High-Speed Rail's Future Looking Dodgy in California

Two rulings by a Sacramento Superior Court judge Monday left the future of California's high-speed rail project hanging in the balance.

Florida gubernatorial candidate Charlie Crist, who has promised to revisit high-speed rail if elected, might want to take notice.

The Huffington Post and Innovation NewsBriefs' Ken Orski both have the story.

"The judge's ruling will prevent the [California High-Speed Rail] Authority from spending bond measure funds for construction until the funding plan is brought into compliance," said Michael Brady co-lead attorney on the case. But because that would require finding at least $25 billion in extra funds, Brady believes compliance seems "virtually impossible."

"They need to step back and rethink their whole approach," added co-lead attorney Stuart Flashman.

The authority?'s chairman, Dan Richard, tried to cast the court decision in a more positive light. "The judge did not invalidate the bonds as approved by the voters," he said. "Like all transformative projects, we understand that there will be many challenges that will be addressed as we go forward in building the nation'?s first high-speed rail system."

The court rulings are the culmination of prolonged litigation. It began two years ago when two aggrieved individuals, farmer John Tos and homeowner Aaron Fukuda, joined King's County Board of Supervisors in filing a lawsuit asserting that the authority failed to comply with certain statutory requirements in its 2011 funding plan.

According to Orski's latest transportation news item, oral arguments were held May 31 and on Aug. 16, after which Judge Michael Kenny ruled that the authority failed to comply with the requirements of Proposition 1A in two fundamental respects:

(1) It was unable to certify completion of all the environmental clearances for the 300-mile Initial Operating Segment (IOS) extending from Merced to San Fernando Valley. (To date, only a 29-mile stretch of initial construction from Merced to Fresno has been examined); and

(2) It was unable to identify "reasonably expected" sources of funds required to complete the Initial Operating Segment. (See Orski's column, "A Major Court Rebuke for the California Bullet Train," Aug. 20, 2013.)

As to the second defect, the authority estimates that the Initial Operating Segment (IOS) will cost about $31.5 billion. It currently has only about 20 percent of that amount, or $6 billion -- $3.25 million in federal funds and $2.7 million in Proposition 1A bond funds appropriated to match the federal funds.

All of this and more should give the federal government pause and cause it to reconsider whether to put more of its money at risk, say William Grindley and William Warren, independent analysts and authors of 38 reports on the high-speed rail project.

"The Federal Rail Administration'?s oversight of the authority?'s actions appears short of legal due diligence. By binding itself to and funding the authority'?s action the FRA has become party to those actions. ... FRA'?s legal position seems cloudy at best," the two analysts wrote in a recent briefing paper, "DOT/FRA Has Several Reasons to Withhold Further Funding from California's High-Speed Rail Project," November 2013.

Whatever the ultimate consequences of the two court rulings, their impact on public opinion and on the confidence of the financial community in the project'?s fiscal integrity are unquestionable, writes Orski.