Caltrain supporters unfazed by high-speed rail suit: Officials believe bond sale, electrification will stay on track despite new case

Officials were pleased that after years of litigation holdup, the High-Speed Rail Authority moved Tuesday to initiate the process of selling $3.2 billion in voter-approved Proposition 1A bonds. About $1.1 billion of the 2008 voter-approved $10 billion in bonds is slated to support “bookend” projects like Caltrain’s.

Regardless if a newly filed lawsuit delays the sale, Caltrain supporters noted the state has already committed to provide interim funding for electrification — a requirement for high-speed rail operations along the Peninsula.

“We’re very pleased that the High-Speed Rail Authority is moving forward with the steps needed to provide Prop. 1A funds to the electrification project,” said Caltrain Chief Communications Officer Seamus Murphy. “We don’t expect any legal action will require us to change direction. We think that we’re on solid legal footing and certainly wouldn’t anticipate any injunction or other reason for our work on the project to stop.”

The authority’s long anticipated move to sell the bonds was made possible in part by Assemblyman Kevin Mullin, D-South San Francisco, who championed a law last year that clarified voter-approved bond funding could be spent on the Peninsula project.

Legal battle continued

But an attorney representing longtime high-speed rail opponents, including the town of Atherton, announced they filed a new lawsuit this week alleging Mullin’s bill is unconstitutional. Their preface is that a material change in the use of the bonds — such as on the Peninsula segment not yet approved for high-speed rail — first requires voter approval.

Attorney Stuart Flashman is working on the suit filed by four individuals, three nonprofits, Atherton and Kings County — the same group that also filed an earlier case.

Local opponents expressed concerns ranging from an increase in gate crossing down times to the costs of the state project ballooning to $64 billion with no reliable funding source. The newly filed lawsuit also questions whether Caltrain’s project is fully funded, noting the local transit agency has yet to receive a federal grant.

“The High-Speed Rail Authority’s Board Chair, Mr. Richard says he wants to use the high-speed rail bond money to modernize California’s rail facilities. That’s not, in itself, a bad idea, but it’s not what voters approved when they voted for the bond. If he wanted to do that, he needed to go back to the voters, not to the Legislature,” Flashman said in a press release.

Although the authority has long been plagued by lawsuits curtailing its ability to sell some of the $10 billion in voter approved bonds, officials remained confident the new litigation wouldn’t cause further delay.

Remaining on track

Mullin, who noted his Assembly Bill 1889 was vetted by the Legislature, emphasized the law simply clarified lawmakers’ earlier intent when they codified the “blended system” and required high-speed rail to pony up funds for electrification.

“I’m excited the Caltrain electrification project has cleared one more hurdle. It’s going to be a big deal for the Peninsula both economically and environmentally. The latest lawsuit that’s been filed, I’m quite confident that lawsuit will be unsuccessful. I have to say, I question the value of continuing to put taxpayer money toward lawsuits when these kinds of suits have been rejected in the past,” Mullin said.

He noted legislative attorneys reviewed his law, but the Department of Finance must now weigh in.

Next stop for bonds

High-speed rail cannot sell the bonds itself. Instead, per the authority’s action Tuesday, it approved its funding plan for the Peninsula segment and the state director of finance has 60 days to review the proposal. If all goes to plan, the state treasurer could then put the bonds for sale on the open market — which typically occurs twice a year during the spring and fall.

H.D. Palmer, deputy director of external affairs with the Department of Finance, noted the department is not named as a defendant in the lawsuit and courts have already considered the matter of bond sales.

“It is our view that litigation would not prevent the director of finance from approving the funding plans,” Palmer said. “I don’t think anyone thinks the mere filing of a court action would prevent anyone from taking action or influencing their decision around this problem because that [earlier] litigation validated the bonds. The treasurer has a court order from the Third District Court of Appeals that he’s safe to sell those bonds.”

Short of the opponents getting a court injunction, Palmer noted it’s unlikely the lawsuit will further stall the process.

High-speed rail officials also questioned the efficacy of the lawsuit.

“We are in the business of building high-speed rail in California, putting people to work and investing in our future,” spokeswoman Lisa Marie Alley said in an email. “This group is in the business of filing lawsuits, delaying the project and raising the cost of the program at the expense of the taxpayers.”

Cities throughout the Peninsula are awaiting the authority’s release of an environmental impact report, with several communities having expressed concerns over the prospect of a combined 10 trains running in each direction during peak hours. Without guaranteed funding for grade separations, let alone the remainder of high-speed rail’s construction costs, opponents and parties to the lawsuit have sought to derail the statewide project.

Electrifying the region

But Caltrain’s Murphy emphasized the local transit agency could continue with electrification regardless, as the authority committed to offer interim funds if necessary. They’re also optimistic in Caltrain’s $647 million federal grant application, which they expect word of early next year.

“It’s an important mobility benefit for one of the most economically productive corridors,” Murphy said. “That’s one reason the state has recognized the value of this project as an early investment in what will eventually be the infrastructure needed to accommodate a statewide rail system, and it’s one reason why the federal government is working to provide the project with a significant investment.”

Caltrain is in the final design stage for electrifying nearly 51 miles of track between San Jose and San Francisco, and purchasing new trains. In a timely show it won’t be deterred, the agency announced Wednesday it will begin seeking public input on how to adjust its train schedule to accommodate construction next year.

Caltrain’s nearly $2 billion electrification project is financed by a hodgepodge of local, regional, state and hopefully federal funding. Officials have stressed it has benefits independent of whether high-speed rail joins its tracks. Proponents tout it as a critical infrastructure upgrade that will accommodate more riders by introducing faster and environmentally cleaner trains.

“This entire Caltrain corridor is the epicenter of the innovation economy and it’s a job creation and economic engine,” Mullin said, noting the downside has been an uptick in traffic and environmental impacts. “This electrification project, I would argue, is monumental with regard to dealing with those byproducts effectively and efficiently.”

samantha@smdailyjournal.com

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