Gov. Gavin Newsom is promising a more realistic approach, greater accountability, and a change in leadership for California’s embattled high-speed rail project, announcing significant changes in his first State of the State address Tuesday in Sacramento.
But Newsom indicated that anything beyond the construction work now under way in the San Joaquin Valley will be on hold until “more federal funding and private dollars” become available to help pay for the project.
Newsom’s speech represents a much more measured approach to the controversial train program compared to the full-throated support of his predecessor, Gov. Jerry Brown. “Right now, there simply isn’t a path to get from Sacramento to San Diego,” Newsom said, “let alone from San Francisco to L.A. I wish there were.”
Instead, he said, “we do have the capacity to complete a high-speed rail link between Merced and Bakersfield.” The California High-Speed Rail Authority, the agency tasked with planning and developing the system, has three construction contracts in place where work is progressing between Madera and Shafter – the bulk of what planners often described as the “spine” of a high-speed rail system through the Valley.
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The new direction could be a boon for Amtrak through the Valley if high-speed trains never materialize.
When California voters first approved Proposition 1A, a $9.9 billion bond measure for high-speed rail in 2008, plans called for a first phase of a statewide system to connect San Francisco and Los Angeles, by way of the Valley, with 220 mph electric trains. A second phase was to extend the routes to Sacramento and San Diego.
Among the changes announced by Newsom is the appointment of a new chairman for the rail authority’s board. Newsom is tapping his economic development director, Lenny Mendonca, to replace Dan Richard. Richard was appointed to the board as its chairman by Brown in 2011. Richard submitted his resignation, effective Feb. 19, in a letter Monday to Newsom.
“I have nothing but respect for Governor Brown’s and Governor Schwarzenegger’s ambitious vision” for high-speed rail, Newsom said. “I share it. And there’s no doubt that our state’s economy and quality of life depend on improving transportation.”
‘Let’s be real’
“But let’s be real. The project, as currently planned, would cost too much and take too long. There’s been too little oversight and not enough transparency.”
That lack of oversight was the subject of a state audit in November that took the rail authority to task for its lackluster cost controls and overreliance on consultants. On Tuesday, Newsom said he is ordering new measures to get the project under control and avoid “repeating the same old mistakes.”
“We’re going to hold contractors and consultants accountable to explain how taxpayer dollars are spent – including change orders, cost overruns, even travel expenses,” Newsom said. “It’s going online, for everybody to see.”
The November audit asserted that change orders and other factors of lax oversight of contracts contributed to a $1.6 billion escalation of costs for work in the Valley.
Keeping fed money
Newsom ruled out pulling the plug completely on the Merced-Bakersfield construction work. “I know that some critics will say this is a ‘train to nowhere.’ But that’s wrong and offensive,” he said. “High-speed rail is much more than a train project. It’s about economic transformation and unlocking the enormous potential of the Valley.”
“Abandoning high-speed rail entirely means we will have wasted billions of dollars with nothing but broken promises and lawsuits to show for it,” Newsom said. “And by the way, I am not interested in sending $3.5 billion in federal funding that was allocated to this project back to (President) Donald Trump.”
Under the Obama administration, the Federal Railroad Authority provided $3.5 billion in federal stimulus and railroad funds starting in 2010 for high-speed rail construction in the Valley.
“We will continue our regional projects north and south,” Newsom said, a reference to work to improve existing rail systems in the Bay Area including electrifying the Caltrain commuter rail corridor and in the Los Angeles basin. “We’ll connect the revitalized Central Valley in other parts of the state, and continue to push for more federal funding and private dollars.
“But let’s just get something done.”
The California High-Speed Rail Authority estimated last year that it would cost about $77.3 billion to build its initial 520-mile phase from San Francisco to Los Angeles by way of Fresno and the San Joaquin Valley. And that’s before considering a future second phase that extends the lines north to Sacramento and south to the Inland Empire and San Diego – sections for which no cost estimates or schedule forecasts have been offered by the rail authority.
That’s a far cry from initial estimates in 2010 of about $45 billion to build the entire system, including the extensions to Sacramento and San Diego. With each new business plan issued in even-numbered years, the price tags have wobbled considerably – usually upward – and the amount of time forecast for completion has grown.
But questions about where the money would come from have long nagged the rail agency. After Republicans took control of Congress during the Obama administration, Republican members including Rep. Devin Nunes of Tulare, Rep. David Valadao of Hanford and Rep. Jeff Denham of Turlock joined their colleagues in vowing to block any additional federal money for California’s project. Valadao and Denham lost their re-election bids last fall.
With no more federal money forthcoming, and hoped-for private investment failing to materialize as planned, Brown and the rail agency turned to using cap-and-trade money from California’s greenhouse gas reduction program to keep the rail project alive. Cap-and-trade money comes from companies who bid at state auctions to buy credits to offset their air pollution emissions.
Patterson: I was right
A longtime critic of the rail authority, Assemblyman Jim Patterson, R-Fresno, said Newsom’s speech “put the final nail in the coffin of high-speed rail.”
“His admission that this project will never go from Los Angeles to San Francisco as voters intended echoes what I have been warning about for years,” Patterson added. “They never had the land, they never had the money, and now we know that it will never be a reality.”
The decision to award construction contracts in the Valley before sufficient planning and land purchases had taken place was driven by a 2017 deadline for project completion that was originally contained in a grant agreement between the state and the Federal Railroad Administration for $2.6 billion in federal stimulus funds. The federal agency later agreed to modify the agreement to require only that the money be spent by the end of September 2017, but requiring completion by 2022.
The business plan issued last year pushed the completion date for Phase 1, San Francisco to Los Angeles, to 2033. But even that was contingent upon figuring out where the money would come from to do the work, including the technically challenging task of tunneling through the San Gabriel Mountains in Southern California to connect Palmdale to Burbank in the San Fernando Valley.
Patterson echoed Newsom’s call for construction in the Valley to be finished rather than stopping the work in its tracks. “Central Valley rail supporters and skeptics must band together to make sure we are left with functional tracks,” he said. “After tearing up prime (agricultural) land and ripping up the heart of our cities, we must ensure that we aren’t left with the unfinished scraps of a failed project.”
What “functional tracks” in the Valley could be used for, if not as the spine of a statewide, all-electric high-speed train system, remains a big question.
In one of a series of Twitter posts following his speech, Newsom reiterated his declaration that “we’re going to make high-speed rail a reality for California.”
“We have the capacity to complete the rail between Merced and Bakersfield. We will continue our regional projects north and south. Finish Phase 1 enviro work. Connect the Central Valley to other parts of the state,” the governor tweeted.
If the plan is for high-speed trains to operate on a Merced-Bakersfield line, the system would face at least one of the same challenges confronting a full statewide train line – compliance with Proposition 1A’s requirement that the project be financially self-sufficient and able to cover its operating costs without any subsidy from taxpayers.
Another possible answer lies in the original grant agreement between the Federal Railroad Administration and the state for stimulus and railroad money.
If cap-and-trade was Plan B for funding, then Plan C – or even Plan D, F or G – is a clause in the federal grant contracts requiring “independent utility” for the stretch of the rail line being built in the Valley.
What that means is if no tracks are ever laid for the project beyond Madera to the north or Bakersfield to the south, the tracks could be used by Amtrak’s San Joaquin trains that currently share the BNSF Railway freight tracks between Madera and Bakersfield, or perhaps some other rail service.
The result: almost 120 miles of tracks with no at-grade traffic crossings and on which Amtrak trains need not stop for passing freight trains. Amtrak could operate at faster speeds – potentially as fast as 125 mph, compared to the current top speed of 79 mph and average speed of 53 mph for the San Joaquin trains.
Costa sees future for HSR
Rep. Jim Costa, D-Fresno, who has supported the idea of high-speed rail since he was a member of the California Legislature and continued to be a booster as a member of Congress, said he doesn’t believe Newsom’s approach to high-speed rail “foreclose a future HSR system for California.”
“His proposal to change the plan, though more modest, will still benefit the Valley,” Costa added.
Costa’s Democratic colleague, Rep. TJ Cox of Fresno, said Newsom’s high-speed rail remarks didn’t address two key Valley concerns: eminent domain to secure the land needed for the railroad right of way, and connecting the region to Northern and Southern California.
“I believe we must bring our rural and urban communities to find transportation solutions that meet the needs of both,” Cox said, “and this proposal fails to do that.”
Richard, the rail agency chairman being replaced by Newsom, said he always expected that he would be leaving the board soon after the transition from Brown to Newsom was complete. “A new governor has the right to put his own members on the board,” Richard said. “Gov. Brown reappointed me at the end of the year, but I told him I would be offering my seat to the new governor after the transition.”