The Jan 27 2016, Assembly Budget Subcommittee hearing labeled “ Oversight of High Speed Rail” turned out to be anything but a hearing on oversight. (Video of Hearing)
The hearing, prompted by pressure from Republicans when an explosive LA Times article reported the Authority had failed to include and ignored cost increases predicted by its prime contractor, Parsons Binkerhoff (PB), while the 2014 business plan was developed and published.
The cost increase predicted by the PB report was about $9 billion, a 31% increase for the Merced to Burbank segment. The report also showed an overall increase of about 5% for the whole Phase I of the project, with a net increase of about $3.5 billion to the baseline project for the San Francisco to Los Angeles segment. Indeed the 2014 business plan, simply incorporated the 2012 business plan cost estimate of $68 billion.
Reading the staff report prepared for the hearing, it was easy to predict the result of the hearing. The staff report included “cut and paste” excerpts from the Authority’s business plan, but no such excerpts from the LA Times’ article. The only speakers were to be from the Authority, Dan Richard (Chair) and Jeff Morales (CEO). From the Authority’s Peer Review Group Lou Thompson appeared.
Thus the whole hearing was setup to be a “white wash” of the issues the Times’ article raised.
Richard spent about 10 minutes telling the world (again) how well run and open the Authority has been in carrying out this project.
Then Morales gave his input, essentially seeking to discredit the Times’ article by claiming the PB report included going all the way to Burbank whereas the comparison cost routing would stop at Sylmar (about 16 miles shorter in distance). Morales claimed about $4.5 billon of the cost difference was due to the PB report extending the segment to Burbank. Claiming this extension would cost $4.5 billion to go only 16 miles on level surface when a corridor like the San Fernando road could be used, is simply not believable. The other $4.5 billon of the PB projected cost increase was simply discarded by the Authority by claiming elimination of elevated structures in the PB estimate with building on berms would save this $4.5 billion.
This brings up the question of why pay PB to produce cost estimates, when the Authority can just claim we will build the segment differently and substitute our own costs? All of this testimony from Morales came without his producing any data for his testimony, since all of this is labeled “DRAFT”
The Authority surely needs more oversight. Lou Thompson echoed this need in his testimony. The Authority resists additional oversight with all its might.
Morales had written the Chair of the Joint Legislative Audit Committee a letter in which he was opposed to the approval of an Audit of the Authority proposed by Senator Andy Vidak.
Let me give you a personal example for this need.
I commented on the need for an audit of the Authority previously. Since that article was published, additional information has appeared.
The reply from the Authority on Sept 18 2015, to my public record request of Sept 8th 2015, stated:
The June 30 Funding Contribution Plan (FCP) is expected to be posted in the near future.When it is available, it will be posted to the following website: http://www.hsr.ca.gov/About/Funding_Finance/funding_agreements.html
The June 30 FCP was indeed finally posted on Jan 21st 2016. That is about 4.5 months after my request. But what is really interesting is an inspection of the FCP reveals it was produced on July 28th, 2015; (see the properties snapshot of the FCP); the FCP was available well before my initial request. Public Record Requests are mandated by law to be filled within 10 days, not 4.5 months later.
Los Angeles Times reporter, Ralph Vartabedian, has authored another article since the Jan 27thcommittee hearing. It explains a lot.
The High Speed Rail project is the largest such endeavor in the nation. It needs more oversight and it needs an audit from the non-partisan State Auditor now. It is time for the Democratic legislative leadership and the Authority to stop denying such an audit.