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Judge: Rail authority's funding plan violated law

Original post made on Aug 17, 2013

The California High-Speed Rail Authority violated state law and "abused its discretion" in proceeding with the controversial San Francisco-to-Los Angeles train system without first identifying the funding sources for the line's first usable segment, a Sacramento Superior Court judge wrote in a Friday decision.

Read the full story here Web Link posted Saturday, August 17, 2013, 11:16 AM

Comments (45)

Posted by So sick of HSR
a resident of Crescent Park
on Aug 17, 2013 at 1:24 pm

Can't we finally put a stake through the heart of this project before any more time, effort, and money is wasted?

Posted by Paul
a resident of Professorville
on Aug 17, 2013 at 4:12 pm

LIES STACKED ON TOP OF LIES seems to be the High-Speed Rail Authority answer for how to build a railroad. CREDIBILITY has become THE BIG PROBLEM for the High-Speed Rail Authority; HSR has none.

Judge Michael Kenny is now ruling, “HSR is violating state law by proceeding” to spend $9 billion on their tracks to nowhere.

Earlier, the nonpartisan analyst's office, which provides fiscal and policy advice to the Legislature, said “the rail authority failed to provide sufficient detail and justification for its plan to build a high-speed train system. Specifically, funding for the project remains highly speculative and important details have not been sorted out,"
Over a year ago, the Mercury News reported that “the state's top analyst is urging lawmakers to pull the emergency brake on California's $68 billion bullet train, saying the recently revised plan carries way too much risk of failure. An April 17, 2012 Legislative Analyst's Office report …concludes… there is a $55 billion shortfall.”

Why would anyone believe a word HSR says? On virtually every substantive issue, HSR has been wrong, wrong, wrong. Let us count the ways:

NONE of the promises made by HSR to win the 2008 Proposition 1A vote are being kept…
- No more than $40 billion to connect San Diego, Los Angeles, Sacramento and San Francisco
- No more than $9.95 billion from state of California
- No money authorized until investors committed
- Los Angeles to San Francisco in 2½ hours for about $50
- Ridership forecast unrealistically high

BOGUS HSR plans, independent auditors say…
- Superior Court Judge Michael Kenny August 16, 2013
- Legislative Analyst Office April 17, 2012
- Peer Review Group January 3, 2012
- Legislative Analyst Office November 29, 2011
- State Inspector General October 27, 2010
- California State Auditor April 2010 Report 2009-106
- Joseph Vranich October 2008

Any village idiot can connect the dots on HSR, yet Eshoo, Feinstein, Brown, et al seem unable to do so. One of the first fathers of HSR, Quentin Kopp, now is dead-set against it, realizing as HSR took shape, it became one ugly monster threatening to eat California.

'Fool me once, shame on you. Fool me twice, shame on me.'

Posted by Maybell neighbor
a resident of Green Acres
on Aug 17, 2013 at 7:19 pm

Wow, isn't that ironic that the City is involved in fighting someone else's abuse of discretion and legally questionable funding plan. Did I say ironic? I meant two-faced.

Posted by resident
a resident of Another Palo Alto neighborhood
on Aug 17, 2013 at 7:29 pm

HSR makes no sense logistically. It was a political decision to
create jobs. What we need is a fully integrated rail system
in our urban areas, for example the 9 county Bay Area, to start with followed by a north-south connecting high speed line,using France
as a model.

Posted by peter
a resident of College Terrace
on Aug 17, 2013 at 10:49 pm

Prop 1a was pie in the sky when I read it before that fateful 2008 election. I was shocked that it passed, but its unfounded claims of being a 'green' train were enough to completely dupe enough voters. The claims made in that unusually plain text initiative were so absurd that it was clear then that it was a fraud. What's clear now, is that it is a really huge fraud. Siphoning what ultimately could be hundreds of billions of your tax dollars for a train that will be an albatross on the CA tax payers for decades to come. We don't need no (education, safe water, secure energy distribution, roads, etc, etc) because duh train is a comin!

The judges decision was obvious, what happens next is less so. The project should be ditched, but our moonbeam Gov and his yes men are desperate to keep billions flowing to the big labor groups, who in turn, will toss millions back as campaign contributions. A self serving cycle that it very hard to break.

Posted by AP LEGAL
a resident of another community
on Aug 18, 2013 at 12:47 pm

Our understanding is that the 2011 filing was based upon the yet to be revised business plan. Since there is a newer HSRA plan...the plaintiffs must therefore delay or refile based upon the new plan, or the judge must make no final judgement until amended by both sides of the argument.

Meanwhile the construction will go forward as this ruling is non legally binding wrt future work in progress. Plaintiffs should note that huge private infrastructure investments are being developed based upon the rail being built. These private investments could file civil lawsuits to recoop their costs and hold the plaintiffs responsible should Construction be delayed or halted. Maybe this legal exposure is why some cities did not join this frivolous and potentially financially self-devastating effort. Some of these points were not made here and are in the original article and are included in the statements.

Web Link

Posted by Parent
a resident of Charleston Gardens
on Aug 18, 2013 at 9:38 pm

First of all the lawsuit was based on the funding plan the CHSRA presented to the legislature last year, which referenced the business plan in pace at the time that was submitted as part of the funding plan. Secondly, the business plan is required to be updated every two years by law - So its your "understanding" that the business plan would have to become a static document or a 'final' document before the CHSRA can be compelled to follow the law or the terms and conditions of the bond.Thats an interesting "understanding" you have there. Third of all, the new business plan is not being submitted for legislative appropriation approval - will have no impact on the legisative approval for expenditure of the bonds already approved. The authority could say they're going to build HSR out of jello, and it would have no bearing on the legislative bond appropriation vote taken last year. And fourth of all False. That's not what the judge said, that is not stated in the ruling, (If you think it is, show us where in the ruling document. Its not.)

Meanwhile you are correct that the CHSRA will be speeding forward with the planning and construction (because they've already stated this in the news, and the CHSRA are slimy like that) unless and until the judge issues a moratorium on the CHSRA's ability to commit further expenditures without compliance to the law.

Its pretty amusing that you would think that people who have been victimized by the CHSRA's abuse of the law would be sued by investors who relied on what the CHSRA has been telling them. Anyone can sue for anything I guess, but the plaintiff in this case won, and it would be a cold day in hell before a judge would agree that the victims would be responsible in any way shape or form to the contractors or businesses that entered in to agreements under false pretenses put forth by the CHSRA. Are these so called 'private investors' going to show up to court with contracts showing these plaintiffs made false claims or signed contracts? No.

Maybe you also think they'll sue the judge for ruining their fun.

Posted by NONIMBYS
a resident of another community
on Aug 18, 2013 at 10:04 pm

[Post removed.]

Posted by Parent
a resident of Charleston Gardens
on Aug 18, 2013 at 10:22 pm

In fact I don't live by the tracks, I live quite far from the tracks, can't even hear the train from where I live. And while my taxes are between me, myself, and the Tax Collector, I can assure you I purchased my house myself, and recently enough to be sure that my taxes are quite current and in line with current property values.

The CHSRA is breaking the law and wrote a bad law that they can't adhere to, just so they could trick the voters in to passing it by promising some very hefty protections for the voters and tax payers, such as that they would secure full 100% funding and 100% environmental permits for an entire usable segment before proceeding to building. They can not meet those requirement and are trying to ignore the terms and conditions that THEY put in the law.

They have botched the high speed rail management, PR, planning, implementation and funding so severely that they have now been ruled by a judge to have ABUSED their authority.

Posted by NONIMBYS
a resident of another community
on Aug 18, 2013 at 10:34 pm

[Post removed.]

Posted by NONIMBYS
a resident of another community
on Aug 18, 2013 at 10:59 pm

[Post removed.]

Posted by Parent
a resident of Charleston Gardens
on Aug 18, 2013 at 11:25 pm

[Post removed.]

Posted by Parent
a resident of Charleston Gardens
on Aug 19, 2013 at 1:22 am

AP - by the way, the 2012 business plan doesn't close any of the faults that the judge found using the sources of information he used, the CHSRA's Funding Plan submitted to the legislature, or the draft business plan that the CHSRA referenced as an attachment to that funding plan to the legislature. The Revised 2012 business plan says IOS south will cost 30B, and still only has secured the $6B of funding from the known sources for the initial construction segment identified.

It also outlines a 5 year timeline for environmental clearances, and goes on to discuss various states of incompleteness of the environment impact reports - again no closure to the fault found by the judge that the environmental clearances are required to be complete prior to commitments of any bond funds.

I'd be pretty surprised if there's a lawyer out there with the eggs to try to use the revised 2012 Business Plan to argue that the CHSRA has any of these faults resolved.

Meanwhile, I wouldn't be surprised if an injunction wasn't issued by the judge to prevent the CHSRA from spending or committing any further money, pending resolution of the penalty phase of the trial. Its exactly what SHOULD happen, the CHSRA is using false pretenses to start eminent domain actions now, altering people's lives and livelihoods now, in total defiance of the law.

Posted by Hold-Government-Officials-Accountable
a resident of Another Palo Alto neighborhood
on Aug 19, 2013 at 8:58 am

If the law was actually broken by the so-called CHSRA, then it was broken by individuals inside this organization. It's time to hold these people accountable. Perhaps incarceration is not called for here--but certainly the loss of their jobs is not out of the question.

Posted by galen
a resident of Ventura
on Aug 19, 2013 at 11:13 am

A recent post stated, "incarceration is not called for here". I disagree, this is election fraud and grand larceny of the worst kind. The people behind this deserve prison! Their criminal enablers in the State Government, Jerry "Moonbeam" on down, are every bit as guilty for approving spending on a plan that breaks both the spirit and the letter of the law imbedded in the Proposition that voters passed in a clear case of election fraud. We send much less dangerous people to jail, why do people who are defrauding us out of billions of dollars not deserve prison?! The correct answer is, "They do deserve to go to jail!".

Posted by Elizabeth
a resident of Midtown
on Aug 19, 2013 at 11:31 am

It's time to vote this turkey down. When it was passed, times were different the economy was different and we've wasted enough money on something that is just a black hole and is not likely to resolve any transportation issues.

Posted by Jeanie Smith
a resident of Evergreen Park
on Aug 19, 2013 at 11:41 am

@so sick of HSR - My sentiments exactly!!!! If it were put to a vote NOW, it would die a swift, relatively merciful death. All these legal rulings are in the right direction, but s-l-o-w torture... Sigh. #worldsbiggestboondoggle

Posted by Jim H
a resident of Community Center
on Aug 19, 2013 at 12:09 pm

Thank you to the folks that are using legal means to try and stop this fiasco.
I have been an opponent of this Rail plan boondoggle for many reasons below.
But the Hyperloop proposal by Elon Musk actually puts forth a 21st century plan rather than the high speed rail technology of the 20th century. If anything, the state should really be looking at this as the time between LA and SF would be 30 minutes, completion decades earlier, and safer with respec to crashes and earth quakes. Nothing compares to that. Not even airplanes.

Here are other main reasons to kill this boondoggle.
- Too little too late - 2030 ??
- Not much better than alternatives. More time than air and not as convenient as car.
- Way sooner than 2030, there will be self driving cars. For freeway driving like I5, speed limits could easily be bumped to around 130 MPH and passengers in the car would arrive relaxed and have their car to use at destination
- No funding
- Clearly violates the proposition that folks signed up for
- 60 Billion? Probably MUCH more. Look at the Bay Bridge to see what to expect for time and money reality versus promises.
- No sane venture capitalists would invest in this. If this were viable you'd see some private funding
- We'd be left paying for the maintenance of this infrastructure for 100 years.

Send mail to Jerry Brown and our legislators to stop this now.

But, of course this will make some temporary jobs in the North of Los Angeles area.

Posted by #worldsbiggest
a resident of Stanford
on Aug 19, 2013 at 12:12 pm

We need to work on the infrastructure in this country to keep up with the other leading industrialized nations. All the major competitiors have HSR

If the judge is correct in this case, hold them accountable - absolutely.

But I love how the same anti's come out in droves and post the same noise over and over on any HSR thread! 160 views, 18 posts. Thats a very high post to view ratio compared to the other threads. No one reads the HSR threads any more because its all the same noise. #worldsbiggestmoaners

Posted by Crescent Park Dad
a resident of Crescent Park
on Aug 19, 2013 at 1:05 pm

Or perhaps there's nothing more to add - what has been stated/opinionated needs no more than that.

And still the pro-HSRs refuse to acknowledge that the costs of building, operating and maintaining HSR are so far out of skew with any plausible revenue model. The fact that not a single private investor has stepped up to the plate (which is supposed to be a major funding source, according to the plan) speaks volumes to the zero viability of this program.

Posted by #worldsbiggest
a resident of Stanford
on Aug 19, 2013 at 1:22 pm

well, there's THAT!

Time will tell.

Posted by Christine
a resident of South of Midtown
on Aug 19, 2013 at 2:46 pm

Identify the sources and build it.

Posted by Paul Losch
a resident of Community Center
on Aug 19, 2013 at 3:05 pm

I voted against it, and it is a turkey, with all due respect to fowl.

Most travelers move locally, not up and down the state. Funds for HSR are better spent improving local transit. In the Bay Area and elsewhere in the state.

Posted by Stan Hutchings
a resident of Old Palo Alto
on Aug 19, 2013 at 3:06 pm

OK, I've sent this to my elected officials. You other anti-HSR folk should do similar.
I strongly oppose any more spending on the HSR. With the recent finding that the HSR violated state law and "abused its discretion" (Web Link and the plan is apparently unfunded and fraudulent, it's time to put an end to it. If the State legislature cannot stop it, please put it to a vote to the People of the State in the next election. Let us decide.
It's time to halt this financial train wreck before any more damage is done.
Stan Hutchings
cc: Rich Gordon, Jerry Hill, Jerry Brown

Posted by debating
a resident of Downtown North
on Aug 19, 2013 at 3:34 pm

Declarative statements with the word "apparently". Let's get the answers then nuke it with facts. Generally considered to be a better method of debate.


Posted by Hold-Government-Officials-Accountable
a resident of Another Palo Alto neighborhood
on Aug 19, 2013 at 5:10 pm

Video (about 27 minutes)--

Is High-Speed Rail A Fantasy? Adrian Moore and Wendell Cox (Transportation Consultant) Discuss HSR:
Web Link

Posted by neighbor
a resident of Greenmeadow
on Aug 19, 2013 at 8:48 pm

@worldsbiggest -- "all major competitors have HSR". Please research the positives and negatives of the rail systems you cite. Also research their funding models. You may find that your assumptions about its advantages are not supported by the evidence. These "competitors" built their systems through regions very different than California. They are, for the most part, funded by their governments -- in California, we voted to move forward once private investors joined the club. They built so long ago that the systems they have and are proposed for California are outdated. Etc,,,,

Posted by Ben
a resident of Evergreen Park
on Aug 19, 2013 at 9:45 pm

Jerry Brown regarding the Judges ruling:

“As we speak we’re spending money. We’re moving ahead,” he said. “And I consider the high speed rail a test of our imagination, of our political will. Is California a state that can do big things, do great things? And I think we can.”
Web Link

From Jerry's perspective, the important aspects of High Speed Rail are: he is spending money, it's a fantasy come true, and it's all about politics. Not one mention of they are violating the terms of Prop 1a, is not important.

So, it's still a big fraud, and following the law, in this case the very clear terms spelled out in Prop 1a, is for the little people, not Jerry.

Posted by Robert
a resident of another community
on Aug 19, 2013 at 9:57 pm

Way to go Jerry. Thank god the future of our state isn't going be dictated by retirees who won't actually have to deal with the consequences of their stonewalling.

Posted by Nayeli
a resident of Midtown
on Aug 19, 2013 at 10:24 pm

Jerry Brown is "moving forward" by progressively throwing money at special interests who want this boondoggle. This is "cronyism" at its finest.

I wish that there was a way to file charges against the wacky politicians who beguiled many voters to agree to a $10 Billion down payment for this lemon.

When all is said and done, the entire $10 Billion will have been spent on "administrative costs" and "planning."

Posted by Mike
a resident of Crescent Park
on Aug 19, 2013 at 10:29 pm

HSR tactics are the same as Willie Brown explains here:
In a column in the San Francisco Examiner, former Baghdad-by-the-Bay Mayor Willie Brown, perhaps overcome in his advancing years by the whispers of conscience, recently wrote of government’s imbedded habit of securing public support by underestimating costs. He said:

“News that the Transbay Terminal (a bay area public works project) is something like $300 million over budget should not come as a shock to anyone. We always knew the initial estimate was way under the real cost. In the world of civic projects, the first budget is really just a down payment. If people knew the real cost from the start, nothing would ever be approved. The idea is to get going. Start digging a hole and make it so big, there’s no alternative to coming up with the money to fill it in.”

Posted by senor blogger
a resident of Palo Verde
on Aug 20, 2013 at 7:14 am


The peninsula smart (and wealthy) guys are turning this area into a third world country.

Posted by As If...
a resident of Another Palo Alto neighborhood
on Aug 20, 2013 at 11:52 am

@senor blogger:
Let's not delude ourselves into thinking HSR will resemble the French TGV system. AMTRAK is a joke.

Posted by Member
a resident of Charleston Meadows
on Aug 20, 2013 at 12:33 pm

Don't you wonder about some of these posts? Is the person posting from Stanford a student who has no clear financial reference points for this project? Are they just exercising their debate skills?
How about Robert praising Jerry Brown? Is Robert a Central Valley recipient of some windfall as a result of this effort? When a legal and financial crime is in process you all need to stop and evaluate the situation. Further Jerry Brown needs to evaluate his political future if he keeps trying to justify what everyone can see as a politically killing project. This is a smoke and mirrors exercise that is going to kill the economy in the manner of its implementation.
If they had only followed the original plan - use existing right of ways then this would have been a great project.

Posted by Robert
a resident of another community
on Aug 20, 2013 at 12:50 pm

I have no financial interest in the project. I'm just a young person who understands that while its going to be expensive catching up on infrastructure, which the generation before me decided to neglect, it has to be done. Wishing California hadn't changed in the past 40 years, or isn't going to change in the next 40, is a nice thought experiment, but it's not going to help any real world problems.

Posted by member
a resident of Charleston Meadows
on Aug 20, 2013 at 1:16 pm

Robert, et all; need to get out from behind their computers and go look at California. We have a good Cal-Trans System that is being incrementally upgraded, good BART system that is continually being extended for new ridership to growing locations. Los Angeles and San Diego are continually upgrading their Transportation systems and infrastructure. The airlines have numerous major airports to inter-connect the state and are increasing their inter-state routes. The central, coastal areas are increasing their populations and agricultural output. We have great new technology regarding the determination of sustainability for the state - we are very smart now in that aspect. It is all happening now. We are smart enough now to see foolish schemes - we have so many examples out there of cause and effect.

Posted by Old Steve
a resident of St. Claire Gardens
on Aug 20, 2013 at 1:21 pm

Some Joke, back east the Acela even "makes" money, inspite of alignment and right of way not ideal for High Speed Rail. Out here ACE, Capitol Corridor, and Amtrak's Starlight and Zephyr do as well as they can, given that in many places freight still gums up the works as the railroads have control. With HSR running on it own rails, delays should be minimal, just like flying (except when SFO is fogged in). Last week my wife sat in a landed airplane for 45 minutes and missed the last flight home due to an airline gate snafu. Ever been stuck in the Tule fog on I-5 for the Holidays? HSR skips both of these north south delay scenarios. Building more runways or freeways in the next 50 years are we? I'll believe Elon Musk after he puts up his own money for a Hyperloop Demo Track. For now HSR is just trying to build a demo track to attract the private investors required. The folks in the Central Valley who are suing certainly have a vested interest in killing a project to benefit the rest of us. FORWARD!

Posted by Robert
a resident of Los Altos
on Aug 20, 2013 at 3:13 pm

Quit suing and delaying, build the damn thing. Now watch - accusations that I'm going to somehow financially gain something! We all gain from rebuilding America. Our kids, most of all.

These do-nothings are the types that objected to Eisenhower building the interstates:
- "another ascent into the stratosphere of New Deal jitterbug economics"


- “a public-works, government-owned boondoggle that was modeled after the National Socialist autobahn system in Germany.”

Sound familiar? That's the mind set of the anti-party.

Posted by Robert
a resident of Los Altos
on Aug 20, 2013 at 3:16 pm

Web Link

Those that insult the interstates because they were based on the autobahn forget that it was German scientists that built our rocket program for self defense.

Posted by Kman
a resident of another community
on Aug 20, 2013 at 4:00 pm

It seems to me like there are no economic personal in govt anymore. Maybe all we have are gangsters. Perez brothers, Maldonado, Leno, Stienberg.

It's like the politicians do not know how to balance a budget and when and if they do balance it, it will be on the backs of the taxpayer. Just like the gov payroll tax increase, that is money out of your's and my income.

We the people need to step up and take control of the abusive spending by these thugs.

Posted by balance the budget with jobs
a resident of Barron Park
on Aug 20, 2013 at 4:21 pm

"It's like the politicians do not know how to balance a budget and when and if they do balance it"

Clinton balanced the budget. Left a surplus for two years. Did it by cutting everything from Defense to the EPA. Only raised taxes on the money over 100,000 per year.

Gave George bush a surplus, and Bush ran it up to the first trillion dollar deficit.

Do it the Clinton way - invest in jobs - 23 million new jobs over 8 years.

Never, ever, trust a republican to balance a budget. Name the last republican to balance a budget... they just raise taxes on working Americans, like Reagan did, 11 tax hikes, including the largest middle class tax hike in history when he doubled payroll taxes.

[Portion removed.]

Posted by Boring
a resident of Old Palo Alto
on Aug 20, 2013 at 5:28 pm

Hey balance,

Clinton also left us the Al Qaeda mess, which resulted in 9/11 and the drop in the economy from that.

I guess from your faulty logic, never trust a Democrat with protecting our own buildings from planes?

Posted by kman
a resident of another community
on Aug 21, 2013 at 11:46 am

@ Balance, here is some info for you.

During Jimmy Carter's last year in office (1980), inflation averaged 12.5%, compared with 4.4% during Reagan's last year in office (1988).[122] During Reagan's administration, the unemployment rate declined from 7.5% to 5.4%, with the rate reaching highs of 10.8% in 1982 and 10.4% in 1983, averaging 7.5% over the eight years.

Reagan Built America up to be STRONG again!!

Clinton signed NAFTA which was the start of our jobs headed to of America.

The REP and DEM all are in this together with the aid for big business to rip off the average Joe.

Posted by Crescent Park Dad
a resident of Crescent Park
on Aug 21, 2013 at 12:06 pm

I'm an Independent...given the performance of our current president (who I voted for), you could say the same thing --- don't trust a democrat to balance the budget either.

And you have to admit the Clinton benefited from a boom economy that he had nothing to do with as far getting it started.

At this point in time, California does not have a balanced budget. Debt and operating costs are still higher than revenues. We can't just keep spending without the revenue to support it. And the bottom line is that HSR will never have the revenue to "balance" their budget.

Posted by Hank Law
a resident of Menlo Park
on Aug 21, 2013 at 1:50 pm

"Reagan Built America up to be STRONG again" by tripling the national debt from $900B to $2.7 Trillion, and raising taxes 11 times on working Americans, including the aforementioned doubling of payroll taxes that do not effect the wealthy.

Reagan also had the most corrupt administration in history, over 130 indictments. Ran like a little girl (no insult to girls) from the Marin massacre in Beirut. Gave weapons to IRAN, right after the hostage crisis, while sending money to the drugrunning contras.

Blame Clinton for 9/11? He foiled the Y2K plots, spending the night in the Situation Room.

Bush was told "BIN LADIN DETERMINED TO ATTACK IN US" and was told who, where, and how on Aug 6 2001 Web Link He was told WTC and Washington, he was told of numerous warnings involving planes.


[Portion removed.]

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