Pleasanton Weekly

Opinion - December 13, 2013

Rulings deal financial blow to high-speed rail

California's proposed high-speed-rail system ran into a legal barrier last month when a Sacramento judge ruled that the funding plan for the $68 billion project must be rescinded and refused to endorse the selling of bonds for the project. The two rulings by Sacramento Superior Court Judge Michael Kenny dealt what opponents of the project described as "dual body-blows" to the California High Speed Rail Authority, which is charged with building the rail line between San Francisco and Los Angeles.

According to an article by Gennady Sheyner of our sister paper, the Palo Alto Weekly, the project received a major boost in 2008, when state voters approved a $9.95 billion bond for the project, and another one in July 2012, when the state Legislature authorized spending the first $2.7 billion from this bond, as well as $3.2 billion in federal grants, on the line's first segment. But the recent rulings, spurred by a lawsuit from Central Valley, threaten to halt the project in its tracks.

One of them orders the rail authority to rescind the 2011 business plan that the Legislature had relied on to authorize the funds for the first segment of the line, a 130-mile stretch between Fresno and Bakersfield. In late August, Kenny ruled that the business plan violated state law because it only listed the available funds for this $6 billion "construction segment," rather than the first segment that could actually be used, as required by law. The first usable segment would cost more than $20 billion under current estimates and would stretch either from Bakersfield to San Jose or from Merced to San Fernando Valley.

The rulings came in response to a lawsuit from Central Valley plaintiffs John Tos and Aaron Fukuda and Kings County, represented by attorney Stuart Flashman. There was also a request from the rail authority to "validate" the issuance of more than $8 billion in bonds. In both cases, Kenny sided with opponents of the rail project, though in some cases he didn't go as far as the plaintiffs had hoped. He declined, for instance, to order the rail authority to rescind its existing two contracts for the construction of the first segment, which total about $1.1 billion. He also did not challenge the rail authority's ability to spend the federal funds, despite arguments from Flashman that doing so would commit future expenditure of "matching funds" from the state.

Rail authority Chair Dan Richard said in a statement that the agency is "reviewing both decisions to chart our next steps" and stressed that the judge did not invalidate the bonds and that the court "again declined the opposition's request to stop the high-speed-rail project from moving forward." Even so, the rulings could delay, if not derail, a project that has become hugely unpopular in various parts of the state, including sections of the Peninsula, and earlier in Pleasanton where a plan to have the train pass nearby brought strong, and successful opposition.

But the high-speed-rail plan continues to garner the support of Gov. Jerry Brown. Last year's funding allocation came by a single vote in the state Senate, with several Democrats joining every Republican in opposition. Flashman called last month's rulings major roadblocks. "If you're the captain of the Titanic and you've just been hit by two icebergs, what do you do?" he asked. "It seems like what (rail authority board Chair) Dan Richard is saying is, 'Full speed ahead!'"

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