News

Lawsuit blocks Measure B funds

Local transit projects delayed by legal challenge

Santa Clara County's new Measure B sales tax has already collected tens of millions of dollars for a multitude of transportation upgrades, but that money is now embargoed from being spent.

An appellate lawsuit filed by Mountain View attorney Gary Wesley on behalf of Saratoga resident Cheriel Jensen is blocking the Valley Transportation Authority from spending any of the $6.5 billion in revenues expected to come from the new tax. For local communities, this means a series of crucial projects -- such as plan for Caltrain grade separation and new bikeways -- could be on hold for up to two years before the suit is resolved.

The suit seeks to dismantle the sales tax by arguing that the language of Measure B was overly broad and lacked specifics as to how the money would be spent.

"$6.5 billion is not pocket change. And we do intend to get the measure invalidated," Wesley wrote in an email to the Voice. "The VTA staff and board did not comply with the law in writing and proposing this open invitation to bait-and-switch."

The Measure B sales was approved by nearly 72 percent of county voters in last November's election. The half-cent tax surcharge lasts for a 30-year span.

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Prior to the election, the sales tax raised some political controversy, especially in the northern areas of the county. Elected officials from Palo Alto, Mountain View and other neighboring cities complained that San Jose officials held too much sway on the VTA board. A coalition of nine cities demanded restrictions on how the money would be spent, particularly on how much would be spent bringing a BART extension to San Jose.

The result of this was VTA officials agreed to an allocation plan to split up the money into nine spending categories. This included some vital projects for the North County, such as $700 million for Caltrain grade separation and $250 million for bicycle and pedestrian improvements. Meanwhile BART spending was capped at around $1.5 billion.

Despite this spending plan, the lawsuit argues that VTA officials sought latitude to spend the tax money however they desire. The suit alleges the money could still be shifted to any purpose deemed "prudent." For that reason, he argues the measure falls short of the requirements under the state government code stipulating that voters deserve to know specifics for how revenue from a proposed tax would be spent.

VTA officials acknowledged the suit in a blog post published last week, but they expressed confidence that Measure B would ultimately prevail in court. VTA spokeswoman Lihn Hoang pointed out that her agency had successfully defended the measure against an earlier civil suit filed by Wesley in Santa Clara County Superior Court. Following that loss, Wesley filed an appeal earlier this month.

"We feel confident in our position moving forward," Hoang said. "We're continuing to move along and be ready so when the funds are ready, we can be ready to distribute them accordingly."

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VTA has already collected about $40 million in tax revenues under Measure B. That money is currently being held in a "low-yield" escrow account, she said.

In general, Hoang said these cases can take one to two years to resolve. Attorneys for VTA would look for ways to speed up the process, she said.

In the meantime, the lawsuit leaves many cities stuck in a holding pattern, especially for some vital projects.

Mountain View and Palo Alto leaders were banking on receiving funding from Measure B for projects to separate city streets from crossing the Caltrain rail line. These grade-separation projects are supposed to be finished by 2020, when Caltrain expects to upgrade to a faster electrified rail system.

"We are disappointed in the delay in the distribution of Measure B funding and encourage the VTA to resolve this issue as soon as possible," Mountain View Mayor Ken Rosenberg wrote in an email. "We continue to work with VTA as they develop guidelines and are cautiously optimistic that the lawsuit will not significantly delay any of the city’s projects."

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Lawsuit blocks Measure B funds

Local transit projects delayed by legal challenge

by Mark Noack / Mountain View Voice

Uploaded: Tue, Aug 29, 2017, 1:54 pm

Santa Clara County's new Measure B sales tax has already collected tens of millions of dollars for a multitude of transportation upgrades, but that money is now embargoed from being spent.

An appellate lawsuit filed by Mountain View attorney Gary Wesley on behalf of Saratoga resident Cheriel Jensen is blocking the Valley Transportation Authority from spending any of the $6.5 billion in revenues expected to come from the new tax. For local communities, this means a series of crucial projects -- such as plan for Caltrain grade separation and new bikeways -- could be on hold for up to two years before the suit is resolved.

The suit seeks to dismantle the sales tax by arguing that the language of Measure B was overly broad and lacked specifics as to how the money would be spent.

"$6.5 billion is not pocket change. And we do intend to get the measure invalidated," Wesley wrote in an email to the Voice. "The VTA staff and board did not comply with the law in writing and proposing this open invitation to bait-and-switch."

The Measure B sales was approved by nearly 72 percent of county voters in last November's election. The half-cent tax surcharge lasts for a 30-year span.

Prior to the election, the sales tax raised some political controversy, especially in the northern areas of the county. Elected officials from Palo Alto, Mountain View and other neighboring cities complained that San Jose officials held too much sway on the VTA board. A coalition of nine cities demanded restrictions on how the money would be spent, particularly on how much would be spent bringing a BART extension to San Jose.

The result of this was VTA officials agreed to an allocation plan to split up the money into nine spending categories. This included some vital projects for the North County, such as $700 million for Caltrain grade separation and $250 million for bicycle and pedestrian improvements. Meanwhile BART spending was capped at around $1.5 billion.

Despite this spending plan, the lawsuit argues that VTA officials sought latitude to spend the tax money however they desire. The suit alleges the money could still be shifted to any purpose deemed "prudent." For that reason, he argues the measure falls short of the requirements under the state government code stipulating that voters deserve to know specifics for how revenue from a proposed tax would be spent.

VTA officials acknowledged the suit in a blog post published last week, but they expressed confidence that Measure B would ultimately prevail in court. VTA spokeswoman Lihn Hoang pointed out that her agency had successfully defended the measure against an earlier civil suit filed by Wesley in Santa Clara County Superior Court. Following that loss, Wesley filed an appeal earlier this month.

"We feel confident in our position moving forward," Hoang said. "We're continuing to move along and be ready so when the funds are ready, we can be ready to distribute them accordingly."

VTA has already collected about $40 million in tax revenues under Measure B. That money is currently being held in a "low-yield" escrow account, she said.

In general, Hoang said these cases can take one to two years to resolve. Attorneys for VTA would look for ways to speed up the process, she said.

In the meantime, the lawsuit leaves many cities stuck in a holding pattern, especially for some vital projects.

Mountain View and Palo Alto leaders were banking on receiving funding from Measure B for projects to separate city streets from crossing the Caltrain rail line. These grade-separation projects are supposed to be finished by 2020, when Caltrain expects to upgrade to a faster electrified rail system.

"We are disappointed in the delay in the distribution of Measure B funding and encourage the VTA to resolve this issue as soon as possible," Mountain View Mayor Ken Rosenberg wrote in an email. "We continue to work with VTA as they develop guidelines and are cautiously optimistic that the lawsuit will not significantly delay any of the city’s projects."

Comments

A Talking Cat
Registered user
Old Mountain View
on Aug 29, 2017 at 3:24 pm
A Talking Cat, Old Mountain View
Registered user
on Aug 29, 2017 at 3:24 pm

Oh come ON. We need that money NOW to improve transportation, especially for grade separation, which will SAVE LIVES.

This selfish lawsuit may literally kill people. What a terrible individual.


Good Lawsuit
another community
on Aug 29, 2017 at 4:18 pm
Good Lawsuit, another community
on Aug 29, 2017 at 4:18 pm

This ballot measure pulled the wool over the eyes of those who voted for it, and
all the lawsuit is doing is requiring that they not switch the usage around.

Notice that the state freed up a lot of transportation money subsequently to the measure. Some people were so desperate for road maintenance that they voted Yes, but now that
road maintenance will come from state funds. This amounts to double taxation.
The state funds are available immediately, but they have been missing for several years
now.

The new tax lasts 10's of years. The subsidy to VTA for operating expenses was a
waste of money given VTA's low farebox recovery. This was the bulk of the tax. The
measure doesn't even but a hard limit on how much can go to VTA salaries (out of the
total). The VTA operating subsidy is the only thing hurt by the delay. I say Good on that.


Patrick
Shoreline West
on Aug 31, 2017 at 11:10 am
Patrick, Shoreline West
on Aug 31, 2017 at 11:10 am

Maybe voters should counter sue Cheriel Jensen for economic damages brought on by delaying these necessary projects.


@ Patrick
Another Mountain View Neighborhood
on Aug 31, 2017 at 6:51 pm
@ Patrick, Another Mountain View Neighborhood
on Aug 31, 2017 at 6:51 pm

Oh no! It is not Cheriel Jensen. She is just the one who put her name on it.

It is all about Gary Wesley. He is what I would call an ambulance chaser, but in this case, it is voter chaser. Everytime!

So tired of him!!


Gary Wesley
Old Mountain View
on Aug 31, 2017 at 6:53 pm
Gary Wesley, Old Mountain View
on Aug 31, 2017 at 6:53 pm

I did a quick search on Gary Wesley in the VOICE. 10 pages of references.


Robert
another community
on Aug 31, 2017 at 6:55 pm
Robert, another community
on Aug 31, 2017 at 6:55 pm

I'm sorry but the fact that ANYONE would support this lawsuit is sick, there seem to be plenty of adults who haven't moved past "taking their toys and leaving" when they don't get their way.


Gary
Registered user
Sylvan Park
on Aug 31, 2017 at 10:27 pm
Gary, Sylvan Park
Registered user
on Aug 31, 2017 at 10:27 pm

If you look up Cheriel Jensen and me online, you will find we both have criticized the VTA for years for different things. The lawsuit is principally based on non-compliance by the VTA with California Government Code Section 50075.1 which requires that a local special tax measure state the specific purposes for use of the tax proceeds to be collected and provide that the money will only be used for those specific purposes. The VTA wrote Measure B to create the option of switching the use of the tax proceeds from the stated purposes to any other "prudent" purposes which 3/4th of its Board of Directors might later fancy. Most or all of the money might be spent on south county BART extensions, for example. If and when you read section 50075.1, you might start to see why such an option violates that state law. You would also need to read the measure. If, on the other hand, you are employed by the VTA or in line to profit financially from its transportation projects, be sure to remain anonymous.


VTA = Bad
another community
on Sep 1, 2017 at 3:00 am
VTA = Bad, another community
on Sep 1, 2017 at 3:00 am

This set up where cities full of people have Zero vote on the VTA Board
depending on what year it is reeks. It's unconstitutional. One person one vote
is part of the U.S. Constitution. So it's no wonder that VTA makes incredibly bad choices and operates an incredibly bad public transit empire.

Now they are trying to ditch contributing to CalTrain and redirecting that funding to their other games.

They deserve no more money. Good for this lawsuit. Do the people kvetching about the delay in their pet projects realize that summed all up together these bones VTA through the North County are only 10% of the total funds raked in by the tax. The law rightfully requires that promises be binding. So kvetch no more. The promises are not binding. They're going to muck with the plans anyway.

This lawsuit is totally overdue. VTA has used other fast and loose allocations with other measures as well. The current measure devotes to a wasteful extension of BART an outsize proportion of funding (if we trust their estimate even, let alone if they use more).

This is not just extending BART. It's building a subway through San Jose for BART, just to cross town a few miles. Wastefully expensive. They have a sloppy light rail
system that is barely usable and barely used, but it connects to the BART station at Berryessa. Why spend $10 Billion extending an antiquated overloaded system
to try to patch the poorly designed light rail? They can't have it both ways.
The light rail could be fixed but it would cost money separate from BART.


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