Analysis: HSR funding plan in serious jeopardy

Judge's ruling suggests that proposal is doomed until state can secure more money
2013-08-20T14:00:00Z 2013-11-25T16:32:17Z Analysis: HSR funding plan in serious jeopardyBy Seth Nidever Hanford Sentinel
August 20, 2013 2:00 pm  • 

HANFORD — If you are one of the people who voted on Proposition 1A — the 2008 ballot measure that approved $10 billion in taxpayer-funded bonds to build a California high-speed rail system — then you are affected by a key court ruling last week.

Why? Because Sacramento County Superior Court Judge Michael Kenny ruled that the California High-Speed Rail Authority’s business plan violates key language in the proposition stating how the $68 billion bullet-train network should be built.

Typically, supporters of high-speed rail have claimed the mantle of Prop. 1A to argue that the public voted for high speed rail in 2008, and therefore the project should go forward despite criticism.

But Kenny’s ruling, being celebrated as a victory by Kings County officials who filed the lawsuit in 2011, says that the Authority violated specific requirements in Prop. 1A requiring that all funding sources be identified before ground breaks on the initial operating segment.

The idea was to protect taxpayers from money being wasted on a project that doesn’t have the financing to make it to the finish line.

The key conclusion in Kenny’s 16-page ruling, issued Friday, is that the Authority doesn’t have the money and is out of compliance with Prop. 1A.

How far out of compliance? The first operating segment, planned to whisk passengers from Merced to Los Angeles, is estimated to cost $26 billion. The Authority has only $6 billion in federal and state funding in hand — barely enough to build an end-to-end piece of tracks and other infrastructure from Madera to a point north of Bakersfield.

There’s no expectation of any additional federal money in the foreseeable future.

“There is, in reality, no reasonably anticipated time of receipt for any of the potential new federal funds described in the [Authority’s] funding plan and the 2012 draft business plan, and that there are no expected commitments, authorizations, agreements, allocations, or other means of actually receiving such funds,” Kenny said.

“The people did not want to let this [project] get out of control the way a lot of other projects the state creates do,” said Kings County Counsel Colleen Carlson, who is one of the attorney’s representing Kings County in the lawsuit.

Authority officials say they are proceeding full steam ahead with the project regardless of Kenny’s decision. But that doesn’t seem likely to pass muster, since the same funding shortages the Authority faced in 2011 plague the project today.

The only question now is what “fix” Kenny might settle on to address the problem.

Kings County officials and co-plaintiffs Aaron Fukuda and John Tos will likely ask for a moratorium on planned construction this year north of Fresno until the Authority can identify $26 billion in funding. That would prevent any construction activity across Kings County fields and dairies until the Authority can guarantee that the result will be a functional system.

Kenny argued that a remedy, if it is to have any real impact, would have to either rescind the state Legislature’s appropriation of $4.5 billion in bond funds for the project last year or invalidate other funding decisions.

“A writ will not issue to enforce a mere abstract right, without any substantial or practical benefit to the petitioner,” Kenny wrote.

Kenny directed the Authority and Kings County to submit arguments, pro and con, for what the remedy should be.

No hearing date has been set.

But one thing is already clear from Kenny’s decision. If voters pass a proposition authorizing a state infrastructure project, the state has to follow the proposition’s language.

The reporter can be reached at 583-2432 or snidever@hanfordsentinel.com.

Copyright 2016 Hanford Sentinel. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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