Judge tosses High Speed Rail funding plan; what does this mean for Caltrain electrification?

Yesterday, Sacramento Superior Judge Kenny invalidated the High Speed Rail Authority’s funding plan. The High Speed Rail Authority will run out of money in April unless something changes.

Since about 50% of Caltrain electrification funding comes from the High Speed Rail project, what could happen with Caltrain electrification?  Read on for details on HSR’s funding problems and a few “Plan B” scenarios, and what Caltrain supporters can do.

While backup plans are being worked on, Caltrain has enough money in hand to complete preparing for electrification in 2015. Caltrain will need money for implementation after that.

High Speed Rail’s funding predicament

The High Speed Rail Project’s funding to get started included $3.4 billion in federal funds from the Obama Administration’s ARRA stimulus package, and $2.6B that the state legislature authorized last summer out of $10B  Proposition 1A bond funds.

Judge Kenny ruled that issuing the bonds would be subject to legal challenges because the High Speed Rail Authority’s plan didn’t comply with the terms of Prop 1A. The Authority’s plan did not have funding or environmental clearance lined up for the entire 130 mile Merced to the San Fernando Valley, only for an initial segment from Fresno to Bakersfield.

Putting a hold on the state bond funding also puts the federal funding at risk.  These federal funds depend on High Speed Rail obtaining matching funds.  However, as of April 2014, the High Speed Rail Authority will need to identify sources of matching funds, or it can no longer spend the federal funds.  What happens then?

The judge did not invalidate High Speed Rail’s current contracts. So in the immediate term, the High Speed Rail project can continue in the Central Valley.

The High Speed Rail Authority  can appeal the ruling to higher courts.

Update: According to Ben Tripousis of the High Speed Rail Authority, the state is likely to go ahead this Spring and issue Prop 1A bonds despite the legal vulnerability, and defend any legal challenges.

The High Speed Rail Authority will be looking for other sources of funds to fill out its funding plan.

One option would be to utilize Cap and Trade funds  that are expected to be designated in the state’s budget this coming spring.  MTC has already been hashing out ways to use Cap and Trade funds for regional priorities.   The High Speed Rail Authority may be competing in Sacramento for a larger piece of the pie.  They would need to assemble a compelling package, including other regional priorities, in order get enough legislative votes to pass a bill.

If that doesn’t work out, or doesn’t generate enough money, the High Speed Rail Authority could explore plans to fund HSR with state sources, along the lines of a proposal by SPUR.

Or High Speed Rail could seek to re-structure its business plan so as to get private funding sooner.

If High Speed Rail is unable to backfill a funding plan soon, the federal government may be looking for other ways to put the ARRA funds to use.  The ARRA funds need to be on their way to being spent by 2017, or they will “time out.”

Caltrain electrification was specifically identified in the appropriation of the federal funding.  If the High Speed Rail Authority is be unable to get matching funds, the federal government could choose to redirect money directly to Caltrain electrification., which is a low-risk, high-value project that will help an eventual High Speed Rail service.

The Caltrain electrification program does have enough money on hand to complete the current environmental and planning work through 2015. Beyond that, additional funds will be needed, according to Caltrain’s Seamus Murphy.

For supporters of Caltrain, what to do?

Your help will be critical to ensure our state and/or federal legislators include Caltrain electrification in the backup plans.  Hold tight for the moment. We’ll see what proposals come forward for Cap and Trade and this year’s state budget – do they offer enough value for our state legislators to support?   If High Speed Rail comes up with some other plan, we’ll need to make sure electrification is part of it.

If High Speed Rail is on hold, we will need help from our Congressional contingent – who helped get funding for Electrification- to ensure the money can be used for electrification.

Help shape the vision and plan for electrified Caltrain

Given these risks, it is more important than ever to have a solid vision and plan for electrified Caltrain, so our region can rally and make sure it happens.

Participate in the development of Caltrain’s strategic plan for the next decade at a Friends of Caltrain-hosted session at December 16, 7pm, at San Carlos Library, 610 Elm Street, a short walk from San Carlos Caltrain.  Click here to RSVP – come be part of the discussion, add your ideas, and hear the latest on funding options.