Politics & Government

Judge looks for a remedy to California’s defective high-speed rail funding plan

Now that he’s found the state’s high-speed rail 2011 funding plan to be out of compliance with the voter initiative that got the project out of the roundhouse, a Sacramento Superior Court judge asked Friday what would happen if he just throws out the financing arrangement altogether.

The lawyer for the California High-Speed Rail Authority said the practical effect would basically be nothing.

The lawyer for the plaintiffs who successfully challenged the funding plan generally agreed, though he said its rescission wouldn’t nearly go far enough for his clients, which include Kings County, a homeowner in the train’s path and a big Central Valley grower who wants to kill the project.

Plaintiffs attorney Stuart M. Flashman of Oakland argued that Judge Michael P. Kenny also should erect a roadblock on the planned Los Angeles-to-San-Francisco line. His main concern is that the state has already allocated federal funds in a way that he says violates the fine print of 2008’s voter-approved Proposition 1A.

Kenny asked questions for a little more than an hour, then took the matter of remedies under submission.

Outside the courtroom, one Flashman client, Kings County grower John Tos, who has six ranches that would be affected by the 200-mph rail cars zipping through his fields, said he found the hearing to be “clear as mud.”

Talking to reporters, Tos at least clarified his own goals in participating in the lawsuit.

“I would hope that we would kill the whole plan,” he said. “We have other issues we need to be spending our time and efforts and money (on), such as water. What good is a train going to do if we don’t have any water in this valley?”

High-Speed Rail spokeswoman Lisa Marie Alley responded, “It’s unfortunate there are a handful of people trying to stop the project.”

She said the $68 billion rail plan has gained support from Fresno Mayor Ashley Swearengen and the Visalia City Council. Construction is expected to begin on the project “in the near future,” she said.

Inside the courtroom, Kenny and the state’s attorney who represented the rail authority engaged in a lengthy exchange over the practical effect of the judge’s Aug. 16 ruling in which he said the authority “abused its discretion by approving a funding plan that did not comply with the requirements of law.”

Namely, Kenny said the November 2011 document failed to identify the source of all the money the authority needs to build its “initial operating segment.” The judge ruled the authority also failed to certify that it had completed all of its environmental clearances to proceed with construction.

Asked by Kenny what the consequence would be to the authority if he invalidated the funding plan, Deputy Attorney General Michele Inan said, “There’s no effect to the authority.” The funding plan, she said, is part of the legislative process, and lawmakers in July 2012 allocated $2.6 billion of the $9.95 billion in bond funding voters approved for the rail project.

Kenny then asked her about his finding of non-compliance, to which Inan answered, “Nothing practical happens,” as a result. She said the High-Speed Rail Authority “has an appropriation to build a project.” In response to another question from Kenny, she said the authority is not out of compliance with Proposition 1A, only that “there is a finding that certain of the reporting requirements were not satisfied.” A second funding plan presented to the Legislature led to last year’s $2.6 billion bond appropriation, according to Inan.

“The appropriation controls the direction of the project,” she said.

When Kenny turned to Flashman, the plaintiffs lawyer strongly disputed Inan’s assertion that the Legislature’s appropriation supersedes the initiative’s language that the funding plan has to identify the “sources of all funds to be invested in the corridor, or a usable segment thereof,” to ensure its construction and operation.

“If this was only for the benefit of the Legislature, why did it go on the ballot?” Flashman asked. “The reason it did go on the ballot is because it wasn’t just for the Legislature. It was for the voters. This was to assure the voters the money would be handled responsibly.”

Flashman repeatedly referred to $3.4 billion in federal money that the High-Speed Rail Authority is now using to design the project and buy land. He pleaded with Kenny to issue a writ to stop the authority from spending the Washington money because it will put California on the hook for future obligations.

Inan said the state can’t use its own money until it obtains a bond-validation action that also is pending before Kenny. Until then, she said the state is basically front-loading the project’s financing with the federal cash.