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	<title>public subsidies &#8211; CalWatchdog.com</title>
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		<title>High-speed rail agency lacks leader at crucial juncture</title>
		<link>https://calwatchdog.com/2017/06/20/high-speed-rail-agency-lacks-leader-crucial-juncture/</link>
					<comments>https://calwatchdog.com/2017/06/20/high-speed-rail-agency-lacks-leader-crucial-juncture/#comments</comments>
		
		<dc:creator><![CDATA[Chris Reed]]></dc:creator>
		<pubDate>Tue, 20 Jun 2017 16:27:48 +0000</pubDate>
				<category><![CDATA[Breaking News]]></category>
		<category><![CDATA[Infrastructure]]></category>
		<category><![CDATA[Jerry Brown]]></category>
		<category><![CDATA[Roelof van ark]]></category>
		<category><![CDATA[cost overruns]]></category>
		<category><![CDATA[public subsidies]]></category>
		<category><![CDATA[bullet train]]></category>
		<category><![CDATA[California bullet train]]></category>
		<category><![CDATA[Chris Reed]]></category>
		<category><![CDATA[CHSRA]]></category>
		<category><![CDATA[Dan Richard]]></category>
		<category><![CDATA[Jeff Morales]]></category>
		<guid isPermaLink="false">http://calwatchdog.com/?p=94528</guid>

					<description><![CDATA[Four months after then-California High Speed Rail Authority Chief Executive Jeff Morales told authority board members he was moving on and two months after Morales made his decision public, the]]></description>
										<content:encoded><![CDATA[<p><span style="font-weight: 400;"><img fetchpriority="high" decoding="async" class="alignnone size-full wp-image-78919" src="http://calwatchdog.com/wp-content/uploads/2015/04/bullet.train_.jpg" alt="" width="300" height="300" align="right" hspace="20" srcset="https://calwatchdog.com/wp-content/uploads/2015/04/bullet.train_.jpg 300w, https://calwatchdog.com/wp-content/uploads/2015/04/bullet.train_-220x220.jpg 220w" sizes="(max-width: 300px) 100vw, 300px" />Four months after then-California High Speed Rail Authority Chief Executive Jeff Morales told authority board members he was moving on and two months after Morales made his decision public, the agency overseeing the state’s $64 billion bullet train project hasn’t settled on his successor.</span></p>
<p><span style="font-weight: 400;">In 2012, four months after Chief Executive Roelof van Ark abruptly left following two stormy years, Morales already</span><a href="http://latimesblogs.latimes.com/lanow/2012/05/bullet-train-board-picks-former-caltrans-director-as-new-ceo.html" target="_blank" rel="noopener"><span style="font-weight: 400;"> had the job</span></a><span style="font-weight: 400;">. This time around, the same speedy selection process seemed likely. The RT&amp;S transportation industry website </span><a href="http://www.rtands.com/index.php/track-maintenance/off-track-maintenance/california-high-speed-rail-authority-announces-executive-transition.html" target="_blank" rel="noopener"><span style="font-weight: 400;">reported </span></a><span style="font-weight: 400;">after Morales’ decision was announced in April that the board was likely to have his replacement approved before Morales’ final day of June 2.</span></p>
<p><span style="font-weight: 400;">But the CHSRA board </span><a href="http://www.hsr.ca.gov/Board/monthly_brdmtg.html" target="_blank" rel="noopener"><span style="font-weight: 400;">met in closed session </span></a><span style="font-weight: 400;">on the succession issue on May 10 and June 14 without reaching a decision. The rail agency’s number two job – deputy chief executive – has also been vacant since Dennis Trujillo left in December.</span></p>
<p><span style="font-weight: 400;">The empty slots atop the CHSRA power structure come at a critical time. </span></p>
<p><span style="font-weight: 400;">According to a federal report prepared under the Obama administration, the state’s high-speed rail project is already </span><a href="http://www.latimes.com/local/california/la-me-bullet-cost-overruns-20170106-story.html" target="_blank" rel="noopener"><span style="font-weight: 400;">seven years behind schedule</span></a><span style="font-weight: 400;"> and on its way to having a 50 percent cost overrun on the $6.4 billion, 118-mile first segment now being built in the Central Valley.</span></p>
<p><span style="font-weight: 400;">The project also continues to face legal challenges which argue that it violates the terms of </span><a href="https://ballotpedia.org/California_Proposition_1A,_High-Speed_Rail_Act_(2008)" target="_blank" rel="noopener"><span style="font-weight: 400;">Proposition 1A</span></a><span style="font-weight: 400;">, the 2008 ballot measure providing $9.95 billion in bond seed money for the project. The rail authority has won most recent judgments. But opponents remain confident they eventually will prevail because of a 2014 state appellate court ruling that held the project still was subject to a financial “</span><a href="http://www.nbcbayarea.com/news/california/California-High-Speed-Rail-Opponents-Aim-to-Overturn-Lower-Court-Ruling-Allowing-Bullet-Train-Project-273644721.html" target="_blank" rel="noopener"><span style="font-weight: 400;">straitjacket</span></a><span style="font-weight: 400;">” that would require it to show short- and long-term financial viability without public subsidies before the project could significantly proceed. The project’s </span><a href="http://www.laweekly.com/news/californias-bullet-train-could-be-a-high-speed-fail-without-federal-funding-7988989" target="_blank" rel="noopener"><span style="font-weight: 400;">struggle to attract private investment</span></a><span style="font-weight: 400;"> shows that at least in the private sector, there are many doubts that the bullet train could operate successfully without such subsidies.</span></p>
<h4>Obama administration rules could haunt project</h4>
<p><span style="font-weight: 400;">But the election of Donald Trump as president in November also has led to a huge new headache for CHSRA. All 14 California House Republicans </span><a href="http://www.latimes.com/local/california/la-me-bullet-train-attack-20170315-story.html" target="_blank" rel="noopener"><span style="font-weight: 400;">have urged</span></a><span style="font-weight: 400;"> Transportation Secretary Elaine Chao to reverse Obama administration actions that loosened federal rules to give California access to about $3 billion in federal dollars for the project.</span></p>
<p><span style="font-weight: 400;">Rep. Jeff Dunman, R-Turlock, and his colleagues have focused their harshest fire on a 2012 decision that </span><a href="http://www.latimes.com/local/california/la-me-bullet-amendment-20150611-story.html" target="_blank" rel="noopener"><span style="font-weight: 400;">gave the state the go-ahead</span></a><span style="font-weight: 400;"> to spend about $200 million in federal funds but not have matching state spending. The decision went against longstanding Washington precedent.</span></p>
<p><span style="font-weight: 400;">Withdrawing all federal funding could also be justified by citing the Obama administration’s 2009 regulations for projects that were to be paid for or partly paid for with money from the economic stimulus bill passed a month after President Obama took office. The Federal Railroad Administration </span><a href="https://www.gpo.gov/fdsys/pkg/FR-2009-06-23/html/E9-14692.htm" target="_blank" rel="noopener"><span style="font-weight: 400;">rules said</span></a><span style="font-weight: 400;"> projects that didn’t demonstrate “reasonableness of financial estimates” and “quality of planning process” would get no funding.</span></p>
<p><span style="font-weight: 400;">That’s the same agency which recently </span><a href="http://www.latimes.com/local/california/la-me-bullet-cost-overruns-20170106-story.html" target="_blank" rel="noopener"><span style="font-weight: 400;">concluded </span></a><span style="font-weight: 400;">the project was seven years behind schedule and on course for a 50 percent cost overrun on its initial segment</span></p>
<p><span style="font-weight: 400;">The California High Speed Rail Authority board’s</span><a href="http://www.hsr.ca.gov/Board/mtg_sched.html" target="_blank" rel="noopener"><span style="font-weight: 400;"> next meeting</span></a><span style="font-weight: 400;"> is July 18 in Sacramento.</span></p>
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