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High-speed rail board approves plans to unlock bond billions

A viaduct for elevated high-speed rail tracks takes shape near Cedar and North avenues and Highway 99 at the south end of Fresno in this Dec. 6, 2016 photo. The California High-Speed Rail Authority is seeking about $2.6 billion in money from Proposition 1A, a 2008 bond act, to continue construction of 119 miles of tracks in the San Joaquin Valley.
A viaduct for elevated high-speed rail tracks takes shape near Cedar and North avenues and Highway 99 at the south end of Fresno in this Dec. 6, 2016 photo. The California High-Speed Rail Authority is seeking about $2.6 billion in money from Proposition 1A, a 2008 bond act, to continue construction of 119 miles of tracks in the San Joaquin Valley. tsheehan@fresnobee.com

The California High-Speed Rail Authority’s board took a “momentous” step Tuesday toward unlocking billions of dollars in state bond funds that it needs to continue construction in the San Joaquin Valley and on the San Francisco Peninsula.

In a series of 7-0 votes at their meeting in Sacramento, board members approved funding plans for the Central Valley and San Francisco-San Jose segments, as well as authorizing the issuance of a “request for qualifications” from potential train-operating companies to guide the planning and earliest stages of operations for the bullet train system between the San Joaquin and Silicon valleys.

The two funding plans are required by state law before the authority can use any money from Proposition 1A, the $9.9 billion high-speed rail bond act approved by California voters in 2008.

Under the provisions of Proposition 1A and subsequent 2012 legislation providing construction funds for the rail authority, the agency has to submit a funding plan that, among other things, details the estimated construction costs for a “usable segment” of the system, identifies the sources of money to build it and provides an assessment of projected ridership and operating revenue.

Proposition 1A long has been identified as the main source of money that the state would use to meet its obligations to match a proportion of federal funds that have been pledged toward the state’s high-speed rail efforts.

Board chairman Dan Richard described the votes as “momentous.”

“There’s been a long path to get to the (Proposition) 1A money. Because we are now fully mobilized in construction, it’s really important to keep the momentum going,” Richard said. “By moving forward today, we assure that we have sufficient funds to meet the federal matching requirements in the best way.”

In the funding plan for the San Joaquin Valley, the authority estimates that it will take $7.8 billion to build what it describes as a fully electrified test line where it will eventually conduct trials of its electric trains at speeds above 200 mph.

The federal government has provided California with about $3 billion in American Recovery and Reinvestment Act stimulus funds and federal railroad transportation money. About $2.6 billion is expected to come from Proposition 1A, and another $2.2 billion from the state’s Greenhouse Gas Reduction Fund.

In the funding plan for the San Francisco Peninsula, the rail authority states that it will operate its high-speed trains on a “blended system” that shares tracks with the Caltrain commuter rail line on more than 50 miles between San Jose and San Francisco.

The cost of converting Caltrain from its current diesel trains to an electrified system and upgrading the tracks to serve both Caltrain and high-speed trains is estimated at just under $2 billion. With the Peninsula funding plan considered Tuesday, the authority will seek about $600 million in Proposition 1A money for the electrification project.

The third vote, for soliciting statements of qualifications from international rail firms to help the authority plan various operational aspects of the system, also was a significant step for the authority, Richard said.

“The program spent years in the planning stage, and then we moved into design, and a couple of years ago we were able to get into the construction stage,” Richard said. “Now we’re taking the first step to get into the commercial operation stage.”

The expectation is that a company would help the authority finalize its track and station designs and carry the system into initial operations between the San Joaquin Valley and the Bay Area.

A company with real-world experience in high-speed train operations in other countries “can infuse their experience into our engineering design,” Richard said. “It might seem like a small step, but it marks a new phase and a new philosophy for the project to have commercial operations baked into the design from the beginning.”

The authority anticipates that it will be able to bring on an operator as a consultant for a six-year contract worth up to $30 million; a second stage of the contract including initial operations would take the form of a franchise agreement for the rights to operate trains on the system.

The funding plans for the Central Valley and the Bay Area already have attracted litigation to stop the use of Proposition 1A money.

Stuart Flashman, an Oakland attorney who represented Kings County high-speed rail opponents in an unsuccessful 4 1/2 -year legal battle that ended early this year, said he filed a lawsuit Tuesday to challenge the validity of Assembly Bill 1889, a law signed by Gov. Jerry Brown this year to establish parameters for what constitutes a high-speed rail segment that is “suitable and ready for high-speed train operation.”

Flashman said he believes the law, which set the stage for the authority to present the two funding plans to the state’s director of finance and to the Joint Legislative Budget Committee, is unconstitutional because “it attempts to materially change the meaning of a voter-approved bond measure.”

Flashman invited the authority board to join the lawsuit and “cooperate with us in getting a quick court decision on whether this is appropriate or not before you start spending the money.”

Richard discounted the importance of Flashman’s lawsuit, stating that he believes AB 1889 was intended to clarify some aspects of the bond act and that ultimately, the funding plans meet the requirements of the law.

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