Critics and supporters of California’s proposed high-speed rail system faced off Tuesday in Palo Alto over a $98.5 billion question: Is the voter-approved project a desperately needed job engine or an out-of-control boondoggle that needs to be stopped?
Both sides came out in full force Tuesday to watch top officials from the California High-Speed Rail Authority, legislative analysts and leading rail advocates and critics testify about the rail authority’s latest plans for the rail line. More than 200 people, including dozens of union workers and community activists, crammed into the Council Chambers for the afternoon hearing, filling every bench and foldout chair and spreading out against the chambers wall.
The hearing centered on the rail authority’s newly released business plan, a document that showed the rail system’s price tag spike from an initial estimate of about $33 billion in 2008 to $98.5 billion. The document attributes the sharp cost increase to new design elements such as tunnels and aerial viaducts, inflation adjustments and an increase in development over the past decade, which made purchases of land more expensive.
The new business plan, while generally seen as an improvement over the rail authority’s 2009 effort, has prompted a fresh set of concerns from city officials, state legislators, rail watchdogs and nonpartisan analysts — all of whom were represented at Tuesday’s hearing. Farra Bracht, principal analyst at the Legislative Analyst’s Office, said her office has several major concerns about the new business plan. Chief among them: Where will the money come from?
“The funding available now would only complete the initial construction segment,” Bracht testified. “That leaves a lot of questions about where funding would come from to complete the rest of the project.”
Bracht also criticized the business plan as failing to analyze a number of possible impacts of the rail line, including jobs and economic activity that would be lost because of businesses that would have to be displaced by the new line and increased congestion near station locations.
William Kempton, who chairs a peer-review group that vets the rail authority’s reports, was more optimistic about the business plan, which he called “a reasonable approach to proceeding in a way that will allow high-speed rail to be implemented segmentally or incrementally into the future.
“I think the plan does lay out a reasonable, logical sequencing approach and makes a very good case for segmented construction,” Kempton said.
But he voiced some concerns about the latest plans, particularly the extension of the timeline from 2020 to 2033. He said his committee would continue to evaluate the rail authority’s revenue and ridership numbers, a subject of major dispute among transportation experts. Kempton also said inadequate staffing remains a problem at the rail authority — an issue that he said needs to be addressed for the project to succeed.
Rail officials maintained Tuesday that the rail line would achieve operating profit and that it would attract investment after the initial segment is built. Rail authority CEO Roelof van Ark also defended the rail authority’s decision to build its first segment in the Central Valley, between north of Fresno and north of Bakersfield.
The authority’s phased approach calls for paying for this segment entirely with public funds and then soliciting private investment for future expansions of the line. Dan Richard, a newly appointed member of the authority’s board of directors, said the second phase would entail stretching the line either north, from Bakersfield to San Jose, or south, from Merced to San Fernando Valley.
The rail authority is banking on getting most of the funding for the line from the federal government. The federal money would be matched by funds from the $9.95 billion bond state voters approved in 2008 for the project. The rail authority also anticipates local contributions and about $11 billion in private investments, which it anticipates receiving after the first segment is built.
“What that initial operating segment would do is trigger the build-out of the rest of the high-speed-rail system both by establishing ridership and bringing in further investment to help build out further segments,” Richard said.
The Tuesday hearing was organized by Assemblyman Rich Gordon, D-Menlo Park, who chairs a budget subcommittee focused on transportation spending. Gordon was also one of three Midpeninsula lawmakers — along with state Sen. Joe Simitian, D-Palo Alto, and U.S. Rep. Anna Eshoo, D-Palo Alto — to call for a blending of high-speed rail and Caltrain on the Peninsula, a proposal that the rail authority largely embraces in its new business plan.
The meeting was a rare public visit for top rail officials to a city that has gradually emerged as a leading critic of the rail project. The Palo Alto City Council, which in 2008 urged voters to support the bond measure, last year took a position of “no confidence” in the rail authority. On Monday night, the council began considering an official request for legislators to either kill the project or bring it back to the voters.
Palo Alto had also joined its neighbors Menlo Park and Atherton and a coalition of nonprofit groups in filing a lawsuit against the rail authority, forcing the agency to revise parts of its environmental analysis. Another lawsuit against the agency was filed this week by two residents of Kings County in Central Valley. The plaintiffs, John Tos and Aaron Fukada, claimed the rail authority violated the terms of the 2008 bond measure by beginning construction in Central Valley.
Michael Rossi, who along with Richard was recently appointed to the rail authority’s board of directors, defended the business plan and its finding that the rail system would operate under a profit.
“The finances in the plan are documented; they are transparent; they are current; and they are public,” Rossi said. “We have a plan that justifies the statement that this is an operating-profit organization and I’m pleased to have that discussion with anybody, anytime.”
Many were skeptical. Jessica Zenk, transportation policy director for the Silicon Valley Leadership Council, said her group is now reconsidering its earlier support for the project because of all the recent changes.
Elizabeth Alexis, co-founder of the Palo Alto group Californians Advocating Responsible Rail Design, said the new business plan is an improvement of the previous version but called the new document a “very risky plan.” Alexis, whose group was the first to point out flaws in the rail authority’s ridership methodology, urged the agency to take its time and to come up with a more realistic ridership model.
“You need another year to gather data; you need another ridership model,” Alexis told the rail officials.
Van Ark said the new business plan is based on fair, reasonable and conservative assumptions. He also defended the rail authority’s decision to build its first segment in the Central Valley, between north of Fresno and north of Bakersfield. The decision had led some state legislators and U.S. Congressmen to dub the proposed system a “train to nowhere.”
“This is the way the experts in the rest of the world have implemented the high-speed rail systems in other countries,” van Ark said, referring to the agency’s decision to start construction at the center of the line.
Labor leaders, meanwhile, remain steadfast in their support for the project. As union workers crowded near the back of the Chambers in orange T-shirts, union officials talked about major projects such as the Transcontinental Railroad and Golden Gate Bridge, which were built, respectively, during the Great Recession and the Civil War.
Union workers also rallied outside City Hall just before the meeting, holding signs in support of the project, which the rail authority estimates will create 100,000 construction jobs.
Cesar Diaz, legislative director for State Building and Construction Trades, said the rail project is exactly what’s the state needs at a time when so many construction workers, electricians, and other tradesmen are out of a job. Some parts of Central Valley, he said, are seeing the unemployment rate for those in the construction industry rise above 45 percent.
“We need high-speed rail, we need more efficient transportation, a cleaner environment and less dependence on foreign oil,” Diaz said .
“Most of all, we need jobs,” he concluded, earning an ovation from the union workers in the crowd.
While most proponents focused on job creation and improved transportation, many critics burrowed in on the details. Some said the rail authority’s latest proposal does not comply with the requirements of the 2008 bond measure.
“The emperor still has no clothes,” said David Schonbrunn, president of the Transportation Solutions Defense and Education Fund, one of the nonprofit groups participating in the suit against the rail authority. “They’re clearly hoping that politicians will overlook the project’s inconsistencies with Proposition 1A in their eagerness to do something to create jobs.
“We hope you won’t succumb to this pressure.”
Gordon, who chaired the meeting, called the hearing “an important first step in what will eventually lead to some key decisions that we will make on the future of high-speed rail in California.” He said the legislature will work with the rail authority and Gov. Jerry Brown’s administration over the next several months to determine what course to take with this project.
“Obviously, there are many issues to be explored as the Legislature moves toward any decision it reaches on financing,” Gordon told the rail-authority officials at the meeting’s conclusion. “But I’m hopeful that we can begin to work with you and with the Legislative Analyst’s Office to further define some of those questions and get to greater clarity before the Legislature has to make the decision.”
TRACKS to nowhere is more accurate.
Should the first segment in the Valley be built, there is not enough money for high speed rail trains, just tracks.
How that will impress investors is beyond me.
Its a very telling sign that the proponents of this HSR plan have become less and less visible in these forums. Telling indeed.
These days, a million, a billion, what’s the difference? Newest projection by the rail authority is for the project to cost around $100 billion. A billion here, a billion there, pretty soon we’ll be talking about serious money! Spending $100 billion boils down to taxing every person in America (babies included) around $360 each. Do you think Robert Johnson in Kentucky wants to pay $360 for a rail project serving Californians? Or, looking at his family of four, $1,430? Let’s get real on this.
What a complete waste of time and energy. This meeting appears to have been a charade. Does anyone think that Rep. Gordon left the meeting thinking anything different than he thought going in? Duh. It’s a political power struggle, always has been, always will be. Isn’t it charmingly coincidental that “100,000” turns out the be the number of “jobs” that allegedly will be produced by this project? Such tidy projections never cease to amaze me.
It’s clear that Gordon will get together with the Governor and the Rail Authority and support committing more money to this boondoggle. His attempt to seem neutral and undecided was utterly unpersuasive. This farce has not yet reached its final act. Stay tuned for more terrible acting, more special interest influence pressure, and a major ballooning of California’s deficit. Jerry Brown is determined to pay off his campaign debts to the construction unions by supporting this turkey to the hilt, politicians want donations to their next campaign funds, and unions, construction companies, and consultants are salivating at the money to be siphoned off from the already anemic public trough.
It is really sad that such a deliberately deceptive Prop. 1A was allowed to be placed before the public with a ludicrously low price tag, no indication of path, and with the support of gullible Green-oriented City Councils like Palo Alto’s. This fiasco should have resulted in the HSR vote being done over, but that’s unlikely to happen. The HSR project approval process is a depressing case study of how private interests can manipulate the public initiative process and make it serve their own financial ends, leaving future generations to pick up the tab. Pathetic.
“…an out-of-control boondoggle that needs to be stopped.”
+1
Ill-conceived — with non-sensical ridership projections — this project is far, far too costly; it will never be financed; no entity or entities will underwrite this mess.
The following article about the on-going bankruptcy case involving the La Vegas Monorail, is probably a glimpse of the financial affairs of the California High Speed Rail:
http://www.vegasinc.com/news/2011/nov/15/monorail/
Bankruptcy judge skeptical about Las Vegas Monorail plans
The Las Vegas Monorail was developed at a cost of $650 million — but based on its meager ridership and revenue levels it’s now worth just $16 million to $20 million.
That caused a bankruptcy judge to express skepticism Monday about Las Vegas Monorail Co.’s plan to emerge from bankruptcy in which it would still be encumbered by $44.5 million in debt — more than twice its value as a company.
—
Mass transit does not work all that well outside areas of high population density.
On the mark for another Solendra. Poor more money into a boondoggle.
Hey Robert from Stanford. “Politicians paying back campaign debts to special Interests”,? Haven’t Politicians been doing that since the beginning of time for the large corporations that have very one sided objectives that cater to them? Don’t blame the Construction Industry and Blue Collar workers for wanting to bring jobs to the area, not to mention it’s a very good idea. So save your argument on that. Keep to the ballooning price tag if you want to complain.
I think you see less supporters of HSR here because of the tone of this forum has degraded to snarky negative rips and barbs – there is no give and take or compromise here.
On another post about HSR someone asked for another vote on the issue – to which I thought – Suppose we did have a second vote on it and it passed would any of the nay sayers be satisfied? Would the opponents then support it? I think not.
Personally I support the idea of HSR although I do think this HSR administration had a few missteps in the beginning. But this is not a reason to kill it outright. I’d have more support and might even come to agree with some who oppose it if we could have a discussion of how to build it to get better value out of it. But the tone on this forum is there is nothing at all that could make HSR successful – and that’s no solution.
Isn’t it against state or federal law to proceed with a project that’s different from what the voters were told it would be? Just the near-tripling of the cost is one such difference.
The whole matter should go back to the ballot, once impartial organizations have provided accurate figures.
In the meantime, how much money has been spent on consultants and pseudo-budgets by the HSR “Authority”??
@ Frank:
A recent poll suggested that 62% of California residents would vote AGAINST the HSR.
The vote in 2008 was far from overwhelming…and came during an election in which voters fully expected an improvement in the economy within a year. Things only got worse.
California cannot afford this experiment. Not only is it incredibly expensive, but we don’t have any proof that it would ultimately be economically viable or self-sustaining (even after the $125 Billion is spent and the construction is complete).
My husband had a good point: Is there really that much of a pressing need for a HSR between Sacramento and Los Angeles? How often do typical California resident travel like this anyway per year (and would choose this method rather than traveling by car, train, bus or air)?
At such an ENORMOUS cost to current and future taxpayers, such criticism and analysis should be expected — and even encouraged.
RE: Frank of Ventura: “I think you see less supporters of HSR here because of the tone of this forum has degraded to snarky negative rips and barbs – there is no give and take or compromise here.”
There was negligible “give and take” by the proponents before: In response to quantitative arguments, their response routinely amounted to little more than the taunting “you can’t stop it”.
Folks,
One of the reasons the costs have escalated is more expensive design solutions in places like the Peninsula. Another reason is a longer build out due all the extra environmental studies and litigation related to those more expensive design solutions. A third reason is the arrogance of the CASHSRA proceeding intially in the way that they did makes reasons one and two something of self inflicted injury. None of that matters now. What matters now is that our construction economy is still flat, AND in twenty, or thirty, or forty years, just like BART now (branded a boondoggle in the sixties) we’d be happy to have HSR instead of more airports and freeway lanes.
Remember, no Bay Area Airport will ever be able to add Runway capacity. Freeway lanes cannot be added until we drive enough zero emission vehicles to offset more air pollution.
To those who think they were sold a poke…no sympathy here. All of the routing info and environmental impacts were thoroughly discussed in the public information square from the founding of the CAHSRA more than a decade ago. Concepts were sketchy of need, as the CAHSRA had no appreciable engineering budget until Prop 1A passed.
Remember the Jetsons? Since we are not already scooting to LA in personal flying machines, there is no guarantee that the modern video conference will eliminate enough travel demand to make HSR obsolete. It is guaranteed that if we kill it now it won’t be there in thirty years, so if we kill it let’s start planning for commercial aviation at Moffett Field, two more lanes each way on I-5 and SR 99, and $8/gallon gas to pay for it all. Personally I’ll continue to support HSR just to get rid of the train horns and grade crossings near my house.
The jobs benefit of HSR would come if a California-based company designed and built it. Then there would be long term spin-off of technical problems solved, skill developed in a number of areas would be leveraged as the project progressed, the money and increased skill levels would stay in California, etc.
It’s a meaty project that would yield significant skill development among Californians.
But the project is too expensive using the least expensive approach of hiring a company from overseas that has no stake in the safety, maintenance, or future of the project. It just won’t yield economic benefit.
When I voted on HSR, I assumed we would buy, develop, or transfer to here the design, technology, and engineering skills necessary to build an HSR in California. That makes sense as a long term government investment. Even then I thought 9B was all we should spend on it.
Now we’re talking about helping to pay to help develop China’s remote engineering and capability?
Sounds like a bad idea.
The “jobs” argument illustrates the intellectual bankruptcy of the American labor movement. What you want from a government jobs program is focus on programs that provide leverage, creating sustained additional economic activity — jobs for others. I bet that if some were to propose a program to _create_ (more) potholes in streets and highways, the construction unions would be vocal advocates of its “job creation”.
On “jobs creation”, remember that the HSR “visionaries” see only the construction and maintenance jobs being here, with the manufacturing and professional jobs exported to China. Notice that it is the jobs to be exported are those that have the possibility of having economic leverage.
I remember when many of the leaders of the American Labor movement were worried about the overall economy. Now, they just focus on their short-term parochial interests, ignoring the bigger picture.
Douglas Moran has it just right – organized labor, Big for-profit Business, the Chamber of Commerce, Big Oil, Big Pharma, AMA, ABA, PTA, NBA , NCAA – all have succumbed to myopic parochialism. Upgrading intrastate transportation to the 21st C is just a ruse akin to the interstate highway system, BART, public trough gluttonous International/regional airports, Unified School School Districts, etc.
@Douglas you’re totally right. The only (negligible) economic benefits of HSR will be through its construction. Its not like greater mobility creates any benefit to the average worker. No one benefits from having access to jobs they wouldn’t have otherwise through services like BART, Caltrain, or the bay bridge and freeway system. These are all expensive boondoggles, and since they aren’t profitable, should be shut down.
A lot of very foolish comments above. But the event was very balanced and informative. More than ever, I am convinced that High Speed Rail is a good project. In fact, we should be all ashamed of ourselves that this did not happen 50 years ago. It is inconceivable to me that the great State of California cannot afford this — it is simply unacceptable to not proceed full speed ahead and get this done. The City Council has done a grat disservice in its opposition to HSR.
I was not at the meeting, so I’m interested in the yes support present at the meeting. From the media coverage I’ve seen about the meeting, it seems to me that the majority of support for the HSR project is from the HSR Authority, and big labor. Where is the ground swell of support from the public demanding transportation alternatives? Oh, they are the ones opposing it! It certainly appears to me that if politicians and big labor are the only significant supporters of anything, there is a fairly high probability that the tax payers should grab their wallets and stop the project before they get fleeced. Unemployment sucks for sure, but dropping a $100B (not counting interest and cost overruns) albatross of debt on the state for decades to come, so big labor can collect union dues, and that the Democratic party is supporting this as a political mandate from the Whitehouse hoping to receive big labors vote at the polls, rather than for any real need for the citizens of this or any state, is a glaring example of what PORK politics really is. It’s time to defund the CA HSR Authority, strip of them of their authority, and fire the lot.
“union officials talked about major projects such as the Transcontinental Railroad and Golden Gate Bridge, which were built, respectively, during the Great Recession and the Civil War.”
Should be corrected to “… the Civil War and the Great Depression.”
there is a triple train problem
1) slow, old technology Caltrain
2) no Bart from SF to SJ and around
3) high speed rail dilemma.
Need to solve them all together
(else we surely will hang apart – BF joke)
with HSR entry points at Oakland and SJ.
Stanford needs to get back in the train business and use
their tax exempt money and civil/mechanical engineering expertise
to complete the Bart loop and make up the shortfall in public funds.
While at it – redo the downtown train station to a modern
train station with a restaurant and high rise hotel which faces
Stanford on one side and PA on the other.
We can do it!
@Stan, you state that this project is being built without “any real need for the citizens of this or any state”. I really don’t understand how building a line that parallels the busiest air route in the country, where neither airport at each end has room to expand, doesn’t serve any need.
NO Tommy its called CENSORS..got it..NOOO we cant hurt the babies with the truth
Robert,
It’s pretty clear that the main force driving HSR is not demand from citizens for a train. It is politically driven. Obama handed the central valley the $2B or $3B in 2010 to help reelect the democrat representing that part of the central valley. That’s why the feds mandated that the train construction start there. It has nothing to do with real needs, just political expediency, with our tax dollars. And of course, there is that little detail that the ridership numbers spewed forth by the CA HSR are quite simply made up and bogus. And the fares they project, and the cost estimates, and the revenues it will generate, etc. It’s pork, pork, pork, nothing more.
> The jobs benefit of HSR would come if a California-based company designed and built it
Maybe ,.
But such a project, if funded with public money, would ultimately have to be managed by public employees—who have a terrible track record of managing large, capital, projects—
CA Large Project Failures Articles:
http://www.scribd.com/doc/32328489/CA-Large-Project-Failures-Articles
With the exception of Caltrans, there are few (if any) large projects that have been managed by the State of California (at least in the last fifty years) that have not either run woefully over-budget, or been terminated due to management failures.
It is painfully clear that the HSRA (at least to date), is headed towards its own, very expensive, set of failures.
Spend $170 billion on more runways? Southwest and United can easily double air travel capacity between the Bay area and Southern California by using 757’s rather than the current, much smaller 737. The larger planes, when filled, are also more fuel efficient and could have lower fares. This puts another CHSRA lie to rest.
I agree with Nayeli that race shouldn’t be taken into account on this matter.
I disagree about the age issue though.
I wasn’t at the meeting and so have no idea about the age of the participants. However, it would be interesting to have a poll done along age lines.
For anyone over the age of 50 (the age mentioned above) the likelihood of their regular use of any HSR would be short lived if at all. However, to the younger demographics, particularly those under the age of 30, I can see that their usage would mean that their views are particularly valid now.
If any more polls are done, I would really like to see age of the responders taken into account. If, as I suspect, the under 30s are in higher percentage agreement, it would show that the trend for the future is stronger and more likely to show usage rather than the older population’s point of view.
I know wisdom comes with age, but it is the younger generation who will be affected by this decision. And, regardless of the outcome of HSR, the younger generation will be paying taxes in the future. Their enthusiasm (or lack thereof) should be a contributing factor in the discussion and eventual outcome. Do they want their future taxes going towards more transportation choices, or do they want to be bogged down with no option but old fashioned road and short haul flying systems.
The unions that see this as a jobs bonanza are short-sighted. The cost to the state will mean cuts elsewhere and a loss of jobs in those areas. Look at the latest state budget figures. Another $3B needs to get cut. More than likely school teachers will lose their jobs, also school employees such as janitors, administrators, bus drivers, etc… CSU, UC and Community College feels will go up. Will these union people also be complaining about the loss of those jobs and the increase in those fees?
Given the manifest incompetence and rank corruption of our so-called “public servants”, this project will be an epic failure, at least when considering benefits to the general public net of costs.
It will be a tremendous success for those who suckle misappropriated wealth from the teat of government.
Dear All,
Many comments have stated that there is no longer support for HSR. I support HSR, oh, and I’m over 50. I suspect that there are still a great many supporters who like myself are just tired of the loud voiced shouting of the opponents to HSR. It is difficult to discuss an issue and try to improve the results when people are shouting.
Infrastructure projects are necessarily foresighted and often raise doubts in the moment. This is an important project that should move forward carefully and efficiently.
Also, it is myopic for Palo Alto to not take advantage of HSR and be the main stop on the line from SJ to SF. We are a destination already, we should be planning hotels, restaurants and shops to attract instead of repel the business which could come from train riders.
I could not have said it better than “there’s company”, above.
I too am over 50 and for HSR. I agree that the people who are opposed to it (probably a lot of them live near the tracks and are mistaken about the impact for most, knowing that the noise level will actually go DOWN from what Caltrain generates, but anyway), those opposed to it have been hyper strident.
I also agree that having an HSR stop in Palo Alto would be the best of all possible solutions from all kinds of perspectives.
Myopic is the word indeed.
Well, HSR supporters are apparently in the minority. A recent poll indicated about 62% would vote AGAINST this extremely expensive endeavor.
http://www.hanfordsentinel.com/news/local/article_0be0363c-ec5a-11e0-abe1-001cc4c002e0.html
That means that just 38% (or fewer) of California voters favor this.
Of course, there never has been overwhelming support for the HSR (at least, in funding it). The proposition passed in a favorable year with just over 52% of the vote in favor. And, of course, many of those who voted in favor of it didn’t know how high the cost would escalate…and many assumed that the economy would improve within a year of the 2008 election (and it actually got worse).
While the concept of a HSR is great, the incredibly expensive cost to California is the greatest issue that hinders wide support for the project. California taxpayers just can’t afford to flip the bill for an enormously expensive system that will only be utilized by a small percentage of intrastate travelers.
While we’re at it, why notrun it on the Coast Route. Much nicer scenery and a better class of people.