Bullet train to nowhere–the ultimate California boondoggle–
PART 2 OF 2
Amtrak’s Acela passenger trains, plying the Atlantic coast from Boston to Washington, have top speeds of only 150 miles per hour. As early as 1996 the California legislature, impressed like Brown by the fact that electric-powered rail systems in Europe could compete with plane and auto travel for distances between 200 and 500 miles, created a nine-member. virtually autonomous High Speed Rail Authority to develop and implement such a system for California.
The idea was to move commuters, vacationers, and business travelers out of their automobiles and onto trains. In 2004 the Democratic-dominated legislature approved the referendum that was to appear before the State’s voters in 2008 as Proposition 1A.
Prop lA also required the line to include stops in the economically ailing San Joaquin Valley, necessitating a major inland detour that seemed to be aimed mostly at attracting the support of San Joaquin Valley legislators. For example, it included a stop in Merced, about 34 miles north of Madera, that isn’t even part of a Los Angeles-San Francisco route but could use an economic boost (it’s No. 5 on the 24/7 Wall Street list, with unemployment of 11.9 percent). The ballot measure stated that the bullet train would eventually stretch 800 miles, when a second phase extended it to San Diego and Sacramento. Those features turned the train from simply an ultra-fast connector between major population centers along the coast into a presumed economic jump-starter for inland California communities (proponents predicted more than 600,000 construction-related and other jobs). In a further effort to make the bond issue appetizing to voters, the ballot measure allocated nearly $1 billion of the proceeds to funding conventional urban and commuter rail projects.
Proposition 1A made certain promises of nearly magical specificity: that the trains would operate at speeds of at least 200 miles an hour; that the maximum travel time between Los Angeles’s downtown Union Station and the Transbay Transit Center in San Francisco would be exactly two hours and 40 minutes; that trains would be running in either direction every five minutes; that state taxpayers would be on the hook only to repay principal and interest on the bonds; that no proceeds would be spent until federal and private investment had kicked in: and that the entire operating costs of the train would be paid for via passenger fares (then estimated to be about $50 a person, a bargain for the Los Angeles-San Francisco run). )
In 2008 the CHSRA had estimated that the total cost to and build the entire high-speed rail system would amount to about $33 billion. Proponents were already counting on federal subsidies and private investment to cover the shortfall between the bond proceeds and the total estimated construction costs.
They [hadn’t] even sold the bonds yet, complained Jon Coupal president of the Howard Jarvis Taxpayers Association California organization that opposed Proposition lA from the beginning. “But the legislature [had] already approved $1.1 billion in spending for bookend projects in L.A. and San Francisco that aren’t even high-speed rail but are basically fixed rail at the local level.”
To placate them while retaining the shorter southerly approach, the legislature eliminated a station proposed for Los Banos, a San Joaquin Valley town that sits adjacent to several state and federal wildlife refuges. But the peninsula is also the home of Silicon Valley and its wealthy towns that house tech billionaires and their well-compensated employees. They dreaded the bullet train for reasons similar to those of the San Joaquin Valley farmers: They didn’t want 200-mile-an-hour trains running high above grade and, shielded for miles by nearly impenetrable barriers, hurtling through their tree-shaded suburbs at five-minute intervals, lowering their multimillion-dollar property values.
A number of environmental groups, filed the first of dozens of lawsuits lodged against the CHSRA over the past eight years. Their argument was that the authority had failed to comply with provisions of California’s Environmental Quality Act. Those lawsuits were initially quite successful, at least in delaying-construction. Issued rulings in 2009 and 2011 that forced the authority to write extensive revisions to its plans to minimize environmental damage.
In early 2013, however, Kenny dismissed the suits, ruling that the state had finally complied with environmental imperatives—and dashing the peninsula localities’ hope that a court order would force the tracks to take the Altamont route. Meanwhile, in its 2012 business plan, the CHSRA had announced that it would scrap the idea of building an elevated rail-bed along the peninsula and would instead use a “blended service” system in which the high-speed trains would share tracks from San Jose to San Francisco with the existing Caltrans trains, which run at grade. The blended system would slow the bullet trains down to 125 miles an hour, raising the travel time from Los Angeles to San Francisco to more than 3 hours, which competes unfavorably with flying (even after factoring in airport hassles). But it would save California a lot of money. The estimated cost of the rail line had by then soared from the initial $33 billion to $98 billion. The blended strategy was expected to lower those costs hours to a more palatable $68 billion.
At public meetings earlier this year, peninsula residents complained that the current plan to run the CHSRA’s contemplated 20 bullet trains per hour at grade would entail shutting down some of the 42 grade” crossing along the Caltrain commuter line that give care trucks, buses, bicycles. and pedestrians convenient routes across the tracks.
Kings County Board of Supervisors, which had initially faced the prospect of the bullet train line’s smashing through the center of Hanford’s historic downtown, filed the most contentious and longest-running of the anti-CHSRA lawsuits. (San Joaquin Valley farmers, farm bureaus, a churches, businesses, irrigation districts, and localities from Madera to Bakersfield have lodged court proceedings to block the tracks, and while some of those cases have settled, others are still ongoing.
Fukuda’s discovery of the actual proposed route came as a complete surprise. “They never knocked on our doors and introduced themselves,” he said. “We would never have known that we lived in the actual route of the train. The amount of anxiety that they’ve created in people’s lives is incredible.” The city of Hanford, he explained, had once enthusiastically supported a high speed station—until it discovered that the authority planned to split its downtown in half.
“This is a heavy dairy area, and it’s the only rendering plant around it serves about 600 dairies south of Fresno. Then they were supposed to move it, but to this day it’s still in the alignment. They have no idea what it takes to run a dairy farm.”
The Tos-Fukuda lawsuit was ultimately unsuccessful, but it did succeed in tying up the bulk of the $9.95 billion bond issue in Judge Kenny’s courtroom for more than four years while lawyers wrangled over the suit’s main contention: that the CHSRA was violating the terms of the 2008 referendum. In November 2013, Kenny ruled that Proposition lA required the authority to identify all of its financing sources for completing the initial operating segment of the train—something the CHSRA, which had (and still has) little money on hand besides about $3.3 billion in federal funding , could not do.
This past March, Kenny definitively declined to halt le train’s construction, rejecting opponents argument that, owing to the slower speeds necessitated by track-blending, it could never deliver on several of Proposition lA’s specific promises, such as topping out total travel time between Los Angeles and San Francisco at two hours and 40 minutes.
Kenny’s ruling highlighted what might be the CHSRA’s biggest problem of all: a lack of construction money. Efforts to gin up private investment and federal subsidies that would trigger bond drawdowns have proved problematic. In 2010 California secured a $2.5 billion grant under the American Recovery Reinvestment Act, aka the 2009 stimulus pushed into place by newly elected President Obama as a way to end the recession by channeling federal dollars into so-called shovel-ready infrastructure projects. Obama, like Jerry Brown, has been an enthusiastic bullet-train booster. During his first term he frequently referred to a coast-to-coast network of high-speed trains that would rival the interstate highway system in scope. His 2009 stimulus package had included $8 billion in construction funds to jump-Start high-speed rail projects across the country. Turned down the Stimulus money, worried about anemic passenger numbers and the soaring costs their taxpayers might face once the federal construction funds ran out. Those rejections turned out to be a windfall of sorts for California, which managed to snag an additional $1 billion from the Obama administration that other states didn’t want, bringing the total up to the $3.5 billion that the state was expected to spend or forfeit by 2017.
Not only does Proposition lA expressly forbid the use of state tax revenues to fund high-speed construction but the deficit-plagued state is already shouldering $400 billion in debt, largely in unfunded pension liabilities. fn 2014 the Democratic-controlled California legislature, looking for ways to pay for the train, agreed to set aside 25 percent of “cap and trade” revenues—proceeds from a 2006 state law designed to curb greenhouse-gas emissions—to help fund high-speed rail.
The cap and trade deal, set to expire in 2020, was supposed to generate about $500 million a year in state funding for the train—until cap and trade auctions in May and August, expected to provide some $255 million, collapsed yielding only $4.6 million. During the summer of 2015 the CHSRA put out feelers to potential private-sector investors. None expressed any interest in underwriting the construction without a state guarantee of expected operating revenues—impossible under the language of Proposition lA.
The plan had been that by 2022 the train would start accepting passengers for a 300-mile leg that would run south from Merced to Burbank in Los Angeles’s San Fernando Valley. To reach Burbank, however, would require tunneling through two east-west mountain ranges, the Tehachapi and the San Gabriel, that separate the San Joaquin Valley from the vast alluvial plain of coastal Southern California. The contemplated 36 miles of tunnels to be blasted through the two fault-pocked and potentially earthquake-prone ranges would be a geology-defying accomplishment.
Three of the proposed routes, which would link the desert city of Palmdale to Burbank, involved tunneling through the federally owned Angeles National Forest, which environmentalists complained would disrupt water tables and wells, threatening wildlife.
Parsons Brinckerhoff, the New York-based main manager for the project, had predicted in 2013 that the total would rise at least 5 percent above the projected $68 billion—a prediction that didn’t make its way into the rail authority’s 2014 business plan. (Parsons presided over the “Big Dig,” a tunnel through downtown Boston whose cost zoomed from a $2.8 billion estimate in 1982 to $14.6 billion by die time it was completed in 2007.) The starting date for the first operational leg of the train wouldn’t be 2022 but 2025. The first main phase of the train—from Anaheim to San Francisco—wouldn’t be completed until 2029, more than 10 years later than contemplated in the text of Proposition IA.
A review ot the business plan by the California Legislative Analyst’s Office pointed out that nearly every single aspect of the proposed funding arrangements for the train was dicey—including the funding for the initial 130-mile segment where work is ongoing. For example, the CHSRA seemed to be counting on the legislature’s continuing to funnel cap and trade proceeds in its direction through 2050, some 30 years beyond the expiration of its current cap and trade arrangement—and that’s without even anticipating cap and trade auction failures like this past May’s. The office also noted that the CHSRA had no concrete idea how it was going to pay for some $43.5 billion out of the total construction costs, which it would need to find by 2018 when the stimulus money dries up.
The Obama administration in May gave the CHSRA something of a break, handing the agency four extra years— up to 2021—to spend its existing federal stimulus grants. Technically, the 2017 deadline remains in place, and had the administration decided to enforce it, the state of California, which has spent only about $1 billion in grant funds so far because of delays, might have had to forfeit most of the rest.
But thanks to some interpretive jiggery-pokery by the Department of Transportation and the Federal Railroad Administration, California will no longer be required to submit invoices for work actually performed in order to receive the federal funds, as most grant recipients are required to do. The May reprieve essentially hands over all the grant proceeds to California in advance, allowing the state .to spend them in a far more leisurely fashion.
Earlier the Obama administration had absolved California from another stimulus-grant requirement- having to supply matching funds on a dollar-for-dollar basis in order to qualify for the federal monies. That would have obliged the state to put up more than $3 billion, which, what with its bond funding tied up at the time and no hope of dipping into state tax revenues, would have been nearly impossible.
The latest change in the grant terms in May—essentially turning the grant into an open-ended cash advance with no federal monitoring of how it is to be spent—enraged congressional Republicans. The rail subcommittee chairman, called this a “blank check” representing a “clear conflict of interest” on the part of train-booster Obama. “Not only do they lack a business plan. but they continue to waste taxpayer dollars without being held accountable.
Times’s Vartabedian, having filed a freedom-of-information request, revealed that the CHSRA had apparently scrubbed from its website a pessimistic assessment by the Spanish rail-construction contractor Ferrovial that the train would never be able to operate without the taxpayer subsidies that Proposition lA specifically forbids. The Spanish firm had noted in its bid that of 111 high-speed lines that it had looked at around the world, only 3 were financially viable without government aid.
August, that the relocation of a section of Highway 99 inning through Fresno that is crucial to the construction of the San Joaquin Valley segment is running six months behind schedule and 15 percent over budget. The CHSRA ho is trying to persuade the state legislature to give Caltrans a $35 million increase over the $226 million it had granted the agency for the relocation in 2013.
We’re destroying agriculture in the Central Valley,” he said. “But over those 130 miles of track, we’re taking maybe 4,500 acres out of 6.5 million , High-speed rail isn’t a threat to agriculture.’
source–weekly std, charlotte allen, chsra, jon coupal, howard jarvis taxpayers assos., michael kenny, elizabeth alexis, aaron fukuda, citizens for high speed rail accountability, diana gomez, joel fajardo, patty lopez, ralph vartabedian, parsons brinckerhoff, the hill, dan richard,