Here's some news we have been waiting for. The Legislative Analysts Office in Sacramento has previously commented about the shenanigans of the California High Speed Rail Authority. The LAO is an independent government agency, somewhat like the Congressional Budget Office in Washington, charged with analyzing legislation and its implementation in the state government.
It should be noted here that the LAO is not the only critical government agency that has repeatedly pointed to all the glaring shortcomings of the rail authority. There have been damning reports from the Inspector General, the State Auditor, and the Legislature, as well as the rail authority's own peer review committee.
Now we have this newest LAO statement. Now we have to ask, yet again. When is enough enough?
Roelof Van Ark's slippery and vacuous platitudes will not excuse the rail authority from it's endless litany of shortcomings. Even the LAO want to cut their budget to the bone. Time to pull the plug.
Here is the LAO Report itself: http://lao.ca.gov/reports/2011/trns/high_speed_rail/high_speed_rail_051011.pdf
You can also obtain the report from: http://lao.ca.gov/laoapp/PubDetails.aspx?id=2475
It's 28 pages long and we'll comment on it in the next several days. Just to whet your appetite, here are the basic recommentations from the Analysts' Office:
*We recommend that the Legislature direct the High Speed Rail Authority (HSRA) to renegotiate the terms of the federal funding awarded to the state by the Federal Rail Administration.
*We also recommend that the Legislature pass legislation this session that shifts the responsibility for the day-to-day and strategic development of the project from HSRA to the California Department of Transportation (Caltrans).
LAO Recommendations:
·Fund Only Needed Administrative Tasks for Now.
·Seek Flexibility on Use of Federal Funds.
·Reconsider Where Construction of the Line Should Start.
·Improve the Way Project Decisions Are Made.
These are Gary Patton's insightful overview comments on the report:
1. Terminate all but “subsistence spending” for the project in the near future.
2. Eliminate or reconstitute the Authority, and remove its operational control over project implementation.
3. Place responsibility for high-speed rail within the existing state departmental and agency structure (Caltrans, specifically).
4. Seek flexibility in the use of federal funds (“the Legislature should proceed with the project only if this flexibility is obtained…”).
5. Do not build the “Train to Nowhere” Central Valley route at this time.
The LAO does not specifically suggest (as the CC-HSR has) that the public-private partnership (PPP) aspect of the project should be realized by having the State involve an experienced company, or consortium of companies, in the actual design of the project at the front end, to maximize the possibility of its economic success. However, the recommendations of the LAO report, which does discuss the PPP aspect of the project at some length, are consistent with this recommendation made by the CC-HSR.
The LAO does emphasize something that the CC-HSR has mentioned but not stressed: a decision to proceed with the project will have “opportunity costs” which will disadvantage other state programs (like education) which are actually in competition with the very significant tax dollars that will be given irrevocably to high-speed rail, if the $9 billion in bonds are sold: “We estimate that, should the state sell all of the $9 billion in voter-approved high-speed rail bonds, the state’s total principal and interest costs for repaying the debt would be $18 billion to $20 billion. This would require annual debt service payments of roughly $1 billion for the next two decades.”
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Here is an excellent five minute YouTube overview of the report:
Thanks to Rita Wespi, William Grindley, Lance Christiansen and Gary Patton, who directs the CC-HSR efforts, for providing all this good stuff.
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May 10, 2011
LAO criticizes high-speed rail project's financing, management
by Dan Walters
California's high-speed rail project is threatened by erratic financing, the state's precarious financial situation and management shortcomings and should be overhauled, the Legislature's budget analyst said Tuesday.
The highly critical report by Legislative Analyst Mac Taylor's office concluded that management of the project be shifted from the state High-Speed Rail Authority into the Department of Transportation and the entire program undergo reevaluation -- especially the decision to build an initial segment in the San Joaquin Valley.
The report details "a number of problems that pose threats to the high-speed rail project's successful development" and adds: "The Legislature faces some challenging choices about whether to continue with a project that, despite the problems outlined above, could have some reductions in spending for transportation improvements as well as air quality and other environmental benefits."
Gov. Jerry Brown has asked for an $185 million appropriation to keep the project moving, but the analyst says only $7 million should be approved "at this time" while managerial and operational questions are answered.
The report was the latest in a string of critical outside examinations of the project, which envisions high-speed trains connecting Northern California with the south part of the state through the San Joaquin Valley. The project's lack of a cogent business plan and its ridership projections have been sharply criticized in official reviews and there are numerous fights over specific routes, especially on the San Francisco Peninsula.
HSRA CEO Roelof van Ark issued a statement on the report saying he believes the project "has been successful thus far because it has strived to operate more like a private business than a typical government bureaucracy."
"I hope to work with the Legislature to come up with solutions that benefit all Californians and allow us to move forward with the successful completion of the state's high-speed rail system - and we hope that this report at least encourages healthy discussion towards that goal," he said.
The full report can be found here.
Editor's note: This post was updated at 12:53 p.m. with a statement from van Ark.
Categories: High-Speed Rail
Posted by Dan Walters
12:10 PM | 11 Comments | Share
Read more: http://blogs.sacbee.com/capitolalertlatest/2011/05/lao-criticizes-high-speed-rail-project.html#ixzz1Lyzf3UDG
