PHOENIX - A courtroom hearing in April will determine whether California can issue a portion of nearly $10 billion of voter-approved bonds for its high-speed rail program.
Sacramento County Superior Court Judge Raymond Cadei declined to issue a temporary restraining order sought by opponents of the California high-speed rail project, but set an April 19 hearing at which he will consider issuing a preliminary injunction to halt the sale of the bonds only a day before the State Treasurer's Office is planning to issue them.
Voters approved the bonds in 2008, but opponents joined in the lawsuit challenging Assembly Bill 1889, approved by the state legislature in 2016 to allow high-speed rail bonds to be spent to electrify the existing Caltrain commuter train system in the San Francisco Bay Area. That funding use fell outside the scope of what voters approved and only voters can change it, the plaintiffs argue.
The high-speed rail plans call for the use of Caltrain tracks to carry the bullet trains between San Jose and San Francisco.
The state defended the legislation, saying the legislature had the authority to specify those uses of the funds.
Aaron Fukuda, a chairman of the Citizens for California High-Speed Rail Accountability, a group critical of the project, said that the state and California High-Speed Rail Authority are hiding behind the legal technicality that most of the bonds have not been issued.
"There is an acknowledgment that there are definite legal questions as to the validity of the actions the authority has taken and the ability to issue and use bond funds, however the Attorney General, representing the authority, continues to hide behind the idea that they have not broken the law yet, but they are just planning to do so in the future," Fukuda told The Bond Buyer. "It is unfortunate that the reality of the case at hand is that the authority and the Governor are expending huge sums of money and political manipulation just to secure less than 5% of the funding needed to complete a system from San Francisco to Los Angeles."
That possible funding gap includes the potential loss of federal funds because Republicans in the congressional majority have been critical of the project. T
he California Department of Finance signed off on the authority's business plan for the Central Valley earlier this month, enabling the rail authority to move ahead on plans to issue $1.12 billion in bonds.
