Wednesday, November 27, 2013

Court bars CHSRA bond issuance

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Opponents of California's high speed rail project celebrated Thanksgiving early – and, some argued, prematurely – following a court ruling barring the issuance of more than $8 billion in state bonds to fund the project.

California state Judge Michael Kenny in Sacramento ruled Monday, Nov. 26, 2013, that the California High Speed Rail Authority (CHSRA) had not adequately disclosed reasons for authorizing the bonds. State voters "intended to empower the finance committee to serve as an independent decision-maker, protecting the interests of taxpayers by acting as the ultimate 'keeper of the checkbook,'" Kenny said.

The ruling does not affect the availability of $3.3 billion in federal funding, but critics said the setback would be enough to effectively kill the HSR plan.

Countered CHSRA Chairman Emeritus Rod Diridon, "This does not jeopardize the project. It will cause delay and it will cost more money," he told local media.

Gov. Jerry Brown in 2012 signed the bill authorizing the state to begin spending the first $2.6 billion of the bonds for construction to begin, and unlocking the federal funds. The state has sold $705 million of debt from the bond measure, but the bonds are sold as part of the state's generic general-obligation bond offerings that finance many different kinds of projects such as schools and roads.

Last August California signed a $1 billion contract with a joint venture of Tutor Perini Corp. (TPC), Zachary Construction Corp. and Parsons Corp. to design and built the first 30 miles. The rail authority is getting ready to seek bids for a second $2 billion contract.