A Sacramento County Superior Court judge's decision late Friday has the potential to halt construction of California's high-speed rail project before it starts.
After considering a lawsuit filed almost two years ago by Kings County and two of its residents, Judge Michael Kenny determined that a funding plan adopted by the California High-Speed Rail Authority in 2011 violated several provisions of Proposition 1A, a $9.9 billion bond measure approved by voters in 2008.
Kenny pointedly noted in his ruling that "the authority abused its discretion by approving a funding plan that did not comply with the requirements of the law."
But Kenny's ruling also asks for more arguments from both sides before he determines whether to issue a court order to overturn the rail agency's plan or to negate the state Legislature's approval last summer of about $2.6 billion from Prop. 1A for construction to begin.
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Kenny heard arguments from attorneys in the case on May 31.
"It's been a great afternoon since the ruling came down," said Aaron Fukuda, a Hanford homeowner who, along with the Kings County Board of Supervisors and Hanford farmer John Tos, brought the lawsuit in November 2011. "To read the judge's statement that the authority 'abused its discretion' -- 'abused' is an understatement."
In a statement issued late Friday, authority board chairman Dan Richard said the authority will keep plugging away on the project.
"Today's ruling is that the Legislative appropriation for high-speed rail ... based on the authority's 2012 business plan, remains valid and our work on project continues," Richard said. "We take our commitment to Proposition 1A seriously and continue to work towards developing a high-speed rail project that benefits all Californians."
The authority's optimism is based not on its 2011 funding plan, but on a revised 2012 business plan that legislators considered when they approved the construction money last summer. In his 16-page ruling, the judge did not explicitly mention the revised 2012 plan, either to uphold or undermine its validity.
The judge agreed with attorneys for Kings County that the authority's draft business plan fell short of requirements that it identify "reasonably expected" sources of money for its proposed Initial Operating Segment -- a stretch from Merced to the Los Angeles basin on which high-speed trains would begin carrying passengers. Instead, the plan only provided information on money that was available for construction of the line in the San Joaquin Valley from Madera to just north of Bakersfield.
"The identification of funds must be based on a reasonable present expectation of receipt on a projected date, and not merely a hope or possibility that such funds may become available," Kenny wrote.
Kenny also determined that the rail authority's plan did not comply with Prop. 1A requirements that the agency have all of its necessary environmental clearances for the Merced-Los Angeles operating segment before starting any construction.
To date, the rail authority has only completed its environmental requirements for the Merced-Fresno portion of its 520-mile statewide network. The agency hopes to approve a final version of environmental assessments for its Fresno-Bakersfield section by the end of this year. But the authority has yet to even issue draft environmental reports for its Bakersfield-Palmdale and Palmdale-Los Angeles section, the remaining portions of the initial operating segment.
"The authority is to certify that project-level environmental clearances are complete," Kenny wrote. "A certification that such clearances will be completed by some later date obviously fails to comply."
Fukuda said the judge's ruling is a vindication for Kings County and its residents after more than two years of fighting over what they describe as being railroaded by the authority.
"This come after years of trying to explain to them, 'You're not doing what everybody asked you do do,' " he said. "They're asking everybody to sacrifice a great deal for something that's not right. ... This is telling them they've got to do it right."
With the rail authority still saying it wants to break ground on the first 30-mile stretch of its train route in Madera and Fresno counties this summer, Kenny could bring the work to a screeching halt before it even begins, depending on what remedy he chooses to impose in the case.
"The court is not yet convinced that invalidation of the funding plan, by itself, would be a remedy with any real, practical effect," Kenny wrote. "Unless the writ also invalidated the legislative appropriation" and subsequent actions including contracts based on the faulty plan, "issuance of the writ would have no substantial or practical impact on the program."
The judge is asking attorneys for both side to provide additional written arguments before deciding if he should invalidate the authority's plan or even go so far as to invalidate the Legislature's approval of funds last summer. No schedule has been set for those briefings or a hearing on the issue.
Fukuda said the future of the case is uncertain. "The judge is saying, 'Am I really going to shut this thing down?' We really have to move on to this next phase."