You will see, below, the section of the Governor's budget pertaining to the California High-Speed Rail Project. It is significant for defining conditions that will be impossible for the rail authority to meet.
Here is the critical set of conditions, as described in this Budget Summary:
"No bond funds can be provided for construction before a plan for completion of a segment of the system is submitted to and approved by the Department of Finance."
"The approved plan must show full funding committed by all contributing entities for construction of all track, stations, parking, and signals, as well the purchase of rolling stock and an agreement with an operator that will operate the proposed segment without an operating subsidy, which is not permitted under Proposition 1A."
Why is this a problem? Because, the CHSRA has been careful to define what they intend to build not as a "segment" but as a section of a "segment." Even if their plans contain all the required bells and whistles for an entire segment, they do not intend to build such a segment and don't have the funds to do so. Proposition 1A does not permit the construction of a section, only a segment and that segment must be fully HSR operational upon completion.
In this case, the CHSR acknowledges that they will not complete the segment to be fully operational. Indeed, it will lack electrification, signalling, PTC, rolling stock or any of the high-speed rail specific features as required by Proposition 1A. Mike Brady has made this point to the CHSRA Peer Review Committee in a letter which appeared in this blog a few days ago.
If the laws of the State of California are going to be obeyed, the State Department of Finance cannot allocate any Proposition 1A dollars to this project, and the more flexible federal funds will not be sufficient without bond funds from Prop. 1A.
Just to keep us from being excessively elated, it's still only the beginning of 2011. Construction won't begin until at least the middle of 2012. Lots can happen in the meantime.
And, here's yet on more option for the rail authority that should give us pause. They can build as much as possible, using only ARRA stimulus dollars and no Prop. 1A bond funds. They can acquire land and lay some track for Amtrak thereby complying with federal requirements and by-passing Prop. 1A requirements. It won't be operational for HSR and may never get used by HSR, but they will spend those federal dollars and that's what this is all about, anyway.
Spend what you can get your hands on.
Repeat after me: "It's not about the train; it's about the money."
Thanks, Morris, for calling this to my attention.
==============================================
http://www.ebudget.ca.gov/pdf/BudgetSummary/BusinessTransportationandHousing.pdf
California Governor's Budget Summary - 2011-2012
High-Speed Rail
The High-Speed Rail Authority, which is independent from the Business, Transportation, and Housing Agency, is responsible for the development and construction of a high-speed passenger train service between San Francisco and Anaheim (Phase 1), with extensions to San Diego and Sacramento. The trains must be capable of operating at speeds of 200 miles per hour. Proposition 1A, enacted in November 2008, authorizes $9 billion in bond proceeds for the rail lines and an additional $950 million for state and local feeder lines. The federal government also has awarded the Authority nearly $3.6 billion, most of which must be used to fund the Central Valley portion of the project. There have been no financial commitments made from the private sector. Total costs for Phase 1 are projected by the Authority to exceed $42.6 billion.
The total amount of funding available, including state bond funds and federal funds, for state operations and capital outlay in 2010-11 is $220.9 million and $192 million in 2011-12. These funds are for continued project management, environmental and engineering work. Proposition 1A limits the amount of bond proceeds that can be used for right-of-way acquisition and preservation, mitigation, relocation, preliminary engineering, planning, and environmental studies to 10 percent of bond funds. No bond funds can be provided for construction before a plan for completion of a segment of the system is submitted to and approved by the Department of Finance.
The approved plan must show full funding committed by all contributing entities for construction of all track, stations, parking, and signals, as well the purchase of rolling stock and an agreement with an operator that will operate the proposed segment without an operating subsidy, which is not permitted under Proposition 1A.
The bond act also requires that no more than half of the total cost of the construction of a corridor or usable segment be funded from bond funds.
The significant Non-General Fund workload adjustments are as follows:
•Program Management Oversight—An increase of $1 million in 2011?12 as a result of an increased need for oversight and review of the Program Management Team’s work products and schedules.
•Interagency Agreements—An increase of $1.136 million in 2011-12 as a result of interagency agreements with the Department of Justice and the Department of General Services.
•Program Management Services—A decrease of $37 million in 2011-12 as a result of the contract with the Program Management Team being fully funded. While the Authority has been awarded several billion dollars in federal funds for construction, details of the grants have not been finalized and appropriation of these funds may not be needed until 2012-13. Thus, only $89.7 million in federal funds for partial design and environmental work is reflected in the Budget, with the same amount in bond funds for the state match.
