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Judge Rules California High-Speed Rail Plan Violates Initiative

SACRAMENTO (CBS / AP) -- A Sacramento County judge dealt a major blow to California's high-speed rail project Friday, ruling that the agency overseeing the bullet train failed to comply with the financial and environmental promises made to voters when they approved initial funding for the project five years ago.

Superior Court Judge Michael Kenny said the California High-Speed Rail Authority "abused its discretion by approving a funding plan that did not comply with the requirements of the law" and has failed to identify "sources of funds that were more than merely theoretically possible."

Yet he declined to immediately halt funding for the project, saying it was not clear that he had the discretion to do so and he will hold another hearing to determine what happens next. A date has not yet been set.

Judge Rules High-Speed Rail Violates Initiative

The 2008 initiative, Proposition 1A, required the rail authority to specify where the funding would come from for the first operable segment of high-speed rail and have all the environmental clearances in place. Kenny said the agency did not comply with either of those mandates, but Proposition 1A appears to leave it up to lawmakers to decide whether the funding plan is sufficient to warrant funding.

The office of Gov. Jerry Brown, who has championed the project, directed inquiries to the rail authority. Dan Richard, the Brown-appointed chairman of the authority's board, said work on the project will continue until the judge determines the remedy.

In the meantime, he said the Legislature's financial appropriation remains valid.

"We take our commitment to Proposition 1A seriously and continue to work towards developing a high-speed rail project that benefits all Californians," he said in a statement to The Associated Press.

Central Valley landowners and the Kings County Board of Supervisors argued in their 2011 lawsuit that the $68 billion high-speed rail plan did not meet the promises made to voters when they approved selling $10 billion in bonds for it.

However, the lawsuit was filed in 2011, before the authority revised its business plan to scale back the cost and revise the planned routes, and high-speed rail officials believe many of the arguments made in court no longer apply to the project.

Still, the rail authority has only received environmental approval for the first 28-mile section of track and was scheduled to begin construction on that segment in late summer.

Proposition 1A required the agency to identify funding for the entire first segment of the project and clear all environmental hurdles before starting construction. The high-speed rail authority had argued that those requirements applied only to the first 130 miles from Madera to Fresno.

Lawmakers last summer authorized selling $2.6 billion in state bonds for construction of that first segment, allowing the state to tap $3.3 billion in federal matching funds. That is just a fraction of the eventual financing needed to link Northern and Southern California by high-speed train.

Officials have said they intend to first spend $3.3 billion in federal money before tapping the bonds. The federal money, part of President Barack Obama's stimulus package, is contingent upon California completing the first phase of the project by 2017, requiring what officials say would be an unprecedented construction pace.

The judge said the plain language in the initiative indicates that financing and environmental clearances should be completed for the first 290 miles from Merced to the San Fernando Valley, which is estimated to cost anywhere from $24 billion to $31 billion.

"The judge indicated that they really had to have the funding for the entire IOS (initial operating segment) that they picked, and that's $31 billion," said Mike Brady, an attorney for the plaintiffs. "They only have $6 billion of the $31 billion, so that's going to be a pretty big hurdle, I think."

Aaron Fukuda of Hanford, one of the landowners who also was a plaintiff, said the judge's ruling was vindication of the concerns raised by regular people.

"To have a judge finally validate those concerns, it's completely uplifting," he said.

Building the bullet train is among the highest priorities for the Democratic governor, who has sought to promote the project as a long-term investment in the state's transportation network and a way to address serious pollution in the Central Valley. His other major infrastructure project is a $25 billion twin tunnel system that would ship water through the Central Valley to Southern California.

Deputy Attorney General Michele Inan, who represented the rail authority in court, had argued that lawmakers who evaluated the business plan determined that the funding identified to date "was sufficient for the state to take the risk to invest an initial sum of money."

(Copyright 2013 by CBS San Francisco. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)

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