Judge Puts Two Roadblocks in the Way of High-Speed Rail Project

Tuesday, November 26, 2013

A state judge issued two rulings Monday that did not stop the state’s high-speed rail project dead in its tracks, but he did load it up without enough baggage to seriously impair its movement forward.

Sacramento County Superior Court Judge Michael P. Kenny barred the state from selling $9 billion in rail bonds approved by voters in November 2008 because the California High-Speed Rail Authority’s finance committee failed to explain its reasons for authorizing the offering. Kenny said the agency was tasked by the voters, when they passed Proposition 1A, to make its decisions independent of other public officials, but instead parroted their rationale for the bonds as simply being “necessary and desirable.”

The Los Angeles Times said it may be the first time in the state’s history that a judge refused to validate a bond sale.

He also ordered the state to come up with a new strategy for raising the estimated $68 billion needed to complete the system. The law required that the state know where it was going to get a significant amount of the money before it started, but the present plan is already tens of millions of dollars shy of financing just the first leg. Kenny wants the old plan rescinded and a new one drawn up.

That could take years.

When voters approved the project, their was hope that the federal government would pick up a big chunk of the cost. President Barack Obama had encouraged states to initiate big-ticket construction projects that would shore up the nation’s tottering infrastructure, move the country into the 21st Century, stimulate the foundering economy and put people to work.

But the stimulus money needed to make that happen was tied up in Congress after a short burst of energy at the outset. The independent state Legislative Analyst’s Office warned in 2011 that additional funding assumed in a 2009 business plan was “highly uncertain” and, more specifically, “Federal funding assumptions appear unrealistic.”

Either of the judge’s legal decisions could prove to be a death knell for the bullet train, slated to run from the Sacramento-Bay Area to San Diego, with stops in Los Angeles along the way. Opponents were gleeful.

“We are ecstatic about this ruling,” Jon Coupal, president of the Howard Jarvis Taxpayers Association, told Bloomberg. “The high-speed rail project is derailed.”

Some supporters did not think that was the case, but recognized the rulings’ negative effect. “This does not jeopardize the project. It will cause delay and it will cost more money,” Rod Diridon, chairman emeritus of the rail authority, told the publication. Dan Richard, chairman of the rail authority’s board, looked on the bright side. “The judge did not invalidate the bonds as approved by the voters.”

The state has already authorized spending $2.6 billion of bond money, which qualified it to receive $3.3 billion in federal funds. Tutor Perini Corp., Zachary Construction Corp. and Parsons Corp. have been hired to begin work on designing and building the first 28 miles, but work is already a year behind schedule. The judge did not halt that work.

The first segment is scheduled to run 130 miles through the Central Valley. Eventually, the 200-mile-per-hour train would ideally whisk passengers from San Francisco to Los Angeles in less than three hours by 2029. Additional track to Sacramento and San Diego would encompass an 800-mile system with 24 trains running.

–Ken Broder  


To Learn More:

Court Rulings Hinder California’s Bullet Train (by Eric Young, San Francisco Business Times)

California High-Speed Rail Plans Stopped in Tracks (by Melody Gutierrez, San Francisco Chronicle)

California High-Speed Rail Bond Sale Rejected by Judge (by Karen Gullo and Michael B. Marois, Bloomberg)

Sacramento Judge's Ruling Throws Bullet Train's Future in Doubt (by Ralph Vartabedian, Los Angeles Times)

Judge Rules Bullet-Train Violates the Ballot Initiative that Created It (by Ken Broder, AllGov California)

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