the alleged mishandling of state and federal money allotted for a failed Alameda Corridor-like project in the Orange County city.
A recently completed California Department of Transportation audit of the city's failed OnTrac project to separate street and rail freight traffic revealed that the city owes millions of dollars to the U.S. Federal Highway Administration and to Caltrans. Local Assemblyman Todd Spitzer, D-Orange, following a meeting with Caltrans Director William Kempton to discuss the audit, said he believes the city's finances are in serious danger.
“The fines that will be leveled against Placentia will be in the millions of dollars,” Spitzer told the Orange County Register.
“My belief is the dollar amount is so significant ' this fine could theoretically bankrupt the city if they have to pay it all back in one lump sum,” the assemblyman told the Register. Spitzer said he would try to work toward giving the city enough time to pay back any money it owes.
The OnTrac project, originally estimated to cost $543 million, would have lowered the city's train track into a concrete trench much like the 10-mile long center section of the Alameda Corridor project near the ports of Long Beach and Los Angeles.
Ironically, trains carrying cargo from the two neighboring ports were blamed for the rundown condition of the city's downtown area and the impetus behind the OnTrac project. Kicked off with much fanfare in 1997, the OnTrac project started nearly a year before actual construction on the Alameda Corridor.
While the $2 billion 20-mile-long Alameda Corridor opened in 2002 after three years of construction, the five-mile-long OnTrac project almost immediately ran out of money. By 2004, and with no major construction begun, the city of 50,000 had spent nearly $20 million of its own money on the project and an almost equal amount of state and federal money. By the time the city abandoned the project last year, it had spent more than $50 million on a single road-rail overpass and a project to keep trains from blowing their whistles while moving through the city. As a result of the project's estimated $500,000 to $700,000 a month costs, the city depleted its reserves and has been forced to slash services.
Two former city officials, ex-City Manager Bob D’Amato and ex-Public Works Director Chris Becker were indicted early last year on conflict-of-interest charges linked to OnTrac.
Current city officials maintain that the city properly used all state or federal funds for the project.