California is about to build the largest public-works project in the state's history: a system of high-speed, electric passenger trains. And even before a spade of dirt is turned, perhaps late next year, the state will have spent about $630 million.
What does California have to show for it?
Thousands of pages of strategies, studies and plans -- and a chorus of concern over the rail authority's budget management and its ability to monitor an army of consultants.
The Fresno Bee, as part of a project by California Watch, has examined the California High-Speed Rail Authority's 15-year budget history and current consulting contracts. By far, the largest chunks of cash have been paid to consultants and contractors hired by the authority, which has only a small in-house administrative staff.
Over the past two years, however, state oversight agencies repeatedly have cited problems -- contract payments made without verifying that work actually was performed; payments for services or equipment not covered in consulting contracts; and a lack of policies and procedures to review invoices and payments.
With spending set to leap from millions of dollars per year in planning to billions per year once construction begins, those worries are now magnified.
The first 520-mile phase between San Francisco and Los Angeles, through the San Joaquin Valley, is expected to cost at least $43 billion over the next decade -- and likely much more.
"We're rapidly approaching a time when I'm going to have to ask myself, 'Is [the rail authority] capable of delivering?' " said state Sen. Joe Simitian, D-Palo Alto, a frequent critic of the authority's management. "That remains a question mark in my mind."
The authority says it needs consultants because the scale of the project is bigger than the agency's staff can handle on its own.
"Through consultants, we can leverage a lot more experts rather than hire someone into a state job that we'll only need for a few months or years," said Jeffrey Barker, the authority's deputy director for communications. But Barker acknowledges it's a challenge to keep tabs on them all.
Escalating spending
The California High-Speed Rail Authority was created by the state Legislature in 1996 to develop a high-speed train system. In its first decade, only twice did the agency's annual budget exceed $4 million a year -- enough to employ a handful of staff, cover administrative expenses and hire consultants to do the heavy lifting.
That included a preliminary business plan at a tab of about $5.4 million between 1997 and 2000; and a statewide environmental assessment that totaled more than $17 million between 2000 and 2006.
Between 1997 and 2007, the authority received more than $32 million from the state's Public Transportation Account, which is fed by sales taxes on gasoline and diesel. About $11 million more came from other state transportation accounts. A little more than $4 million came from federal transportation trust funds.
Intensified planning over the past several years has ramped up the authority's spending dramatically. As construction approaches, the agency's budget rocketed from less than $5.2 million in 2005-06 to more than $220 million in the 2010-11 budget year that ended June 30.
The acceleration has been sharpest since California voters approved Proposition 1A in 2008. The bond measure provides up to $9 billion for construction of the statewide train system. Since Prop. 1A was approved, nearly $400 million in bond money has been allocated to the authority for its operations. The federal government also kicked in more than $144 million in 2010 and 2011.
Tim Sheehan is a business reporter and covers high-speed rail for The Fresno Bee. The reporter can be reached at tsheehan@fresnobee.com or (559) 441-6319. This story resulted from a partner