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Kings County To Appeal HSR Ruling To State Supreme Court

Rail Authority In No Hurry To Sell Bonds

August 7,2014
Screen Shot 2014-07-15 at 8.35.59 AMCalifornia’s Third District Court of Appeal reversed a Superior Court ruling last week that has, to date, halted the sale of Prop 1A state bonds to finance the bullet train. The court decision was a blow to litigants from Kings County who vehemently oppose the project.

Now Kings County staff attorney Colleen Carlson says a decision was made Tuesday by the Board Of Supervisors to appeal portions of the ruling to the California Supreme Court.

The appeal court ruled July 31 on two cases brought by both residents and the county itself that include use of Prop 1A funds as well as the validation issue ruling in favor of the rail Authority in both cases.

Opponents had argued the state was required to show where all of the money to pay for the $68 million project would come from before it begins construction but the three member panel unanimously rejected that line of argument.

“Contrary to the trial court’s determination, the High-Speed Passenger Train Finance Committee properly found that issuance of bonds for the project was necessary or desirable.” In addition the court found that “further challenges
by real parties in interest to these of bond proceeds are premature.”

Translation – the sale of the bonds can move forward.

No Hurry

With court approval to begin the sale of $8.2 million in bond money at hand the state Department of Finance who will oversee their sale says nevertheless, there is no hurry to begin the borrowing process ”until we need it” says the state agency representative HD Palmer.

“The rail Authority has sufficient funds through the 2014/15 fiscal year (about a year from now) to carry out all land acquisition and construction projects planned in the Central Valley.” The state funds will also provide the required match to federal monies.The Authority will be using a combination of federal funds and state Cap and Trade funds ($250 million annually) approved by the legislature earlier this year.

Voters approved the bonds for the state’s largest public works project in 2008 but the sale of the bonds has been put in limbo until the recent appeal court ruling – now itself being appealed to the state’s highest court.

CHSRA says they have enough federal monies as well as state Cap and Trade funding to move forward on construction of the first leg of the project from Fresno north (just underway last month) as well as right of way purchases and design work for the second and third segments south of Fresno, into Kings and Tulare County.

The California Supreme Court ordered the Third District Court of Appeal to undertake an expedited review of two trial court rulings  that question the financing plan for California’s High-Speed Rail project. A petition filed by Governor Brown in late January asked the Supreme Court to overturn the two lower court rulings. But instead the Supreme Court asked the Court of Appeal to make a decision asking it  “expedite its consideration of this matter” with claims by the state that further delay puts at risk pledged federal monies.Now that court has ruled.

Arguing For Flexibility

While opponents made the argument that the original plan passed by voters has changed, the appeal court seemed to favor a flexible approach, citing another case.

“In fact,the Supreme Court has allowed substantial deviation between the preliminary plans submitted to the voters and the eventual final project, admonishing: “[T]he authority to issue bonds is not so bound up with the preliminary plans as to sources of supply upon which the estimate is based that the proceeds of a valid issue of bonds can not be used to carry out a modified plan if the change is deemed advantageous.”

More Of A Win?

Despite the setback Kings County Counsel Carlson said after “reading the 49 page decision we are looking at it as more of a win than at first.” Carlson says the Authority can’t spend Prop 1 money on construction until all their ducks are in a row” even though the appeal court said challenges to plans to spend money are not yet timely and the rail board can finalize their specif plan and not have to redo it.

Kings County has several other complaints pending including an appeal to the California Supreme Court of a trial court ruling that allowed the rail authority to begin seismic testing along the right of way.

In addition the county was among those who have now filed a lawsuit  under CEQA alleging the EIR done on the second leg of the rail route through Kings County is inadequate.

“To date the Authority has not provided a clear and stable funding plan that would indicate that a true high-speed rail project can be completed and that all mitigation measures can be funded. Shrouded in the lack of transparency, lack of funding, and lack of accountability, we believe that the Authority will be unable to complete any functional rail project, let alone a high-speed one.” says a news release from the Kings County group.

Also another Prop1A suit is pending in front of the the Sacramento Superior Court.

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