High-speed rail officials: arrogant and dismissive

May 1, 2012

By Katy Grimes

SACRAMENTO — A hearing at the Capitol Monday proved once again that high-speed rail officials live in a bubble and are far too comfortable in their roles spending billions of dollars of other people’s money.

The informational hearing in the Assembly Transportation Committee covered the multiple versions of the California High-Speed Rail Authority’s business plan, and the supposed adjustments officials have made. The plan has gone from bad, to just slightly bad, is still incomplete and even is inaccurate to some.

If they are sincere about making the high-speed rail system work, then the officials don’t seem to know what they are doing. They don’t even have a project management team in place. They are treating the largest public works project in the state’s history as if it’s a bathroom remodel, which can be designed as we go.

However, despite all of the brown-nosing and friendly bureaucratic talk at the hearing, High-Speed Rail Authority Chairman Dan Richard and board member Mike Rossi still came off as arrogant as ever, and were characteristically dismissive of the important lingering questions and challenges.

The plan is still going to cost taxpayers nearly $100 billion, and at least $1 billion every year thereafter to operate. Voters who approved the system through Proposition 1A in 2008 didn’t bargain for a $100 billion train system, or such high operating costs, and are asking where the money will come from.

Reminiscent of then House Speaker Nancy Pelosi’s comment during the Obamacare debates in 2010 when she said, “We have to pass the bill so you can find out what’s in it,” Rossi told committee members not to worry. Because once the project gets underway, everyone will see what the actual costs and real ridership numbers will be.

The plan is good — don’t question the plan

In an attempt to remove some of the sticker shock, high-speed rail authority officials had removed the entire Orange County segment of the line, thereby dropping the estimate to build down to $68 billion. But the latest plan added the segment back in without adjusting the cost. No one at the hearing asked about this slippery move.

The committee chairwoman, Assemblywoman Bonnie Lowenthal, D-Long Beach, asked Richard to answer whether or not the high-speed train system really makes sense for California.

That’s like asking a child to answer whether or not a piece of cake before dinner makes sense.

Richard told committee members that Rossi spent “hours and hours” with the flawed ridership plan, and researched the funding sources and found that “those funds are sound,” and there will be enough revenues.”

Using a tired old bureaucratic cliche, Richards also insisted that “the cost of doing nothing” is worse, and will result in only higher costs to other modes of transportation.

Richard also said that the Central Valley is the right place to start high-speed rail, because “we need to test trains, and there are no right-of-way issues.”

Richard and Rossi are looking less and less nimble, and more reactive, as the design-as-you-go plan is becoming more obvious.

Business plan to blended plan

Richard said that, with the latest version of the business plan, the high-speed rail system now complies with Prop. 1A. But that’s open for debate as well.

Prop. 1A, $9 billion in bonds for high-speed rail, included numerous mandates, none of which can be legally bypassed on the way to building the massive train system.

Top on the list is that the rail system must be high-speed. “Electric trains that are capable of sustained maximum revenue operating speeds of no less than 200 miles per hour,” the law stated. “However, much of the first segment between Fresno and Bakersfield is not high-speed; nor will high-speed be attainable in dense cities,” I recently wrote in “New High-Speed rail plan runs over Prop 1A mandates.”

Rail Authority Chairman Dan Richard recently said at a legislative hearing that the Rail Authority “never intended, our business plan does not contemplate, that we would operate a high-speed rail system only in the Central Valley.”

But Monday, Richard insisted that the latest plan is in total compliance with Prop. 1A, and they were building new, electrified track. Even when asked by Assemblywoman Joan Buchanan, D-Alamo, how the trains could be considered high-speed in the high-density areas, Richard just dismissed her questions.

Buchanan asked what speed the trains will be at the “bookends” in the Los Angeles basin and San Francisco Bay Area, and how in those dense areas, “high-speed” could be attained.

“As long as we can get from Union Station to Los Angeles in two hours and 40 minutes, it’s high-speed rail,” Richard said, ignoring the basis of Buchanan’s question.

Buchanan explained that her constituents located in the bay area don’t care about traveling from North to South on a bullet train. They are worried about their lengthy commutes to and from work. She said it takes her one and one-half hours to get across town during commute times. “I hear high-speed rail is nice,” Buchanan said.”But for the one to two times a year they may use it, they are sitting in traffic daily. We need to get them out of daily traffic. Most would like existing transportation helped.”

Cap and Trade Funds

With Gov. Jerry Brown announcing his plan to use AB 32 cap and trade revenues to help fund high-speed rail, the legality of the issue is in question.

“The cap and trade program, authorized under AB 32, is a market-based mechanism to reduce the state’s greenhouse gas emissions,” the committee analysis said. “Billions of dollars are expected to be raised as a result of this program and the Administration has identified these funds as a potential source of funding for high-speed rail should federal funding not materialize.”

Even more worrisome is the scheme the Air Resources Board and High-Speed Rail Authority may come up with, under the auspices of a “study” they are currently working on. There is little doubt that the “study” will somehow prove that high-speed rail reduces greenhouse gas emissions, regardless of the massive electricity usage the system would drain from the state’s energy grid.

Legislative Analyst’s opinion

Tiffany Roberts, an environmental analyst at the Legislative Analyst’s office, took the wind out of the sails over cap-and-trade funding as a legal revenue source. Roberts said that the legal opinions they have received from Legislative Counsel indicate that the plan most likely will not be legal. Because of the way AB 32 was written, requiring a clear nexus between the cap-and-trade tax and the reduction of greenhouse gas emissions, using AB 32 cap-and-trade revenues for high-speed rail would not meet that requirement.

And with no cap-and-trade funds to count on, “the project will lose its only identified, realistic source for long-term funding,” she said.

AB 32, the Global Warming Solutions Act of 2006, required greenhouse gas emissions to be reduced to 1990 levels by 2020.

Not only was AB 32 never intended to create revenue for the high-speed train system, Roberts said that, because the first segment of high-speed rail system won’t even be online until 2020, there is a big timing problem with cap-and-trade funds.

Peer Review Group

While the High-Speed Rail Peer Review Group has not minced words in the past over objections to much of the business plan, Will Kempton, the group’s chairman, seemed somewhat more pleased with the new plan, but said that the group still has some concerns.

The High-Speed Rail Peer Review Group sent a letter in January to the Legislature, recommending that the project be put on hold for numerous reasons, but of particular concern was funding.

Kempton said funding was an issue the group could not ignore, and the lack of project management was a red flag. Even after having approval for two years from the Legislature to fill the project management positions, High-Speed Rail Authority officials have not hired any of the project management team needed to tackle the actual rail-related issues.

Instead, they’ve hired hundreds of consultants and public relations experts.

State Auditor still has concerns

Elaine Howle, the California State Auditor, who wasn’t even on the agenda, expressed her ongoing concerns as well.

In January, Howle issued her audit report of the High-Speed Rail Authority, having discovered that the business plan left out $97 billion in operating and maintenance costs from 2025 to 2060.

The HSR business plan stated that revenues would cover all costs starting 2022, the year trains are projected begin operating, a theme confirmed again by Richard at the hearing.

And, no operating losses are figured into the plan.

“I still have concerns,” said Assemblyman Kevin Jeffries, R-Lake Elsinore. “I’ve gone from luke warm to luke cold. High-speed rail will not fix traffic problems, it will only help guys like me.”


Write a comment
  1. Beelzebub
    Beelzebub 1 May, 2012, 10:16

    It’s too late for all these high ticket items. California just can’t afford it. We missed the train, so to speak. Instead of spending billions on the Marshall Plan to reconstruct Europe or giving billions to Israel we should have spent that money at home to develop sound urban and intercity transportation systems. We didn’t and now it’s much too late. The money just isn’t there. Piling on the debt now will collapse the economy that much faster. These birdbrains must be smoking some of that Humboldt County sensimilla. The real strong stuff. One toke over the line, Sweet Jesus. One toke over the line………

    Reply this comment
  2. queeg
    queeg 1 May, 2012, 13:21

    Is there anything in California or Wall Street going ok????

    Reply this comment
  3. Beelzebub
    Beelzebub 1 May, 2012, 13:40

    “Is there anything in California or Wall Street going ok????”

    I guess if there was you’d name it and wouldn’t have to ask others for the answer, eh???

    Reply this comment
  4. Rex The Wonder Dog!
    Rex The Wonder Dog! 1 May, 2012, 21:42

    Once Wall Street stops buying our bonds/debt the game is over, and that day of reckoning is almost here.

    Saw Peter Uberoth getting interviewed on TV last night and he was on the money when he said this about LA, but it is not just LA it is the state also.

    Reply this comment
  5. Beelzebub
    Beelzebub 1 May, 2012, 23:41

    Yeah, Ueberroth makes some good points. I saw him on another show and he gave some pretty gloomy warnings should Ca continue to move in the same direction. Don’t forget that he took lots of government money in a effort to turn So Central around after the riots. It was mostly a give-a-way to minority contractors in Los Angeles. And it really didn’t do much to improve the culture or the extended business climate in that part of LA. If you were an entrepreneur would you open a business there? Honestly, would you?

    I haven’t been to a pro baseball game in 25 years. I used to go to watch some of the farm leagues play. They get paid a pittance compared to the big leagues. I got as much enjoyment watching them. I refuse to shell out big money to watch these spoiled brats make millions for playing a game. The first time they went on strike they lost me. I never forgot about that.

    Uberroths not going to vote for Jerry Clowns tax hikes. Why is acting like he’s on the fence??? heh. He’s a multi-millioaire. Why would the old man cut his own throat? I would rather just have him look into the camera and say “hell no”. But it’s hard to get anyone to be straight now a days.

    Reply this comment
  6. larry 62
    larry 62 2 May, 2012, 07:02

    Beelzebub, Love your comment about the baseball strike and not going back to see a game since then. They lost me at that time too. I feel that way about pro sports in general. Why would the average person making an average income give so much money to watch a bunch of over paid brats play ball of any sort. Minor league stuff is fun to watch.

    Reply this comment
  7. CalWatchdog
    CalWatchdog Author 2 May, 2012, 08:08

    The High-Speed Rail Authority has an internet ad that reads, “We’re not stopping now.”

    There is another sponsored by the California Alliance for Jobs that says, “Put High-Speed Rail on Track.”


    Reply this comment
  8. Beelzebub
    Beelzebub 2 May, 2012, 08:27

    “Why would the average person making an average income give so much money to watch a bunch of over paid brats play ball of any sort”

    Propoganda marketing that the sheeple buy into. They have turned it into a national pasttime. You are one of the ‘cool ones’ if you can go to work on Monday and tell everybody as you stand next to the the water cooler that you saw the Broncos play the Saints at Mile High. I always felt like saying “You’re an idiot. You spent $350 to watch a game with binoculars in 30 degree weather that I saw from a front row seat in the comfort of my home”. Most of those you see on the field couldn’t operate an elevator in real life and they’re making a minimum of $1M a year – even if they’re bench warmers. The ones who really play make $7M and more a year. For playing a game. More than neurosurgeons who cut tumors out of human brains. It’s a total farce. I recommend everybody boycott them.

    Reply this comment
  9. queeg
    queeg 2 May, 2012, 08:46

    Boycotts are childish and distasteful to educated and discerning people….nasty rants foaming up “sheep” are counter productive.

    Reply this comment
  10. Ted Crocker
    Ted Crocker 2 May, 2012, 09:18

    Katy, As usual you are spot on. There is one thing I wish the press (including yourself in your next article) would call these guys to the mat on and that is the idea that all infrastructure projects, INCLUDING THIS ONE, are built a little at a time as the money comes along. This falls under the heading of “If you say it enough times it must be true.” Well, Dan Richard and others keeps perpetuating this as if it were a fact, when he is in fact lying. Nor are they allowed to wait for private investors after the IOS was built. That wasn’t how the bond measure was written:

    From the June 2008 Senate Report on HSR explaining the bond measure (http://stran.senate.ca.gov/sites/stran.senate.ca.gov/files/FINALHSRREPORT.pdf) :
    “This farsighted transportation project, however, is not a conventional public works
    project to be built with pay as you go funding or by relying exclusively on debt financing. “
    “The Authority’s business proposition for California’s voters is to structure a major
    infrastructure project capable of attracting a substantial amount of private capital. It is
    anticipated that the project will be developed on a design-build-finance-operate-maintain
    basis with a private business partner as the key player. This plan requires the project to
    attract a private consortium with the resources to design, construct, finance, and operate
    the high-speed project under the terms of a long term franchise.”

    Ted Crocker
    Co-Founder High Speed Boondoggle

    Reply this comment
  11. Beelzebub
    Beelzebub 2 May, 2012, 10:27

    Boy babble from boneheads is even sillier – but very entertaining. Almost like watching the monkeys at the zoo pleasure themselves.

    Reply this comment
  12. Edward Rasen
    Edward Rasen 15 May, 2012, 22:07

    Got to get those union boys working before the November election. Jerry Brown Nose wants to raise the sales tax to generate $6 billion. How about not building the Bullet Train to Nowhere and not issuing $3.3 billion in bonds to commence construction? How about repealing the Dream Act and not pay illegal immigrants to attend college? How about taxing all alcohol products? How about recalling Jerry Brown like we did with Gray Davis?

    Reply this comment

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