Briefing Report: Kings County Sues High Speed Rail Authority

Wednesday, January 18, 2012

Is High Speed Rail the Old 97? (The Wreck of Old 97 American folk song)
“Well they gave him his orders at Monroe Virginia sayin' Steve you're way behind time This is not 38 this is old 97 you must put her into Spencer on time.”

On November 14, 2011, the County of Kings and two of its residents filed suit in Sacramento County Superior Court against the California High Speed Rail Authority (CHSRA) and numerous other defendants. The defendants are principally persons and agents of the State who, under Proposition 1A (Prop 1A), have a voice and decision-making authority on whether bond funds under Prop 1A should be allowed to be used for the purported Central Valley High Speed Rail (CHSR) project and to authorize release of said funds to CHSRA for the purpose of constructing a purported HSR system in the Central Valley of California.

Plaintiffs allege generally that the Central Valley high speed rail project’s Merced to Bakersfield segment (Central Valley HSR project) is not eligible to receive financial support from Prop 1A  bond funds and that it would be illegal under Prop 1A to disburse or distribute Prop 1A bond funds to the CHSRA for the purpose of constructing a purported HSR system in the Central Valley. They seek in this action to have the court declare that such use of Prop 1A funds would be illegal and that all defendants must be prevented from doing so.

They assert that the voters of the State of California, in passing Prop 1A, never intended that Prop 1A's $9 billion in bond construction funds would be used for anything less than a true HSR electrified system, as such; the voters specifically never intended that Prop 1A bond funds would be used "preliminarily" to build a non-electrified substantially "conventional" rail system, with an electrified HSR system to be constructed at a later period. No such allowance or permission for such a so-called phased system is provided in Prop 1A.

Plaintiffs assert that CHSRA intends to use Prop 1A bond funds for the purpose of building initially a non-electrified rail segment/system, preliminary to, actual construction of an electrified HSR system. They additionally contend that the use of Prop 1A bond funds for those purposes for preliminary construction of what is a non-electrified rail segment, and which does not contain all the components of a true HSR system, as such, is illegal under, and violates, Prop 1A.

County of Kings and the other plaintiffs allege that unless the defendants are prevented from obtaining access to Prop 1A bond funds, these funds will be exhausted and spent on constructing a non-electrified rail system that is substantially conventional in nature. Building a conventional system as "preliminary" to a true HSR electrified system has always been the intent of defendants, including defendant CHSRA; such a conventional system may be permitted under federal law and the applicable federal statute, since such a conventional non-electrified and non-HSR system may have "independent utility" under federal law.  However, no such concept of "independent utility" exists under Prop 1A, which is more restrictive than federal law and which predated federal law and was not enacted to mirror federal law. They conclude that Prop 1A absolutely requires that Prop 1A bond funds be spent to construct, from the outset, an electrified HSR system with all the components required for a high speed rail system.

The plaintiffs have asked the court to declare that: (1) the purported HSR project in the Central Valley is not eligible to receive funding/financial support from the $9 billion bond fund established by Prop 1A; (2) it would be illegal under Prop 1A to disburse Prop 1A bond funds to CHSRA to be used in construction of the purported HSR project in the Central Valley; (3) it would be illegal for any of the defendants to disburse or provide Prop 1A bond funds to CHSRA for the purpose of using such funds for the construction of the purported HSR project in the Central Valley.

Interestingly, the allegations of the lawsuit gained credence from a recently released study required by Prop 1A.  Prop 1A requires that a peer review group study the CHSRA plans before funding.  The peer group reviewed the Central Valley plan and issued its report January 3, 2012.  They raised serious doubts about almost every aspect of the project and concluded that the current plan "is not financially feasible." As a result, the panel said, it "cannot at this time recommend that the Legislature approve the appropriation of bond proceeds for this project."

Additionally, Prop 1A required that the CHSRA plan include and certify to the following: “The corridor or usable segment thereof would be suitable and ready for high-speed train operation.”  Streets and Highways Code, sec. 2704.08 (c)(2)(H).   However, the plan for the Central Valley segment explicitly uses normal trains not high speed equipment.  It is hard to see how a conventional train line fulfills the language and intent on Prop 1A.

Another important requirement is that “the authority has completed all necessary project level environmental clearances necessary to proceed to construction.”  Streets and Highways Code, sec. 2704.08 (c)(2)(K).  On November 10, 2011, Judge Michael P. Kenney, of the Sacramento Superior Court, ruled that the entire environmental impact report from San Francisco to Merced which embraces the area where CHSRA has chosen to build its "usable segment" was to be decertified and has to be recirculated.[1] Plaintiffs assert that this order means that the environmental work in the exact area where construction is proposed has to start over and is not completed. Plaintiffs conclude that the funding plan approved on November 3 by CHSRA is therefore invalid by the terms of Prop 1A.

The CHSRA appears to be bound and determined to go full throttle ahead with the Central Valley segment.  This is unfortunate.  Previous briefing reports published by the Senate Republican Policy Office have detailed the financial and practical difficulties with the high speed rail project as it has been presented to the public and correctly so. Those prior reports can be found at the following links:

The recent County of Kings lawsuit also illustrates that the CHSRA may also be ignoring the law, which gave it its very existence.  Although the lawsuit is in the earliest stage of development and it is too early to say how it will end, it provides another way of looking at how the CHSRA operates.  Following this lawsuit will be interesting.

1 See Town of Atherton, et al. v. CHSRA, et al, Sacramento 26 Superior Court Action No. 34-2008-80000022-CU-WM-GDS.

 

For more information on this report or other Judiciary issues, contact Mike Petersen, Senate Republican Office of Policy at 916/651-1501.