Trump’s plan to take back $2.5 billion in California’s

Trump’s plan to take back $2.5 billion in California’s high-speed rail funding ‘unprecedented’

By RALPH VARTABEDIANFEB 21, 2019 | 6:40 AM  

Trump’s plan to take back $2.5 billion in California’s high-speed rail funding ‘unprecedented’
A full-scale mock-up of a high-speed train stands outside the state Capitol in Sacramento in 2015. (Rich Pedroncelli / Associated Press)

The Trump administration’s decision to cancel a $929-million grant to California’s troubled high-speed rail project and claw back $2.5 billion in funds already spent has thrust the federal government into uncharted legal territory and poses an existential threat to the state’s largest investment ever.

Never before, experts say, has the federal government attempted to take back such a large sum of money from California, particularly after it was spent under federal supervision.

“I have never seen anything this large,” said Ron Flavin, a San Francisco consultant who advises state agencies and local governments on grants. “I have never seen anything where they said we are going to cancel a grant because of issues in the administrative or bureaucratic process.”

The Federal Railroad Administration this week sent a letter to state officials asserting that the project is out of compliance with major provisions of the grant agreement’s schedule, scope and payment terms.PAID CONTENTWhat Is This?

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California has for years struggled to comply with the grants, which are laid out in lengthy legal documents that have been repeatedly modified over the last decade. At the same time, the project has dealt with funding shortages, contract mismanagement, legal disputes and myriad other complex challenges — issues that were identified in a critical state audit in November.

The nearly $3.5 billion at stake represents about one-fourth of all the funding that the project has on hand today, so its loss could push the state into having to make up for the funding while the dispute is resolved or further curtail the schedule and scope of the Los Angeles-to-San Francisco bullet train.

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