7. 11/2013 Briefing Paper for the Federal Railroad Adminstration

Overview -The December 2012 Amendment 5 to the Grant and Cooperative Agreement (Agreement) between the Federal Railroad Administration (FRA) and the California High-Speed Rail Authority (CHSRA) allowed the project to move forward on the basis of a “federal funds first” understanding, shifting financial risks to the FRA and contravening DOT’s prior ruling that federal and State funds were to be spent simultaneously. 

The California court intervened eight months after those provisions to the Agreement were agreed upon.  On August 16th 2013 a Sacramento Superior Court judge ruled the CHSRA had abused its power in November 2011 when it approved the high-speed train’s Funding Plan.  The judge’s ruling changes the way the FRA should view its relationship with the Authority.

Whether knowingly or not, the Authority violated State law. That action eroded the foundations of the Agreement’s provisions governing the expenditure of Federal and State monies since the Agreement made FRA party to the Authority’s conformance with State law. 

In addition, in all probability California’s legally binding rules for contract awards were repeatedly violated in selecting the contractor for CP1. The Authority’s actions directly implicate the FRA by the FRA being party to the Agreement, and to date the only source of construction funds.

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  496k v. 2 Nov 21, 2013, 1:28 PM William Warren