California High-Speed Rail Authority CEO Brian Kelly worked over the summer to reassure anxious state lawmakers that a new management team could revive the troubled bullet-train project. He also proceeded to push out key officials overseeing contract and property decisions.

Yet the changes haven’t stopped a new wave of bad news in September for the project, which was once envisioned as a statewide network of high-speed rail but has been downsized to a 119-mile link between Bakersfield and Merced expected to cost in the range of $20 billion. 

A Los Angeles Times report outlined the huge problems still facing the rail authority’s land-acquisition efforts after seven years in the Central Valley. Not only does the agency need to buy about 300 more properties to be able to build the train, the Times reported that consultants believe at least an additional 488 parcels will need to be bought to deal with complex issues related to easements on sites with infrastructure owned by Pacific Gas & Electric and other utilities as well as AT&T, railroads and irrigation districts.

This adds new doubts about the rail authority’s projection it could finish construction of the Central Valley route by 2026.

One project manager, after warning of severe delays, told the Times that “I am going to ride this train, but I am afraid it is going to be my ashes in an urn. I told my kids to take my ashes on the bullet train.”

The Times also noted that the rail authority had been forced to buy larger lots than it needed to accommodate the rail route to such an extent that it now owns hundreds of properties – including “toxic waste sites, vacant lots and rental homes” – that it must manage. The list includes at least 466 acres of cultivated agriculture fields.

San Jose area critics push for costly elevated lanes

There was also bad news for the project from Northern California. At a rail authority board meeting held in San Jose, trustees voted unanimously to approve a route connecting the San Joaquin Valley with San Jose after the Central Valley initial segment is built. Yet testimony at the hearing showed the intensity of opposition to building any new rail route that didn’t minimize disruptions to the neighborhoods and communities it traveled through.

According to a Fresno Bee report, speakers complained to the rail board that early promises that elevated rail lines would be built had given way to plans for regular, surface rail lines. But since elevated rail costs two to four times more per mile, choosing it would make project costs explode – and Gov. Gavin Newsom has already said there’s not nearly enough funding likely to be available to complete the $78 billion statewide project advocated by his predecessor, Jerry Brown.

That argument didn’t move San Jose resident Danny Garza. According to the Bee, he said that not building elevated tracks in his neighborhood was “a bait-and-switch” given past guarantees of minimal impacts. “Please don’t use our neighborhood to balance your budget,” he told the board.

San Jose Mayor Sam Liccardo told trustees that his city could drop its support for the project if the rail authority didn’t use “best practices”  to “provide our community with the safety it deserves.”

The section of the proposed route in the San Joaquin Valley also drew complaints, according to the Bee. Rick Ortega, general manager of the Grassland Water and Resource Conservation Districts, said the staff report “contains no design detail on how the authority intends to mitigate impacts through the ecological area.” The Grassland Environmental Area is a 160,000-acre site mostly in Merced County that the U.S. Fish & Wildlife Service has repeatedly said must be preserved because of the crucial ecological importance of its wetlands.

Ortega also said elevated tracks were necessary – or that the rail authority should change its planned route.

Board members said the staff would consider the complaints, but offered no promises about the nature of possible mitigation efforts, according to the Bee.

The California High-Speed Rail Authority – the agency in charge of building the state’s bullet train system – has already faced a tough year, with Gov. Gavin Newsom signaling in February that he’s not confident the full system can ever be built. But now the rail authority has two new public relations headaches on its hands.

In the Central Valley, farmers were already upset over state use of eminent domain to seize their property for construction of the project’s first segment – a 110-mile route from Bakersfield to Merced projected to cost $12.2 billion. But a recent report in the Los Angeles Times documented how slow the rail authority was in paying for seized land and in refunding farmers for the cost of the train project’s effects on their businesses.

The Times’ story focused on a kiwi farmer who lost 70 acres of land to the project more than a year ago and who since has gone unpaid for $250,000 incurred in “relocating wells, removing trees, building a road and other expenses.” It also noted farmers who had been owed $1.9 million and $630,000 for three years, and two others owed $500,000 and $150,000, though for shorter periods of time.

State officials questioned by the Times had no explanation for the delays beyond saying the project was complex in its legal and engineering challenges.

A follow-up story by Fox News emphasized why the delayed payments are particularly upsetting to many Central Valley residents. Not only is there a chance the initial segment between Bakersfield and Merced will never be completed because the state doesn’t have enough funds, there is a good chance that even if the segment is finished, some of the property that has been seized won’t be used for the project. That’s because even now – more than five years after the administration of Gov. Jerry Brown decided to start the bullet train’s construction in the Central Valley – authority officials still haven’t agreed on the exact details of the final route.

“The property owners are very frustrated that the High-Speed Rail Authority [doesn’t] seem to know what they actually need,” Sacramento attorney Mark Wasser said. “We have farmers who the authority has come back four times to change where they want to take.” Wasser has more than 70 clients affected by the rail authority’s Central Valley project.

Audit warnings validated by ethics probe

Meanwhile, state audits which have long warned that it is problematic for the rail authority to rely so heavily on outside consultants have been vindicated with what appears to be evidence of a conflict-of-interest scandal.

Recently, the authority’s deputy chief operating officer – Roy Hill – was suspended pending an investigation by the state Fair Political Practices Commission. Hill is a top executive with the WSP consulting firm employed by the authority. Evidence suggests that Hill approved a $51 million increase in a bullet-train contract held by the Spanish firm Dragados despite his apparent ownership of more than $100,000 in stock in Jacobs Engineering, a multibillion-dollar multinational corporation that is providing key services to Dragados on the California project.

The FPPC approved the request of Assemblyman Jim Patterson, R-Fresno, to investigate Hill, his actions and his personal economic interests.

“This is such a deep conflict that it calls into question whether the entire High-Speed Rail Authority and the contractors they have put together are involved in a massive corruption,” Patterson told Fresno TV station KMJ.

The rail authority says it will cooperate with the FPPC probe.

Hill has not yet commented publicly on the matter.

The California High-Speed Rail Authority’s rough year continues with the departure of another top executive at the agency overseeing the state’s $64 billion bullet-train project.

Jon Tapping, the agency’s director of risk management since 2012, is leaving, the Los Angeles Times reported in a story that quoted an unnamed agency official describing internal “chaos.” Authority Chief Executive Jeff Morales left in June. Morales’ second-in-command, Dennis Trujillo, quit in late 2016.

This leaves the authority with three high-profile vacancies as it tries to move ahead with a long-troubled project that’s taken a series of hits throughout 2017. Among the bad news:

– On Oct. 1, the Times printed a report that internal authority documents showed the initial 119-mile segment being built in the Central Valley would cost $8 billion, 27 percent more than the authority’s public declarations that the segment would cost $6.3 billion. The overrun estimate may prove low. In January, documents surfaced that showed federal rail officials expected an overrun in the 50 percent range.

– On Sept. 24, a critical Fresno Bee analysis showed how the authority’s original plan to complete a Merced-to-Bakersfield segment by Sept. 30, 2017, had long since been abandoned because of the authority’s unrealistic expectations about how quickly property could be obtained and environmental approvals be secured. The analysis also cited ongoing lawsuits. The Bee noted that the starting date for passenger service was now projected to be 2025 – 17 years after California voters approved $9.95 billion in bond seed money for the project, initially estimated to cost $32 billion.

Court ruling clears way for potent CEQA lawsuits

– On July 27, the California Supreme Court overturned a lower-court ruling and said state-owned rail projects were not completely exempt from the California Environmental Quality Act and other state environmental laws. The case involved another state project besides the bullet train, but legal analysts said there was no question it would apply.

CEQA has been a powerful tool against projects large and small in California for decades. The state Supreme Court ruling paves the way for a wave of CEQA lawsuits by deep-pocketed interest groups against now-pending environmental impact reports for bullet-train segments in Silicon Valley and the Los Angeles area.

Even individual citizens without high-powered legal teams can stall projects using CEQA. San Francisco’s plan to add bicycle lanes to encourage bicycle commuting was delayed for five years by a self-described “dishwasher from Mendocino.”

– On July 17, the Legislature approved a measure to extend the state’s emissions cap-and-trade program by 10 years, with a handful of Republicans providing crucial support after then-Assembly GOP leader Chad Mayes of Yucca Valley secured support for a provision that could eventually halt the bullet-train project.

“The concession … places a constitutional amendment drafted by Mayes before state voters in June 2018,” CalWatchdog reported in July. “If passed, it would lead to a one-time up-and-down vote in the Legislature in 2024 on whether to continue allowing the use of cap-and-trade revenue to fund the project. But the threshold wouldn’t be a simple majority. A two-thirds vote would be required to allow continued use of the funds – presumably giving GOP lawmakers a prime chance to pull the plug.

This amounts to a bet that the bad news about the project would continue. With the exodus of top staff, the confirmation of major cost overruns and the new certainty about another round of legal challenges, so far that’s what’s come to pass.

Train company owned by Germany may win key contract

Rail authority officials, however, say critics of the project ignore the steady progress it is making, with more than 400 small businesses and 1,400-plus “craft workers” proceeding in building the initial segment.

The rail authority board is likely to make a crucial decision at its meeting Thursday. DB Engineering & Consulting USA, a subsidiary of Deutsche Bahn AG, is expected to be given a $30 million contract to design and operate the initial segment from San Jose to the Central Valley.

Deutsche Bahn AG, which is owned by the German government, is competing with companies from Spain, Italy and China for the contract. In 2015, it was the world’s largest railway company based on revenue and the ninth-biggest carrier of global freight, according to industry reports.

Will news about the California bullet train’s cost overruns and

These are the key questions prompted by a concession that some Republican state lawmakers gained in return for helping Gov. Jerry Brown keep alive the state’s greenhouse-gas emissions cap-and-trade program until 2030. The provision could eventually end the state’s high-speed rail project, leaving a massive white elephant in the agricultural fields of the Central Valley. Or the concession could end up yielding a second vote validating a project first approved by state voters in 2008.

The concession – secured by Assembly Republican leader Chad Mayes of Yucca Valley – places a constitutional amendment drafted by Mayes before state voters in June 2018. If passed, it would lead to a one-time up-and-down vote in the Legislature in 2024 on whether to continue allowing the use of cap-and-trade revenue to fund the project. But the threshold wouldn’t be a simple majority. A two-thirds vote would be required to allow continued use of the funds – presumably giving GOP lawmakers a prime chance to pull the plug.

So far, the funding has been substantial in one sense but marginal in the big picture of trying to pay for a $64 billion project. After the fifth year of cap-and-trade distributions, about $1 billion has gone to the California High-Speed Rail Authority, with another $500 million expected this fiscal year. But it is considered crucial because it is the only new funding source Brown has found for the project, which has been unable to gain outside investors because of rules banning public subsidies for bullet-train operations.

Rail authority chair Dan Richard says he isn’t worried about a public veto in seven years: “By 2024, we’re going to be deep into construction. We’re going to be on the verge of opening the first service. We’ll be seeing Google and others making massive investments in areas around high-speed-rail stations. The case will be there for the importance of continued funding,” he told the San Francisco Chronicle.

The authority’s 2016 business plan said the state expected to have $21 billion in hand from state bonds, federal grants and cap-and-trade funds to build a segment from San Jose heading south.

Feds expect cost overrun of 48% or more on first segment

But Mayes and other GOP lawmakers are betting that from here until 2024, the bad news about the project will never stop.

Lawyers for the Central Valley farmers and the government and civic officials they represent in lawsuits against the state government like to point out that – apart from court victories allowing the project to continue to spend public monies – there has been no substantial encouraging news about the project in years.

In January, the Los Angeles Times reported that it had obtained a confidential Federal Railroad Administration risk analysis that predicted a cost overrun of 48 percent or more on the initial 118-mile segment in the Central Valley. What the Brown administration has been saying would cost $6.4 billion is instead likely to be $9.5 billion to $10 billion, federal officials warned.

The idea that voters will be pleased with what they see in 2024 could be difficult to square with what rail authority officials told a visiting congressional delegation in August 2016: that construction is expected to stop in the middle of an almond orchard 30 miles northwest of Bakersfield when the money runs out.

This is contrary to promises made to voters in 2008 to get them to provide $9.95 billion in bond seed money for the project. They were guaranteed no construction would begin until the state could guarantee its initial segment would have financial viability without any more train tracks being laid.

But it seems safe to say the rail authority didn’t expect implacable, unyielding opposition from this group: Wealthy equestrians. For months, they have targeted plans to put the tracks for high-speed rail in parts of the San Fernando Valley that are beloved by horse owners and riders.

Attempts to reassure the equestrians that the effects would be minimal blew up in the rail authority’s face in March. The authority touted a study from the San Jose State-based Mineta Transportation Institute that said the bullet train would have little effect on horses and riding along the Tujunga Wash and other communities in the Santa Clarita-Sunland area.

Leaders of the equestrian communities in the north San Fernando Valley —  home to an estimated 10,000 horses — dismissed the report as untrustworthy because rail authority Chief Executive Jeff Morales and former bullet-train board member Rod Diridon serve on the institute’s board.

Bullet-train board chairman Dan Richard further undermined confidence in rail authority claims at a March public meeting when he noted that in Europe, cows have become used to the noise of passing bullet trains. The comparison of cows to horses — considered an unusually high-strung animal — prompted laughter and disbelief.

‘Environmental justice’ move not paying off

The bullet-train route was changed in ways that outraged equestrians in response to criticism that previously planned routes would bisect working-class, largely Latino communities in more populated parts of the San Fernando Valley. Richard likened this decision to “environmental justice” at the March public meeting. But the route change hasn’t won much praise from opponents of the previous alignment, who still see the bullet train as more trouble than it is worth.

Now rail authority officials find themselves caught in an unexpected crossfire from both wealthy and working-class critics in the San Fernando Valley. A recent Los Angeles Times story treated the rich equestrians’ grievances with the same sympathy that previous coverage had shown for protesters from Pacoima and Sylmar:

Dale Gibson grimly shook his head, his white cowboy hat blocking out the bright afternoon sun.

“How about this mess,” he said, walking through his Sunland ranch in the shadow of the San Gabriel Mountains.

Gibson, a rodeo cowboy and stuntman who has performed in more than five dozen films, was pondering the prospect of 220-mph bullet trains rocketing about 100 feet from his competition arena along the Big Tujunga Wash. He boards about 100 horses on 5 acres and, on many days, is out teaching children and actors the finer points of riding.

“It would be like trying to ride your horse down the runway at LAX,” Gibson said. “We will be done.”

Study seeing minimal effect widely ridiculed

Meanwhile, the Mineta Institute study’s findings continue to draw mockery from equestrians who see it as confirmation that they’re not being taken seriously. The study stated that compared to humans, “horses are somewhat deaf.”

The assertion outrages Gibson who, to prove his point, made a kissing sound to a horse about 50 feet away. The animal raised its head. “Does he look deaf to you?” asked Gibson, who serves on the Los Angeles Equine Advisory Committee.

“Deaf?” he said. “I don’t think so.”

That’s also from the recent Times account.

The only conceivable way to placate both the equestrian community and residents of San Fernando, Sylmar, Pacoima and neighboring towns is to build a 20- to 24-mile segment of the bullet train underground. But given that studies suggest it costs nine times as much to build underground tracks as above-ground tracks, that could balloon the cost of the estimated $64 billion project by at least $20 billion.

The state government presently doesn’t have enough money to complete the project’s initial $21 billion segment in the Central Valley. The prospect it may have to spend far more than expected to bring the bullet train to the Los Angeles region could make it even more difficult to attract the private investors that the rail authority has been hunting for without success since 2008.

Under previous plans, the route linking the Los Angeles area to the Central Valley, Silicon Valley and San Francisco would either have bisected the heavily populated parts of the San Fernando Valley, cutting through Sylmar, Pacoima, Santa Clarita and San Fernando, or gone through a more rural part of the San Fernando Valley, affecting thousands of acres of equestrian lands and estates.

Now the rail authority proposes to instead mostly tunnel under valley communities. Two of its proposed new routes would see the bullet train go underground south of Pacoima and come out north of Santa Clarita. A third, more conventional route would still go above-ground through Lakeview Terrace, Shadow Hills and Sun Valley.

The change initially drew an ecstatic response from one local official. San Fernando Mayor Joel Fajardo called the revisions “absolutely phenomenal” in an interview with the Los Angeles Daily News just after learning of the changes.

But as more information came out, others were far more skeptical. At a San Fernando Valley Council of Governments meeting on Thursday, critics offered many objections. The new route would still have what were deemed unacceptable impacts on Shadow Hills and Sun Valley. A Santa Clarita official said that while the new plan was a big improvement, his city’s position remained that the bullet train should be underground the entire 40 miles-plus from Palmdale to Burbank, not just the approximately 22 to 24 miles from north of Santa Clarita to south of Pacoima. Environmentalists also said the new routes would likely harm two endangered species in the Angeles National Forest.

Underground tunneling: $1 billion a mile?

Rail authority officials provided no detailed information on another aspect of the proposed change: how it would affect the cost of the $64 billion project. Under previous routes, there would have been the need to have about 20 miles of the bullet train go underground. The new plan would only add a few more miles underground. But since it would require going under heavily populated areas — in addition to still having to go through mountains — that would likely add to the complexity of what the Los Angeles Times has described as “the most ambitious tunneling project in the nation’s history.”

By some accounts, underground systems cost about nine times as much as above-ground rail per mile. Details matter with individual projects — cost of land, difficulty of engineering, how many changes must be made to limit effects on the public, etc. A 2013 survey found underground railroad construction costs ranged from $357 million per mile in Sao Paulo, Brazil, to $960 million per mile in Singapore.

The Southern California tunnel seems likely to have a price tag on the high end. If it were to match the price in Singapore, that means at least $21 billion would have to be spent to go from north of Santa Clarita to south of Pacoima — about a third of the tab for the entire project. If the entire Palmdale-to-Burbank route were underground, that would mean at least $38 billion would be needed.

The rail authority is now preparing for construction of the first segment of the bullet train from the Central Valley to Silicon Valley. Plans for the first link to go from the Central Valley to San Fernando Valley were dropped by the state in February, mostly because the new plan is cheaper and would likely face less local criticism.

The state is still struggling to identify how it will come up with funds to build a statewide project; private investors want revenue guarantees that are illegal under state law. Lawsuits also question the project’s legality. The state Legislative Analyst’s Office also recently weighed in with a report saying it was difficult to gauge bullet-train progress because the rail authority keeps making major changes in its plans.

Rail authority board chairman Dan Richard described the change in plans as being driven by practicality: Having the first segment go from Kern County to San Jose instead of Fresno to Burbank allows the authority more certainty in being able to complete an initial segment. The old plan was for a difficult, partly mountainous 300-mile route costing $31 billion. The new plan is for a flat 250-mile route costing about $20 billion.

This allows for “a transition from planning and initial construction to being able to stand up and say we have federal funding, bond money, cap-and-trade revenue, and that those funds are sufficient for us to build, open and operate the first real high-speed rail leg in California,” Richard said at the news conference announcing the changes.

L.A.-area route risked mass political defections

But there is also evidence that the rail authority feared that if it continued with the original plan, it would face a political Waterloo. The state project had already lost the crucial support of some Los Angeles-area politicians and risked losing far more — starting with state Senate President Kevin de Leon and Assembly Speaker Anthony Rendon.

In 2014 and 2015, throughout the San Fernando Valley, grass-roots opposition to the state’s planned route built steadily. Some Latino activists said the bullet train’s effects would be so harsh on working-class minority communities that it should be a civil rights issue because the train and its 20-foot-high sound wall would bisect the San Fernando Valley in a way that would disrupt traffic, business patterns, schools, transit and everyday life.

At a May 2015 town-hall meeting, rail authority officials heard impassioned pleas to take their project elsewhere.

“Our community’s history has been riddled with displacement. My family has all its roots here. I want my grandchildren to grow up here, understanding how great a place it is. We like where we live,” testified San Fernando resident Genaro Ayala, according to a Los Angeles Times report.

But at that meeting, Richard downplayed the impacts to the crowd. Lou Correa, a veteran Democratic politician from Orange County appointed to the rail authority board in March 2015, said he detected “NIMBYism” in the complaints. That sparked a furious response from local residents, who said that rich communities used similar tactics to block projects they didn’t like, and that it was outrageous for anyone to suggest opposition was reflexive instead of driven by concern about impacts on their neighborhoods.

This public anger has translated into political support. As CalWatchdog reported last year, many public officials have been sharply critical of much or all of the project. The most prominent initial opponents included Rep. Adam Schiff, D-Burbank, and Rep. Judy Chu, D-El Monte, Los Angeles County Supervisor Michael Antonovich, who represents much of the affected part of the county, and San Fernando Mayor Pro Tem Sylvia Ballin and Councilman Jaime Soto. Now the list also includes elected leaders from Sylmar, Santa Clarita, Shadow Hills, Lakeview Terrace and other Valley communities. In December, Assemblywoman Patty Lopez, D-San Fernando, dropped her official support.

Did Rep. Schiff pressure Obama administration?

Schiff is the heavy hitter of the crowd because of his willingness to use his good relationship with the Obama administration to pressure the federal government, the state government’s de facto partner in the high-speed rail project because of $3 billion-plus provided in federal funds and because of the many federal regulatory approvals still needed.

A year ago, for example, he made headlines in the San Fernando and San Gabriel Valleys when he ripped the National Parks Service for delays in completing promised studies involving the Angeles National Forest. That led the Save Angeles Forest for Everyone group, known as SAFE, to urge Schiff to pressure federal officials to seek changes in the bullet-train route, starting with plans for a mountain tunnel.

It’s not known what, if anything, the veteran Democrat did. But the California High Speed Rail Blog, home to the project’s most ardent defenders, expressed deep concern in January 2015 that Schiff’s opposition to the state’s plans “is going to make it very difficult for such a tunnel to be built. Other Democrats in the state’s congressional delegation will likely defer to Schiff on this, leaving the CHSRA with even fewer allies for a tunnel in the unlikely event they chose that alternative.”

However it came to pass, Schiff got his way, and, for now, his district is safe from disruption.

Through an in-depth investigation, the paper revealed embarrassing details of the train’s lurching progress toward an apparent morass of spiraling costs, spooked investors and — worst of all — an engineering disaster in the making.

Heads in the sand

In one particularly galling example of misfeasance, when California’s main project management contractor, Parsons Brinckerhoff, raised the alarm years ago, it was simply ignored by the authority’s top brass. A document obtained by the Times revealed that Parsons Brinckerhoff had briefed state officials on the spiraling cost projections in October of 2013. “But the state used a lower cost estimate when it issued its 2014 business plan four months later,” noted the Times. “Jeff Morales, the rail authority chief executive, said he was not aware of the Parsons Brinckerhoff projection. A spokeswoman for the authority declined to discuss the differences in the estimates.”

Opposition to California’s high-speed rail project has been strong since Gov. Jerry Brown first threw his weight firmly behind the idea. Critics have predictably held up the Times report as proof that they saw its failures coming from a figurative mile away. As the Reason Foundation suggested as early as 2008, “cost overruns were likely, state and federal funding would not be sufficient to cover the costs of the project, the state would have to spend more money, and private investors would not be making up the difference,” as Scott Shackford noted at Reason.com.

A policy earthquake

The challenges revealed by the report go far beyond those objections, however, raising the specter of dangerous environmental damage done virtually blind. “It will be the most ambitious tunneling project in U.S. history. Crews will have to cross the tectonic boundary that separates the North American and Pacific plates, boring through rock formations and earthquake faults, some of which are not mapped,” the San Francisco Chronicle noted. James Monsees, “one of the world’s top tunneling experts and an author of the federal manual on highway tunneling,” said the plan was unrealistic. “Faults are notorious for causing trouble,” he cautioned.

That trouble could well become calamitous — especially given California’s propensity for large earthquakes affecting populations centers. As the Los Angeles Times added:

“A 2012 report by Parsons Brinckerhoff, obtained by The Times, warned the rail authority that the ‘seismotectonic complexity … may be unprecedented’ and that the rail route would be crossing faults classified as ‘hazardous.'”

But the tunnel trouble arose from the authority’s inability to surmount public criticism to easier, more direct routes. “The original plan was to build the train route up along the 14 Freeway, but a host of nearby residents from Pacoima to Acton, many freaked out about a high-walled train corridor cutting through their towns,” according to Curbed Los Angeles. “Angry citizens in San Fernando even interrupted an informational meeting in on the rail project to protest its dangers to the local economy and the ‘death wall’ that would split the town in two along the route.”

That led the authority toward the current, disparaged tunneling plan — and, last month, a request for “permission to test-drill deep beneath the Angeles National Forest to determine the feasibility of digging a rail tunnel through the rugged San Gabriel Mountains near Santa Clarita,” as the San Gabriel Valley Tribune noted. Among officials, the fear of another public outcry has yet to abate. “In what only can be described as an unusual process, the U.S. Forest Service is asking the public for their thoughts on whether to allow the rail authority to proceed with its tunnel study,” the Tribune added.

In calculating the risk of loans that would likely exceed $35 billion, bankers want to see a greater willingness on the part of the public to bet on the train. “Even as builders clear land and begin work on viaducts near Fresno for the bullet train’s initial segment, financiers solicited by the state rail agency are calling on California to pitch in more than the $10 billion in bond funds already committed in order to give potential investors confidence that the project will become reality,” Bloomberg Business reported:

“Their responses point out a dilemma for Democratic Governor Jerry Brown and other supporters of the line: persuading reticent taxpayers to ante up more than already approved under a 2008 bond measure as support for the project declines, though private investors may stay away unless they see a bigger public buy-in.”

Banks’ reticence has been matched by the construction and engineering firms solicited to join in a partnership with the High Speed Rail Authority. Although many of the 36 firms to respond “expressed a willingness to participate in the project,” the international group gave the Authority more than it bargained for when it asked for “suggestions on how to complete the $68-billion project,” according to the Los Angeles Times. None offered to bring forward private funding, as the Sacramento Bee noted.

State investment so far has been significant, but is nowhere near the amount needed to bankroll the entire project. Along with $3.5 billion in federal matching funds, the 2008 measure greenlit some $10 billion more. “The state Legislature agreed last year to provide the first ongoing source of financial support to the project by tapping revenues from the state’s greenhouse gas emissions program in which companies buy and sell pollution credits,” the Associated Press confirmed — a divisive process that saw Gov. Jerry Brown claw away from environmentalists to his left about $750 million and 25 percent of future “cap-and-trade” revenue.

Pressing on a particularly sore spot for train backers — especially Gov. Jerry Brown, who has labored to fund construction while keeping a relatively tight hand on budgeting — Spanish and German companies warned that California’s rail program would require substantial and ongoing subsidies. “As part of the taxpayer protections written in to a voter-approved plan to provide funding to build the line, public subsidies for operation of passenger service were banned,” the Times noted. “State officials have consistently projected the train will turn a profit as soon as it begins carrying riders.”

One proposal advanced by some companies involved segmenting the train project into several much smaller and more affordable chunks, giving firms a greater willingness to bear risk and spread outlays of capital. “In the documents, many firms suggested breaking the project up into smaller contracts, typically in the $3 billion to $5 billion range. Anything much larger could scare off even the world’s largest construction and financing firms, the respondents said,” according to AP.

Meanwhile, construction plans have not slowed down. But evident shifts in the Authority’s strategy and priorities became clear as planners startled Silicon Valley with a sudden emphasis on the region. “Some Bay Area city officials were surprised by the California High Speed Rail Authority’s renewed focus on the San Francisco to San Jose segment because they believed the agency was going to start building the line in Southern California after finishing the first section in the Central Valley,” reported the San Jose Mercury News.

Initially, the sequence of events was expected to begin with the state’s midsection, move up toward the Bay, and then extend branches to Sacramento and San Diego — a span of “520 miles, shuttling travelers between San Francisco and Los Angeles in less than three hours,” according to the Bee.

A court ruling is expected within weeks on whether certain documents should be considered in a lawsuit against California’s High-Speed Rail Authority.

The state has argued for limiting the evidence to documents, such as business plans and environmental reviews, from formal Authority proceedings. Project opponents are arguing for broadening the scope of evidence to documents related to decisions that they say were made outside the public’s eye.

Attempts to Halt Project

Opponents are attempting to halt the $68 billion dollar project by showing that the Authority cannot achieve the trip times promised in the taxpayer bond funding the project, that the voters did not approve the planned system of sharing tracks with commuter and freight rail, and that the financial viability of the project just doesn’t add up.

Superior Court Judge Michael Kenny is weighing whether to consider as part of the case two documents in particular: a travel time analysis prepared by opponents, and declarations submitted by the opponents in 2013. A hearing in Tos, Fukuda and Kings County v. California High-Speed Rail Authority was held late last month in Sacramento.

The Attorney General’s office argued against considering the expert declarations. The declarations, which include a statement from the former head of the high-speed rail project, question the viability of the rail’s promised travel times as well as the overall finances of the project. They also question the legality of the blended system of sharing tracks.

The AG’s office says the declarations should have been presented as commentary for the Authority’s 2014 business plan in order to be allowed in the administrative record.

Opponents said the declarations were presented to the Authority’s attorneys in 2013 and that should suffice as delivery to the Authority.

Transparency in Question

Opponents also argue that the Authority has made decisions outside the public view, through informal, or closed-door decisions, and that the public was not allowed to challenge the Authority’s thinking before key decisions were made.

Example: The Authority’s attorneys submitted a declaration from one of its chief program managers, engineer Frank Vacca. In that declaration Vacca says the authority can make the time required in Prop. 1.  This declaration was never debated and discussed at any board meeting.

The AG’s office says that the declaration was not an official decision by the Authority; it only offered proof that the Authority could achieve the two-hour, 40-minute time requirement.

Opponents have requested but not received the computer model inputs that inform the rail authority’s time analysis. They say because they have not been able to analyze those numbers, the public did not have a chance to debate or challenge the thinking behind the analysis.

Opponents gave another example of an informal decision reached without public discussion: to limit train speed to 125 mph in urban areas. The opponents said the authority decided on the speed limit, then presented the decision as a done deal to the public. Opponents submitted records of those presentations, to 40 cities, and the attorney general’s office did not oppose allowing those records to supplement the Administrative record.

Appellate Court Postpones Ruling

On Aug. 13, 2013, project opponents received a favorable ruling for the first part of their case, which challenged the adequacy of the Authority’s funding plan. That ruling was overturned on appeal July 31, 2014, when the court said it was too early to decide the funding issues.

The appellate court determined that opponents would have to wait to challenge the funding plan when construction was imminent and money was about to be spent. To date, the Authority has used only federal funds to prepare to construct early phases of the project in the Central Valley.

A hearing on the merits of the case is set for Feb. 11.