Nov 2013

Judge's decision also endangers $3.3 billion in federal funds

Great press coverage:
Judge's decision also endangers $3.3 billion in federal funds
California high-speed rail plans stopped in tracks
High-speed rail financing struck down by judge, project in jeopardy
Bullet train snag could affect Transbay Terminal
Sacramento judge's ruling throws bullet train's future in doubt
Locals Participated in High-Speed Rail Court Case
EDITORIAL: Pump the brakes on ‘bullet’ train
Dan Walters: High-Speed Rail 'blended system' may help derail it: It’s time for a backspace-delete. Brown should acknowledge that the project as now planned is doomed and either kill it or go back to the voters with a revision that includes realistic routes and costs and lays out how it will be financed.
“If it's worth doing -- a debatable point -- it's worth doing right and not with legal sleight-of-hand and pie-in-the-sky financing.”

Famous Last Words Department:
High speed rail chief says lawsuits won't stop project: Jeff Morales, Californiaʼs high speed rail chief, says heʼs confident lawsuits filed by South Valley local officials will not stop the project.

Best British Understatement Department:
The Economist: California’s high-speed rail authority emphasised what the judge did not do, telling reporters it was "important to stress" that Mr Kenny did not cancel the project altogether. But if that is a victory, it is not clear how many more wins California high-speed rail can handle.”

TRAC Proposes Plan B for HSR

In the wake of the collapse of the Central Valley project, the Train Riders Association of California has issued its Plan B for High-Speed Rail:

1. The Train Riders Association of California (TRAC) strongly supports a modern High-Speed Rail (HSR) system for California. HSR will be critical in providing interregional mobility to a growing population at a lower environmental impact than widening highways and adding runways. Successful HSR should greatly benefit the economy.

2. Even if the currently proposed $6 billion Merced-Bakersfield project were successfully completed, no funding is available to build the rest of the HSR system. This would leave this very expensive track unused and unusable, except perhaps by Amtrak to save a few minutes on the San Joaquins.

3. Funding is a problem because the California High Speed Rail Authority's plans are not attractive to private investors. The Authority hopes that $26 billion of federal grants will lead to private investment, but the Sacramento Superior Court ruling found that “there is, in reality, no reasonably anticipated time of receipt for any of the potential new federal funds."

4. TRAC is grateful for the Sacramento Superior Court's ruling that the Authority's project does not meet the taxpayer protection requirements of the 2008 voter-approved HSR bond measure, Proposition 1A. Preventing the current project from spending bond funds illegally will preserve the potential for successful HSR in California.


Mercury News Editorial Pronounces Death of HSR Project

The Mercury News published the editorial below on the Court’s rulings. Note the sentence in bold on the Read More page.

Mercury News editorial: High-Speed Rail ruling is right on

A Superior Court judge Monday slowed the California bullet train boondoggle to a crawl.

It's about time. For more than two years, Gov. Jerry Brown and his puppet leading the California High-Speed Rail Authority board, Dan Richard, have overstepped their legal authority and disregarded the will of the voters by pushing ahead full-throttle.

Judge Michael Kenny had ruled in August that the authority "abused its discretion" by failing to secure funds and complete environmental reviews before authorizing expenditures.

This week, he sent the project back to the start by blocking the authority from implementing its 2011 spending plan and refusing to provide necessary legal blessing to the misguided issuance of $8.6 billion of construction bonds.

By any reasonable interpretation, this should put an end to Brown and Richard's bait-and-switch. But, when it comes to high-speed rail, those two aren't reasonable.

In a statement issued after the ruling, Richard tried to deceptively spin what the judge had said. True, as Richard notes, the judge did not stop the project. Rather he left it with no funding plan and the inability to borrow money.

Court Delivers Dual Body-Blows to High-Speed Rail Project

Judge Michael Kenny of the Sacramento Superior Court placed two major roadblocks today in front of the California High-Speed Rail Authority's Central Valley project. The judge had ruled back in August that the Authority's funding plan for the project had not complied with the requirements of the Proposition 1A High-Speed Rail bond measure. His ruling today will prevent the Authority's project from spending bond measure funds for construction until the funding plan is brought into compliance. Because that would require finding at least $26 billion in grants, compliance seems virtually impossible.

In addition, the judge declined today to validate the issuance of High-Speed Rail bonds. The Authority had sought validation, a legal maneuver to protect bond investors from lawsuits challenging the issuance of bonds. Without validation, state Treasurer Bill Lockyer will not allow bonds to be issued, putting the future of the project even more in doubt. With today's ruling on non-compliance with 1A, it is questionable whether the requirements to authorize selling bonds can be met.

The Authority had assured the Court that it would be spending only federal funds to start construction, and that no state bond funds would be used on the project. However, because the federal funds must be matched with state funds, today's rulings mean that state bond funds will not be available to provide that match. That could cause the federal government to rethink whether to put its funds at risk. If the federal government withholds its funds, the project will never break ground.

New HSR Briefs Filed

A Reply Brief by the HSR Authority was filed in the Validation Suit, prior to the hearing held on September 27. Validation briefs are available here.

The Authority asserted at the very last moment in the
Atherton appeal that the Surface Transportation Board’s assertion of jurisdiction over the HSR project has resulted in the federal preemption of CEQA. The Authority is asking that the appeal be dismissed, because it claims that CEQA cannot be enforced. These claims have led to the filing of amicus briefs by prominent environmental organizations. Briefs in the Atherton appeal are available here.

Taxpayer Lawsuit
A series of briefs were filed in the
Tos case which dealt with proposed remedies for the violation of the requirements of Proposition 1A. Plaintiffs have asked that funds for the HSR project be shut off by the Court. Amicus briefs supported that proposal. The Authority’s Opposition Brief in effect claimed that no remedy was needed or even possible, as the construction contracts under way would be fully paid for using federal funds. Plaintiffs filed a devastating Reply Brief which proved that most of the federal funds could not even be used for the two contracts. It must have been extremely embarrassing for the HSR Authority. Read More...