Highway 41 work in Madera County will cost $150 million. Who's paying for it?
Reality Check is a Fresno Bee series holding those in power to account and shining a light on their decisions. Have a tip? Email tips@fresnobee.com.
It will cost Madera County an estimated $150 million to expand the two-lane Highway 41 near Riverstone and Tesoro Viejo, where daily rush-hour congestion makes obvious the need to improve the state road.
That's a large price tag in a county where many are skeptical of how road work funding generated by their Measure T sales tax dollars has been administered in the past.
So, who is footing the bill to improve the state route near Madera County's growing master-planned communities?
'At the end of the day, those improvements are largely going to be borne by the homes that are being built down there,' Madera County District 5 Supervisor Bobby Macaulay told The Bee.
The county explained to The Bee how it intends to finance the Highway 41 improvements. The plan does not include any tax dollars from the 0.5% Measure T sales tax voters renewed in November, according to county officials.
Development road impact fees and property tax increments generated by the Tesoro Viejo and Riverstone enhanced infrastructure financing districts will ultimately provide the majority of the funding. The rest will come from state and federal grants.
Construction on the improvements — led by the county, not Caltrans — is expected to begin early next year. It will widen the highway to four lanes between avenues 10 1/2 and 15, and also add more turning lanes at the major intersections of the four-mile stretch.
At $56.4 million, revenues from the road impact fees that Madera County charges developers make up 38% of the Highway 41 improvement funding.
The county's Code of Ordinances says developers are charged $24,179 per single-family home they build in southeast Madera County. In the past year, Treber said, the county has collected an average of 'close to $2 million a month' from developers in road impact fees.
A federal Transportation Infrastructure Finance and Innovation Act (TIFIA) loan is expected to provide 24% of the funding, or $36 million, for the Highway 41 improvements. This loan has been approved for the county, but its amount will be determined based on the actual bid price of the project. If necessary, the loan can fund up to 33% of the Highway 41 project.
The county has also obtained a $25 million federal RURAL grant, which will fund an expected 17% of the project. Madera County has also applied for a $25 million grant from the state's Local Partnership Program, which would fund another 17% of the project.
Awards for this competitive grant will be announced in June. Treber said the county is confident it will receive the award, but it can use more of the developer road impact fee funding and the federal loan if it does not obtain this grant.
The county has also obtained $1.9 million in congressional discretionary funding from Rep. Jim Costa, D-Fresno, which will provide 1% of the funding for this project. The last $3.9 million of the project's funding, or 3%, will come from the property tax increments already generated by the Riverstone and Tesoro Viejo enhanced infrastructure financing districts, known as EIFDs.
The county established these two EIFDs in 2018 with the intention of funding parks and Highway 41 improvements. The districts are funded by 25% of the annual increase in county property tax revenue that is generated by development within Riverstone and Tesoro Viejo. Property tax revenues increase when development occurs because development on a property raises its assessed values.
'The homeowners aren't seeing an increase in their taxes,' Treber said. 'It's simply taking that incremental increase from vacant agricultural land into urban development and carving out 25% of that to fund regional infrastructure projects, primarily (Highway) 41.'
The EIFDs will also repay the federal TIFIA loan the county is borrowing to fund the Highway 41 improvements.
The funding generated by the EIFDs 'increases every year as more homes and more development occurs,' Treber said.
The Highway 41 improvements come as Riverstone and Tesoro Viejo continue to add residents to Rio Mesa, the southeastern area of Madera County planned to one day be home to 100,000 people and 30,000 homes.
But Treber said the Highway 41 expansion is not solely for the benefit of Riverstone and Tesoro Viejo.
'It's benefiting all of our residents that live on the 41 corridor, that commute down into the Valley every day,' he said.
Macaulay, the District 5 county supervisor, also noted that over 1 million vehicles travel Madera County's stretch of Highway 41 each year on their way to Bass Lake and Yosemite National Park's southern gate.
'Beyond that, residents up in the mountain communities often have to travel to Fresno for work, as well as goods and services that they need,' Macaulay said. 'We're all using that road.'
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