News

Rail authority lags in response to auditor's report

Agency blames state budget delay, hiring freeze as it struggles to reply to state auditor's scathing report

Six months after State Auditor Elaine Howle released a scathing report about California's proposed high-speed rail project, the agency is lagging in its response -- blames Legislature's budget delay and state hiring freeze.

The California High-Speed Rail Authority has already taken several steps to address some of the problems Howle identified in her report, "High Speed Rail Authority: It Risks Delays or an Incomplete System Because of Inadequate Planning, Weak Oversight, and Lax Contract Management."

The audit found that the rail authority's program managers routinely made mistakes in their invoices and that the authority failed to consider adequately risk management and funding scenarios in its business plan.

The authority released a progress report last week detailing its efforts to respond to Howle's recommendations. Though the authority had revised some of its contracts and policies to improve accuracy and oversight over consultants, officials said their response has been hampered by the Legislature's failure to pass a budget on time.

Legislators passed the budget Oct. 8, after a 100-day impasse.

"The task of managing, controlling and oversight of this project remain a huge challenge for the Authority due to a lack of additional qualified staff," authority CEO Roelof van Ark said in a cover letter to Howle.

"As the project continues to evolve, the ability to hire additional competent and experienced staff (as was envisioned in the budget and planning) has not been authorized, due to the lack of a State budget, and the subsequent hiring freeze announced by the Governor," van Ark wrote.

The budget situation has kept the authority from hiring a deputy director for risk management, who would assume risk management for the entire project. The authority also wanted to hire two new auditors, but had not been able to do that "due to a lack of a State budget and the current freeze on hiring."

The authority's business plan has come under heavy criticism from both the auditor's office and the nonpartisan Legislative Analyst's Office, which also found the document's risk analysis to be insufficient.

Legislators included a provision in their budget requiring the authority to submit a better business plan, but Gov. Arnold Schwarzenegger vetoed this budget provision.

On the Peninsula, where opposition to the rail system has been most vehement, a group of financial experts released a study earlier this month dismissing the authority's revenue and ridership projections as "implausible."

Despite its financial difficulties, the authority is swiftly proceeding with its analysis of possible design options for the Peninsula segment of the rail project. The authority's board of directors is scheduled to discuss the San Francisco-to-San Jose portion of the line at its Nov. 5 meeting, at which time board members could further narrow down the possible design alternatives.

So far, the authority has identified elevated tracks, at-grade tracks and open trenches as the three possible alternatives for the Peninsula segment, rejecting for cost reasons deep tunneling or covered trench alternatives favored by many residents and cities.

The board is also scheduled to approve the hiring of new financial consultants, who will help the authority develop alternative funding scenarios for the project, as Howle recommended.

Comments

Like this comment
Posted by Sylvia
a resident of Southgate
on Oct 25, 2010 at 10:55 am

HSR Authority routinely bites off more than it can chew. Now HSR can't comply with required ethical disclosures because California taxpayers haven't provided enough money for staff.

Give me a break.

HSR is just one negative surprise after another.

Buy a clue, legislators. Require HSR to live up to its many unfulfilled promises OR do the reasonable thing, cut HSR off at the purse strings.


Like this comment
Posted by YIMBY
a resident of University South
on Oct 25, 2010 at 11:16 am

YIMBY is a registered user.

Sylvia,
I respectfully disagree. Gennady reported on this topic well by noting "The budget situation has kept the authority from hiring a deputy director for risk management, who would assume risk management for the entire project. The authority also wanted to hire two new auditors, but had not been able to do that "due to a lack of a State budget and the current freeze on hiring."
The budget was a record (I think) 100 days late.
HSRA is part of state government - it ails with the other depts. and agencies.


Like this comment
Posted by Paul
a resident of Downtown North
on Oct 25, 2010 at 11:30 am

High-speed rail ain't so fast after all.


Like this comment
Posted by bill
a resident of Barron Park
on Oct 25, 2010 at 11:52 am

I note that HSR has said it will not pursue a tunnel or trench option from Burlingame to San Jose. Anyone not in a dream world and paying attention realized these alternatives were never seriously considered.

This is a boondoggle of mismanagement with overly optimistic ridership projections, today's estimated $100 Million cost, private investment unwilling to put money into a losing venture, and the questionable availability of funding from any government source. Why anyone is willing to commit future generations to paying for this is unthinkable. It's an example of heads in the sand - and a lot of wishful thinking.


Like this comment
Posted by Alice Smith
a resident of Green Acres
on Oct 25, 2010 at 3:41 pm

It is so easy and unfair to blame the legislature for delays in HSR. The ineptitude of the HSR Authority is the problem: that commission's blatant conflicts of interest, the lack of real planning, taking a route which is the most expensive and least politically competent are examples of why we should have a blue ribbon commission of experts in finance, transportation, geology make recommendations and I would suggest to map out a route which will not cut up the Peninsula. Access to federal stimulus money was the reason to make haste and frankly, that isn't good enough: LET'S STOP LOOK AND LISTEN: get a route that makes sense (through the industrial parkS of Oakland and under the bay bridge sharing bart's tunnel would be a good starting ground.

Upgrade CalTrans and reduce the price of passenger tickets to grow that business in the meantime.


Like this comment
Posted by ODB
a resident of Old Palo Alto
on Oct 25, 2010 at 5:34 pm

I thought a trench through Palo Alto was infeasible due to issues with creeks, the water table and El Palo Alto.

Running HSR up the peninsula sure seems like an awfully expensive way of sparing a relatively small number of travelers the inconvenience of having to change trains in San Jose.


Like this comment
Posted by HIGHSPEEDRAILNOW
a resident of Charleston Gardens
on Oct 25, 2010 at 6:35 pm

Where is the headline about the 900 million for HSR given today???OOO
thats "bad" news for PA Naysayers and whinners


Like this comment
Posted by jim
a resident of Adobe-Meadow
on Oct 25, 2010 at 10:04 pm

funny how HSR can't ever seem to do anything on time, except of course cash their pay checks, and of course, it's never their fault. Plenty of other state agencies somehow managed the budget stalemate, but somehow HSR could not. Never mind that their recently hired director pulls down a $375K annual pay check Web Link If they were so cash strapped, how did their visionary leaders approve of that sort of pay package? How about, it's not their money, it's yours, they have zero accountability, will not allow anyone to check their books, and the list goes on. If this thing isn't a massive tax payer fraud, I'm not what could be.


Like this comment
Posted by Parent
a resident of Charleston Gardens
on Oct 25, 2010 at 11:13 pm

On the contrary - The 700 M (not 900) is great news for the Peninsula because it clearly specifies the money will be spent in the central valley where a) it clearly will not qualify for AB3034 funding to match and b) will not produce a operable revenue generating HSR "usable segment" that can operate without subsidy - and therefore, will fail even before it begins. The most dangerous possible thing that could happen to the bay area/peninsula would be federal funding targeted to the Caltrain ROW that 'fastracks' the project through this section.

Look at the bright side - Caltrain not getting the federal funding, which means Caltrain can either go get its own funding and tell CHSRA to go to hell - or - equally as attractive - caltrain can go under - UPRR can quit this ROW given it has no landlord for the ROW - and the lands can be turned back over to the counties - turning the ROW into park, extended school grounds, a little commercial strip, or whatever (anything would be better than trains)

Bye Bye HSR on the Peninsula - good riddance. Don't let the screen door hit you on the a@@ on the way out.


Like this comment
Posted by YIMBY
a resident of University South
on Oct 26, 2010 at 8:48 pm

YIMBY is a registered user.

@Bill, a resident of the Barron Park neighborhood, on Oct 25, 2010 at 11:52 am who wrote:

I note that HSR has said it will not pursue a tunnel or trench option from Burlingame to San Jose

Get your facts right, Bill - trenches are in. Covered trenches are possible for 'very short stretches'. In addition, it is my understanding that 'longer stretches' are possible, as well as even tunnels if cities pay, pardon the term, the freight, like Berkeley did with BART by paying for the tunnel through the city.

Here are two quotes from Mercury, 10/22/2010, Mike Rosenberg, "High-speed rail boss to Peninsula: forget about tunnels":

"In a two-hour meeting with California High-Speed Rail Authority CEO Roelof van Ark at San Mateo City Hall, the bullet train executive told officials from San Mateo, Burlingame and Millbrae that the covered trenches were not possible for anything other than very short stretches of track, city leaders who attended the meeting said."

"The tunnels in many cases would cost billions of dollars for just a few miles and were several times more expensive than the above-ground options. But state officials had said that if the cities could raise the money, they could get the below-ground tracks they wanted."
See article: Web Link

Here's a great editorial suggesting just that approach: "Berkeley's BART Tunnel Should Be Model For Peninsula Rail Opponents" Web Link

HSRA is not unreasonable. Just pretty broke.


Like this comment
Posted by YIMBY
a resident of University South
on Oct 26, 2010 at 8:54 pm

YIMBY is a registered user.

@ HIGHSPEEDRAILNOW, a resident of the Charleston Gardens neighborhood, on Oct 25, 2010 at 6:35 pm:

Where is the headline about the 900 million for HSR given today???OOO

"CA & FL To Win $900 Million & $800 Million For HSR"
Web Link
Make sure to read 'comment' below it:
"The San Francisco to San Jose high-speed rail segment is slated to receive $16 million."


Sorry, but further commenting on this topic has been closed.

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