Court Upholds Decision to Allow California Rail Bond Issuance

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SAN FRANCISCO - The California Supreme Court will not review appeals challenging funding for the state's high speed passenger rail project, clearing the way for construction to begin.

Justices Wednesday declined to consider petitions filed last month by opponents of the $68 billion project, which would connect the San Francisco and Los Angeles areas with trains on new tracks.

"This decision reaffirms that the authority can continue building a modern high-speed rail system that connects the state, creates jobs and complies with the law," the chair of the California High-Speed Rail Authority's board of directors, Dan Richard, said in a statement. "We will continue to move forward aggressively to deliver the nation's first high-speed rail system."

The petitions, filed by Kings County, two citizens, a taxpayers' association, and a church, asked the court to review a recent decision from the Third District Court of Appeal that gave California the go-ahead to issue $8.6 billion of state general obligations for the project.

That decision, which was finalized on Aug. 30, overturned a lower court decision that blocked the issuance of GO bonds for the project.

The petitioners argued that the bond issuance would fail to meet requirements under the voter-approved ballot measure, Proposition 1A.

Specifically, the 2008 measure requires that no segment of the rail project can be started until all the money necessary to complete that segment is in the bank. Attorneys for the petitioners said the authority only has 20% of the money to complete the first segment.

"My clients are obviously extremely disappointed in this decision," said Stuart Flashman, one of the attorneys representing the petitioners. "The Court of Appeal's decision, which the Supreme Court has now let stand, means voters can no longer trust promises made in bond measures or tax measures."

Michael Brady, another attorney for the petitioners, noted that the upheld Court of Appeal decision had stated the authority cannot access bond funds until it goes through a "rigorous procedure."

"We will be there to enforce those requirements," Brady said. "In the meanwhile, we will take the authority to trial in early 2015 on whether the high-speed rail system can meet the bond measure's requirements. We think the evidence is very strong that it can't."

One of the requirements they will challenge is the project's estimated two hour and 40 minute travel time from Los Angeles to San Francisco.

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