By Sue Doyle

A $1 billion plan to widen the San Diego Freeway through the Sepulveda Pass is the latest victim of the state’s financial crisis, with a $730 million shortfall threatening to delay – or even cancel – a car-pool lane that could ease commutes for San Fernando Valley motorists.

The 10-mile car-pool lane project on the northbound 405 between the Santa Monica (10) and Ventura (101) freeways was supposed to begin in mid-May, largely paid for with bond revenue awarded two years ago. However, that money was temporarily rescinded in December as the Legislature struggled to close a $42 billion deficit.

Transportation officials are now scrambling to identify other sources of revenue to keep the project on schedule. Adding to the sense of urgency is the potential loss of $200 million in federal stimulus money if the project is delayed.

“It’s unfortunate,” said Krishniah Murthy, Metro deputy chief capital management officer for the Metropolitan Transportation Authority. “But that’s where we are today.”

The Metro board meets Thursday, when it’s scheduled to consider awarding the construction contract for the five-year project. Members could opt to award the contract in the hope of somehow finding more money; decide to build the project in phases; or postpone the improvements and risk losing the funding to other freeway projects.

State officials have said they believe the bond revenue for the freeway lane could be reinstated in the next fiscal year.
Right now, the freeway project has about $378 million – including the $200 million in stimulus money – enough to continue the project for 15 months, Murthy said.

About $13 million in local money and $48 million from a state traffic relief program are secured for the lane.

The federal government has kicked in $117 million, separate from the stimulus money, contingent on construction starting in 2009.

Murthy said federal leaders are aware of the state’s predicament, so they are unlikely to withdraw the $117 million allocation.

In 2007, when Caltrans introduced several proposals for widening the freeway, some residents were outraged by one plan to build car-pool lanes on the north- and southbound sides of the freeway. That project would have required the razing of 37 homes, two commercial properties and a landmark Lutheran church in Brentwood.

State officials bowed to community pressure and agreed on a scaled-back plan to build only the northbound lane. Six homes near the freeway’s Valley Vista Boulevard exit will be taken through eminent domain proceedings.

Three of those homes are now in escrow, one has a signed contract and the two others will most likely accept the state’s offer, said Judy Gish, a spokeswoman for the state Department of Transportation.

If the Metro board decides to proceed with the project, even in phases, officials would first have to complete design and engineering work. This includes relocating utility lines and creating a traffic management plan that would also be created to handle the flow of vehicles during construction.

Even if the project gets under way, Murthy said, it could be suspended if their financing plans crumble – although terminating the contract could cost as much as $30 million.

“If we don’t have the money to finish it, we would have to demobilize the contract and that would be very expensive,” Murthy said.

“We will be very cautious as to what items will go full speed.”

If the freeway expansion plans do collapse, it would bring an unexpected dead end to a story that took off with incredible force.

A delegation of Los Angeles and Metro officials lobbied hard for a car-pool lane, persuading the California Transportation Commission to allocate $730 million. The Sepulveda Pass project was the largest recipient of the money, which came from Proposition 1B, a $19.9 billion transportation bond approved by voters in 2006.

The victory for Los Angeles enraged San Gabriel Valley officials, who wanted money for their own car-pool lane on the eastbound 10 Freeway between West Covina and Pomona.

The Daily News: