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County establishes road fund reserve designation

The County of San Diego has established a reserve designation for the county’s road fund.

A 5-0 San Diego County Board of Supervisors vote May 12 authorized a reserve designation within the road fund for the planning, review, design and construction phases of road projects currently underway. The Fiscal Year 2008-09 road fund balance of $26 million creates the existing reserve’s funding.

“This is a way of making sure we have sufficient funds should the state suspend or take away our gas money,” said county Department of Public Works deputy director Donna Turbyfill. “Because of state budget issues funding has been very uncertain for the last three years.”

The county’s road fund allows the county to operate, maintain, repair and improve nearly 2,000 miles of local streets and roads under county responsibility. Road fund money has mostly been provided by the state-imposed excise tax on gasoline known as the Highway Users Tax Account (HUTA). In March 2002 the state’s voters passed Proposition 42, which dedicated the sales tax on gasoline for local road projects, and the road fund has also utilized Proposition 42 funding since then if the state hasn’t suspended Proposition 42 after declaring a fiscal emergency.

HUTA revenue isn’t subject to the same involuntary borrowing restrictions as Proposition 42 funding. On September 30, 2009, Governor Schwarzenegger signed a bill deferring HUTA disbursements for November 2009 through March 2010 until April 28, 2010. On March 1, 2010, Governor Schwarzenegger signed a bill passed during a special session of the state legislature which suspends HUTA payments to cities and counties for nine months of Fiscal Year 2010-11.

On March 22 Governor Schwarzenegger signed a special session bill which eliminated the sales tax on gasoline while increasing the excise tax, thus replacing all Proposition 42 funding with increased HUTA funding.

In October 2009 the county supervisors appropriated $12 million of road fund money for contingency planning, review, design and construction expenses of projects currently under way. That appropriation assured that funds would be available to avoid interruption to projects if the state did not pay the county. The establishment of a reserve fund not only protects current projects against the loss of state funding but also better serves the multi-year nature of ongoing road projects.

The $12 million appropriated in October was transferred into the reserve fund.

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