Placentia spending is faulted

A soon-to-be-released Caltrans audit will assert that Placentia improperly spent as much as $36 million in state funds to pay for an ambitious rail-corridor project that drove the tiny north Orange County city to the brink of bankruptcy, state and municipal officials said Wednesday.

Officials familiar with Caltrans’ findings said the pending audit shows that $12 million was misused to buy land for the now-defunct OnTrac project and to pay expenditures authorized by the project manager while he allegedly had a conflict of interest.

They said Caltrans is also questioning the use of an additional $24 million in state funds because the city has not provided documentation to justify the expenditures.

If Placentia fails to refute Caltrans’ findings, the city could owe the state tens of millions of dollars while it is still dealing with the financial burdens triggered by OnTrac.

“It is a shame,” said Assemblyman Todd Spitzer (R-Orange), who requested the audit several years ago. “No matter what the number is, it is going to be big and it will seriously impact the city.”

After more than two years of scrutinizing the project, Caltrans is planning to release the audit Friday.

The $650-million OnTrac project was shelved in 2006 after it failed to receive federal funding, dragging Placentia deeply into debt and forcing city officials to cut services and sell park land to keep the effort going. Planners had wanted to build 11 overpasses and lower five miles of railroad tracks into a concrete trench to help revitalize the city’s Old Town district.

Former Public Works Director Christopher Becker and former City Manager Robert D’Amato are facing felony conflict-of-interest charges involving their work on the project. Both have denied wrongdoing.

Mayor Scott Nelson said the city plans to contest Caltrans’ findings that Placentia owes the state a minimum of $12 million. On Tuesday night, the City Council hired a community relations consultant and a lobbying firm, California Strategies, to help in that effort.

Nelson said the city has provided Caltrans with documentation it requested related to the $24 million in question, but state officials have asked Placentia for more information.

“I absolutely think we will get these amounts reduced. We will contest these findings on legal and factual grounds,” Nelson said. “We will do everything we can to defend the city.”

But Spitzer, who was a county supervisor when problems surfaced in the OnTrac project, said it is likely the city will have to reimburse the state about $12 million because of questionable land purchases and expenditures.

If Placentia has to reimburse Caltrans, state officials have promised to create a repayment plan that will not interfere with the city’s day-to-day operations.

The reimbursements will likely come out of local and state transportation funds Placentia receives annually for street programs.

--

dan.weikel@latimes.com