Judge blocks sale of California high-speed rail bonds

AP Photo/Rich PedroncelliSacramento County Superior Court Judge Michael Kenny questions attorney Stuart Flashman

A Sacramento judge on Monday tore up California's funding plans for its bullet train project in separate orders that could force the state to spend months or years redrawing its plans for the $68 billion undertaking.

Judge Michael Kenny rejected a request from the California High-Speed Rail Authority to sell $8 billion of the $10 billion in bonds approved by voters in 2008, saying there was no evidence it was “necessary and desirable” to start selling the bonds when a committee of state officials met last March.

He said the committee was supposed to act as “the ultimate 'keeper of the checkbook'” for taxpayers, but instead relied on a request from the high-speed rail authority to start selling bonds as sufficient evidence to proceed.

In a separate lawsuit, Kenny ordered the rail authority to redo its $68 billion funding plan before continuing construction, a process that could take months or years.

Proposition 1A, which voters approved in 2008, required the rail authority to specify the source of the funding for the first operable segment of the high-speed rail line and have all the necessary environmental clearances in place. Kenny previously ruled that the agency did not comply with either of those mandates.

The lawsuit claimed that the project's current plan no longer complies with what voters were promised, and the judge agreed. But he stopped short of blocking the project altogether.

The rail authority had argued that the funding plan had already been updated. The rail authority has also said that it intended to first spend some $3.2 billion in federal money before tapping the bonds.

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