The California High-Speed Rail Authority announced a settlement Monday with the city of Chowchilla, ending one of several environmental lawsuits challenging the proposed route for the train.

Authority Chief Executive Officer Jeff Morales said the agreement brings the state one step closer to creating thousands of jobs in California.

"We greatly appreciate the city of Chowchilla's willingness to come to the table and work with the authority to resolve this case," he said. "The authority is pleased to end this part of the litigation."

Under the settlement, the authority has agreed not to build along Highway 99 through the middle of the Chowchilla, said City Administrator Mark Lewis. "That would split the city in half," he said. "They've agreed not to pursue that route."

The authority also has agreed to pay the city $300,000 in legal fees and associated costs, Lewis said. In addition, the authority agreed to pay for the city's share of the administrative record, which "could be considerable," he added.

High-speed rail opponents were dealt a significant setback in November.

In a case that combined several legal challenges, including Chowchilla's, Sacramento Superior Court Judge Timothy Frawley ruled that construction of the project could move forward as the court battle plays out.

The case is expected to hear the first arguments in April.

The first section of the rail system from east of Madera to Fresno is scheduled to begin construction this summer.

The Chowchilla area is where the rail authority expects to branch off from the north-south backbone of the high-speed train line with a connection westward toward Gilroy and San Jose -- a connection known by planners as the Chowchilla Wye (a railroad term for the Y-shaped route that would ultimately be built).

Chowchilla's lawsuit argued that the environmental impact report for the Merced-Fresno rail section failed to address "the impacts of splitting the city of Chowchilla in half" by routing the high-speed tracks along Highway 99.

The rail authority approved its Merced-Fresno section in May, but postponed approving details of the Chowchilla connector options until more studies could be completed. That environmental work is being done as part of the environmental work for the San Jose-Merced section of the rail route.

In their lawsuit, Chowchilla leaders claimed that by approving the Merced-Fresno route, the rail authority violated the California Environmental Quality Act by limiting the potential for a full environmental analysis of all of the route alternatives.

As many as 14 alternatives had been under consideration for the Chowchilla connection on the Merced-Fresno section of the route. Only six remain in contention, rail officials said last week. Rail planners said they could select one option for a detailed environmental review by April.

Reporter Joshua Emerson Smith can be reached at (209) 385-2486 or jsmith@mercedsunstar.com.