Tuesday, February 7, 2012

California High-Speed Rail: Trying to salvage the unsalvageable.

This is from the HSR-loving LA Times. George Skelton, the article author, discusses the dynamics of change taking place, even as we speak, in order for California's Governor to salvage the high-speed rail house of cards.

As we know, Governor Jerry Brown will say anything, and let nothing get in the way of obtaining the promised $3.3 billion in ARRA funds from the FRA.  The FRA has insisted that all the funds from Washington get spent for start-up construction in the Central Valley. 

But, that's a problem.  That's not where most of California's voters are.  That's not where most of California's affluent potential HSR riders are either. 

At the same time, the California legislature is enduring the ridicule of sustaining this project as they are about to launch a "train to nowhere."

And, there are increasing pressures from high-level Congressionals, like Boxer, Pelosi and Feinstein, seeking to distribute these available funds throughout California, such as in the LA Basin and Bay Area, homes of their constituents. 

It should go without saying that the amount available for the Central Valley is insufficient to build a real, operating high-speed rail segment.  Therefore, some verbal manipulations and legerdemain are required. 

The solution offered by the rail authority is to build what they call an "initial construction section." That's not a high-speed rail usable segment as the law requires. But, never mind. That is supposed to come later, at which time it will be longer and will be called an "initial operating segment."  

Of course, there aren't enough funds to build anything more than about 100 miles of track, with no electrification or anything else to permit use by high-speed rail, so it's pretty much useless. Hence the ridicule. And that's why the rail authority, to cover itself, calls it "initial."  It's not the main course.  It's only hors d'oeuvres. 

Are you following this?  Jerry Brown knows that there won't be more money for HSR after this $3.3 billion from Washington. But, his state is in deep economic doo-doo, and over three billion dollars is a lot of money to bring into the ailing state's budget. 

So, says Jerry, he will find more money in the cap-and-trade legislation, although that hasn't been implemented yet and there are lots and lots of legal questions.  All of which is to say, it's distracting nonsense.  

When Brown dismisses the current rail authority estimate of $117 billion to construct the system as "silly," what is he talking about and how does he know that the rail authority, led by his own hand-picked wing-man, is completely wrong?  

What he means is he's not interested in building anything costing that much, if only because that much money will never, ever materialize. If you can't be with the girl you love, love the girl you're with. Right, Governor?

He wants to spend a lot less. Being a pragmatic realist, Brown wants to spend what he can get his hands on, such as the ARRA funds, and whatever else he can find and squeeze out of a stone. Oh, yes, he also gets to tap into the bond funds, although very few bonds have been sold.  That's money the state wants to borrow, to the tune of $10 billion, as the state's contribution to the construction of the project.

Oh, and there's a free $950 million inside that $10 billion that's petty cash with no strings attached for spending it on anything that can possibly be labelled, or related to, "high-speed rail." 

When the voters approved of that bond measure, they thought -- they were told -- that the whole thing would cost around $33 billion. Now, of course, it's a few dollars more; $117 billion and climbing. Anyhow, Brown can squeeze several more billion out of those borrowed bond dollars, especially since he won't be around when it's time to pay them back.

There are other ideas floating around, including putting money into the rejected Altamont crossing alternative route from the Central Valley, across the Bay.  (Building the rail bridge for that alone would cost at last $4 or $5 billion!) 

And dribbling a few million here in the Bay Area, on the Peninsula for electrifying Caltrain, and in LA, to add some miles to the Metrolink line.  That would make the voters in those population centers happy.  

All these nickel-and-dime activities would, of course, drain the basic HSR funding from the Central Valley which the US Department of Transportation, up to now, has insisted on as the initial construction site.

Look, dear friends.  All these maneuverings are not really about high-speed rail, not about solving a transit crisis, nor about solving any of the problems that the rail authority likes to name-drop, like jobs, congestion, pollution, etc.  

They are about politicians getting their hands on tax dollars, in very large quantities, in order to spend them very publicly and thereby show their constituents all the benefits their time in office has provided.  It also distributes this largesse among political croneys, and rich consultants and contractors who will show their appreciation at election time with campaign funding. 

This project is wrong and bad on so many levels it's mind-boggling.  It can't be "done right." It can't be salvaged. It can't be re-constituted into something more palatable. There is only one right thing to do and this Legislature can and must do it. Terminate the funding completely, and shut down the Rail Authority once and for all.  

By George Skelton
Capitol Journal
February 6, 2012
From Sacramento
California's proposed bullet train is being recalibrated. And designers may finally be on the right track.
Sensitive to growing public and political opposition, high-speed rail officials seem to be coming to a rational conclusion: It makes good sense to begin service ASAP in urban areas where people might actually ride the trains.
Construction still would start next fall in the rural San Joaquin Valley, the thinking goes. But simultaneously there'd be major upgrades to conventional lines in the Los Angeles and San Francisco regions.

Those upgrades would amount to initial blending of the Southern California Metrolink and Bay Area Caltrain systems into the ultimate 500-mile high-speed rail line from Los Angeles to San Francisco.

By using existing right-of-way and accelerating construction — therefore reducing future inflationary costs — the state can lower the price tag from the current jaw-dropping estimate of $98.5 billion, triple what voters were told when they approved the project in 2008. At least that's the theory.

Gov. Jerry Brown, the bullet train's most enthusiastic supporter, hinted at the changes in an interview with KABC-TV in Los Angeles on Jan. 29. Calling the nearly $100-billion tag "silly," he insisted: "That's way off…. It's going to be a lot cheaper."

We'll be anxiously awaiting the governor's new figure. It could be unveiled along with the project's redesign in a few weeks.

So far, only about $13 billion in financing has been identified: roughly $9.5 billion in state bond authorization and $3.3 billion in federal grants.

The feds are insisting that all their money be spent in the Central Valley, contending now's the best time to buy land there. Also, the initial 130-mile flat stretch over farm fields will be a good place to test the 220-mph bullets, even if there aren't many riders between Fresno and Bakersfield.

Brown in the TV interview for the first time talked about augmenting available rail funds with cap-and-trade fees the state plans to collect from industry in its controversial effort to reduce greenhouse gas emissions. The governor has penciled in $1 billion from such fees in his latest budget proposal. Cap-and-trade "will be a source of funding going forward in high-speed rail," he asserted.

The governor also promised there'll be state money for Metrolink and Caltrain, presumably to pay for upgrades. He talked about laying a high-speed line from Bakersfield to Palmdale and linking it with Metro.

"I'm trying to redesign it in a way that, in and of itself, will be justified," he said, presumably meaning that if the money well runs dry, what already has been built will be useful.

In truth, Brown just wants to build a bullet train — any bullet train, anywhere — to burnish his legacy. OK, he's also a visionary and definitely not a "declinist," the governor's new word.

The man who really knows what's going on is Dan Richard, a former Bay Area transit official, retired utility executive, infrastructure financier and the governor's handpicked new chairman of the state High-Speed Rail Authority.

"It would be beneficial — and not just politically — to find ways to advance [rail] investment in the urban areas," he says. "It makes sense, but we don't want to get into fights about taking money from the valley."

Richard says he has been negotiating with Southern California officials for a $1-billion package of Metrolink upgrades between Los Angeles and Palmdale. The locals also would have to put up money, he says.

In the Bay Area, there's discussion about upgrading — even electrifying — train service along the peninsula between San Francisco and San Jose.

"We're looking at ways to make the first steps of the project more usable," Richard says.

One smart thing would be to junk the proposed tracks from San Jose south to Gilroy and east over the sparsely populated Pacheco Pass to Merced.

Reroute the line through the densely populated East Bay over the Altamont Pass into fast-growing Stockton, hooking up to tracks headed north to Sacramento and south to Merced. Pick up some political support and paying riders.

The proposed Altamont route previously was rejected by the rail authority in favor of the Pacheco routing. But the agency's new management is trying to make the project more practical and popular. Example: the recent scrapping of a possible Grapevine route and choosing the Palmdale link.

All this is urgent in Brown's view because he's asking the Legislature, by June, to appropriate the initial big chunk of bond funds, $2.7 billion, to start the valley track-laying. Urban upgrading presumably would cost more.

There's much skepticism about the project's financing — and loud demand that urban residents get an early crack at riding the speedy rails.

State Sen. Alan Lowenthal (D-Long Beach), chairman of the Senate High-Speed Rail Committee, says of Brown and the bullet train honchos: "They were tone deaf. Now they're finally beginning to hear the music."

"I think it's wonderful he wants to do this. But show us the means," Lowenthal continues. "I'm into listening, but I haven't seen anything. I just hear from the governor, 'Stay tuned.'

"I'm a supporter, but I'm not going over a cliff."

Sen. Joe Simitian (D-Palo Alto), who sits on the Senate transportation and high-speed rail panels, long has advocated much of the redesign that's in the works.

"If the authority and administration are nimble enough to put a carefully crafted proposal before the Legislature, we're open to hearing it," Simitian says. "But it'll be tough. This is a pretty big ship to turn in a matter of months."

Richard says there's "a pretty big attitude change" at the agency.

Maybe he can turn a boondoggle into a boon.

It's worth watching.

Copyright © 2012, Los Angeles Times

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