Rail foes seek to bar spending on project | September 25, 2013 | Almanac | Almanac Online |


News - September 25, 2013

Rail foes seek to bar spending on project

by Gennady Sheyner

After scoring a victory in a Sacramento court last month, opponents of California's proposed high-speed rail system are now asking the judge to bar the agency responsible for the line from spending any money on the $68 billion project until a new business plan is in place.

Stuart Flashman and Michael Brady, attorneys for plaintiffs in the latest lawsuit against the California High-Speed Rail Authority, last week filed proposed "remedies" in response to an Aug. 16 decision from Sacramento County Superior Court Judge Michael Kenny. The judge concurred with the plaintiff's argument that the rail authority violated the law when it adopted a business plan that identifies funding sources for only the first 140-mile construction segment of the San Francisco-to-Los Angeles line.

Proposition 1A, which the voters approved in 2008 and which allocates $9 billion in state funds for high-speed rail, requires the rail authority to identify funds for the fist "initial operating segment" of the line before commencing construction.

Mr. Flashman, who represented Menlo Park, Atherton and Palo Alto in prior lawsuits against the rail authority, is now representing Central Valley plaintiffs John Tos, Aaron Fukuda and Kings County.

As part of the proposed remedy, which the court will consider on Nov. 8, Mr. Flashman and Mr. Brady are asking the court to require the rail authority to set aside its 2011 business plan and return with an updated version that identifies funding for the initial usable segment, as required by law. Until that happens, the rail authority would be barred from approving construction contracts or expending any portion of the $2.6 billion in Prop. 1A funds that legislators approved last year.

In addition, the rail authority would be restrained from spending the $3.3 billion in federal funds it received last year for the first segment of the rail line.

The plaintiffs also are calling for the rail authority to provide, within 30 days, a "full and complete accounting of its use of Proposition 1A bond funds, including its past expenditures of such funds, its current commitments to future expenditures of such funds, and its plans for committing or expending such funds during the next two years," the attorneys' brief states.

The November decision will come at a critical time for the rail authority, which is now preparing to start construction on the first set of tracks, between Fresno and Bakersfield. Under its preferred alternative, the segment would later be stretched south to San Fernando, culminating in the first "initial operating segment." After Judge Kenny's ruling last month, rail officials said they plan to proceed with their construction plans until the litigation concludes.

In their opening brief on remedies, Mr. Flashman and Mr. Brady argue that the bill authorizing Proposition 1A "added a series of taxpayer protections to the bill" and that these protections should be respected. The Legislature "did this in recognition of the need to assure the voters that the money they were being asked to authorize would be used wisely."

"As the Court has already ruled, Respondent violated those provisions by issuing a funding plan that did not comply with Proposition 1A's requirements for adequate funding and prior environmental clearance for the usable segment to be constructed with bond funds," Mr. Flashman wrote. "The question of remedy is therefore key to assuring that the promises made to the voters remain meaningful."


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