Sunday, March 18, 2012

A Sunday Roundup of the California High-Speed Rail Adventure

An introductory word about the source of this article, below. The Sacramento Bee is the newspaper of the State Capital of California, which, as a state, is the 8th largest economy on the planet.

Here is one of several discussions about the current status of the high-speed rail project intended to run from San Francisco to Los Angeles.  This project has undergone endless permutations.  It changed many times in concept since its inception several decades ago. It's still in a constant state of transformation.

What is constant about the project is worth discussing on this windy Sunday. Fact number one. The project was conceived well over 30 years ago, when the current Governor, Jerry Brown, was Governor the first time. At that time he was ridiculed as "Governor Moonbeam."  Today, we are calling this HSR project the "Moonbeam Express."

A group of backroom politicians decided that the state needed a high speed train. What was such a decision based on? Actually, we don't know. It certainly wasn't based on a thorough analysis of the state's transit systems, local, urban, regional, rural and state-wide. And by transit, I include vehicular and air travel. 

Additionally, any analysis based solution would include cost/benefit analyses. Those also have not taken place.

High-Speed Rail is, around the world, a solution to a set of clearly defined problems.  In this case, in California, those "problems" were identified after the instigation of this "solution" in order to "market" HSR to the public.  

Perhaps the one problem of longest duration was the expected population growth of the state, in which case, the demand pressures on all the state's transit capacities would increase.

Turning that around, if the population expansion is less than recently projected, therefore the demand for HSR would decrease as well.  Therefore, we are not going to hear from the rail promoters about the the population growth reductions described by demographers in the press currently. 

For a long time, HSR was touted as the cure for air pollution and the sick environment

When oil prices started climbing, HSR was sold as the way to stop using foreign oil. (We failed to understand then that all oil is "foreign," including our own. Oil prices and oil consumption are based on global needs and the market-place, regardless of the source. In the marketplace, all oil is in a single indistinguishable pool. As classified by grade.) 

HSR was also being proposed as the solution to traffic congestion, hence obliging us to abandon our no longer necessary cars.

More recently, in this enduring recession, jobs became the critical issue as unemployment increased significantly. And HSR was now cast as the solution to unemployment. We are being promised, not only by the rail authority, but by most Democratic politicians, that this project would employ 1,000,000 people.  

My point here is that the supposed benefits of high-speed rail can all be easily challenged with facts and common sense.  The fatal flaw in the reasoning is that the solution, HSR, was aggressively promoted well before, and as the search for problems continues.

With conceptual and design flexibility that never seems to end, it has become crystal clear that this project is not about building a rail solution to California's transportation problems -- since that's obviously not the case -- but for getting and spending a lot of money.  That is politicians' favorite pastime.  It's how you win friends and influence voters and business cronies. 

Let's continue this over-view a step further.  The Obama Administration, which jumped on HSR at the beginning of the Recession, and in its search for solutions or bailouts for the United States, did not have an understanding of what the costs for HSR would actually be. So what the federal government provided to accompany its program and vision, was "seed money." It was what is called an "unfunded mandate."

This was the message: "Here are $8 billion for HSR in the US. Write us some proposals, and we will give you some of the money. If you win an award, you can get the rest of the money elsewhere."

That was the basic implicit message. As several Governors rejected those funds with the knowledge that it would cost their states far more than what they would receive, the Administration's program ran into media challenges and difficulties. Who knew it would become so expensive to build so little?

The California project, which in 2008, before the elections, was pegged at $33 billion, jumped to $43 billion in a matter of weeks. Today, it hovers at $117 billion and we know that this is far from enough to connect SF with LA, especially with Sacramento and San Diego, intended for "Phase II" connections, not covered with this amount. What does that mean?  It means that the Republicans discovered a boondoggle of enormous government waste that it could use to club the Democrats on the head.

Which brings us up to this point where, as the article describes, radical transformations are taking place yet again, with the rail authority (and the Governor's) intentions for the project.  Knowing that it is quite likely no more funds will be available from the federal government, and that there are no other sources such as private investors, our happy train builders are stuck with the $3.3 billion awarded by the DOT, and, at most, an equal match from the state bond funds.

That explains what's going on right this minute, and will be described in the upcoming version of their ever-changing business plan.  It's coming soon and it will be a model of evasiveness, jargon and double-talk.

The feds. want their DOT dollars spent in the Central Valley, the so-called spine of the system.  For the state to get those $3.3 billion, that's where construction must start. Therefore, that's where HSR will start, somewhere between Fresno and Merced.  130 miles of useless track; even Amtrak said it doesn't want it.  State politicians, for obvious reasons, want the funds spent in the two population centers north and south, the "book-ends." And that's the newest twist.

Can we have it both ways? Well, they are all certainly going to try.  They will have to please the DOT in Washington with the initial Central Valley construction, as well as the more locally based politicians in the Bay Area and the LA Basin with additional funding.  

Not only local politicians, but national representatives from the House and Senate have local constituencies.  So, even as Simitian doesn't want the funds spread around, that's exactly what will happen. A shark feeding frenzy for not enough dollars to accomplish anything substantive regarding HSR.

The current buzz-words and phrases to explain and justify all these shenanigans include "initial construction section," "blended system," and "initial investment sections."  They all mean that instead of building a high-speed train as authorized by the voters when they passed Proposition 1A, bits and pieces are going to be build for which there is money now. The rationalizations for this "new" approach are flying fast and furious.  

"We will build increments since we can't build the whole thing at once; it's too big."

"Instead of waiting for all the funds necessary to be identified, we will make initial investments in the population centers in order to see early, useful results."

"We will save lots of money this way, far less than the threatened $117 billion. We will use existing rail corridors in the population centers wherever possible with a "blended system," using existing tracks for somewhat faster passenger rail service. By combining regional commuter rail and high-speed rail, the entire project will cost less."

In short, when they give you lemons, make lemonade.  So, now the huge single question, which the state attorney general refuses to make public, is whether this process and the use of the state bond funds is legal.  What is now being devised is nothing like what is described in the authorizing language of AB3034 and Proposition 1A.  Therefore, it stands to reason that the use of the state bond funds would be prohibited.

Since this project is more about the distribution of money than about building any trains, the political support for this project will continue in the face of overwhelming evidence that what is being done is illegal and totally unnecessary. It's also immoral and unethical. 

OK, California, have enough yet?

High-speed rail proponents make changes to win over California lawmakers

Proponents of California's $98.5 billion high-speed rail project, freshly battered by critics and teetering before the Legislature, are preparing a series of eleventh-hour changes to reduce the project's cost and improve its chance of approval.

The effort is materializing just weeks before the Brown administration is expected to seek funding to start construction in the Central Valley.

The changes include accelerating construction to reduce inflationary costs and funding regional rail improvements in and around Los Angeles and the Bay Area. Those areas are represented by influential lawmakers whom the California High-Speed Rail Authority is trying to appease.

Time is short, however, and some lawmakers are losing patience.

"That is not a set of decisions that should be hurried," Sen. Joe Simitian, D-Palo Alto, told rail officials at a hearing in Mountain View last week, "when we don't yet know, after three and a quarter years, what the plan of the High-Speed Rail Authority is."

If pressed, said Simitian, "you may not get the answer you like."

The Mountain View hearing, which drew several hundred spectators and lasted more than five hours, was to provide a "sneak peak" of changes to a business plan the authority will release later this month, before requesting the appropriation of some $2.3 billion in rail bond proceeds by June.

Dan Richard, the rail board chairman, and Jim Hartnett, a board member, addressed the changes only generally and did not say how much lower the new cost estimate might be.

"I believe the number's coming down," Richard said.

The revised plan is expected to rely on some existing infrastructure in urban areas. In a so-called "blended approach," the authority could spend more than $1.5 billion in and around Los Angeles and the Bay Area to improve commuter rail service and to prepare existing tracks for eventual use by high-speed rail.

"We want to enhance the local rail," Gov. Jerry Brown told The Bee's editorial board recently, "so that, for example, the L.A. Metro could come to up meet the high-speed rail at Palmdale."

At the meeting in Mountain View, Richard told the four senators present that "since we're doing that in Southern California, we would be foolish and remiss not to be thinking about something similar in Northern California."

Simitian said he doesn't yet know if the rail authority is "really creating a more viable system, or are we just sprinkling some dough around at both ends of the state?"

Yet the proposed changes are encouraging to him and to Alan Lowenthal, chairman of the Senate Select Committee on High-Speed Rail.

Though skeptical of starting construction in the Central Valley, Lowenthal, a Long Beach Democrat, said the rail authority's increased focus on California's population centers is "good policy, and it's not just to appease people."

Most potential rail riders live in those areas, Lowenthal said, and "you'd better darn well do it where there's going to be some kind of ridership numbers now."

Despite its likely commitment to invest money earlier in the San Francisco and Los Angeles areas – the so-called bookends of the project – the authority still intends to start construction in the Valley, from Bakersfield to near Chowchilla. The federal government, which is contributing some $3.3 billion, requires it.

The revised business plan also is unlikely to include additional guarantees of funding from the federal government, a chief complaint of critics.

Among them has been the project's own peer review group, which told lawmakers in January that it could not recommend funding construction because the prospects for long-term funding are unclear.

"The fact that the Funding Plan fails to identify any long term funding commitments is a fundamental flaw in the program," the California High-Speed Rail Peer Review Group said in a letter to legislative leaders.

"Without committed funds, a mega-project of this nature could be forced to halt construction for many years before additional funding could be obtained."

Former Caltrans director Will Kempton, chairman of the peer review group, said last week that the blended approach suggests a "very substantial" improvement to the plan, but he remains concerned about financing.

Public opinion has turned against the rail project since voters approved it in 2008. Brown, a Democrat, said support could be regained "by having a transparent and more persuasive business plan, and finding a way to bring the cost down, and also communicating to people that we have to do something as California grows."

Simitian said "it's tough" to envision the rail authority producing such a persuasive plan that it could be reviewed adequately by the public and approved by the Legislature before June.

But the rail authority appears committed to its schedule, likely setting up a showdown in the Legislature this spring.

"We don't think that there's a need for delay, and we surely don't want to see a delay which could potentially jeopardize the start of our construction schedule," said Lance Simmens, an authority spokesman.

Already the authority, which planned to start construction by fall, said that date could slip into early next year.

"I can only tell you that it would be our hope that we get this done in this budget cycle," Richard told the lawmakers. "But at that point it will be in your hands, and the hands of your colleagues."

© Copyright The Sacramento Bee. All rights reserved.

Call David Siders, Bee Capitol Bureau, (916) 321-1215. Follow him on Twitter @davidsiders.

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