The Assembly Transportation Committee High Speed Rail oversight hearing of Tuesday (11-12-2019) exposed a regional funding war. 

The project’s leadership, Brian Kelly (CEO) and Board Chair Lenny Mendonca, are pushing the present “spend all existing funds in the Central Valley (CV) agenda”.  Governor Newsom, who “flip/flops” with his position on HSR depending on the season of the year, right now does endorse Kelly’s leadership and the present plans.

However, HSR Board Director Danny Curtin and others and are also now supported by some Democrat Legislators, support an effort to divert some funding (around $5 billion) away from the present plans to spend all funding in the Central Valley. They would rather divert these funds to other projects and regions in Northern and Southern California. 

Kelly strongly defends his position by stating:

“The idea to divert money from what we’re doing now and spend it on regional services, to me, is not consistent with the mission of high-speed rail. That’s my opinion.”

But what is the mission of the High Speed Rail Authority?

Actually one clear mission of the  HSR Authority, as stated in the 2008 Prop 1A bond measure, is to connect Northern and Southern California on a high speed train, taking no longer than 2 hours and 40 minutes between San Francisco (Trans Bay Terminal, not 4th and King), and Los Angeles, with a one-seat train trip.

The present plan, directs all existing funds to the CV, and certainly fails to accomplish that goal in the foreseeable future; not being mentioned is the over $50 billion short fall in existing funds as mentioned by the State Auditor, to fulfill that goal. 

The Federal Rail Administration (FRA) certainly no longer believes this will be accomplished and has cancelled $929 million in previously obligated funding for the project. The FRA has also announced its intention to attempt a “claw-back” of $2.5 billions in Federal ARRA funding, which has already been spent on the project. 

Kelly’s agenda, which would start operation on the segment from Merced to Bakersfield, by his own admission, requires an operating subsidy; this is a clear violation of Prop 1A which allows for no operating subsidy for the train, which was a prime selling point back in 2008, inducing the voters to pass the Prop 1A bond measure.

Kelly tries to make the case that future federal funding and private investment will appear as soon as the present plan is completed.

Elaine Chao, Federal Secretary of the Department of Transportation, has called Kelly’s plan, a “bait and switch”.  In addition the Federal Transportation Inspector General is conducting an audit of the Authority, which is due to be reported in this winter quarter.

Rarely has any dissention among HSR Board Members become public. The most notable was probably Director Lynn Schenk in March 2013, failing to endorse the “blended plan” for the project because she didn’t believe it was truly High Speed Rail. 

At the hearing, Director Curtin with back-up from Assembly Woman Laura Friedman (see Fresno Bee Article of 11/13/2019) stated powerful arguments that better and much sooner results would happen by diverting some funding to solving regional problems.

It should really be noted, that Kelly has “slow-rolled” the original dissent, which was initiated when the board approved, a Side-by-Side study which was to examine the possibilities of diverting funds at the May Board meeting. The study was to be completed within 60 days. Kelly pushed off the time line for the study and appointed the Early Train Operator (ETO) to perform the study. The ETO is hardly un-biased, since they are on a fast track to be awarded lucrative contracts for CV work. The study is now months over due, and released thus far is only a qualitative, biased study, with a full report delayed to be delivered sometime next year.

Where all of this will lead is, at this time, not known.  The Legislature will be asked to approve sometime, probably early next year, the appropriation of the remainder of the un-allocated Prop 1A funds (about $4 billion).  Will the Governor and CV advocates succeed in getting all of these funds directed to the CV or will other regional interests prevail and have these funds directed their way?

In either scenario, the voters of California have been defrauded! Kelly’s agenda, which would start operation on the segment from Merced to Bakersfield, would result in having spent over $20 billion and having constructed only an isolated High Speed Rail segment, which certainly does almost nothing to connect North California and Southern California.  

Back in 2008, the whole 800 mile project stretching from Sacramento to San Diego was estimated to cost $45 billion. (There is no current cost estimate for the full build)

Back in 2008 the SF to Los Angeles build was to cost $33 billion and would be completed in 2020. (The current estimate now is $80 to $100 billion)

Back in 2008 the promise was the train would run on grade separated, dedicated HSR tracks and not interfere with local auto traffic.

Back in 2008 the voters were promised that passing the Prop 1A almost $10 billion bond measure, would be all the funding from California voters ever required. Remaining funding was promised to come from private investment (none existent to this date) and Federal matching funds. 

It is no wonder the project has lost its appeal to so many California residents.