Saturday, December 31, 2011

Happy New Year

We treat our home like shit and then want to go find another one beyond our solar system?

What are we, crazy?

When is too much enough? High-Speed Rail?

Although interested, I wasn't taking this article very seriously (since I'll be long gone if this aircraft ever becomes operational) but then I came across a few sentences that rang a bell.

"The ghost of Concorde also haunts the project. Concorde flew for 27 years but after an air crash investigation grounded it in 2000, its carriers British Airways and Air France realised they could generate more revenue by selling first and business class tickets on subsonic planes.
Tom Otley of Business Traveller magazine believes hypersonic flight could suffer the same fate because the demand for faster flights just isn't there.
"Speed isn't everything, comfort and cost play a big part. If you ask people how fast aircraft fly they wouldn't have a clue. They don't care but they do know which one is the most economical, which one is the most comfortable and which is the quietest."
Even business travellers are willing to take indirect flights in order to save money, a study found last year."
Does this argument pertain to HSR as well? I've been making the Concorde analogy since HSR came up on my radar screen in 2003.  The similarities are considerable.  Grossly overpriced tickets, yet the two carriers, (AF and BA), lost money on every seat.

In the case of the Concorde, although development was government subsidized, it was the commercial carriers that took the losses.  Who will take the high-speed rail losses?  You know who. 

There is a saying in engineering; just because something is possible doesn't make it desirable. If 150 mph is economically optimal for passenger rail, is 220 mph too much in cost/benefit terms?  

HSR is being developed as if it was a race for speed. Note the Chinese, of all people, doing a 310 mph train. Their deplorable HSR history hasn't interfered with their political/economic ambitions, apparently.  300 mph+ are on-the-ground speeds at Bonneville Salt Flats.  While a 150 mph train can use shared tracks and existing rail lines, 220 mph really can't -- at least, not at those speeds. The cost differential, construction and operation, are enormous. 

We seem unwilling to consider the trade-offs. Are there to be no cost limits on anything the government wishes to spend our tax dollars on?  Will the government rationalize its intentions regardless of the facts, the truth, reason, and the collateral harm that will be done to those who at the same time are obliged to pay for it?

This is what High-Speed Rail guys do; who's got the biggest one?

When it comes to high-speed rail, all sorts of metrics are bandied about.  For example, when talking about ridership, the count often is the number of passengers, rather than the number of passenger-miles, a much more meaningful measure that permits more honest comparison with other modalities (and other countries).

Here's another measure, miles of track.  That is more confusing than amusing, or meaningful.  Being the Financial Times blog, the measure in the comparison chart in this article is in kilometers rather than miles, but that's not important.  

Are these dedicated tracks used only by HSR, or are they shared tracks, such as with the Acela? It makes a difference.  Are they the number of kilometers that their HSR trains run on, regardless of whether they are also used by regular passenger service or freight?  We don't know.

Then, should one judge one nation's HSR system against the others by miles of track used, or should there be other numbers in that equation such as actual passenger-miles racked up per year, or what percent of inter-city transit each modality gets used, highways, airways and railways, and measure that against actual populations per country.

It is possible that although China has the most miles of track (by whatever measure), they also have the most people, and therefore France may have more HSR miles per capita than China?  I don't know that, but there are no such comparisons being made. Or, say, as with Russia, which has the largest land mass, the number of miles of HSR track per square miles of country. 

Then, there's the question of area, or as the article suggests, as it states the obvious, Belgium will never have a "larger" HSR network than France, "let alone China."  All that this point suggests is what we are trying to say here, that all such comparisons are meaningless. 

How about comparing per capita dollar investment?  How about operational cost expenditures?  How about fare-box volume? How about number of locomotives and passenger cars?  How about counting only trains that exceed, say, 175 mph?

My point here is that these nation to nation comparisons are useless. There are no appropriate metrics unless one combines a large number of factors, ratios and percentages for each nation into what becomes a very complicated equation.  And, that's not what this is.  Miles or kilometers of track, by itself, doesn't mean much.

And if we did have a comprehensive comparison, what would we know that is useful and beneficial?  Is all this what the President means when he says he wants to "win the future with high-speed rail ?"   Mine is bigger than yours?

Who would be the "winners," who would be the "losers," and what difference would that make?  If California builds this HSR monstrosity, would we all run around with one of those huge styrofoam hands with an index finger pointing, and the #1 on it?  Would that make us #1?

Chart of the week: high-speed rail
December 30, 2011 6:30 pm 
by Rob Minto

All countries would like to be able to move people about quickly, cleanly and (relatively) safely. Hence the attractions of high-speed rail. The downside is that it is very expensive to build, and there can be tough political decisions over where to run the track.

With those concerns in mind, it comes as no surprise that China is the country building the most, despite the recent fatal crash. But which other countries are investing in high-speed rail? Chart of the week finds out.
It’s been a bit of an on-off year for high-speed rail in China. First there was the crash in July that put expansion plans on hold, then the government announced in December it would push ahead with plans. But despite all this, China has by far the biggest high-speed rail network in the world, with 37 per cent of the total track.

And if we look at where high-speed rail is under construction, EMs count for over 60 per cent of the total track being built.

Of total planned high-speed rail lines, it’s about 50-50 between the developed and emerging world. However, given the debt crisis in Europe, it would hardly be a surprise if some of those projects were cancelled.

Of course, comparing high-speed rail roll-out between countries is a tricky business – needs vary according to population, geography and size. Belgium is never going to have more kilometers of high-speed rail than France, let alone China, for example. But bearing this in mind, the chart below shows the share of high-speed rail as current, under construction, and planned for key countries. Turkey is perhaps the biggest surprise, with 235km of high-speed rail in operation, another 510km in construction and over 1000km planned.

Source: International Union of Railways

High-Speed Rail Wars in the Central Valley of California

Last day of 2011.  That's the year that California discovered that a major crime was taking place.  A few people have known about it for a long time, but they were pretty much ignored.  What could possibly go wrong, they were asked. This is a great concept, people said.  Everyone will want to ride the train, people said. It's a great investment, people said.  

Well, here's an article from the California Central Valley.  People there have been fighting this high-speed rail monster since they discovered that they were the first target of opportunity for the rail authority, which was promised funds from the FRA if they started construction there.

You really need to get this fine-grained picture of the situation, with its history, to understand just how shabbily the citizens of the Central Valley have been treated by the rail authority. This article does a great job of that.

This entire high-speed rail process, if you didn't know any better, would appear to be intentionally designed to piss-off everyone in the state.  The CHSRA is a text-book case of how not to make things happen in the government. 

Everyone likes to make lists at the end of the year.  Here's ours, in no particular order. For brevity's sake, we'll stop at 10.

1. This project has been primarily a public relations stunt, intended to make the public believe a large number of lies.

2. The CHSRA has mismanaged this project to a stunning degree and this has been documented by a number of other government agencies in California.

3.  The rail authority has made massive efforts to fool all of us with grossly distorted numbers for just about everything, with charade like open-houses and other meetings, and with fraudulent plans and agendas.

4.  This project has not had bipartisan support at any level.  It has been, and continues to be, fiercely fought over between Republicans and Democrats. It's not a transit project; it's a political battle-ground over money.

5.  High-Speed Rail is the worst possible way to stimulate a moribund economy and create jobs for the unemployed.  With stimulus funding available well over a year now, there still has been no hiring and there won't be until late next year.

6.  The basic reason Democrats are promoting this project is their claim of reducing unemployment.  That's a demonstrably false claim. Real jobs forecasts are fractions of those being promised.

7. One of the most egregious lies is that this project will produce profits; that is, surplus revenues.  We already know that this is not going to be the case.

8.  Both political parties are using this project as a weapon against each other, claims of deficit reduction on the Republican side and employment opportunities on the other side.  These claims have nothing to do with reality.

9. The high-speed rail project in California is not a transit project that is intended to address California's transit problems.  Those have not been studied except by the HSR promoters determined to substantiate their highly inadequate rationalizations and justification.  Outside of the rail authority's advertising hype, there is no compelling reason to build this train.

10.  High-Speed Rail is a luxury, premium, top-of-the-line component of a comprehensive passenger rail system.  It is intended for the affluent, the well-to-do, the professional class with expense accounts.  California's passenger rail system is far too inadequate to support this icing layer on the passenger rail cake.

11. One more.  Costs. Even $100 billion as the final cost forecast can't be trusted. Construction hasn't even started yet.  Remember the Boston Big Dig.  From $2 billion to $22 billion over the life of the construction process. There is still litigation many years after completion.  This HSR project will be no different.

Happy New Year. And it will be a Happy Year if we can stop HSR in California.


Fight against high-speed project dominates 2011

By Seth Nidever
Posted: Friday, December 30, 2011 12:15 pm 

A lot of stories came and went in 2011, but one really dominated local news coverage with dozens of headlines: the California high-speed rail project. And it’s only going to heat up in 2012. A volatile mix of Sacramento politics, growing local opposition and the state’s budget deficit is combining to create the conditions for an epic battle over the future of a project that seems to grow more controversial with each passing day.

It’s not that high-speed rail is new. First approved by voters in 1996, then reaffirmed in 2008, the project stayed in the shadows for a long time, cropping up at obscure planning meetings where California High-Speed Rail Authority consultants passed out glossy brochures for what was then a $33 billion plan to whisk riders from the Bay Area to Southern California at up to 220 mph.

Skeptics questioned how a state in a constant budget crisis, running huge deficits, could possibly fund a $33 billion project. Now that the estimated cost has ballooned to $98.5 billion, early skepticism has turned into openly hostile criticism in many parts of the state.

When it became clear in late 2010 that the route was going to sweep through dairies, homes, businesses and farms in Kings County, the issue hit home. During 2011, grassroots efforts sprouted and grew, establishing Kings County as an epicenter of anti-rail activism.

The proposed route cut through farmland, dairies and even a housing development east of Hanford, with construction to start in late 2012. Residents of the Ponderosa neighborhood off East Lacey Boulevard in the path of the alignment scrambled to find out more information but were frustrated by the lack of answers.

Concerned Citizens for California High-Speed Rail Accountability was born out of that frustration. Pairing Ponderosa neighborhood resident Aaron Fukuda with Frank Oliveira, a property owner with farmland in the path of the proposed route, the group has since swelled to dozens of members, with Fukuda and Oliveira acting as co-chairmen.

Even as private citizens were mobilizing, established groups were also getting in on the act. The Kings County Farm Bureau adopted a legal strategy trying to force the Authority to move the alignment either along Interstate 5 or Highway 99, thereby sparing local farmland. County supervisors quickly adopted the same approach, arguing that running the rail through farmland and dairies could produce as much as a $100 million hit to the local economy. Local officials never bought into Authority arguments that high-speed trains would spur economic development.

County criticisms added ammunition when the nonpartisan state Legislative Analyst’s Office issued a blistering report in May saying that the plan was plagued with problems threatening its success, including inadequate funding, poor accountability and inaccurate cost estimates.

The report made big waves — big enough to bring a rebuke from longtime high-speed rail advocate Rep. Jim Costa, D-Fresno.

Armed with a sense of swelling dissatisfaction, Kings County residents made inroads with other groups, linking up with Bay Area citizen groups that were also questioning the project’s wisdom. A contingent of vocal county residents made their first trip to an Authority board meeting in June. It would be the first of many such journeys, often by the busload. Sometimes, the results were amusing, such as in November, when Oliveira spoke past his time limit and was approached by two California Highway Patrol officers under direction from Authority officials.

As anti-rail sentiment surged, politicians began jumping into the fight. Assemblyman David Valadao, R-Hanford, held a packed community forum in Hanford in July in which he joined several legislators raising concerns, including Assemblywoman Diane Harkey, R-Dana Point; Sen. Alan Lowenthal, D-Long Beach; and Sen. Doug La Malfa, R-Richvale.

Valadao said California voters should get a second chance to vote on the project. State Sen. Michael Rubio, D-Bakersfield, said the same.

On Aug. 9, the Authority released a massive, 30,000-page collection of environmental documents for the Fresno-to-Bakersfield section aimed at addressing the public’s concerns, but seeming to only raise more questions. Fukuda and Oliveira’s group said 45 days wasn’t a long enough public comment period to review the report. So did the Kings County Farm Bureau. Both groups asked for 90 days. Instead, the Authority extended the review period to 60 days.

Meanwhile, in late August, county officials asked Gov. Jerry Brown to force a reconsideration of the proposed high-speed rail route that would swing through local farmland.

The complaints continued. Farming giant JG Boswell Co., dominating southern Kings County with tens of thousands of acres, said it needed six months to adequately review the documents to determine how it would affect its farming operations, as the proposed route sliced through or near Corcoran and into Boswell property. Very quickly, other groups followed suit to ask for a longer review period.

On Oct. 5, the Authority dropped a bombshell. It delayed the Fresno-to-Bakersfield environmental impact report until sometime in 2012, saying it would reconsider a long-abandoned alignment going west of Hanford. The Authority said it was acting on the recommendation of federal agencies and local comment. Local groups, for their part, scratched their heads, wondering what the Authority was referring to.

The new alignment proposal generated a whole new crop of opponents who joined with east-of-Hanford property owners in a united front.

Finally the Board of Supervisors voted on Oct. 11 to reject any possible high-speed alignment through Kings County. Officials acknowledged that the gesture was mostly symbolic, but hoped it would catch on.

On Nov. 1, the Authority changed its strategy in a newly released business plan. Instead of building the whole project at once, the Authority announced that it would start with a test track in the San Joaquin Valley and expand from there if more funding became available. The target completion date for the whole project was moved back from 2020 to 2033 and the cost estimate soared from $43 billion to $98.5 billion.

The revamped strategy was subjected to a withering assault. It prompted a lawsuit filed by Kings County, Fukuda and Hanford-area farmer John Tos. They argued that the piecemeal approach violates Proposition 1A, the 2008 law that authorized funding for high-speed rail. The lawsuit alleges that Prop. 1A requires the money be in hand for a usable segment before any groundbreaking starts.

The Authority has only enough money to build Valley test tracks without electricity and with no passenger service.

The hits kept coming.

The Legislative Analyst’s Office chimed in again, suggesting that the Authority’s scheme might not meet the legal requirements of Prop. 1A.  Then in early December came a new Field poll, concluding that nearly two-thirds of registered California voters want high-speed rail to be put back on the ballot for reconsideration. The poll also found that a hefty majority would kill the project if given a chance.

The intense debate over high-speed rail spilled over the Kings County line. On Dec. 5, the Tulare County Association of Governments upset local officials by moving forward with an $800,000 high-speed rail planning grant for a train station in Kings County. Tulare County officials have since put the action on hold, saying they regret that they didn’t talk to Kings County officials first.

On Dec. 14, the Bakersfield City Council, after listening to City Manager Alan Tandy deliver a scathing critique, voted 6-1 to condemn the whole high-speed proposal. Kings County critics praised the vote, hailing it as a sign of growing unanimity in the southern San Joaquin Valley.

The project’s prospects are up in the air. There’s a growing chorus of criticism in Sacramento and in Washington, D.C., but strong support continues from Brown and the Obama administration.

A couple of things are certain. Expect to hear a lot more about high-speed rail in 2012, and expect Kings County to be in the thick of it.

The reporter can be reached at 583-2432 or

Read more:

High-Speed Rail in California: Have they been cooking the books?

The Press Enterprise is a San Bernadino online paper.  That's Southern California, inland from Los Angeles.  This is an editorial.  They oppose the high-speed rail project.  I have not kept count of the number of papers that have taken this same editorial position; that is, total opposition to the California high-speed rail project. There should be no doubt that it's a large number and getting larger.

This editorial states that they do not agree that another audit, this time from the Federal General Accounting Office, is necessary; that we already know enough to shut the project down.  Perhaps.  

However, politics being what it is, and the Democrats so adamant in perpetuating this project against all the facts and evidence that it is totally unworthy of further support, we need to keep accumulating as much information as possible, based on empirical investigations into the CHSRA records, to let all Democrats know exactly what it is that they are so insistent about.

Furthermore, I strongly suspect that we don't begin to know all the underlying facts about what the rail authority has done with the half billion that they have already spent in preparation for next year's construction start.  I welcome a really thorough independent audit, digging into all the rail authority's files, as well as those of the CHSRA Board members and their contracts, to bring all their book-keeping to the light of day.  I believe we will be horrified.

STATE: Rail wreckage
Published: 30 December 2011 05:16 PM

California does not need another independent study before passing judgment on the state’s high-speed rail plans. The flaws in this project are already painfully clear — to voters, if not politicians. Legislators should simply halt this train before it rolls over taxpayers.

A dozen GOP congressmen this month asked the Government Accountability Office to study California’s high-speed rail plans. The congressmen want the GAO to assess the accuracy of ridership projections, determine the amount of public funding necessary to complete and operate the train and answer other questions about the project’s viability. The request came after a contentious mid-month hearing on the bullet train proposal before the House Transportation and Infrastructure Committee.

Taxpayers hardly need to pay for another independent review of this pipe-dream project, however. There is already ample evidence, including reports from the state’s impartial legislative analyst, about the dubious financing and substantial public risks behind this plan. Nor would the bullet train address the state’s biggest transportation priorities: urban traffic congestion and cargo movement.

The California High Speed Rail Authority envisions a train line that would whisk passengers from Southern California to the Bay Area at speeds of up to 220 mph. The agency plans to start construction next year on the first segment of track from Bakersfield to Merced.

But financial questions alone should derail this proposal. The projected cost of the system has more than doubled in the past two years, to $98.5 billion. The source of that money remains disturbingly vague, if not flatly improbable. The rail agency has $6 billion available from state bond money and federal funding to build the first stretch of track. High-speed travel, however, would not begin until the agency extended the initial line to either San Jose or the San Fernando Valley — a step which depends on an additional $20 billion or more in federal funding that does not now exist.

The legislative analyst calls the rail agency’s fiscal plans “highly speculative.” The analyst says the increasingly likely prospect is that the Bakersfield-Merced stretch will be the only part of the line built — at a cost that could not possibly justify any potential benefit.

Nor are the agency’s job creation claims much more trustworthy. The rail authority says that constructing the entire Los Angeles to San Francisco system would result in more than 1 million jobs. But the San Jose Mercury News reported last week that the actual figure was closer to 20,000 to 60,000 jobs during a typical year. The agency counted each year worked by an employee as a separate job, so one person working 10 years would count as 10 jobs.

No wonder a Field Poll in early December found that California voters, by a 2-1 margin, favored putting the rail project to another vote — and would reject it this time.

A project built on imaginary finances and flimsy promises does not need additional study, but a quick end. California has enough public financial disasters without adding a fiscal train wreck, too.

Friday, December 30, 2011

Mark Powell's analysis of "California High-Speed Rail's Fraudulent Funding Plan

It always gives me great pleasure to post Mark Powell's blogs and papers on this blog.  I'm not only preaching to the choir; I'm asking the choir to preach to me and the rest of us. We may speak with different voices, but the central theme is the same; the California High-Speed Rail project must be terminated.

Here is Mark's excellent argument why the project should be shut down based on the rail authority's flawed funding model.  The bottom line here is that there will be no further funds after the initial funding is consumed; that is, the slightly less than $4 billion from the FRA and the $10 billion in bond funds.

Those bond funds cannot be spent unless they are matched by other funds, such as those from the FRA.  In any case, after those are gone, nothing.  Everything else is wishful thinking on the part of the rail authority and their greedy colleagues and contractors.

There is no funding model.  There will be no further funding.  The project should not start, even if nearly half a billion dollars have already been spent on administrative costs, public relations, and all the other paperwork that has kept these guys occupied, off the streets and out of mischief.  Scratch that last part.  They've been doing a lot of mischief.
California High-Speed Rail's Fraudulent Funding Plan
Rail Authority Relies on Non-Existent Federal Programs and All $9 Billion of Proposition 1A Bonds to Build the Initial Operating Section.
The voter approved High-Speed Passenger Train Bond Act, Proposition 1A, stipulates that a funding plan must be in place for a usable high-speed rail corridor before any Rail Bonds can be released for construction of that corridor [Note 1].  

The California High-Speed Rail Authority's Draft 2012 Business Plan purports to show funding plans for usable corridors.  These corridors are termed Initial Operating Sections (IOS). 
IOS-North would extend north towards San Jose from the Initial Construction Section (ICS) built between Madera and Bakersfield while IOS-South would extend south from Bakersfield towards Los Angeles.  The completion of either IOS requires a minimum of roughly $26 billion [Note 2] based on the low end cost of $98.5 Billion for Phase 1 of the statewide system; San Francisco to Los Angeles/Anaheim.  The Authority's high end cost for Phase 1 is $117 Billion.   This $26 Billion is in addition to the $6 billion required to build the ICS [Note 3] which some have dubbed the “Train to Nowhere”.  

Quoting directly from the Authority's Draft 2012 Business Plan:
“The IOS will require a mix of funding from federal, state and local sources to support construction in the years 2015 to 2021. Committed funding for this future period is not fully identified. Several potential options exist to fund the completion of an IOS and provide the state with an operating high-speed rail segment.”[Note 4]

In truth, “committed funding” is not identified at all and “potential options” to fund the system amount to little more than wishful thinking on the part of the Rail Authority.  Each IOS suffers the same funding issues.  For the sake of brevity, this article discusses funding IOS-South. 

Paying for IOS South 
Federal Grants of $8.488 Billion[Note 5]
The Rail Authority's funding plan cites President Obama's Fiscal Year 2012 Budget Request for the Department of Transportation which proposed “establishing a comprehensive Transportation Trust Fund comprised of subaccounts for highway, transit, an infrastructure bank, and high-speed rail. The plan designated $37 billion for new rail network development, at an average level of $6 billion per year.”  The Rail Authority's “funding plan” relies on this level of federal support and its hope of reaping 20% of the annual $6 Billion for each of the seven years from 2015 through 2021 [Note 6].

It does not seem much of a concern to the Rail Authority that President Obama's budget request for high-speed rail was not approved by Congress and that zero dollars were allocated for FY 2012 and subsequent years
Qualified Tax Credit Bond Proceeds of $13.29 Billion [Note 7]
Again citing the Rail Authority's Draft 2012 Business Plan:
“The proposed tax credit bond program for transportation would allow state or local issuers to sell long term QTCBs, with the federal government subsidizing all of the annual interest cost, making these comparable to zero-interest loans from the state or local project sponsor's perspective. Moreover, Congress allows QTCBs to be set up with internal debt service sinking funds that can be reinvested up to a federally prescribed rate (the current maximum allowable yield is about 4 percent), which enables investment returns to contribute substantially to repayment of the QTCB principal at maturity. These two features could allow the State's planned Proposition 1A bond payments to secure 3.5 times the total Proposition 1A bond principal without additional cost to the state.”
The “proposed tax credit bond program” referred to by the Rail Authority is just that, a proposed program.  It is Senate Bill 1436, the Transportation and Regional Infrastructure Project Bonds Act of 2011.  Moreover, this proposed program would authorize only $50 Billion for all of the 50 states and each state would only be authorized to issue $1 Billion of these bonds.  In an interesting exchange between Congressman Gary Miller and Roelof van Ark, Rail Authority CEO, at the December 15, 2011 House Committee on Transportation and Infrastructure Hearing on High-Speed Rail, Congressman Miller pressed van Ark on the following points [Note 8]:

οSenate Bill 1436 is a bill NOT a law.
οEven if it were a law, it would only allow California to issue $1 Billion in QTCB's. [Note 9]
οWhy do you show $12.9 Billion (actual number is $13.29 Billion per Exhibit 8-24 of Business Plan) in QTCB proceeds? Where do the other $11.9 Billion come from?

Mr. van Ark did not answer this question other than to say it was just an example of how something “could work”.  

There is one way to use QTCB's to “secure 3.5 times the total Proposition 1A bond principal without additional cost to the state” and raise the $13.29 Billion in “QTCB Proceeds itemized in the funding plan. The state would need to issue the $5.316 Billion in Proposition 1A Bonds shown in Exhibit 8-24 of the Business Plan.  The current language in Senate 1436 requires only a 20% match from the state.  The Rail Authority's Business Plan merely chooses to ignore the bill's language capping each state's issuance of QTCB's at $1Billion and instead focuses on the maximum 5 to 1 match.  $13.29 Billion of the “QTCB Proceeds” could be spent on construction of high-speed rail if $18.6 Billion in QTCB's were issued by the state.  The unspent proceeds ($5.31 Billion), invested at 4% as allowed by the law cited by the Rail Authority, would earn $13.29 Billion in interest by the QTCBs' maturity date and would be used to pay off the bonds in full.  

Congressman Miller evidently just couldn't grasp the depravity and level of deceit hidden in the Rail Authority's funding plan.  The Rail Authority's funding plan does not call for issuing $13.29 Billion in QTCB's when a law allowing only $1 Billion is being considered in the Senate.  Their funding plan calls for issuing $18.6 Billion in QTCB's!!  True to form, this important detail is hidden from the public, and Congress, because the Rail Authority avoids the use of the words “bonds issued” in their funding plan.

Proposition 1A Rail Bonds Issued for $5.3 Billion [Note 10]
The Rail Authority's funding plan calls for issuing $2.7 Billion in Rail Bonds to build the Initial Construction Section, $5.3 Billion to build the Initial Operating Section, and $.7 Billion to be allocated to “administration and preliminary engineering, planning, design, environmental, and other programs before revenue operations commence”.  To date, $.3 Billion in Rail Bonds have been issued and spend.  All $9.0 Billion in voter approve Rail Bonds are accounted for in the Authority's funding plan for the Initial Operating Section.  No Rail Bonds will be available to complete Phase 1 or to build out the system to San Diego and Sacramento.    This situation is totally in line with the 2008 Business Plan released 3 days after the statewide election which showed all $9.0 Billion in Rail Bonds being spent on Phase 1, San Francisco to Los Angeles/Anaheim [Note 11].  

One wonders if the Rail Authority was ever serious about building the statewide system promised to the voters across the state, especially when all Business Plans since 2008 have been devoid of any discussion regarding the cost and schedule for constructing the Phase 2 links to San Diego and Sacramento.  However, it is no wonder at all that with Californians learning more each day, they now oppose high speed rail by a margin of 2 to 1 [Note 12].

From the date of its inception in September 1996 with the passage of California Senate Bill 1420, the California High Speed Rail Authority has been charged with the following task:

“ In order for the state to have a comprehensive network of high-speed intercity rail systems by the year 2020, it must begin preparation of a high-speed intercity rail plan similar to California's former freeway plan and designate an entity with stable and predictable funding sources to implement the plan.” [Note 13]

The Authority's latest Business Plan is utterly devoid of the “stable and predictable funding sources” statutorily required before any Rail Bonds can be issued.  Any attempt to issue Rail Bonds in 2012 will surely result in a winnable lawsuit brought against the Rail Authority by opponents of this project and more tax dollars will be spent defending the Rail Authority's indefensible funding plan.

Write to Governor Brown and Members of the California Legislature and demand a stop to the horrific waste of California Taxpayer Dollars currently funding the High-Speed Boondoggle.

Statements of fact made in this article are supported by the footnotes shown below:


Note 1:  Text of Proposed Law: Proposition 1A as shown on the Official Supplemental Voter Information Guide for the November 4, 2008 Ballot; page 10 of voter guide; Section 2704.08 (c)(1)
Note 2: California High Speed Rail Authority Draft 2012 Business Plan; average of IOS North and South in Year-of-Expenditure Dollars; Average of costs found in Exhibits 8-23 and 8-24
Note 3: California High Speed Rail Authority Draft 2012 Business Plan; Exhibit 8-22
Note 4: California High Speed Rail Authority Draft 2012 Business Plan; page 8-4; bottom paragraph
Note 5: California High Speed Rail Authority Draft 2012 Business Plan; Exhibit 8-24
Note 6: California High Speed Rail Authority Draft 2012 Business Plan; bottom half of page 8-7
Note 7: California High Speed Rail Authority Draft 2012 Business Plan; Exhibit 8-24
Note 8:  Congressman Miller questioning Roelof van Ark at  3 hours 00 minutes 45 seconds into Video of House Transportation and Infrastructure Committee Meeting on California HSR
Note 9: Explanation of Senate Bill 1436 found on website of the bill's sponsor, Senator Ron Wyden
Note 10: California High Speed Rail Authority Draft 2012 Business Plan; Exhibit 8-24
Note 11:  California High Speed Rail Authority 2008 Business Plan; page 21; Figure 26
Note 12:  Field Poll conducted November 15-27, 2011
Note 13: SB 1420 (Kopp) Transportation: High-Speed Rail Act.

What are the "hidden" High-Speed Rail costs in California?

Many people write letters to the editor criticizing the high-speed rail project in California.  Some letters are better than others. Include, among these letters, the so-called "guest opinion" articles which are, in a sense, longer letters.  It's a chance for the public to have an editorial voice.  And it's one of the reasons we prize the "fifth estate" in the US so much.  It's the quintessential vehicle for "freedom of speech." 

This lengthy article, by a radiologist residing in Bakersfield, is one of the best ones; well written and thought through.  Dr. Patel raises the critical issue, to which we have referred numerous times in the past, about the loss of revenues to the cities targeted by the rail authority. That is, such cities will lose a variety of revenue sources including homes taken by eminent domain, businesses and farms, while at the same time they are required to foot a number of bills connected to the rail project.

Did you know that Prop. 1A refers to "local funding contributions?" Several California cities have already declared bankruptcy or on the verge of doing so.  What "local contributions" could the rail authority be thinking about?  Meanwhile, local governments are struggling to make ends meet, and now must confront the nightmare of massive construction, disruption of businesses, traffic diversion, and being  tied up by this disruptive mess for perhaps ten years. 

And, the cost burden to the cities will not be met by the rail authority.  That is certainly an unfunded and undeclared HSR tax imposition. 

The point that Dr. Patel makes is one that we have tried to highlight on this blog.  Not only are all the voters and taxpayers on the hook for this train in California, but so are the Nation's taxpayers.

Furthermore, all the urban, suburban and rural areas through which the rail corridor passes, will take massive financial hits. Eminent domain will not replace market value to properties adversely taken. The cities and counties will lose tax revenues. Businesses will fold or suffer major losses. Farms' productivity will be severely impaired. 

There has so far been no adequate accounting of all the costs that HSR will impose on the environments through which it passes.  They are only looking at their construction costs.  Not their cost of impact.  That is a gross oversight.  And, those costs attach not only to the construction, but to the operation of the train if it ever gets running, and I'm including lots of job losses that also don't get talked about.

I'll give you one example.  The rail authority claims that they will take many flyers off the short-haul flights and put them on the HSR trains.  That's a loss of business for the air carriers.  And that, you can easily predict, means lay-offs.  Will the CHSRA see to it that all those laid off air-carrier employees find work with the railroads?  Yeah, right!

We have not yet fully realized what we are in for in this state with this project.  We better find out fast, before we get sucked into the high-speed rail black hole.

Post Script thought: I have to say this.  All the nation's taxpayers will be on the hook for this luxury train in California.  The train will carry only the affluent who can afford the most expensive train tickets available.  Most people in the US don't live in California and may never even travel to California.  Why should they be expected to have their tax dollars pay for this state's foolish, fancy train?  The immorality of this outrageously expensive project is stunning and unforgivable. 

Tuesday, Dec 27 2011 07:06 PM
GIRISH PATEL: Rail project through city must be stopped

The residents of California passed Proposition 1A in 2008, authorizing a $9 billion bond for a statewide high-speed rail project. The bond amount was based on cost estimates of $33 billion for the entire project. The project was to be a public-private partnership that included $8 billion in federal grants. Prop. 1A expressly prohibited any taxpayer subsidy for the project. The trains would run from the Bay Area to San Diego when completed.

Since initial passage, there has been strong opposition to the project in the Bay Area as well as in Southern California, and the plans for building in these areas have been shelved. The California High-Speed Rail Authority therefore decided to build phase 1 in the San Joaquin Valley.

On Nov. 1, the rail authority released a revised business plan for HSR. According to the plan, a number of properties in Bakersfield will be destroyed in order to construct railroad tracks through the city. There are almost 550 properties, including 250 homes, a number of existing businesses, churches, schools and city property. Kern County will lose highly valuable farmland.

Looking at my property tax bill, I notice that the first line in the bill is for general/local government taxes (1 percent). There are 13 additional lines of various tax amounts, which include payments for Kern High bonds, Water Agency debt, sewer and other assessments. These items add about 25 percent to the baseline tax amount. When the property is taken over by HSR, our community will lose all that revenue. Multiply by 550 additional properties of varying valuations, add lost revenue from losing farmland and it becomes clear that a large amount of revenue will be lost to Bakersfield and Kern County.

A number of existing businesses will be disrupted, and properties on both sides of the tracks will lose significant value -- and all this will cause additional losses of tax revenue. It is estimated that more than 1,400 existing jobs will be lost.

The draft business plan released by the rail authority grossly overestimates its ridership. Pages 6 to 17 of the plan forecast "medium ridership" at 53 million to 77 million riders, with a high forecast of 57 million to 98 million riders. These numbers got me thinking, so I checked how many riders Amtrak carries here and in the nation.

According to an Amtrak news release from June, the ridership in California broke a record. Amtrak carried 5 million annual passengers throughout the state after an increase in the ridership of 12 percent.

According to the most recent data available, Amtrak set a record and carried 30.2 million passengers nationwide for the fiscal year ending on Sept. 30. These include the Northeast corridor, South (New Orleans), Carolinian, Acela Express, special trains -- long and short distance -- all of them.

Now, it is impossible to believe that California HSR, after a couple of years of ramp-up, will carry almost 20 times as many passengers as currently are carried through California, or more than three times as many passengers as the entire country. Obviously, the ridership and revenue projections are outlandish to say the least.

Further, Amtrak states that Caltrans has spent nearly $2.3 billion in support since 1990. That comes to almost $110 million per year. Since Prop. 1A prohibits subsidy for the HSR project, it will not have enough revenue to sustain itself and it will go defunct. We will be stuck with railroad tracks, with no trains to run on them, and blight in the community.

Even if HSR begins operations, it will take Amtrak passengers. What happens to the existing tracks and brand-new Amtrak station in that case?

The rail authority also claims that the project will create a million jobs. As Mike Rosenberg of the San Jose Mercury News wrote in an article published Dec. 23 in The Californian, that claim has been called "bogus."

Thus, the community will give up existing property, facilities, jobs and tax revenue in favor of a nonviable pie-in-the-sky project concocted on improbable revenue and job creation estimates.

The state of California is broke and running huge deficits. The HSR business plan estimates cost of construction at up to $117.5 billion -- or $226 million per mile. The bureaucrats and politicians in Sacramento are spending money we don't have on a scheme we can't afford, and asking us to forgo our existing jobs and income in favor of such an improbable boondoggle.

The people of California must rise up and stop such nonsense in its tracks now.

Dr. Girish Patel is a practicing radiologist in Bakersfield and a longtime Bakersfield resident.


With the California High-Speed Rail Authority, where's a cop when you need one?

If you go through the over 900 entries on this blog, and count the number of times we have asked for an independent audit of the CHSRA books, you will be amazed at the frequency.

The rail authority has operated as an autonomous, unaccountable organization since the beginning. 

What's that you say, they have been audited by the state auditor already?  Yes, that's true.  And found severely inadequate.  Nothing ever happened about that. There has been no follow-up audit to see if they cleaned up their act.

Also, the Legislative Analysts' Office, the former Inspector General, and the rail authority's own peer review committee have provided lengthy and detailed critical reports.  What's been the result of that?  Nada. Zilch. Zip.

Laws are worthless without enforcement.  The rail authority has been flagrant in its, shall we say, "alleged" bending of the applicable laws.  Where's the enforcement?  Indeed, who has done a comprehensive audit, not only of the rail authority's books, but the financial records of the Board members themselves? Nobody. 

And the Legislature has had oversight on this Governor's organization, and has slapped their collective hands many, many times.  Results?  We continue to be deceived, lied to, manipulated, misled.

With all these failures-to-correct, I would think it's time to bring in the Federal Marshals, lock up and transport all their files and conduct a full-blown audit of all their books.

The rail authority is a loose cannon in this State's Government.  The oversight is tokenism at best. Actual accountability is absent.  Yet, the amount of information flying around the media-sphere about their many violations is such that you would think that by now a comprehensive criminal investigation would be under way.  Not yet.

OP-ED: High-speed rail project needs to be audited
December 30, 2011, 04:42 AM — Contra Costa Times

There are many missing elements to California’s high-speed rail proposal, but the most glaring one is honesty. What is needed before any further action is taken is a realistic, accurate audit by a nonpartisan watchdog agency that has no stake in the development or abandonment of the rail project.

That is what congressional Republicans are calling for in the wake of growing concern about the high cost of the project, dubious ridership estimates, inflated job-creation projections, unrealistic funding expectations, legal questions and broad deviation from the bond measure that won voter support in 2008.

Understandably, the members of Congress want to see if it makes financial sense to spend tens of billions of federal tax dollars on a highly questionable high-speed rail system in California.

It’s not only Republicans who are wary of going ahead with such a huge project burdened with so many uncertainties.

We are convinced that the latest business plan for the high-speed rail system is so flawed that it needs an independent analysis, which a nonpartisan audit could and should provide.

Even more problematic is that the rail plan now under consideration is vastly different from the one presented to voters in 2008.

Not only has the cost estimate more than doubled, but the route has dramatically changed, leaving out rail lines to Sacramento and San Diego.

There is no compelling reason to move ahead now with construction of an initial phase of the rail system in the Central Valley.

There is no early start date deadline on the state bond money or the matching funds from Washington.

Furthermore, the Central Valley is the wrong place to begin a high-speed rail project. The initial route should be in a high-density region with traffic congestion, such as the Los Angeles to San Diego corridor.

Successful high-speed rail operations in Japan and France each began in the most densely populated areas of those nations.

The closer we look at the rail project, which we doubted was viable form the beginning, the worse it looks in terms of ever having nearly enough ridership potential to attract the needed private investment.

The job-creation estimates, in which real jobs and job-years have been conflated, raise more questions. The fact is that only a few thousand workers will be employed on the project at any one time.

Besides, money spent on other more worthwhile transportation or any public works projects would create as many jobs as a high-speed rail system.

Before any more money is wasted on the rail project, a comprehensive, independent audit needs to be done. Then a new vote on rail bonds must be held. Unfortunately, some supporters of the high-speed rail project fear that a vote would kill the project.

We agree with them about the likely outcome of a vote, especially after an accurate independent audit reveals the gross inadequacies of the current business plan.

We trust that given proper information, voters would be able to discern the differences between a fantasy and a realistic vision and would derail what promises to be a costly mistake.

Thursday, December 29, 2011

Accessory after the fact: The case of the High-Speed Rail project and Governor Brown

Not much to add to this LA Times article.  We already know that the plans for the Central Valley are all smoke and mirrors.

Amtrak's passenger rail service was supposed to be able to use the intended tracks -- which, get this, will not be usable for high-speed rail -- in the interim while the rail authority waits for their federal lottery ticket to win the big one.

The catch, which Amtrak didn't catch initially, is that it would cost them a bunch of capital development money to make use of these tracks that they don't have.  Well, that's not so good.  Amtrak admits that they don't really need those brand new, not usable for high-speed rail, tracks. Anyhow, and this is so typical, Amtrak says that the CHSRA hasn't discussed this with them as they developed their rail plans. 

All of which is to say, simple and clear, the reason for building these tracks is nothing more than to spend the federal dollars that become available, almost $4 billion, plus another $2.7 billion of state bond funds.  

I cannot put this any more emphatically.  This project is not about building a high-speed train.  That may never happen.  This project is about getting and spending federal dollars for political purposes.  When the federal and state governments assure us that this project is about jobs and boosting the economy, do not believe them.  It is not true. 

By now, the evidence is ample and should be convincing.  We have been lied to about this project from the beginning.  That has not yet stopped. The longer the state Governor, Jerry Brown, persists in his support for this corrupt project, the more tainted by this project he becomes as well.  

High-speed rail's backup plan criticized
Rules say the track must be put to use if the project fails. But Amtrak officials are uneasy with that role.

December 27, 2011|Dan Weikel and Ralph Vartabedian

When the Obama administration gave California $3.4 billion in startup money for a high-speed rail system, it insisted on a guarantee that the project would not become a white elephant -- something critics could brand as a train to nowhere.

The first section of track had to run down the spine of the Central Valley and have another use, should the rest of the bullet train project collapse.

Those requirements are now at the center of an intensifying political battle, waged by critics who say the state's fallback plan to use a 130-mile stretch of track for slower Amtrak service is a sham because there's no guarantee the national rail service will ever use it.

Amtrak said it has no agreement to operate on the track and has not analyzed the possible negative effects on one of its most successful rail lines. Still, the California High Speed Rail Authority has estimated 45 minutes could be shaved off Amtrak's current service between Bakersfield and Merced.

"Our purpose is to build a high-speed rail system between Northern and Southern California," said Tom Umberg, the chairman of the California High Speed Rail Authority. "But if there are any delays, I believe the track will have independent utility and provide increased efficiencies in the Central Valley."

In a letter sent last year to the authority, Amtrak officials said they supported the project and interim use of the high-speed corridor. They cited potential improvements in travel time and reliability but also cautioned that cost issues and a need for faster locomotives would have to be addressed.

But now Amtrak says it has no commitment to use the track and has not been directly involved in the planning of the route. No cost-benefit analysis or detailed studies have assessed how switching to the bullet train track, which may veer around existing stations, would affect current service.

Officials note that the state has invested millions of dollars to improve the San Joaquin Valley line and build ridership, which now ranks among Amtrak's five most traveled routes.

Without a viable alternative use for the bullet train's first segment, the controversial decision to start building in the Central Valley is likely to draw more political fire. Rep. Devin Nunes (R-Tulare), who is seeking to kill the project, called the assertion that high-speed rail construction would benefit Amtrak "a lie."

The bullet train agency plans to starting building the first section next year between Bakersfield and Merced and finish the work in 2017. But no high-speed service would operate on the line partly because there is insufficient funding for signals, maintenance facilities and an electrical system to power the trains. Another $20 billion or more in funding will be needed to begin running trains to L.A. or the Bay Area.

Starting construction in the Central Valley is growing more controversial as the project nears a groundbreaking late next year. At least four local governments in the Central Valley are rebelling, fearing the effect on their communities. Also, agricultural interests are gearing up for a major legal battle against the plan, while critics in urban areas question why the project is not starting in a major population center with severe traffic congestion.