CalPERS is gettin’ there.

Reports Calpensions.com:

In a few years CalPERS retirees are expected to outnumber active workers, a national trend among public pension funds that makes them more vulnerable to big employer rate increases.

A mature pension fund for a growing number of retirees becomes much larger than the payroll. So if the pension fund has investment losses, an employer rate increase to help fill the hole takes a bigger bite from the payroll.

The growing number of retirees, partly due to aging babyboomers, is one reason a staff report last week argues that CalPERS has too much “risk” and should consider a number of options during a board workshop early next year.

The “employer” stuck with the “rate increase,” of course, is the California taxpayer.

Those who haven’t left.

This is Part 6 of a series on Medium-Speed rail alternatives to California’s High-Speed Rail project. Click to read Part 1, Part 2, Part 3, Part 4, and Part 5.

Dec. 18, 2012

By Stan Brin

In any discussion of rail expansion, two gorillas always appear: How do we pay for it? How do we keep the government out of it?

I’m not a politician. I can only accept that the people of California, especially in the areas that would be served by faster rail service, have spoken. They want it and appear ready to pay for it. They were simply sold a technically impossible can of worms at a ridiculous price.

Here comes the hard part: Private enterprise isn’t interested, at least not in financing it.

In fact, railroad companies, often willing to go to heroic lengths to improve their freight traffic, feel about passenger service the way most people feel about disease-bearing insects. It’s death.

Overregulation and price manipulation by the now-defunct Interstate Commerce Commission nearly wiped them out.

While the federal regulators that kept fares low and unprofitable lines open have been abolished, I don’t see anyone stepping in to invest his own money. So if the taxpayers want trains, they will have to pay for them out of the public purse, the way Louis XIV financed the Canal du Midi.

Who is to own it?

As planned, the High-Speed Rail project is to be an independent, state-owned system operating entirely on its own.

My alternative, on the other hand, would be mostly a modernization of existing routes — the Tehachapi segment being the exception — and a part of the national railroad system. The track owners are likely to be the companies that own the existing right of way, Union Pacific and BNSF, or a combination of the two — or a consortium along the lines of the Alameda Corridor agency.

Perhaps a new company will operate the trains that will run on the new tracks, but perhaps no one but Amtrak (sigh) will want to operate it.

There is no question that Amtrak loses money on every line it runs. There is no question that Amtrak could probably break even on its East Coast “sorta high speed” Acela Express line if politics didn’t intercede to keep fares about five bucks per ticket below cost.

There is also no question that its long distance routes across the prairies and deserts can never break even because the ridership isn’t there. Political pressure keeps those lines rolling.

A divested Amtrak would face the same issues.

I believe that that Amtrak can be divested, but Congress would likely force the private operator or operators to maintain unprofitable lines, and the private operators, in turn, would expect federal subsidies to do so, bringing us back to square one.

In fact, it’s hard to find a precedent for this problem. The British divested their state-owned trains in the 1990s, and created a bloody mess which they still haven’t been able to clean up. Even Richard Branson couldn’t make a go of it. His Virgin Rail Group system and was about to lose his franchise until it was extended until November 14. After that, it’s uncertain what will happen.

The Federal Government successfully divested its cobbled-together Conrail system in the 1980s, but its assets were undervalued and the taxpayers were taken to the cleaners. The two private railroads that snapped up Conrail made a fortune.

France

Perhaps the whole thing should just be turned over to the French. Against all logic, their TGV trains make a profit of a billion dollars a year, even if they can’t regularly run above 200 mph. The French also obtain 75 percent of their electricity from nuclear facilities, but have never had a major accident.

Go figure.

In 2010, the managers of the French high-speed rail system made some suggestions to the California HSR authorities that they said would make the line profitable, but they were rudely ignored.

Perhaps someone thought such behavior was a form of payback — Americans being rude to the French, for a change.

Whatever the case, the French went home in a huff, and we’re stuck with a boondoggle. And certainly no one is going to pay any attention to all my talk about double-tracking.

Medium-Speed Rail?

It’s too easy, and too cheap.

Forget about it.

This is Part 1 of a series on Medium-Speed rail alternatives to California’s High-Speed Rail project. Click to read Part 1, Part 2, Part 3, Part 4, Part 5 and Part 6.

Dec. 10, 2012

By Stan Brin

By now, everyone in California knows the voter-mandated High-Speed Rail project is a boondoggle. In fact, the HSR appears to be a boondoggle that actually exceeds the meaning of the word.

Not only will it cost as much as $80 billion to complete. The latest information from the United Kingdom indicates that the HSR is unlikely to even reach the speeds that the voters were promised in Proposition 1A, which was passed in 2008.

Attempts to cruise above 200 mph produce a tremor strong enough to throw trains off their tracks. Called “Critical Track Velocity,” this phenomenon causes rails to vibrate and buckle dangerously. British engineers consider Critical Track Velocity to be the steel-on-steel equivalent of the infamous sound barrier that tore apart early jet fighters and still limits the speeds of commercial airliners.

CTV is a major reason why China won’t allow its high-speed trains to travel more than 185 mph. In Britain, engineers are working on the CTV problem, but they don’t expect a quick answer. Meanwhile, the French allow their TGV (“Train à Grande Vitesse” which translates, oddly, as “Train to the Big Fastness”) to exceed 200 mph and keep their fingers crossed.

Alternatives?

That being said, are there any alternatives to mind-numbing hours behind the wheel or the humiliating mess at the major airports? The voters are clearly frustrated with crowded skies and highways designed in a time when the state’s population was less than a third its current size.

Perhaps there is a non-rail alternative. Here’s one suggestion that’s been bandied about that avoids roads, airports, and rails entirely:

A decade or two from now, those with a lot of money to burn may be able to take elevators up to high-rise heliports. There, they could board tilt-rotor aircraft similar to the Air Force’s V-22 Osprey. These odd-looking contraptions would be able to fly them from San Francisco to Los Angeles, downtown to downtown, in 90 minutes or less. No tax money invested in infrastructure, no taking of private property, just private enterprise.

A tilt-rotor aircraft, flying from downtown high-rise to downtown high-rise, could work — for perhaps a few hundred daily custom-tailored members of the country-club set.

Especially those who could stand the ear-shattering noise and don’t mind paying a thousand bucks a ticket. Or maybe two thousand bucks a ticket. It’s impossible to say. So far, tilt-rotors are an exclusively military toy and aren’t certified for civilian use.

If it happens, I say, good for them. It’s their money.

Medium-Speed Rail

But for the rest of us, barring the development of beam-me-up teleportation, the only practical alternative to cars and airports appears to be what I call Medium-Speed Rail — conventional trains, running on conventional tracks, but at 90 to 135 mph.

That would be two to three times the current rail speed limit of around 45 mph, which is only a tad faster than trains powered by steam engines hauled around the horn on clipper ships 150 years ago.

What? You didn’t know that California’s trains only run at a speed of 45 mph? If you didn’t, you probably also didn’t know that the same trains can reach 80 mph with a free stretch of open track, or that conventional trains — not sleek, high tech streamlined thingies — operating in Pennsylvania cruise at 110 mph every day.

British steam engines reached 120 mph on conventional tracks back in the mid-1930s.

What does this mean? A steady 120 mph ride means a one-hour trip from Los Angeles to San Diego, downtown to downtown, certainly fast enough to compete with planes and automobiles. Most business travelers would prefer to have a leisurely breakfast in the dining car, read the paper, or unfold their laptops, and rent a car at the end of the line than waste two to three hours fighting boredom and traffic.

So why are California’s trains so slow?

The answer is simple: Our present system was designed and completed in the middle of the eighth decade of the 19th century, in an age of wood-fueled steam locomotives, while Ulysses S. Grant was president of the United States, and Sitting Bull and Crazy Horse were still fighting General Custer.

A Hopeless Relic

Rail infrastructure has been upgraded in places, of course, but mainly for the needs of unhurried, steady freight traffic, a sector that it handles well.

But for passengers, trains are a mixture of the bad, the obsolete and the completely missing. Bottlenecks force existing trains to operate at less than freeway speeds; and render it impossible to take a passenger train between Los Angeles and Bakersfield at all, with the exception of a single day per year.

I believe that if Californians cleared away 19th century cobwebs from their current system, the High-Speed Rail project wouldn’t be necessary, at least not for a long time. In fact, passenger service could be brought up to international standards without expending much more than a tenth of the $80 billion that the High-Speed Rail craziness would require.

All it requires is the will to be practical, and, well, capitalist.

Next: Part 2 will advance a real-world, capitalist solution.