LOS ANGELES -- The San Bernardino County Transit Authority is planning its first issuance tied to a proposed $420 million transportation bonding plan opposed by smaller communities.
The authority plans a Dec. 4 vote to select investment bankers and lawyers for an estimated $93 million bond issue to help fund the ambitious 20-year transit plan. Securing the debt is a half-cent sales tax increase that has already produced more than $71 million for transportation purposes, according to George Kaenel, director of finance at the authority.
The transit bond plan sparked a bitter battle when community leaders in the county's outlying desert and mountain aras refused to set aside their portion of sales tax revenues -- an estimated 20% of the total collected -- to back the proposed transit bonds. Instead, those communities wanted the funds returned directly to local control, as stipulated in the sale tax measure when voters approved it in 1989.
"It got pretty emotional," Mr. Kaenel said. "They didn't trust us to give them their money."
Even without revenues from those communities, he said, the county has concluded there will be enough sales tax money to cover debt service.
The mountain and desert communities can still participate in receiving bond proceeds from the upcoming issue, but they must make that decision by December, Mr. Kaenel said.
When it meets Dec. 4, the 27-member San Bernardino transit board will review the county's proposed $420 million long-term bonding plan, which calls for commuter rail line construction, highway extensions, acquisition of buses for the handicapped, and street improvements.
"If the board makes a change in our strategic plan, the size of the bond issue may change," Mr. Kaenel said.
This summer the San Bernardino transit authority sold $30 million of bond anticipation notes that mature in March. The proposed $93 million sale -- planned in February -- will be the authority's first longerm bond sale.
Responses to a request for proposals for underwriterfs and bond counsel must be submitted to the county transit authority this week, according to Keith D. Curry, senior managing consultant at Public Financial Management Inc., the financial adviser on the issue.
San Bernardino County, with more than 20,000 square miles, covers more land than any other county in the United States. It is a high-growth area, although much of the county's area covers sparsely populated desert.
Rural desert dwellers -- some of whom objected to the allocation of sales tax revenues from the tax rise -- tried and failed with a 1988 ballot proposal to create a new ocunty from San Bernadino's desert areas.
At least one other county transit agency has run into similar problems with the division of sales tax revenues. the Los Angeles County Transportation Commission diverts 25% of its countywide sales tax revenues to cities because of language inserted in a sales tax measure that voters approved several year ago.
Each city receives a portion called a "local return," calculated on the basis of population. The other 75% of collected revenues could be used to back debt, but an estimate 35% of that portion is currently earmarked for bus service.
The local return stipulation was included in the sales tax measure in an effort to gain political support for the tax increase from local interest groups, according to Mike Smith, assistant treasurer of the Los Angeles commission.