Category Archives: Finances

California High-Speed Rail Summer Highlights, Part 2: Failed Promises

Contrary to the claims of the taxpayer-funded California High-Speed Rail Authority Communications Department, the summer of 2017 was grim for the future of California High-Speed Rail.

Citizens for California High-Speed Rail Accountability (CCHSRA) continually tracks developments (or lack of developments) for this costly, misguided high-speed rail plan. We see several trends ongoing with this project. The second is Failed Promises.

In November 2008, when California voters were considering Proposition 1A to borrow $9.95 billion for California High-Speed Rail, fiscal conservatives warned about the official projections:

California General Election Official Voter Information Guide – Proposition 1A – November 4, 2008

Now, almost nine years later, the truth is being revealed. The project is much more expensive than was claimed:

California Bullet Train Costs Up $1.7 Billion for Central Valley SegmentLos Angeles Times – September 28, 2017

Even board members of the California High-Speed Rail Authority were compelled to ask about cost overruns:

California High-Speed Rail Authority Board Meeting Transcript of Proceedings – September 19, 2017 (also California High-Speed Rail Authority Board Meeting Video – September 19, 2017)

“That my concern and my discomfort level is that while this is short-term cash flow kinds of decisions that need to be made, in the big picture for the public, for our stakeholders where we don’t frankly have a great deal of good will or confidence in us, this sort of shell game of moving money around where we know we’re going to eventually — especially items three and four — we’re eventually going to have to come up with the money that we’re moving around.”

Rail Board Members Question Bullet Train Budget Overruns  – Associated Press – September 20, 2017

And it’s way behind schedule:

High Speed Rail in Valley Was Once Supposed to Be Done by Saturday. Not Even CloseFresno Bee – September 24, 2017

Not that any observers of California High-Speed Rail are surprised their predictions came true:

Why Missed Deadline for California Bullet Train Is No SurpriseSan Diego Union-Tribune – September 30, 2017

Of course, what California High-Speed Rail is today is not what was promised to voters in 2008:

High-Speed Rail Gets Us Stuck in Traffic – California Policy Center – July 24, 2017

Former leading backers of the project are now highly critical, especially former California State Senator Quentin Kopp:

Bogus Bullet TrainSacramento Bee – September 14, 2017

The Politician Behind California High Speed Rail Now Says It’s ‘Almost a Crime’ – Reason Foundation – September 20, 2017

But what can ordinary Californians do? One area where citizens have exposed the California High-Speed Rail Authority concerns its schemes to circumvent environmental review:

California’s Bullet Train Is Likely to Face More Environmental Hurdles After a High Court RulingLos Angeles Times – July 31, 2017

High-Speed Rail Backers Lose Another Round in Court – Los Angeles Times – August 2, 2017

Governor Jerry Brown and the majority party in control of the state legislature are committed to support this project to the end. Citizens have turned to the courts to bring California High-Speed Rail Accountability to the public:

Lawsuit Demands California High-Speed Rail Comply With Voter Intentions – California Policy Center – June 1, 2017

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Confidential Report Says First Construction Segment of California High-Speed Rail May Cost 50% More Than Expected

California's bullet train is hurtling toward a multibillion-dollar overrunSomehow, Los Angeles Times reporter Ralph Vartabedian was able to get a document “for internal use only” that top Federal Railroad Administration officials reportedly gave to top California High-Speed Rail officials at a December 1, 2016 meeting in Washington, D.C. He reported on this “confidential” document today (January 13, 2017): California’s Bullet Train Is Hurtling Toward a Multibillion-Dollar Overrun, a Confidential Federal Report Warns.

This report claims that the Initial Construction Segment of California High-Speed Rail (apparently identified as Merced to Shafter rather than Madera to Shafter) would cost $9.5 billion to $10 billion instead of the assumed $6.4 billion. It also will not be completed until 2024 instead of the planned 2018.

Finally, the report concludes that the California High-Speed Rail Authority may not be able to achieve the conditions required to qualify for federal American Recovery and Reinvestment Act (ARRA) stimulus grants awarded in 2009 and 2010. This means California taxpayers would be alone in paying for it.

Presumably this report only refers to the laying of track in the San Joaquin Valley and does not include electrification. At this time the California High-Speed Rail Authority had not even begun the bidding process toward Construction Package 5 – laying track on the Initial Construction Segment. Contractors for “Construction Package 1” are now working on demolition and civil engineering, including a viaduct near Madera.

Aaron Fukuda, co-chairman of Citizens for California High Speed Rail Accountability (CCHSRA) was a guest on the Ray Appleton Show (with substitute hosts Blake Taylor and Michael Reed) on KMJ News/Talk 580AM/105.9 FM in Fresno on January 13 to talk about the boondoggle. Also calling in to decry the insufficiency of state oversight on the project was California State Senator Andy Vidak. And a statement from California Congressman Jeff Denham criticizing the project was referenced during the show.

This cost overrun and delay is not surprising to Citizens for California High Speed Rail Accountability (CCHSRA). Nor is it surprising that the California High-Speed Rail Authority is downplaying the report. That state agency continues its quest to take land from San Joaquin Valley farmers, homeowners, commercial and industrial businesses, places of worship, non-profit groups, and even homeless shelters. It wants to lock up the land for a time when state tax increases provide enough funding to pay for completion of the San Joaquin Valley track.

What Californians may end up getting for their $10 billion is a winding dedicated track for Amtrak diesel engines to cart passengers between Madera to Shafter. Is this what 53% of California voters envisioned when they voted for Proposition 1A in November 2008?

KMJ Podcast: 2:04:36 Blake Taylor & Michael Reed fill in for Ray Appleton – January 13, 2017

Congressman Jeff Denham: Denham Statement on Latest Report of California High-Speed Rail Overruns – January 13, 2017

State Senator Andy Vidak: Now Governor, Will You Finally Support an Audit of High-Speed Rail? – January 13, 2017

Congressman Kevin McCarthy: Statement on reports that California’s high-speed rail would cost taxpayers 50% more than estimated, or an extra $3.6 billion – January 13, 2017

The Hunt for Dollars to Build the $64-Billion Bullet TrainLos Angeles Times – December 24, 2016

Proposition 53 Has Implications for California High-Speed Rail

Proposition 53 Has Implications for California High-Speed Rail

Governor Jerry Brown and his political allies, led by construction trade unions, have ramped up a major campaign to defeat Proposition 53. This statewide ballot measure could jeopardize future funding prospects for California High-Speed Rail.

Proposition 53, also known as the “No Blank Checks Initiative” would require voter approval for the State of California to sell a total of more than $2 billion worth of revenue bonds for a project. Unlike “general obligation bonds,” which are repaid (with interest) through state income and sales taxes, revenue bonds are repaid (with interest) through fees, fares, tolls, or other payments for services.

The Delta farmer who funded the placement of Proposition 53 on the ballot and is funding the campaign to pass it was mainly inspired by a desire to stop Governor Brown’s controversial “Delta Tunnels” project. But Proposition 53 could also hinder future efforts by the State of California to borrow money for California High-Speed Rail construction and operation.

Voters fed up with the continuing expenses for high-speed rail could potentially reject the sale of revenue bonds and cut off a source of state funding. An effective opposition argument to the sale of revenue bonds for California High-Speed Rail would probably focus on the exaggerated projections of ridership and fare revenue for the high-speed passenger train system.

California High-Speed Rail is frequently mentioned in the news media as a project that could be jeopardized if Proposition 53 passes on November 8. For example, the October 14, 2016 San Francisco Chronicle article about Proposition 53 was titled “Prop. 53 Could Bring Big Projects to a Halt” and featured a frequently-published photo of CCHSRA allies Kevin Dayton and his daughter picketing at the high-speed rail groundbreaking ceremony in Fresno in January 2015.

Besides the farmer who is paying for the Proposition 53 campaign, the Howard Jarvis Taxpayers Association – an ally of CCHSRA – is the main organization supporting it. The argument in favor of Proposition 53 cites California High-Speed Rail as a reason to vote for it:

Proposition 53 will STOP POLITICIANS FROM ISSUING BLANK CHECK DEBT to complete billion dollar state boondoggles. Take California’s bullet train. They told us it would cost California taxpayers $10 billion. Now we know it’s going to cost more than $60 billion! Yet, you don’t have a right to vote on that huge increase!

Leading opponents of Proposition 53 are construction trade unions, which have a monopoly on construction of the California High-Speed Rail system through a Project Labor Agreement. The State Building and Construction Trades Council of California; the Carpenters, Laborers, Ironworkers, and Operating Engineers unions; and the California Construction Industry Labor-Management Cooperation Trust have been top funders of the campaign to defeat Proposition 53.

The rebuttal to the argument against Proposition 53 in the California Official Voter Guide states that opponents “include insiders who profit from massive state revenue bond projects, and politicians and bureaucrats who don’t trust you to decide whether to approve boondoggles like the $64 billion bullet train…” Some people would declare that to be an accurate depiction of the chief backers of California High-Speed Rail.

For More Information:

California General Election November 8, 2016 Official Voter Information Guide – Proposition 53

Proposition 53 Donors – For and Against

California High-Speed Rail Authority Blames You for Its Four-Year Delay

On May 16, 2016, the Federal Railroad Administration and the California High-Speed Rail Authority revised their agreement for $2.6 billion in federal funding from the American Recovery and Reinvestment Act of 2009 (ARRA) for the High-Speed Passenger Train for the 21st Century.

California High-Speed Train Program ARRA Grant

The revised agreement can be found here: FRA Grant/Cooperative Agreement for ARRA Funding (Amendment, FR-HSR-0009-10-01-06)

In a California High-Speed Rail Authority press release dated May 18, 2016, the Authority CEO claimed that “High-speed rail construction is underway in California and this agreement is consistent with our efforts to connect Silicon Valley and the Central Valley by 2024, and then move forward with connecting San Francisco to Los Angeles.” Those “efforts” were just adopted by the Authority board on April 21, 2016 as the California High-Speed Rail Authority 2016 Business Plan.

This revised plan anticipates high-speed passenger trains running on electrified track between the Central Valley and San Jose by 2025. The 2014 Business Plan had anticipated high-speed passenger trains running on electrified track running between the Central Valley and the San Fernando Valley by 2022.

A May 18, 2016 article in Politico quoted the CEO as saying “Early on, there was a vision, but no clear sense of how to implement that vision…We have that now, and we’re moving ahead aggressively.” Central Valley residents are surprised to learn there had not been clarity in how to implement a vision, considering that the Authority has tried for several years via negotiations and eminent domain to acquire private property for the supposed implementation of a vision.

Proposition 1A was approved in November 2008. The federal grants were awarded in 2010. As of today (June 2, 2016), the Authority has not even issued a Request for Qualifications for track between Madera and Shafter (Construction Package #5) and there is no schedule yet for bidding on electrication or a heavy maintenance facility coveted by local governments in the San Joaquin Valley. Construction has been limited to a viaduct, the demolition of structures and a street bridge in the City of Fresno, and some token archeological investigation.

Who’s to blame for the delay? The Obama Administration and the California High-Speed Rail Authority have designated a villian, and it is YOU. The May 18, 2016 article in Politico reports the contention of the Authority that your quest for public accountability is to blame:

Federal Railroad Administration officials assigned much of the blame for the lags to the project’s vociferous critics, who have tied it up with a tangle of lawsuits, administrative challenges, and other red tape. They complained that the opponents, especially Central Valley farmers and other not-in-my-back-yard landowners, have gotten far more traction against the railway than they would have against a highway, reflecting a cultural and political bias in favor of traditional asphalt infrastructure. But while they described today’s agreement as a routine bureaucratic clarification, they said they expect an explosive reaction from opponents looking to score political points in Sacramento and Washington.

There will always be politicians and special interest groups who will blame any California High-Speed Rail failures on ordinary citizens who exercise their rights to bring public accountability to this boondoggle. Advocates of the high-speed rail often express resentment about being subjected to checks and balances inherent in the United States Constitution and the California Constitution.

But the truth is that the legislative branch and the executive branch have generally ignored opponents, and the judicial branch has mostly rejected legal arguments from opponents. The real cause of the delays is the flawed language in Proposition 1A approved by 53% of California voters in November 2008. That ballot measure made promises to voters that it could not possibly keep.

Since then, the California High-Speed Rail Authority and Governor Jerry Brown have used every trick in the book to keep the taxpayer money flowing and their patrons happy. (The funding comes from the annual state budget, particularly through cap-and-trade taxes.) Meanwhile, the self-declared author of Proposition 1A continues to receive awards and acclaim for putting out the bait while the switch goes on in Sacramento.

SOURCES

Federal Railroad Administration Cooperative Agreement with California High-Speed Rail Authority – California High-Speed Train Program ARRA Grant – Amendment No. 6 – May 16, 2016

High-Speed Rail Gets a Four-Year Delay: The California Bullet Train Megaproject Was Even Less Shovel-Ready Than AdvertisedPolitico – May 18, 2016

California High-Speed Rail Authority 2016 Business Plan

High-Speed Rail and Federal Partners Realign Grant to Reflect Updated Business Plan – California High-Speed Rail Authority Press Release – May 18, 2016

California Legislators Concerned About California High-Speed Rail Accountability

During the past four weeks, the California State Legislature has discussed the 2016 Draft Business Plan for California High-Speed Rail in several hearings. While some legislators continue to effusively praise the project, many legislators – both Republicans and Democrats – have expressed grave concerns about the abrupt change in the direction of the project and the outlook for funding sources.

On March 28, 2016, the California Legislative Analyst’s Office released a report entitled Review of High-Speed Rail Draft 2016 Business Plan. This report stirred the Assembly Transportation Committee enough to pass Assembly Bill 2847 on a 15-0 vote on April 18.

Introduced by Assemblymember Jim Patterson (a critic of the project), AB 2847 requires the California High-Speed Rail Authority to do two things in future business plans: (1) include projected financing costs for a proposed segment or combination of segments, and (2) identify any significant changes in scope for segments identified in the previous business plan or project update report, and provide an explanation of adjustments in cost and schedule attributable to those changes.

Citizens for California High-Speed Rail Accountability (CCHSRA) continues to be active in calling for public accountability for this beleaguered project. CCHSRA Co-Chair Frank Oliviera spoke during public comment at the April 6, 2016 hearing of the Assembly Budget Committee #3 – Resources and Transportation – on California High-Speed Rail funding. (Watch the video clip of Frank Oliviera testimony.) A letter from CCHSRA was cited in a March 28, 2016 Associated Press article, State Lawmakers Poised to Scrutinize California High-Speed Rail Plan:

In a letter to the committee, Citizens for High-Speed Rail Accountability urged lawmakers to reconsider all funding for bullet trains. “There is not enough money available to put a functional financially sound high-speed train on what they are building,” the group wrote.

Nevertheless, the project moves on, with an Assembly budget hearing scheduled for April 20 to discuss the $500 million annual budget appropriation of cap-and-trade tax revenue to the California High-Speed Rail Authority.

AGENDAS AND VIDEOS OF LEGISLATIVE HEARINGS

On March 28, the California State Assembly held an oversight hearing to review the Draft 2016 Business Plan for the California High-Speed Rail Authority.

http://olive.calchannel.com/videos/assembly-oversight-hearing-on-the-review-of-the-draft-2016-business-plan-for-the-california-high-speed-rail-authority/

On April 4, the California State Senate held an oversight hearing on California High-Speed Rail: An Overview of the 2016 Draft Business Plan.

Agenda: https://docs.google.com/gview?url=http%3A%2F%2Fstran.senate.ca.gov%2Fsites%2Fstran.senate.ca.gov%2Ffiles%2Fagenda_4-4-2016.pdf&embedded=true

Complete Video: http://calchannel.granicus.com/MediaPlayer.php?view_id=7&clip_id=3525

Individual Speakers (video compiled by derailhsr)

State Senator Lois Wolk: https://youtu.be/xTK8-13P7iY

State Senator Richard Roth: https://youtu.be/rYq34TFI75Y

State Senator Jim Nielsen: https://youtu.be/ebxdrSkUWbo

State Senator Cathleen Galgiani: https://youtu.be/N89xw1YaLNk

State Senator Ted Gaines: https://youtu.be/kuB2ECon1hc

State Senator Ben Allen: https://youtu.be/Iy9BaL-ubAk

State Senator Bob Huff:  https://youtu.be/iCnPn36NSu8

Lou Thompson, California High-Speed Rail Peer Review Group: https://youtu.be/7gZvvW4Jmvc

Jessica Peters, California Legislative Analyst’s Office: https://youtu.be/FXI3GHg3OLM

Dan Richard, Board Chairman, California High-Speed Rail Authority: https://youtu.be/yBnVW-0jHuw

On April 6, the Assembly Budget Subcommittee #3 Resources and Transportation held a hearing on California High-Speed Rail.

Agenda: http://abgt.assembly.ca.gov/sites/abgt.assembly.ca.gov/files/Sub%203.%20Exide%20Cleanup%20and%20High%20Speed%20Rail.%20Revised%20-%20final.pdf

Complete Video: http://calchannel.granicus.com/MediaPlayer.php?view_id=7&clip_id=3543 starting at 13:03

Individual Speakers (video compiled by derailhsr):

Jessica Peters, California Legislative Analyst’s Office: https://youtu.be/PhuWAclk0zI

Assemblyman Jim Patterson: https://youtu.be/iBziL_H0xOc

Dave DePinto, Save Angeles Forest for Everyone: https://youtu.be/3Xuz0BvdLes

Frank Oliveira, Citizens for California High-Speed Rail Accountability (CCHSRA): https://youtu.be/J9DeiYsyxYE

Mike Brady, Community Coalition on High Speed Rail (CC-HSR): https://youtu.be/QiHX1IGyXZY

David Schonbrunn, Train Riders Association of California (TRAC) and Transportation Solutions Defense and Education Fund (TRANSDEF): https://youtu.be/-jYy0F2cevM

William Grindley, high-speed rail analyst and critic: https://youtu.be/t9KEffvGG34

Cindy Bloom of Save Angeles Forest for Everyone: https://youtu.be/OyB6UUaf6bY

Rebutting Claims About California High-Speed Rail as a Highway and Airport Alternative

Below is a summary (abstract) of a report submitted to the California High-Speed Rail Authority board by Mark R. Powell of Against California High Speed Rail at the board’s November 9, 2015 meeting.


Pushing Back on the California High-Speed Rail Authority’s Myths About High-Speed Rail

24,300 Miles of Highway Lanes as an Alternative to High-Speed Rail
by Mark R. Powell
October 30, 2015

The Authority’s most recent hyping of the need for high-speed rail, a June 2015 brochure entitled California High-Speed Rail Big Picture (2015), makes the claim that Phase 1 Blended, connecting San Francisco and Los Angeles, provides a transportation capacity equivalent to 4,300 new highway lane miles, 115 additional airport gates, and four new airport runways costing $158 billion. A second claim is that high-speed rail provides this capacity at half the cost.

This paper dissects these deceptive claims where the Authority uses “capacity” instead of “ridership” knowing full well that the theoretical capacity of Phase 1 Blended will dwarf its ridership and that the itemized highway lane miles will not be necessary this century, if ever, whether Phase 1 Blended is built or not built.

The paper then traces the evolution over two decades of the asserted highway benefits of high-speed rail, from the thousands of miles of highway lanes reported in the Authority’s 2005 California High-Speed Train Final Program EIR/EISback to earlier minimal assertions made in its first business plan and those made by its predecessor, the Intercity High-Speed Rail Commission.

Lastly, this paper looks at California Department of Transportation (Caltrans) traffic data and Caltrans long range planning documents. The data and planning documents prove how the Authority grossly overestimated future highway infrastructure needs for the year 2016 in its 2005 California High-Speed Train Final Program EIR/EIS and attempts to give readers information sufficient to see for themselves high-speed rail’s true impact on future highway needs over the next 20 years.

Read the full report at the California High-Speed Rail Authority website at Pushing Back on the California High-Speed Rail Authority’s Myths About High-Speed Rail or at the Citizens for California High-Speed Rail Accountability website at Pushing Back on the California High-Speed Rail Authority’s Myths About High-Speed Rail.

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U.S. House of Representatives Unanimously Passes Amendment Proposed by Congressman Jeff Denham to Nullify California High-Speed Rail Grant Agreement

Congressman Jeff Denham's District

Congressman Jeff Denham’s District

Citizens for California High-Speed Rail Accountability (CCHSRA) received a press release this morning (June 10, 2015) from the office of U.S. Representative Jeff Denham, who represents many residents of the Central Valley concerned about the financial waste, ill-conceived route alignment, and relentless property takings of California High-Speed Rail.

You may thank Congressman Denham via email by going to this website:

https://denham.house.gov/contact-me/email-me

Be especially sure to contact Congressman Denham if you live in his district. See the district map.


In a vote Tuesday evening (June 10, 2015), the U.S. House of Representatives unanimously passed Congressman Jeff Denham’s amendment to the Fiscal Year 2015-2016 Transportation, Housing and Urban Development appropriations bill nullifying the current grant agreement between the Federal Railroad Administration (FRA) and the California High-Speed Rail Authority.

“This amendment will finally hold California High-Speed Rail accountable for its finances,” said Rep. Denham. “The project is several decades behind schedule, nearly $70 billion over budget, and will not meet the speeds, travel times, or ridership levels promised to voters. No longer will they be able to accept a hamburger today for payment on Tuesday.”

Specifically, the amendment prohibits any appropriated federal funds from being used for high-speed rail in the state of California or for administering a grant agreement that includes a “tapered” match (described below).

When the Federal Railroad Administration initially awarded the Authority with nearly $3 billion in federal grant dollars under the federal stimulus package, it entered into a standard grant agreement with the Authority requiring a dollar-for-dollar match. This agreement stipulated that for every federal tax dollar spent, the Authority must spend a dollar from a non-federal source. California never came up with the money and subsequently missed payment deadline after payment deadline.

In order to avoid violating the Federal Deficiency Act, the Federal Railroad Administration quietly amended its grant agreement in December 2012 to allow for a tapered match – allowing federal dollars to be spent in advance of any matching dollars – despite having no assurances from the California High-Speed Rail Authority that the matching dollars would ever exist. The FRA’s Inspector General has subsequently criticized FRA for jeopardizing federal taxpayer dollars with this scheme. This amendment guarantees that the FRA must enter into an agreement that requires the Authority to match, dollar-for-dollar, federal tax dollars in current fiscal years.

See Text of Denham Amendment to Nullify the California High-Speed Rail Grant Agreement

Congressman Denham has repeatedly introduced legislation to stop the California High-Speed Rail Authority from continuing to waste billions in taxpayer dollars. In June 2012 and June 2014, he offered an amendment suspending federal funding for California High-Speed Rail. It passed each year. He also successfully added an amendment to the American Energy and Infrastructure Jobs Act (H.R. 7) in February 2012 ensuring that money in highway bills could not be spent on California High-Speed Rail. In January 2014, Rep. Denham introduced the Responsible Rail and Deterring Deficiency Act, which would suspend all federal funding to California High-Speed Rail.

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Encouragement: Our Next Steps in Pursuit of California High-Speed Rail Accountability

Frank Oliviera, co-chairman of Citizens for California High-Speed Rail Accountability, provides these encouraging words to all Californians (and Americans) concerned about how the most expensive endeavor in human history continues to advance in defiance of law.

Here Is Where We Are…

What is the Meaning of the October 15, 2014 California Supreme Court Decision?

On October 15, 2014, the California Supreme Court denied petitions asking the court to review a disappointing appellate court decision that sided with Governor Brown and the California High-Speed Rail Authority. This outcome is a setback but certainly not the end of the citizen campaign to ensure accountability for the California High-Speed Rail project.

The news media is mistaken when it echoes the triumphant claims of Governor Brown and the California High-Speed Rail Authority that this court decision is a major “go-ahead” for construction to start. It is not. This project is not inevitable and citizens on the side of the rule of law should not surrender to the interests pushing it.

The appellate court decision simply said that the trial court (the Sacramento County Superior Court judge) erred in rejecting the California High-Speed Rail Authority’s FIRST funding plan. The appellate court declared that the first funding plan was simply notification to the California legislature before the legislature appropriated money for the project. The appellate court also said that the Authority COULD NOT USE or SPEND Proposition 1A bond funds UNTIL it had gone through the rigorous requirements and procedures of a SECOND funding plan.

Without the ability to spend Proposition 1A bond funds, the Authority is still hindered in its plan to take land and direct its design-build contractor Tutor Perini/Zachary/Parsons to demolish buildings and prepare land and build bridges for actual rail construction in a few years. It will have to rely on limited revenue obtained through cap-and-trade taxes and other budget sources. It may also seek international government funding or perhaps even private investment.

It is also important to remember that the appellate court itself said that the Authority FIRST funding plan was defective and deficient. These problems still exist, and the Authority will have to overcome them before approving a second funding plan.

Therefore, there will be somewhat of a “repeat” of what has happened to date. Before borrowing and spending $8.5 billion authorized by Proposition 1A, the Authority has to prepare a detailed new second funding plan. This plan must meet requirements in state law to demonstrate adequate funding and environmental compliance. Then the California Director of Finance must approve the plan.

Our Next Steps to Ensure Accountability

Citizens will have an opportunity to file papers if there are legitimate legal reasons to oppose approval of the second funding plan by the California Director of Finance. If approval is granted for a defective and deficient plan, citizens can seek a writ of mandate from a court to stop the funding plan on the basis of its failure to comply with Proposition 1A. The appellate court said that citizens had the opportunity to do this when the ACTUAL SPENDING of the money is at issue.

Another Lawsuit Is Moving Toward Trial on Some Compelling Arguments

Meanwhile, a case is moving toward trial based on the California Code of Civil Procedure Section 526(a), a state law that gives taxpayers rights to defend their interests against injury. This lawsuit is separate, involves different issues, and is NOT AFFECTED by the appellate or supreme court decisions. A Sacramento County Superior Court judge has already rejected aggressive efforts to dismiss this lawsuit. Damaging evidence is being collected to introduce at the trial, which is expected to occur early in 2015.

If the people filing the lawsuit win on any of these four issues, the project may be stopped:

  1. Will the Authority be able to carry a passenger between San Francisco and Los Angeles in the 2 hours, 40 minutes required by law? (No.)
  2. Does the adoption of the “blended system” by the Authority violate Proposition 1A because California voters never approved it, and does those the blended plan make the goals of the High-Speed Rail system unachievable? (Yes.)
  3. Will the government need to subsidize operating costs – something forbidden expressly by Proposition 1A? (Yes.)
  4. Is the High-Speed Rail system financially and physically viable? (No.)

Once the evidence is determined, the court will establish a briefing schedule. The case will be briefed, argued, and then decided. The leaders of CCHSRA believe that the California High-Speed Rail Authority does not meet the requirements of Proposition 1A; in fact, the Authority CANNOT comply the requirements of Proposition 1A under its current business plan or under ANY plan.

Few people are willing to admit this stunning truth in public: Proposition 1A was a poorly-written law, and the state legislators who are routinely honored for writing it actually doomed the project through their incompetence.

There’s a Long List of Other, More Obscure Lawsuits Challenging the Project

As anyone can see from looking at the closed session agenda items of the board meetings of the California High-Speed Rail Authority, there are at least a dozen other major lawsuits originating from all over the State of California challenging the project. Some lawsuits contend that the Authority has violated environmental laws; a few challenge the constitutionality of the cap-and-trade taxes that are now a major source of funding for the project. In fact, the 2014 business plan for the California High-Speed Rail Authority is riddled with weaknesses, inadequacies, absudities, and failures to comply with the law.

Hundreds of private property owners in the San Joaquin Valley are prepared to go to court to force the state to legally justify the taking through eminent domain of homes, ranches, farmland, churches, and small businesses. On the Peninsula, numerous parties are ready to file a lawsuit challenging a Final Environmental Impact Report shortly to be approved for the electrification of the CalTrain commuter rail. This electrification of the CalTrain rails is a precursor to high-speed rail trains sharing track with CalTrain commuter trains at the northern “bookend” of the “blended plan.” If you don’t remember voting on this blended plan, your memory isn’t failing: it was developed AFTER voters approved Proposition 1A.

California High-Speed Rail Can’t Get Through the Tehachapi Mountains

New outrages and schemes come to light at every California High-Speed Rail Authority board meeting. Proving yet again the value of the First Amendment, the press is constantly exposing what Governor Brown, his appointees, and some powerful legislators don’t want the people to know.

The latest revelation is not a surprise to people who closely monitor the Authority, but nevertheless it is a stunning development.

The Authority’s own experts and consultants (contracted through the engineering firm of URS) issued a report in September 2013 saying that the grade going south over the Tehachapi Mountains (between Bakersfield and Los Angeles) was too steep and the route for the Bakersfield to Los Angeles project segment through Palmdale was therefore infeasible. The Authority was ridiculously assuming that the high-speed train would coast down from the mountains to the San Joaquin Valley at 220 miles per hour. Reportedly these consultants/experts found themselves looking for a new job after writing this report.

All along, Citizens for California High-Speed Rail Accountability has insisted that the Authority needs to choose a route along Interstate 5 through the Central Valley and through the Grapevine. Twice the Authority has rejected this alignment based on logic and instead chosen an alignment based on politics.

Expect this report to be important evidence in the trial about taxpayer standing.

Don’t Give Up, and Please Consider Ways to Support the Fight for Accountability

The backers of California High-Speed Rail as currently planned have corporate and political power as well as taxpayer money and public legal resources. Governor Brown is intent on getting the project underway. The financial industry is eager for the bonds to be sold to investors. Construction and transportation conglomerates and their unions want the work and the money, now. Meanwhile, a small but influential group of intellectuals and activists regard the train as the centerpiece of a utopian vision for America in the 21st Century.

A majority of Californians rightly see the project as foolish and misguided. Generally, the more people know about the high-speed rail project, the less they are to support it, at least as it stands now. Whenever you hear people talking about how “cool” the train will be, start by asking them if they know how much it will cost, how the state will get the money, where the train route will go, when the system will be completed, and how it will be secured.

Finally, please join our group of ordinary citizens in staying the course and fighting for accountability on every aspect of this project. If we persevere, I am confident that we will achieve our goal of accountability, but it will take time and money. Don’t be discouraged!

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Citizens for California High-Speed Rail Accountability (CCHSRA) Express Support for Bill to Freeze Spending of Federal Funds While Courts Stop Bond Sales

On Monday, March 24, the California Assembly Transportation Committee held a hearing on Assembly Bill 1501, introduced by Assemblyman Jim Patterson of Fresno, that would have prevented the California High-Speed Rail Authority from spending federal grant money on the bullet train while the courts continue to prohibit the state from borrowing money by selling Prop 1A bonds. Assemblyman Patterson noted that the state would be bound to matching any of the federal funding spent on the high-speed rail project.

Aaron Fukuda, co-chairman of the CCHSRA, testified as a key witness in support of AB 1501. A second featured witness in support of AB 1501 was Diane Friend, Executive Director of the Kings County Farm Bureau. In addition, Alan Scott and Frank Oliveira of CCHSRA spoke during public comment in support of AB 1501, along with policy consultant and CCHSRA ally Kevin Dayton of Labor Issues Solutions, LLC.

A California High-Speed Rail Authority representative claimed that Cap and Trade auction allowances (described by some as “taxes”) would match the federal funding. Representatives of the California Labor Federation, the State Building and Construction Trades Council of California, and individual construction trade unions spoke in opposition to AB 1501, along with representatives of high-speed rail interests.

Assemblyman Patterson had hoped the committee would pass his bill to the Assembly Appropriations Committee in order to trigger a fiscal analysis. Instead, the Democrat majority on the committee rejected the bill on an 11-4 party-line vote.

Watch the video of the AB 1501 hearing (starts at 20:50).

Now on the Web: A Centralized Primary-Source Compilation for Reports and Litigation on California High-Speed Rail Finances

If you’re looking for primary source documents about California High-Speed Rail finances, take a look at a relatively new and simple web site: California High-Speed Rail Finance Reports (Calif HSR Fin Reports). It’s the self-declared “Home For Reports And Litigation On Aspects Of The California High Speed Rail’s Finances.”

According to the authors, “As a team of financial experts, with many years of diverse experience, we have reviewed and analyzed the financial aspects of the planned California High Speed Rail project, and have documented the financial risks of this project in a series of reports. We are proud to present our reports here.