High-speed rail financial blueprint on to lawmakers

The Fresno BeeApril 12, 2012 

— SAN FRANCISCO -- A financial blueprint for linking the San Joaquin Valley to Los Angeles by high-speed trains within 10 years was approved Thursday by the California High-Speed Rail Authority.

The authority's latest business plan, which calls for the eventual construction of a system that connects San Francisco and Los Angeles by way of the Valley, now heads for the Legislature, which must decide whether it will approve using billions in state bond funds for the initial construction between Madera and Bakersfield.

Thursday's board meeting here also marked the possible emergence of a new voice in the contentious high-speed rail debate: young professionals who say the high-speed train represents a transportation choice for their future and urged the authority to approve the plan.

The business plan calls for extending the first construction segments northward to Merced, where the system would link with upgraded and improved Amtrak service to Sacramento and the Bay Area, and southward toward Los Angeles. The southern extensions would head southeast from Bakersfield across the Tehachapi Mountains to Palmdale before turning southwest into the San Fernando Valley.

Until high-speed trains begin running in 2022 from Merced to Burbank, Amtrak trains would be able to run on the dedicated high-speed tracks through Merced, Madera, Fresno, Kings, Tulare and Kern counties. That would free up freight railroad tracks -- now shared with Amtrak -- to handle more cargo without conflicting with passenger trains, authority Chairman Dan Richard said.

In November, an earlier version of the business plan estimated that it would cost more than $98 billion to build a 520-mile line of dedicated, electrified tracks that would be used only by high-speed trains from downtown San Francisco to downtown Los Angeles and on to Anaheim. The plan approved Thursday lops about $30 billion off that price tag. At $68.4 billion, the new version realizes most of its savings by calling for a "blended system" in which high-speed trains would share tracks or right-of-way now used by commuter trains in the Bay Area and Los Angeles Basin.

Another fundamental change is the identification of state "cap and trade" money from the sale of air-pollution credits to industries as a source of money to continue building the project. That provision is intended to answer concerns about how the authority would pay to build beyond the Valley.

The Obama administration has pledged $3.3 billion toward construction starting in the Valley, and the business plan anticipates $20 billion or more in additional federal funding over the next decade. Republicans in Congress, however, have blocked future money for high-speed rail.

Ridership has been a third major concern of critics who fear that too few people will buy tickets for the system to pay its own way, requiring subsidies at the expense of taxpayers.

Kurt Ramey of the accounting firm KPMG, consulting for the rail authority, said that even at the lowest projected ridership levels, the system should generate an operating profit even in its first year.

"The break-even point for revenue is well below the low estimates," Ramey said. With the low ridership and revenue estimates being based on factors that are unfavorable to train travel -- including gasoline prices of $2.60 a gallon in 2022 and airfares that remain at current rates -- the proposed system "just looks like it's got some room in operating performance to it."

Richard, the authority's chairman, said he hopes the plan addresses concerns expressed by legislators over the past five months as they prepare to debate Gov. Jerry Brown's request for $2.7 billion from Proposition 1A in the 2012-13 state budget to begin construction next year. Prop. 1A, approved by California voters in 2008, authorized $9 billion in bonds to help build high-speed rail in the state.

"A lot of what's in here is the result of criticisms and suggestions that have come not only from the Legislature, but also from their peer review group and from the Legislative Analyst's Office," Richard said. "I don't want to be presumptuous, but it is my hope that they will look at this and say, 'OK, this makes more sense.'"

Authority members said they took those often-harsh comments to heart as they revised the November plan. The vote Thursday was 6-0 with two members absent.

"The most significant changes, the blended approach in particular, were directly tied to external recommendations to the authority," said Jeff Morales, an engineer for Parsons Brinckerhoff, the consulting company that is serving as the authority's project manager.

But Richard acknowledged that high-speed rail could remain a tough sell in the state Capitol.

"It's partly a matter of how broadly the question is defined," Richard said. "Are we sitting down to decide the fate of a $68 billion high-speed rail program? Or should the state spend $2.7 billion in bond money to get $3.3 billion in federal money to build this piece as it now fits into this business plan? That's a much more narrow question, and a more easily digestible question."

If legislators say no to the budget request, Richard said, it would represent a "fundamental setback" for the future of high-speed trains in the state. "If the Legislature decides that way, we would not be building high-speed rail, at least not for the foreseeable future."

The federal money would disappear because it requires that California put up its own matching funds. And, Richard added, budding interest among the private sector -- including companies that would pay for the rights to operate the system -- would also go away.

Several key legislative hearings will be held in the coming days that could provide a barometer of the project's future. The state Senate's transportation committee will meet Tuesday, and high-speed rail committees for both the Assembly and Senate will meet Wednesday.

Many of the speakers here Thursday praised the new business plan's move toward a blended system that could commence operation within 10 years.

But Ted Crocker, co-founder of a group called High-Speed Boondoggle, described the blended system as "a prime example of false economy."

"This is not a money saver," Crocker told the authority board. "When you do something half-assed to save money or because you don't have the money, it always costs more in the end. Yet here you are, jumping on the blended-approach bandwagon."

Frank Oliveira, a Hanford-area farmer who is among the leaders of CCHSRA, a Kings County group that opposes the proposed route through Kings County, said he doesn't believe the revised business plan meets the requirements of Proposition 1A, the high-speed rail bond approved by California voters in 2008.

"This plan is better, faster and cheaper, but like the previous business plan, it fails to comply with Prop. 1A on cost, funding, timing and trip time," Oliveira said. "That said, approving this plan as drafted would be dishonest and appropriately challenged. Do the right thing and comply with the law, or don't to this project."

While Oliveira and other critics have become fixtures at board meetings to voice concern about the project's cost and its effects on farmland in rural areas, a group of four young Fresnans said they see the fast trains as important investments for future generations.

"You do have support" in the Valley, said Kristen Kawaguchi, 25. "It's the teenagers, the young professionals and the 30-somethings who will need this system in the future. This will change our lives."

Kawaguchi works for the Fresno County Economic Development Corporation, which has long favored the high-speed rail program. She was joined by fellow EDC employees Fernando Santillan, 26; David Kennedy, 25; and Matt Severson, 23. The quartet said their support is independent from their workplace allegiances.

"We've decided to start advocating on behalf of people like us, young professionals in their 20s who so far haven't had much of a voice in this," Kennedy said. "We're working to fill that void."

Santillan said that within the next few weeks, he expects to announce a formal group of young professionals from the Valley to weigh in more actively as the debate heats up in Sacramento. "We can't take for granted that this is a done deal," he said.

The reporter can be reached at tsheehan@fresnobee.com or (559) 441-6319.

The Fresno Bee is pleased to provide this opportunity to share information, experiences and observations about what's in the news. Some of the comments may be reprinted elsewhere in the site or in the newspaper. We encourage lively, open debate on the issues of the day, and ask that you refrain from profanity, hate speech, personal comments and remarks that are off point. Thank you for taking the time to offer your thoughts.

Commenting FAQs | Terms of Service