Tuesday, March 27, 2012

Why are they robbing high-speed rail projects? Because that's where the money is.

Two articles that bring us up to date. Be sure to read both.

One is from the LA Times and the other is from the San Francisco Examiner.  What this is about is the manipulation by politicians and bureaucrats to get money from high-speed rail labelled sources and spent it in their districts or regions. As we keep saying, it's not really about building trains, it's about processing money.

One of the recent more skillful maneuvers by the rail authority which is notable for its persistent screwing up, is to negotiate funding beyond the federal ARRA stimulus expenditures which are mandated to be spent in the Central Valley.

In Northern California, the machinations of the Caltrain commuter train executive gang and the Metropolitan Transportation Commission, both of which are really in the business of massaging money, are now eager to get their hands on additional Proposition 1A bond funds.  Those are state bonds, and the money borrowed, just like any mortgage, must be repaid with interest. Figure two dollars for every dollar borrowed. Where will those funds come from, and with a $9 billion bond issue, that means $18 billion are owed by the taxpayers to the bond buying lenders. It's a lousy deal.

Anyhow, the game here is to get enough money for Caltrain to electrify. You say it's not high-speed rail, and therefore not eligible for those Prop. 1A funds? We agree with you and it's going to take a lawsuit to get that resolved. Upgrading a commuter train system like Caltrain with electrification is certainly not building HSR.  But wait, the rail authority will tell us, this is for the "foundations" of high-speed rail in the future.  We say, not good enough!

While both articles give you ample details about all these shenanigans, the bottom line is that we taxpayers are being snookered by a gang of thieves, some elected, some appointed, to take our money and run.

There are several ironies in the further down LA Times article.  It quotes Quentin Kopp who was probably more instrumental than anyone in getting HSR off the ground as an actual project.  He was, while on the CHSRA Board for what seemed like an eternity, our 'bete noire';  our hated beast. He opposes this new move to spread funding around for the benefit of regional transit rail and thereby, presumably, dilute high-speed rail as a vision and mission. 

Kopp may well be correct when he calls this new move illegal. And, it should be pointed out, none of these "new" concepts being funded with "immediate investments" are certified or have undergone the environmental review process. There is great haste and I would guess that's to seal the deal before the November elections. 

Another "county heard from" is Mehdi Morshed, the first CEO for this project who was involved from the start as staff director for the Senate committee on Transportation, and a tight buddy of Rod Diridon and Quentin Kopp.  He also wishes to share his two cents about his concerns regarding these new negotiations. Now that Kopp, Morshed and Diridon are on the sidelines, they can be more free with their candor and tell us what the new guys are doing all wrong.

One thing to watch out for now is if Governor Brown will exempt these projects from an environmental review in order to expedite getting and spending the funds. All the more reason to call this hanky-panky for what it is, an illegal money-grab.

Failing an effective lawsuit or two, it does look like all the good guys, us, have been outsmarted by all the bad guys, the rail authority and their supporters.  And large sums of money will flow into the virtual black hole of 'high-speed rail'-labelled projects like Caltrain electrification and similar upgrades in the LA Basin.

Two things are going to be certain.  1. For Caltrain, they will get an accumulated $1.5 billion from several sources. 2. It won't be enough to accomplish their purposes. (It never is.) So, what can we expect?  

Additional funding will be found, and so the eternal process begins with further construction, even more insufficient funds, and therefore further funding sources tapped. All on the edge of, or over the edge of legality.

And that is why this project has been created. To build a money seeking processing and spending machine that will run forever. Companies like Parsons Brinckerhoff will make fortunes, as will many of the other contractors and consultants.  The project will never be complete and will require an open checkbook as far as the eye can see.  That's our money I'm talking about.
MTC set to spark off Caltrain funds
By: Will Reisman | 03/26/12 8:40 Pm
Sf Examiner Staff Writer

A meticulously crafted plan to provide $1.46 billion for the electrification of Caltrain’s trackway will face its first vote of confidence this week.

Talked about for more than a decade, the transformation would speed up and increase service with quieter and less environmentally damaging trains.

Regional and local transportation officials have been hammering out a deal for several months to get Caltrain tracks electrified by 2019, in anticipation of future high-speed trains that would share the rail. 

Funding will come from a variety of sources. On Wednesday, the Metropolitan Transportation Commission, the region’s lead transit financing agency, will vote to recommend $467 million in federal sources for the project. 

Of that total, $342 million has already been set aside to replace and upgrade aging transit vehicles throughout the Bay Area. The remaining $125 million has not been assigned for any particular purposes, but money from the federal government typically goes toward crucial long-term infrastructure projects, such as rail replacement and facility upgrades. 

But by recommending the plan, the MTC would steer all that money away from agencies such as BART and Muni and toward Caltrain.

Caltrain spokesman Seamus Murphy said there has been strong support from local transit agencies for the Caltrain funding plan. The proposal also seeks a collaborative pursuit of $3 billion for an underground extension of Caltrain — and later high-speed rail — from South of Market to the Transbay Transit Center, a project San Francisco leaders see as vital.

The largest chunk of funding for electrification — $730 million — will come from the state. That includes $706 million in bond funds approved in 2008 for high-speed rail projects, which the California High-Speed Rail Authority must approve. The authority will discuss the allocation at its April 5 meeting, but is unlikely to take action then, said spokesman Lance Simmens.

Murphy said if the funding plan is approved, Caltrain could be electrified by 2019. However, California’s uncertain fiscal situation could delay release of bond funds, which also would delay the project.



Bid to appease bullet train critics may violate law
Revisions are in conflict with the ballot measure approved by voters and may go against the Obama administration's plans. Gov. Jerry Brown backs the changes but admits potential legal problems.
By Ralph Vartabedian and Dan Weikel, Los Angeles Times

March 26, 2012

A series of concessions over the last year to quiet opposition to the California bullet train has created a potentially lethal problem: the revised blueprint for the system may violate requirements locked into state law when voters approved funding for the project in 2008.

The Legislature packed the law with an unusual number of conditions intended to reassure voters, protect the project from later political compromises and ensure that it would not end up a bankrupted white elephant.

But many of those requirements may be at odds with the plan to integrate bullet trains with existing commuter rail lines in Los Angeles and San Francisco. They may also conflict with the Obama administration's insistence to start construction in the Central Valley without any near-term prospect that high-speed trains would operate there.

Outside critics, state oversight boards, some legislators and former officials of the California High-Speed Rail Authority say the compromises violate those requirements, not to mention that voters were told the system would cost far less than the currently projected $98.5 billion.

The project is entering a crucial phase, adding urgency to the legal questions. A final business plan is expected this week. Gov. Jerry Brown said he will request $2.7 billion from the Legislature next month. And the authority wants to start building a 130-mile section of track later this year. A legal dispute could snarl the tight schedule.

Quentin Kopp, an architect of the project when he was a state senator and chairman of the rail authority, believes the design changes do not meet the law and is not what was envisioned by the Legislature.

"These guys at the rail authority have been pretty clever," said Kopp, who is also a former state judge. "I saw it coming."

The mandates in the law are considerable. They require that any initial segment has to use high-speed trains. Money for each operating segment needs to be in hand before construction starts. Passengers must be able to board in Los Angeles and arrive in San Francisco without changing trains. As many as 12 trains per hour are supposed to run in each direction and the system has to operate without taxpayer subsidies.

Instead, the rail authority has agreed to run fewer trains at slower speeds on tracks shared with commuter rail systems, Amtrak and freight trains. In the early years, passengers will probably have to transfer trains to get from one end of the system to the other. The concept, known as the blended approach, was pushed last year by Bay Area politicians, who fought the original plan to run high-speed trains through the region on 60-foot high viaducts over local neighborhoods. The idea has attracted support in Southern California as well.

Brown has thrown his weight behind the blended plan, but also recognizes the potential legal problem.

"We are aware of the issue," Brown said. But he dismissed the suggestion that any judge would block the nation's largest infrastructure project over disputed ballot language. "People want to micromanage everything," Brown said, adding that the matter will be tested legally before any bonds are sold to pay for the work.

The rail authority is on guard too. The former chief executive, Roelof van Ark, requested a legal analysis by the attorney general. In the confidential letter dated Sept. 9, Van Ark asked whether the blended system would "comply with the criteria prescribed by Proposition 1A" and whether "there is a time limit to achieving full compliance" with the law.

A spokesman for the attorney general, citing attorney-client privilege, declined to say whether the office has issued an opinion.

The blended approach was intended to save the project. State Sen. Joe Simitian (D-Palo Alto) said the earlier plan for exclusive high-speed rail tracks was unaffordable and faced overwhelming opposition in the Bay Area. But he acknowledges the alternative system, which will be detailed in its final form when the business plan is made public this week, may have defects also.

The two biggest legal issues, Simitian says, are the requirement for no subsidies and the fracturing of the bullet train project into pieces, whereas the law describes it as a unified effort. Kopp believes the failure to guarantee a single-seat ride from Los Angeles to San Francisco in the early years is a key legal liability, though transit officials disagree with him.

Mehdi Morshed, a former chief executive of the rail project, said the reduction in the number of trains represents a major setback. The blended approach may reduce the number of train departures to as few as two per hour at peak times, while the law calls for up to 12 trains per hour.

"Why would we spend billions of dollars to get two trains per hour?" Morshed said. "We were telling people the system would have essentially unlimited capacity. If you don't have frequent service, you are not going to have a profitable system."

Meanwhile, a suit brought by Kings County and two of its residents alleges that the plan to start construction in the Central Valley is also illegal. "It is just a conventional rail line," attorney Michael Brady said. "It will not be electrified. There are no trains in the funding."

Indeed, those issues were debated by the authority board in December 2010. Former deputy Atty. Gen. George Spanos warned the board at the time that the Central Valley track was not "in our view a usable segment" under the law. Since then, the authority has created a new vocabulary and deemed the track an "initial construction section," rather than an operating segment. Authority spokesman Lance Simmens said the agency has an internal legal opinion that the Central Valley plan complies with the law.

Whether a court would actually stop the project because of such alleged violations is not clear, said UC Berkeley assistant law professor Bertrall Ross, an election law expert. The conditions in the law, he added, were not in the ballot summary that voters saw at the polls, and judges often attach more importance to that than the underlying statute. On the other hand, some of the conditions were in voter pamphlets, and a judge could rule against the plan on that basis, Ross said. "It could go either way."

But the legal issues, even if they are decided in favor of the authority, threaten to further delay a project that is already slipping months behind schedule and leaving legislators little time to carefully consider major changes in the plan.

"No one wants to feel like they are in a car showroom being told this is a one-time offer and we have to make up our mind now," Simitian said.


Copyright © 2012, Los Angeles Times

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