The city of Bakersfield will have to borrow $30 million less to finish its lengthy list of major highway projects after earning more in transportation fees and spending less on Highway 178.
The bill is expected to drop from $270 million to $240 million, and that's not all. The city will also be able to "pay as we go" on an array of projects and not borrow to finish them until fiscal year 2016-2017.
The Bakersfield City Council will hear the good news at its meeting Wednesday.
It'll be on top of other good news reported by officials in charge of the city's lengthy slate of Thomas Roads Improvement Program projects, funded by local money and $630 million in federal earmarks secured by former Congressman Bill Thomas, R-Bakersfield.
Last week, Thomas and city officials announced the early release of more than $180 million in federal funding allowing the purchase of property in the path of the future Centennial Corridor and funding right-of-way and design on widening 24th Street.
The city won't get this money up-front, however, the council will learn Wednesday -- the federal government takes anywhere from 60 to 90 days to pay its bills.
To cover their short-term costs, city officials are considering opening a line of credit with a bank of between $30 million and $50 million -- which they would pay down when they get the federal money.
"We're starting to work on it, starting to talk to banks, but I don't think we will start to borrow any money for a couple months," said Finance Director Nelson Smith. "Whether we ever borrow that much money is contingent on how quickly these other things happen."
Many TRIP projects are interconnected by local and federal money.
Saving that $30 million means improvements to the Hosking Road-Highway 99 interchange -- an estimated $21 million in construction costs -- can be entirely paid through gas tax, utility surcharge and transportation development funds the city receives.
The project should go out to bid this spring.
Construction of so-called beltway improvements -- including upgrades to Rosedale Highway, Highway 58, Highway 99 and the Westside Parkway -- can also proceed.
They will be funded by $96 million in federal earmarks and $22 million in city funding. The city has requested federal approval of the construction funding; it hopes to get the improvements built this year.
The widening of Highway 178 out to Miramonte Drive can also go on in light of the windfall. Granite Construction crews are currently reconfiguring the Highway 178-Morning Drive intersection.
That project's construction costs are estimated at $18 million in earmarks and local funds.
Major sources of the city's $30 million savings include:
* Granite Construction's $25.5 million bid to rebuild Highway 178 at Morning Drive -- which saved the city $8 million.
* Lower cost estimates to widen Highway 178 and the Hosking interchange, which saved the city $13 million.
* A revised city estimate of fiscal year 2013-2014 transportation development fees paid by real estate developers, from $12 million to $18 million. Officials say this revenue stream is rising as the economy rebounds.
Ward 2 Councilman Terry Maxwell said he's not always inclined to believe projections.
"It's great to see on paper but I'm pretty much a skeptic, because I need to know more about it," Maxwell said.
Ward 4 Councilman Bob Smith said he's confident the real estate market will continue to support transportation development fees.
"For the next few years we should have a good building market and that should keep fees" up, Smith said.