The analogies between SMART and the California High Speed Rail Project are pretty remarkable spin, particularly the PR, emanating from the sponsoring agency and claims of "transparency" surrounding both projects.
However, in the case of the statewide project, the legislature is going to have a say in the outcome and and they may insist the voters have a say before any bonds are issued to construct the CAHSR line in the San Joaquin Valley. Also, noteworthy, it is the legislature that has insisted on an updated ridership and cost analysis that showed the California HSR Agency had significantly understated the project costs by billions of dollars and overstated its ridership potential.
Sound familiar? Marin and Sonoma voters have no such check on the SMART board. The repeal process is the only game in town to check the SMART board’s power and arrogance.
It's too bad that the current SMART board has decided to "circle the wagons" and try to thwart rather than accommodate the right of voters to have a say on the project.
And those supporting repeal have a solid case to make. It has been three years since Measure Q was passed, providing most of the funding for SMART. The project is vastly different than what voters approved and it seems reasonable voters should have a say whether they still support such a shrunken rail line that goes no farther south than San Rafael and no farther north than downtown Santa Rosa.
Claims that SMART can construct a second phase are completely made up. So are the financial plans the board approved in 2008, 2009 that claimed SMART could afford a 72-mile rail line. Marin voters ought to have a say after the shenanigans pulled by the SMART board members at the Transportation Authority of Marin this summer to siphon $8 million from Marin County transportation programs despite repeated promises not to do so.
What about the SMART’s potential ridership? Earlier this year, the Dowling ridership study was rejected because it made no sense. There has been no update since and no accounting for the removal of two destination rail stations (Atherton Avenue in Novato and Corona Road in northern Petaluma were eliminated). Again there has been no one on the board to even suggest maybe they ought to know what the ridership is likely to be.
SMART’s CFO is on "administrative leave" (who are they kidding?) and the agency — just like the CAHSR — still hasn’t issued the bonds they need to raise the cash to pay for construction of the rail line. Meanwhile, Farhad Mansourian, SMART’s GM, has appointed himself interim CFO despite having no financial qualifications to fill that job even temporarily, further indicating the board’s inability to make prudent financial judgments.
Speaking of those pesky bonds, if the SMART board tries to issue the bonds before the repeal process has ended, it will come at great cost to the taxpayers in the form of higher interest payments. The board can mislead voters, but if they try to mislead investors, they risk civil and criminal penalties. Maybe SMART board director Kate Sears, who was a lawyer in the Attorney General’s office, should explain the consequences of misleading investors to her fellow board members.
If SMART does issue the bonds before year end, as it claims it will, the disclosures will contradict the PR and spin the board has been disseminating. They'll have to disclose that a viable repeal effort is under way and, if successful, the revenues supporting the bonds will be repealed. As a result, even if they issue the bonds, they can’t spend the funds. If they did spend the funds raised by the bonds before the repeal process is resolved, and voters vote for repeal, SMART, at that point would have to default on the bonds.
Given the risks, would they spend the funds anyway? If SMART does decide to spend the funds, it'll have to disclose its intentions and the risks to investors who would then charge even more interest for the bonds.
All readers ought to realize that the rail project construction timeline is now facing a significant delay. The more the board the fights the repeal process and acts imprudently, the longer the delay is likely to be. Just like the CAHSR project.
