Friday, March 16, 2012

Charles Voltz's take on the current high-speed rail situation in California

Retired Attorney Charles Voltz, a colleague from Burlingame on the Bay Area Peninsula, has produced a succinct statement of the current conditions we face as high-speed rail and the supporting Democrats struggle for this project's survival. 

He demonstrates the problems with the rail authority's improvisations and perpetual revisions of its soon to be released business plan, which are nothing more that grasping for funding and deploying it in the most politically acceptable manner. 

And, he makes the point, with which we agree, that what is going on now is immoral, unethical and illegal. High-Speed Rail will not carve out a brighter future for us.  It will mortgage us and our children and their grandchildren to the past. 



HIGH SPEED RAIL: The Importance of What Was Left Unsaid

Q. What was the most important fact about high-speed rail that became evident in the course of the recent California Senate Committee hearing in Mountain View--but was largely left unsaid?

A. That what is driving current HSR activity and thinking is "the great risk of an abandoned investment" (Will Kempton's telling phrase). A fair translation is that (1) the chances that the HSR project promised the voters will be completed are increasingly unlikely, and (2) the $6 billion Central Valley project will not be worth the investment when, as anticipated, the project runs out of money. 

Accordingly, HSR planners now want to shift their attention and funding to regional rail projects that will have what is known as "independent utility"--not necessarily for genuine HSR but rather for regional rail transit in the Bay Area and Los Angeles basin.  

To accomplish this, the HSR Authority is willing to "eat its seed corn," i.e., spend over half of its precious bond funds on marginal-value projects that will leave the proposed system far short of what is needed to complete the HSR system promised the voters. ($.4 billion already spent + $2.7 billion for Central Valley project + $1.65 billion for "bookend" regional transit projects = $4.75 billion). 

That will leave only about $4.5 billion of matching Prop. 1-A bond funds for construction of the entire remainder of the promised HSR mega-project. At the customary 20% match required for most federal transportation funding, this would generate only $18 billion of federal funding--were it to be available for this project. 

As van Ark admitted, no HSR system in the world has been built without a major infusion of capital investment by the national government, and the reality is that no such funding is in sight for California HSR, not this year or in the foreseeable future. 

Both federal and state governments face huge structural deficits (a veritable "mountain of debt") that for at least the next few decades will severely constrain discretionary spending such that other more pressing priorities, including other infrastructure priorities, operate to crowd out major funding for HSR. These harsh realities are not likely to change anytime soon; they are part and parcel of the world to which we must all adjust.

Thus, for all practical purposes the California HSR Dream is dead, dependent on the occurrence of a miracle.

While still pretending that what the HSR system promised the voters is still achievable sometime in the ever-distant future, the Authority's actions proclaim otherwise. 

Unable to deliver the HSR system that Prop. 1-A requires, the Authority simply wants to change the basic game plan on how the bond funds will be spent. It proposes to divert the Prop.1-A bond funds legally dedicated to HSR to regional rail systems in the Bay Area and the Los Angeles basin. The significance of this cannot be understated, and the consequences are most troubling. 

First of all, it is dishonest. As the Authority is forced by economic reality and its own incompetence to keep changing its Business Plan, with each change the project becomes further removed from the HSR system that the voters were promised. Indeed, for most voters the proposed Blended System and "bookends" plan will be a barely recognizable substitute for a genuine HSR LA to SF one-seat ride in 2 hours and 40 minutes--a classic "bait and switch" maneuver. Politically, how can this be justified by the Legislature without the approval of another vote of the people? 

Worse yet, the cynical purpose behind the “bookends” proposal is to buy political support among Bay Area and Los Angeles basin legislators for the upcoming vote on funding the politically-challenged Central Valley project. 

The implicit promise to these legislators is that in the following two years the Authority will be rolling out Prop. 1-A funding for regional rail projects in their districts; “logrolling” in legislative parlance.

Equally important is legal compliance with the bond requirements of Prop. 1-A. Attempting to fund regional rail systems (e.g., Caltrain and Metrolink) with Prop. 1-A HSR bond funds, the Authority is forced to make the tenuous (some say 'pretextual') claim that it helps lay the foundation for HSR whenever, if ever, HSR should be built on those tracks. This fundamental shift in the use of HSR bond funds make the entire project more vulnerable to attack in the courts because it would not comply with the letter or spirit of Prop. 1-A bond funding requirements. 

At the very least, before the Legislature ever agrees to use Prop. 1-A HSR funds for such projects, it should require a claw-back proviso (similar to one the FRA requires) that requires the recipient agency to pay back to the State Treasurer the misused bond funds if, after a specified number of years, the funded trackage, bridge or other rail facility is not being used for genuine HSR operations. Such a provision would have a salutary prophylactic function--just as locks keep honest people honest.

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