Wednesday, January 4, 2012

Mike Rosenberg's article on today's events regarding the California High-Speed Rail Project

So, this is what we know.  This is what went on today. The CHSRA Peer Review Committee released a highly critical review of the rail authority's program, intentions and funding plans.  They ask the project to be stopped.  The staff of Governor Jerry Brown condemned the report, claiming it faulty.  The Governor, in response, is criticizing the expert committee that was appointed by various government departments with a specific interest in the project. This, in turn, was followed by the most rancorous press-release ever written by the CHSRA in self-defense.

So, realistically, what can we expect?  What are the chances that Brown will respond to the peer review's recommendations to terminate the project?  What are the chances that the state legislature will take these recommendations seriously?

Why do I believe they -- the governor and legislature -- will ignore the peer review committee? One simple answer: $4 billion dollars of free government funds, combined with three billion of state bond funds, borrowed from the taxpayers. There are no limits to how desperate California is to obtain these funds, regardless of the legitimacy of the purpose.

Unless persuaded otherwise over the next weeks and months, I firmly believe that California will continue to move toward construction starts in the Central Valley late next year or early 2013.  That is to say, that they will do everything to remain in compliance with federal requirements, flexible as those may be, in order to be on track to accumulate the promised $6 billion to waste in the Central Valley on useless tracks. 

What could stop this? Perhaps, I say, perhaps, lawsuits.  However, those would require the court to take actions which will result in the termination of the project and prevent those $6 billion to become available to this cash-strapped state.  What are the chances of a judge taking such a bold and courageous action?  I'm not sanguine about that, but willing to be pleasantly surprised.
This evening I've been in constant communication with my colleagues over today's dramatic events.  Here are some of the observations I shared with them: 

A. The current already extended-several-times transportation budget, including that of the FAA, will expire end of the month.  They will need another appropriation extension quickly if they don't get to work on the basic re-authorization of this budget.  They certainly can't let the FAA get de-funded!

Doubtlessly, Mica and the Republicans won't let this opportunity slide by without trying to stick in some other budget cuts, and they will also keep HSR out of that next budget extension.

Meanwhile, it is quite likely that they will battle over the basic new authorization, even quarreling about the length of time, two years or six years, that this authorization will remain in effect.  The Senate Democrats want more money, especially beyond what the highway trust fund can generate, like $12 billion more.  And Boxer wants it for two years only.  Mica wants a six year bill with less money in it. That chess game may not play out until after the elections.

We should be asking to be notified IF and WHEN the GAO takes up the McCarthy audit request.

And, about the NYT article about Gingrich's having been a HSR supporter.  It just tells you that HSR has been a political football, regardless of Party, in the US for a long time.  All that blather about needing it for our future is typical Washington BS.
B. In response to the staff of Jerry Brown commenting on the peer review report: As Morris reminded me, it's close to $4 billion.  Free money.  Plus borrowed state bond funds to match.  Can California use this?  Will it make the Democrats, starting with Jerry Brown, look like heroes to their constituencies? Does it really matter how it's spent, just so it's spent? Will it make our state Democrats look like they are creating jobs and building the economy?  It's not about realities; it's about appearances.

Of course this project has no future.  Of course there won't be more funding after this. Of course they will do a huge amount of damage in the CV. Of course they will put down 100 +/- miles of useless track.

What's most important is that they will start construction, keep themselves employed and keep lobbying. They will continue to hold monthly meetings, attend legislative committee hearings, defend themselves, explain themselves, conduct "outreach" to all their "stakeholders," and continue this wasteful charade until all the money is used up.  What is Roelof Van Ark worried about?  His resume.

What can we do?  Sue the Bastards!  I never thought I would be saying this in my entire life:  Vote Republican.

Morris just sent us this press-release from the CHSRA.  WIll Kempton must have cut all his ties with Sacramento.

"The report's conclusions, which would be premature at best, would place at risk $3.5 billion of federal funding for High Speed Rail currently in hand for the project and undermine extensive outreach efforts on the part of the Authority to develop greater integration with regional rail systems."

$3.5 billion.  What more do you want to know? That's all they give a damn about.

Here is David Siders' take on the peer report.

After re-reading the CHSRA press-release, I am stunned at the tone.  These guys are really panicked.  To lash out, in print, so aggressively, suggests a wounded beast cornered and fighting for its survival.

We should remember that it's actually over $6 billion total that they get to play with.  That is an immense amount of money to have power over.  People kill other people for less than that. 

For over three years I have been trying to communicate that this is not a polite game being played in school.  Peoples' careers are on the line.  This is a cut-throat business.  They are bringing in their lawyers.  They are ranting and name-calling.

Many of our genteel colleagues have never accepted how adversarial and confrontational this is going to be. Be assured that the rail authority and their supporters are not going to walk off the tennis courts shaking hands with us. 

To  mix more metaphors, this is professional hard-ball and there will be blood. 

Let  me extend this cynical analysis further.  With this much money, there will be kick-backs, bribes, laundering, and lots of other under-the-table activities.  Both Unions and corporations like Parsons Brinckerhoff will be far more involved than meets the eye.  

This project was initiated thirty years ago by back-room politicians like Willie Brown. People like Rod Diridon are not out of the picture.  There are all kinds of behind the scenes activities over all this.  Many people are eager for a "piece of the action."  There will be no clean, decisive resolution.  It will be knock-down, dragged-out street fighting.

The Jerry Brown team has now given us a hint of how determined they are to get these funds, and even if the entire bunch of CHSRA guys ended up going to jail, it wouldn't make any difference. 

The most cynical interpretation of any political action invariably turns out to be the most accurate.


Experts: Don't build $99 billion California bullet train
By Mike Rosenberg
Posted: 01/03/2012 10:14:10 PM PST

Warning of an "immense financial risk" to the state, a renowned group of transportation and financial experts advised lawmakers Tuesday to pull the emergency brake on funding California's $99 billion high-speed train.

The Legislature created the high-speed rail peer review group to weigh the project's chances for success, and its sobering conclusions are the most striking -- and perhaps most influential -- analysis yet of the pivotal plan lawmakers will evaluate in coming months.

Former Caltrans chief Will Kempton, the group's chairman, said most troubling was the state's plan to spend all available funding -- $6 billion -- on a small stretch of track in the Central Valley and hope for the rest of the money later.

"There is simply just no identification of a long-term funding source or commitment, and we think that is a fundamental flaw," Kempton said. "There is a huge risk they could be stuck with (only) that initial section of track."

The report's release coincides with Wednesday's start of the Legislative session, which will end with a vote this June on whether to authorize $2.7 billion in state bond funds to match $3.3 billion in federal money.

"It is particularly compelling because this comes from a group with no political ax to grind, and undeniable experience and expertise on a global basis," state Sen. Joe Simitian, D-Palo Alto, who has helped lead the discussion on the project in Sacramento. "It adds to an accumulating pile of concern."

Though Gov. Jerry Brown continues to support the project, opposition among the public and the Legislature is mounting, particularly as the cost to build has tripled since voters approved the railroad in 2008.

As state leaders face a federal deadline this fall to start construction, the report is likely to fuel criticism.

"It's a voice we're certainly going to need to listen to," said Assemblyman Rich Gordon, D-Menlo Park, who heads the budget committee overseeing the project.

State Sen. Mark DeSaulnier, an East Bay Democrat and head of the Senate transportation committee, agreed with the eight-page report, siding with Simitian, most Republican lawmakers and a growing number of Democrats who argue the current plan shouldn't be funded.

But in a 10-page response, the California High-Speed Rail Authority attacked the credibility of the peer review panel and called the analysis "by and large deeply flawed."

They accuse the group of holding the bullet train to an impossible funding standard, noting other megaprojects have been built segment-by-segment without having all the money in place at the onset.

"As the report presents a narrow, inaccurate and superficial assessment of the high-speed rail program, it does a disservice to policymakers who must confront these decisions," project Chairman Tom Umberg said.

But Kempton noted that other huge projects, like the Interstate system, had dedicated sources of future funding, such as a gas tax, that the high-speed rail plan does not.

The report is particularly surprising because panel members support high-speed rail in concept. The railroad is envisioned to zip passengers between San Francisco and Anaheim by 2034.

"It was very hard for me," said Kempton, currently the head of Orange County's transportation agency. "I do believe that we should have a bold vision for transportation but I think that vision has to be tempered with reality, as well."

Their assessment also calls into question whether the plan to start building in the remote Central Valley is legal, since the tracks would be too short to support bullet train service. They also express doubt over project cost estimates, whether the rail authority is equipped to handle the project and if the train would actually turn a profit.

The rail authority denied virtually all the accusations, saying the group's assertions were "unsupported," didn't mention the potential benefits of the project and would let massive matching federal funds slip away.

Staff writers Steve Harmon and Denis Cuff contributed to this report. Contact Mike Rosenberg at 408-920-5705.

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