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	<title>elaine chow &#8211; CalWatchdog.com</title>
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		<title>Bullet train roundup: CEO out as project faces lawsuit and federal threats</title>
		<link>https://calwatchdog.com/2017/04/24/bullet-train-roundup-ceo-project-faces-lawsuit-federal-threats/</link>
					<comments>https://calwatchdog.com/2017/04/24/bullet-train-roundup-ceo-project-faces-lawsuit-federal-threats/#comments</comments>
		
		<dc:creator><![CDATA[Chris Reed]]></dc:creator>
		<pubDate>Mon, 24 Apr 2017 15:12:14 +0000</pubDate>
				<category><![CDATA[Breaking News]]></category>
		<category><![CDATA[federal funding]]></category>
		<category><![CDATA[elaine chow]]></category>
		<category><![CDATA[bullet train funding]]></category>
		<category><![CDATA[bullet train]]></category>
		<category><![CDATA[California bullet train]]></category>
		<category><![CDATA[California High-Speed Rail]]></category>
		<category><![CDATA[Chris Reed]]></category>
		<category><![CDATA[Jeff Morales]]></category>
		<category><![CDATA[Jerry Brown]]></category>
		<category><![CDATA[Kevin McCarthy]]></category>
		<category><![CDATA[Proposition 1A]]></category>
		<guid isPermaLink="false">http://calwatchdog.com/?p=94215</guid>

					<description><![CDATA[The chief executive of the California High-Speed Rail Authority – former Caltrans director Jeff Morales – is resigning in June from the agency after five years overseeing the state’s $64 billion bullet]]></description>
										<content:encoded><![CDATA[<p><span style="font-weight: 400;"><img fetchpriority="high" decoding="async" class="alignnone size-full wp-image-78919" src="http://calwatchdog.com/wp-content/uploads/2015/04/bullet.train_.jpg" alt="" width="300" height="300" align="right" hspace="20" srcset="https://calwatchdog.com/wp-content/uploads/2015/04/bullet.train_.jpg 300w, https://calwatchdog.com/wp-content/uploads/2015/04/bullet.train_-220x220.jpg 220w" sizes="(max-width: 300px) 100vw, 300px" />The chief executive of the California High-Speed Rail Authority – former Caltrans director Jeff Morales – is resigning in June from the agency after five years overseeing the state’s $64 billion bullet train project.</span></p>
<p><span style="font-weight: 400;">The </span><a href="http://www.latimes.com/local/lanow/la-me-california-bullet-train-20170421-story.html" target="_blank" rel="noopener"><span style="font-weight: 400;">announcement</span></a><span style="font-weight: 400;"> Friday prompted Gov. Jerry Brown and others to praise Morales for leading the authority during a contentious period in which it managed to break ground on the bullet train’s system initial 118-mile segment but struggled to find funding that would actually allow for construction of a statewide network. That’s what voters were promised in 2008 when they approved </span><a href="https://ballotpedia.org/California_Proposition_1A,_High-Speed_Rail_Act_(2008)" target="_blank" rel="noopener"><span style="font-weight: 400;">Proposition 1A</span></a><span style="font-weight: 400;">, which provided $9.95 billion in bond seed money to a project then estimated to cost $43 billion.</span></p>
<p><span style="font-weight: 400;">But the timing of Morales’ departure could lead to a melancholy final two months on the job for the rail executive if House Republicans get their way. House Majority Leader Kevin McCarthy, R-Bakersfield, and the other 13 California House GOP members have launched a several-pronged front to try to get the Trump administration to prevent already-committed federal dollars from ever being spent on the project.</span></p>
<p><span style="font-weight: 400;">Their most visible effort came in February. That’s when their lobbying was seen as prompting Transportation Secretary Elaine Chow to put on </span><a href="https://www.nytimes.com/2017/03/06/us/trump-and-republicans-block-caltrain-grant.html?_r=0" target="_blank" rel="noopener"><span style="font-weight: 400;">hold</span></a><span style="font-weight: 400;"> a promise made late in the Obama administration to provide $647 million to electrify tracks in Silicon Valley leading to San Francisco – a crucial part of the governor&#8217;s plan to have a “blended” system of high-speed and regular rail.</span></p>
<h4>Key Obama administration decisions could be rolled back</h4>
<p><span style="font-weight: 400;">But California House Republicans also want to “claw back” some of the funding and procedural decisions in Washington made related to the project. This push received an unexpected boost in the final weeks of the Obama presidency when a confidential Federal Railroad Administration report was </span><a href="http://www.latimes.com/local/california/la-me-bullet-cost-overruns-20170106-story.html" target="_blank" rel="noopener"><span style="font-weight: 400;">leaked </span></a><span style="font-weight: 400;">to the Los Angeles Times. It predicted the first segment of the bullet train that the rail authority had long said would cost $6.4 billion could instead cost $9.5 billion to $10 billion.</span></p>
<p><span style="font-weight: 400;">Based on this evidence of dubious management and on the rail authority’s inability to attract investors – raising questions about financing – the U.S. Transportation Department appears to have grounds to rescind decisions made in 2009 and 2012 that enabled the project to end up getting about $3 billion in federal funds.</span></p>
<p><span style="font-weight: 400;">The 2009 decision was the original DOT move to make the California bullet-train project eligible for federal funding from the massive omnibus stimulus bill adopted soon after President Obama took office. The decision required an analysis concluding the project was properly funded and had responsible and thorough planning that<a href="https://www.city-journal.org/html/solyndra-times-seven-10988.html" target="_blank" rel="noopener noreferrer"> substantiated expectations of success</a>.</span></p>
<p><span style="font-weight: 400;">The 2012 decision was in the form of an agreement that allowed California to bypass the tradition of state and federal infrastructure projects being jointly funded on a dollar-for-dollar basis. Instead, California </span><a href="http://www.latimes.com/local/california/la-me-bullet-amendment-20150611-story.html" target="_blank" rel="noopener"><span style="font-weight: 400;">was allowed</span></a><span style="font-weight: 400;"> for at least three years to get an advance on federal dollars in return for guaranteeing eventual matching funds – totaling $200 million as of June 2015. The federal government has the authority to demand the state match what it has already spent before allowing another dollar to go California’s way.</span></p>
<h4>Is new state law a tweak or a &#8216;material&#8217; change?</h4>
<p><span style="font-weight: 400;">A revocation of these bullet-train-friendly decisions isn’t the only possible twist that Morales faces in his final two months on the job.</span></p>
<p><span style="font-weight: 400;">Central Valley farmer John Tos, Kings County, the city of Atherton and several other Central Valley groups – the same coalition that previously filed, with some success, legal challenges against the state project – may have their first hearing this week on a </span><a href="http://www.latimes.com/local/california/la-me-bullet-train-lawsuit-20170201-story.html" target="_blank" rel="noopener"><span style="font-weight: 400;">new lawsuit</span></a><span style="font-weight: 400;"> in Sacramento Superior Court. (A previous hearing scheduled for last week was delayed, so another delay is possible.)</span></p>
<p><span style="font-weight: 400;">The lawsuit challenges the legality of the December vote of the California High-Speed Rail Authority to </span><a href="http://www.mercurynews.com/2016/12/14/california-board-approves-high-speed-rail-funding-as-new-lawsuit-filed/" target="_blank" rel="noopener"><span style="font-weight: 400;">authorize </span></a><span style="font-weight: 400;">the selling of $3.2 billion in state bonds for the project under the authority granted it by Assembly Bill 1889, a measure by Assemblyman Kevin Mullin, D-South San Francisco, that was enacted last year. It loosened bond-spending restrictions in Proposition 1A, the 2008 measure funding the rail project.</span></p>
<p><span style="font-weight: 400;">Mullin and other Democrats depicted the change as a routine tweak in the law. Attorneys for Tos, Kings County and Atherton will seek an injunction against any sale of the bonds on the grounds that there is no provision in Proposition 1A allowing for it to be subsequently “materially” altered by the California Legislature.</span></p>
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