An out-of-court settlement was reached last week in a dispute that threatened to derail the $1.84 billion Alameda Corridor freight rail project.
Vernon, Compton, Lynwood, and South Gate -- four of the six California cities located along the proposed 20-mile route -- ended a legal stalemate with the Port of Long Beach.
The settlement clears the way for the port to rejoin the 16-member Alameda Corridor Transportation Authority. Port officials on Aug. 11 suspended their participation in the authority, but said they would return if the lawsuit was dropped.
"I am very pleased with the agreement ... and pleased that everyone is happy," said Steven R. Dillenbeck, executive director of the Port of Long Beach, on Friday. However, he added, the port has no plans to rejoin the authority until "all the documents are signed."
In July, the four cities filed a motion in Los Angeles County Superior Court to block any dockside expansion of the port's Pier J terminals until the corridor is completed.
But before a court hearing scheduled last Thursday could be held, the cities announced that a compromise was reached with the port. Under the agreement, the port will amend its Pier J environmental report. The report will state that train and truck traffic generated by Pier J expansion must use the Alameda Corridor.
The cities view that language as significant because fees charged to corridor users will help to retire debt service on up to $600 million of bonds expected to be issued to finance a portion of the project. The cities have said funding shortfalls could force the corridor planners to place the tracks at ground level instead of in trenches, where the traffic would be less obtrusive.
In a related development, the ninemember California Transportation Commission is expected to authorize at its November meeting the issuance of $80 million in voter-approved general obligation bonds for the construction of five overpasses along the corridor route. Construction of the overpasses is expected to take two to three years.
Voters in June 1990 approved Proposition 116, which called for the issuance of $2 billion in transportation-related GO bonds. Included in that amount is $80 million for the Alameda Corridor, but authorization must first be obtained from the Transportation Commission.
A 1991 issue of $23.1 million of certificates of participation to fund expansion of a landfill in Nevada County, Calif., "is not in payment default, nor is payment default threatened," a press release issued by the Nevada County administrator's office said last week.
The reserve fund has a balance of $1.98 million, and "the county does not anticipate using these funds to meet" debt service payments in the current fiscal year, the county said.
"Numerous inquiries received from COP holders and their representatives" concerning the status of the certificates prompted the press release, the county said.
The calls followed rating agency downgrades of the issue earlier this year, the county said. In addition, some observers were confusing the landfill problem with Nevada County's unrelated Wildwood Estates Mello-Roos bond issue. The Mello-Roos issue has missed scheduled payments to bondholders because of special tax delinquencies.
Certificates for the solid waste program originally were issued in March 1991 to expand the McCourtney Road landfill, owned and operated by the Western Nevada County Solid Waste Management System. About $9.7 million of the proceeds were spent before the county closed the landfill in December 1992. The site later was converted to a garbage transfer and recycling station.
Early this year, Nevada County attempted to issue $13 million of refunding COPs to reduce debt service costs on the 1991 issue. But "a financially acceptable bid was not received" because the issue received speculative-grade ratings by two rating agencies, the release said.
Standard & Poor's Corp. down-graded the 1991 COPs to BB from BBB, while Moody's Investors Service lowered the certificates to Baa from Baal.
Nevada County still has $10.7 million of proceeds from the 1991 COP issuance in a project fund. The release said the county will transfer the funds by the end of September "to a newly created account which will remain with the trustee, Bank of America."
Under the transfer agreement, Nevada County will use portions of the proceeds to pay annual debt service and to call some COPs in 2003.
The transfer of funds to the trustee "accomplishes the original intent" of the proposed issue of refunding COPs, the release said.