SAN FRANCISCO – The California High-Speed Rail Authority has authorized the eventual sale of $8.6 billion of bonds to fund the first stage of a bullet train system.
The authority’s board Monday unanimously voted for a resolution that allows the issuance of bonds as needed to fund construction of the initial section in the San Joaquin Valley, as well as refunding bonds.
The board’s approval of the debt sales means the state can now sell bonds for the rail authority as needed as part of its regular general obligation bonds sales. The authority would work with Department of Finance to determine timing.
The next opportunity for the authority’s bonds to be included in a GO sale would be this fall, according to Tom Dresslar, a spokesman for state Treasurer Bill Lockyer.
In 2008, voters approved a $9.95 billion general obligation bond measure to seed construction. So far, only several hundred million dollars of state GO bonds have been issued for the authority. Lawmakers created the rail authority in 1996 to plan a high-speed passenger train system to link the Los Angeles and San Francisco Bay regions.
The Legislature and the governor last year signed off on a bill as part of this fiscal year’s budget that allowed the authority to spend $4.7 billion, $2.6 billion from the sale of bonds, to start construction of the rail network.
The state’s investment is to be matched by $7.9 billion in federal and local money for the project and to fund transportation projects linked to the high-speed rail project.
The Legislature needed to fund the Central Valley section to secure $3.2 billion of federal grant money. The first segment of the high-speed rail line is slated for the Central Valley, roughly from Fresno to Bakersfield.
Part of the seed money will be used to fund upgrades to existing commuter rail lines that are to host the intercity high-speed trains, including the Caltrain system in the San Francisco Bay Area and the Metrolink in Southern California.
By 2029, the authority hopes the train network will stretch 500 miles between San Francisco and Southern California and eventually lengthen to 800 miles connecting Sacramento and San Diego. The authority estimates the overall cost of building a 500-mile system at $68 billion.
The authority’s long-term business model uses public-private partnership to design, build, operate and maintain a high-speed system, supported by both public money and future revenues.
Some of the bullet train bonds could taxable, depending on the specific project they are used to fund, the treasurer’s office has said. The high-speed rail project has faced criticism partly because of its price tag and partly because its initial planned segment does not initially connect to the state’s two largest population centers.