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Federal agency canceling grant for high-speed rail project

Original post made on Feb 20, 2019

Officials with the U.S. Department of Transportation announced Tuesday that they are terminating an agreement worth $929 million for the California High-Speed Rail project.

Read the full story here Web Link posted Wednesday, February 20, 2019, 9:03 AM

Comments (16)

Posted by What Will They Do Next
a resident of Old Palo Alto
on Feb 20, 2019 at 11:37 am

What Will They Do Next is a registered user.

This was a con job from the very beginning. Newsom wanted to stop the whole project but backtracked and is going with a scaled down version, succumbing to pressure from Sacramento democrats.

The central valley train will fail because of a lack of ridership and tax payers will be forced to subsidize the boondoggle, if in fact it ever gets built.

U.S.Transportation department terminating the agreement makes fiscal sense and forces California dems to come to terms with reality.


Posted by Curmudgeon
a resident of Downtown North
on Feb 20, 2019 at 12:03 pm

No big surprise. Trump wants the money to pay for that Big Beautiful Wall he assured us Mexico would pay for.


Posted by TBM
a resident of another community
on Feb 20, 2019 at 12:08 pm

What the Federal letter actually says is that they "intend" to cancel the grant unless there is information showing:
(1) CAHSR has satisfied its commitments and obligations under the agreement.
(2) CAHSR is making reasonable progress to complete project.
(3) Governor's announcement does not constitute a fundamental change to the project.

On point 3, the Governor does not have the authority to materially change a project approved by a state-wide ballot, so that shouldn't be a problem.


Posted by Thom
a resident of Downtown North
on Feb 20, 2019 at 12:17 pm

But someone wants to teach CA a lesson - law, contracts and agreements don't matter to him! Just ask anyone ('cept Vlad) that have invested with him.


Posted by Leslie
a resident of Old Palo Alto
on Feb 20, 2019 at 1:33 pm

"The central valley train will fail because of a lack of ridership and tax payers will be forced to subsidize the boondoggle, if in fact it ever gets built."

That has been true of the entire HSR project from day one. They never did realistic market research to assess demand.

"What the Federal letter actually says is that they 'intend' to cancel the grant unless there is information showing:"

It will be an interesting court fight.

"(2) CAHSR is making reasonable progress to complete project."

It would be hard to argue that they have in the 8 years since Prop 1a was passed. They've made plenty of progress in jacking up the price year after year, and private capital hasn't gone near the project.

"the Governor does not have the authority to materially change a project approved by a state-wide ballot"

Who's going to stop him? It's hard to imagine he would do this without being aware of the legal ramifications.


Posted by TBM
a resident of another community
on Feb 20, 2019 at 2:38 pm

@ "Who's going to stop him?"

Materially changing a voter approved project would be unconstitutional, so the Superior Court would stop him.

Prop1A anticipates that construction will occur piecemeal and has no date by which Phase 1 must be completed. The Governors statement to focus on getting the central valley section up and running first is not inconsistent with the terms of the voter approved project.

I anticipate that in the next few days, CAHSR lawyers will write a letter to the Feds asserting that the three conditions are being met.

CAHSR will certainly assert that they are making a good faith effort to complete the project despite a dysfunctional system working against them.


Posted by peninsula resident
a resident of another community
on Feb 20, 2019 at 3:28 pm

### the Governor does not have the authority to materially
### change a project approved by a state-wide ballot

## Who's going to stop him?

# Materially changing a voter approved project would be
# unconstitutional, so the Superior Court would stop him.

All Newsom has to do is simply not fund it beyond its current funding. And there's absolutely nothing unconstitutional about that. Prop 1A only approved a ~$10 billion bond, nothing more.

Superior Court cannot force him to fund the project simply because Prop 1A doesn't require him|California to do so.


Posted by TBM
a resident of another community
on Feb 20, 2019 at 3:44 pm

@ "All Newsom has to do is simply not fund it beyond its current funding."

Correct, but that does not cancel the project or release the Government from its constitutional obligation to complete it. It merely puts completion of Phase-1 on-hold until Alexandria Ocasio-Cortez is president in 2021.


Posted by What Will They Do Next
a resident of Old Palo Alto
on Feb 20, 2019 at 3:50 pm

What Will They Do Next is a registered user.

@TBM.....the dysfunction is with Sacramento and the people in charge. Can't blame this on anyone else, including the feds. Eight years of piecemeal construction has done nothing but line the pockets of consultants, contractors, suppliers and some construction workers.

In the real world, those in charge would have been terminated for failure to deliver, but most government run projects don't have those constraints placed on them. They promise the sky, deliver very little and have no one to answer to but themselves.

And even if the project continues, the costs will keep rising,the technology will have improved making the finished project obsolete and the tax payers will be stuck with the costs.

Stick a fork in it. It's done.


Posted by What Will They Do Next
a resident of Old Palo Alto
on Feb 20, 2019 at 3:51 pm

What Will They Do Next is a registered user.

@ TBM....will she extend the system across the ocean to get us to Hawaii ??


Posted by peninsula resident
a resident of another community
on Feb 20, 2019 at 5:15 pm

## "All Newsom has to do is simply not fund it beyond its current funding."

# Correct, but that does not cancel [the project]

Pedantically, you're correct, and if you want to hang your hat on the semantics, be my guest. As long as no new dollars go to that boondoggle, I'm happy and you're free to call it whatever you want :)


# [does not] release the Government from its constitutional
# obligation to complete it.

The State has a legal and ethical duty to enforce Prop 1A AS WRITTEN. No more. As written in Prop 1A, HSR must:

* have full funding for each Operating Segment in ADVANCE of construction.
* run with no taxpayer funded operational subsidy.
* have maximum nonstop service travel time of 2hr 40 minutes LA<->SF.
* (etc numerous other requirements, as specified in Prop 1A text).

Prop 1A: Web Link

Enforcing Prop 1A effectively kills CAHSR.


Posted by Ahem
a resident of Another Palo Alto neighborhood
on Feb 20, 2019 at 5:17 pm

As bad as things are for CalHSR, they are about to get a whole lot worse.

The letter the Federal Railroad Administration sent to CalHSR's Brian Kelley is similar to the letter the FRA sent to the Honolulu Authority for Rail Transit (HART) about a month before serving HART with a sweeping federal subpoena seeking construction documents in connection with HART's rail project that was originally budgeted to cost $5 billion but is now expected to cost $9 billion or more.

Feds subpoena Honolulu rail authority for construction documents Web Link


Posted by JR
a resident of Palo Verde
on Feb 20, 2019 at 8:27 pm

It's all but official that HSR will never pass through Palo Alto. That means we have spent years debating construction projects that were based on faulty assumptions. Back to the drawing board.. or not. Time for real leadership to take a stand -- all crossings in the city should remain as-is. We'll debate the need for grade separation if / when the pie-in-the-sky "projections" come to pass. Until then let's build projects that improve quality of life for ALL Palo Altans, like additional bike / ped overcrossings across the tracks.


Posted by Leslie
a resident of Old Palo Alto
on Feb 20, 2019 at 9:09 pm

"Eight years of piecemeal construction has done nothing but line the pockets of consultants, contractors, suppliers and some construction workers..."

... and Jerry Brown's benefactors.

"have full funding for each Operating Segment in ADVANCE of construction."

Too late for that.

"run with no taxpayer funded operational subsidy."

Can't be done.

* have maximum nonstop service travel time of 2hr 40 minutes LA<->SF.

Likewise can't be done.

"Enforcing Prop 1A effectively kills CAHSR."

Yup.

The State of California has no more business running a passenger service than it has manufacturing washing machines.


Posted by TBM
a resident of another community
on Feb 21, 2019 at 1:02 am

@ peninsula resident
#### "The State has a legal and ethical duty to enforce Prop 1A AS WRITTEN. No more. As written in Prop 1A, HSR must:

* have full funding for each Operating Segment in ADVANCE of construction.
* run with no taxpayer funded operational subsidy.
* have maximum nonstop service travel time of 2hr 40 minutes LA<->SF.
* (etc numerous other requirements, as specified in Prop 1A text).
####

These assertions have already been litigated and the courts (pending appeal) have rejected them. The CAHSR can point to the litigation to show the Feds that the project approved by the voters has not been fundamentally changed.

"### * have full funding for each Operating Segment in ADVANCE of construction."
They have full funding for the central valley segment, at issue is whether the Authority must immediately begin a high speed train service on a completed segment, the court has ruled that they do not (1).

"### * run with no taxpayer funded operational subsidy."
The court isn't interested in hearing competing experts predict what the world will be like in the year 2030. CSHAR gets the benefit of the doubt.

"### * have maximum nonstop service travel time of 2hr 40 minutes LA<->SF."
The first train is not expected to run that route before the year 2033, by that time trains two generations more advanced and faster will be available. The exact route of the train has not yet been determined.

"### * (etc numerous other requirements, as specified in Prop 1A text)."
Opponents in Court have thrown everything at the wall and nothing has stuck.

The Court does not have the power to cancel a voter approved project, the most the Court can do is force the CAHSR to come into compliance. With future obligations like subsidies and travel time, CAHSR just needs to show that these things are not impossible.

(1) Petitioners offer, may be that the language, "if so completed, the corridor or usable segment thereof would be suitable and ready for high-speed train operation," requires a segment to be ready for high-speed travel immediately upon completion of that particular segment. However, such arguable interpretation is not dispositive of the issue. ... the Court agrees with Respondent that the phrase "suitable and ready for high-speed train operation" is not specifically defined in Proposition lA. Further, the statutory scheme anticipates that construction will occur piecemeal, and that it will require pre-construction activities as well as capital improvements to passenger rail systems. Because Proposition 1A contemplates that the project is of a large scale that will be constructed over a period of time, the Court finds that "suitable and ready for high-speed train operation" was reasonably subject to clarification by the Legislature through AB 1889.


Posted by Leslie
a resident of Old Palo Alto
on Feb 21, 2019 at 2:42 am

"The first train is not expected to run that route before the year 2033, by that time trains two generations more advanced and faster will be available."

Ah, but you just said: "The court isn't interested in hearing competing experts predict what the world will be like in the year 2030."

"The Court does not have the power to cancel a voter approved project"

Right, but the matter can be put on the ballot and re-voted, which it should be.


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