A $15.5 million deficit in the Highway 25 Bypass has local
transportation officials scrambling to find a way to fund the
long-awaited project
Hollister – None of the several scenarios presented to local transportation officials this week for making up the $15.5 million funding shortfall for the Highway 25 bypass project offers the quick fix that many San Benito County Council of Governments directors were hoping for.
“I think it’s a good first step,” COG Chair Pat Loe said. “But there’s many more things to look at, I think. We’re not going to leave a stone unturned looking for other alternatives.”
Last month, COG staff revealed that the long-awaited bypass project – previously estimated to cost about $24 million – would end up costing nearly $43 million because of increased land, material and construction costs. With only about $27 million in local, state and federal funds for the bypass, COG is scrambling to find a way to make up the difference so construction can begin this summer as scheduled.
“How long can we drag our feet on this and not make a decision?” said COG Director Anthony Botelho during a meeting Thursday. “I’d hate to get us into June or July and we’re supposed to break ground and we don’t know what we’re doing.”
Despite this current hurdle, COG staff still say that construction on the bypass will begin this August and end in late 2007. Many in Hollister are eager to see the project – which will create a new leg of Highway 25 at San Felipe Street that circumvents downtown and connects to Airline Highway near Safeway – finished. Once the bypass is built, Caltrans will cede control of San Benito Street to the city, which plans on making the road more pedestrian friendly as part of downtown revitalization efforts.
More than half of the $15.5 million shortfall can be made up with $9.2 million in traffic impact fees, according to traffic planner Mary Dinkuhn. At the meeting, COG staff presented four possible funding scenarios – each with its own difficulties and trade-offs – to provide the $6.3 remainder.
One scenario is to redirect state funds earmarked for future transportation projects to the bypass. Though this scenario would provide the $6.3 million still needed, it is unlikely that the state would give that money up front because many of the projects it is supposed to go to are slated to begin a year of more from now, according to Dinkuhn.
“Next year is next year. We have to have all this money lined up for construction (in 2006),” COG Executive Director Tom Quigley told the board. “We’re not allowed to front-load and take all the money up front.”
A second possibility, according to COG staff, is to take $4.5 million in state money that Hollister requested for local street repairs and put it toward the bypass. But Dinkuhn said that it is unlikely that the state will give the city the money. And if the funds were made available, she said, Hollister would lose out on the money for local street repairs. Also this scenario would leave a $1.8 million deficit for the bypass.
Another scenario explored was passing a revenue bond that would repaid by future impact fees. COG attorney Shirley Murphy said that she wasn’t sure yet that the county could pass a bond for a highway project, because normally revenue bonds are repaid from fees generated by people using the project that the bond paid for. In this case, she said, the bypass would not generate revenue to pay back the bond.
A final scenario consists of diverting funds from current road projects – such as Hollister’s North Street extension and the county’s planned improvements to John Smith Road and Highway 25 – and using the money for the bypass. While Dinkuhn did say that time and money have already been invested into those projects, she added that the they could be completed at a later date when more funding becomes available.
“We can shelve them and kind of have them on the list of ready to go,” she said.
Botelho said that none of the scenarios offered Thursday was the “silver bullet” he had been hoping for.
“I saw four scenarios here, and none of them looked good,” he said. “I’m not optimistic about any of the four scenarios.”
Botelho agreed with Loe that more funding alternatives need to be investigated.
“I think more research is needed as far as the viability of other scenarios,” he said. “I just didn’t get the impression that enough work has been done for reviewing our options.”
While how the bypass will be funded is up in the air, Botelho and Loe reaffirmed their dedication to seeing the project get built on the current time line.
“We are going to build this road. We feel that we have the support of the community to do so. It’s going to get done,” Botelho said.
The funding shortfall is just the latest bump in the road for the bypass project, which has been around for decades. Originally slated for June of 2005, construction of the bypass was delayed for a year when COG chose to get new appraisals on property needed for the project. Land owners said that they weren’t offered enough, and some threatened legal action.
Though COG directors say that they believe the new offers – which, according to Quigley account for a large portion of the increased cost of the project – were fair, several property owners still say that they are getting a bad deal. In an effort keep the project moving up the road, COG directors voted Feb. 16 to start eminent domain proceedings on 13 parcels needed for the bypass. The COG offers are confidential.
Now that eminent domain has been initiated on the properties, COG will have possession of the land in about three months, according to Dinkuhn. After that, COG can begin construction of the project, even if property owners decide to take the matter to court in hopes of getting more compensation, she said.
