(Bloomberg) -- The California High-Speed Rail Authority was denied a judge’s permission to issue more than $8 billion in bonds to finance construction of a rail system from San Francisco to Los Angeles.
State court Judge Michael Kenny in Sacramento ruled Monday that the authority’s finance committee failed to adequately disclose what factors it considered when it authorized the bonds. The committee said only that it was “necessary and desirable” to approve the bond sales, the judge said.
“We are ecstatic about this ruling. This is a massive bond proposal but for a different project,” said Jonathan Coupal, an attorney for the Howard Jarvis Taxpayers Association, which opposed the bond sales. “The high-speed rail project is derailed.”
California voters in 2008 approved a bond measure that authorized the state to sell $9.95 billion on bonds to help build the $68 billion rail line. The state plan anticipates that federal funds and private investors will pay for the rest. The proposal saves money by upgrading existing commuter and freight lines in some areas, rather than build new track.
The plan has been criticized for its cost, choice of routes and the wisdom of spending on the rail line while future funding remains uncertain.
Lisa Marie Alley, a spokeswoman for the rail authority, didn’t immediately respond to a phone message seeking comment on the ruling.
The case is High-Speed Rail Authority v. All Persons Interested in the Matter of the Validity of the Authorization and Issuance of General Obligation Bonds, 43-2013-00140689, Sacramento Superior Court.
