Jeffrey Morales, the California High-Speed Rail Authority's new executive director, will earn $365,000 a year when he starts the job June 18, according to a contract approved Friday by the authority's board in Sacramento.
That salary could be sliced by 5% or so, however, if the state imposes executive pay cuts as a money-saving measure.
Morales, once a director of the California Department of Transportation, is a vice president with Parsons Brinckerhoff, the consulting company that manages the authority's statewide high-speed rail efforts. Parsons Brinckerhoff is being paid $199 million under a seven-year contract that expires in 2013.
Morales' hiring stirred critics who said his ties to the company prompt conflict-of-interest worries.
David Schonbrunn, president of the Transportation Solutions Defense and Education Fund, told the authority that it "is about to make one of [Parsons Brinckerhoff's] most loyal employees its paymaster."
The hiring "abandons any pretense that this is anything but a Parsons Brinckerhoff operation," he added. "What interest will someone vested in the Parsons Brinckerhoff retirement system have for the taxpayers when they are overseeing Parsons Brinckerhoff?"
"The conflict of interest is so blatant, this must not go forward," said Schonbrunn, whose group opposes the authority's planned route through the Pacheco Pass.
Another critic of the authority, California Rail Foundation president Richard Tolmach, said the choice of Morales reinforced "a long tradition of inside dealing within the authority."
"An outside observer could be excused for thinking the CEO's job is to grease payments for Parsons Brinckerhoff," Tolmach said. "As capable as Mr. Morales is, this is just another negative reflection on the project of inside dealing."
The authority's chairman, Dan Richard, defended Morales' selection. "I understand that people can look at historical relationships," Richard said. "But the policies of the state of California will be carried out by this board. The board is responsible to the governor, the Legislature and the people. The executive director and his staff are responsible to this board."
The authority's chief counsel and interim chief, Thomas Fellenz, said he consulted with the state Attorney General's Office about Morales and his work with Parsons Brinckerhoff. "Based on their advice and my research, I've determined there is no conflict of interest," Fellenz said.
The package approved by the authority's board includes a potential bonus of $25,000 for Morales at the end of his first year on the job if he satisfies a set of performance standards.
Those standards, Richard said, include establishing a management plan to oversee the authority's contractors; successfully filling a raft of vacant positions among the agency's senior and staff leadership; appointment of a risk-management officer; successfully awarding contracts for the first construction projects at or below engineering cost estimates; meeting goals for including small businesses and businesses owned by minorities, women and disabled veterans in construction contracts; and making major improvements to the agency's outreach to the public, communities, property owners and other stakeholders along the route.
The authority's board voted May 29 to hire Morales to replace Roelof van Ark, who stepped down from the job in March.
Morales led the California Department of Transportation from 2000 to 2004. After leaving Caltrans, Morales was hired by Parsons Brinckerhoff as a senior vice president. As a Parsons Brinckerhoff employee, Morales has worked closely with the rail authority and was instrumental in developing the agency's newest business plan.
Also on Friday, California Transportation Commission executive director Bilma Rhinehart unveiled a proposal for spending more than $930 million from Prop. 1A, the $9.9 billion high-speed rail bond approved by California voters in 2008.
While $9 billion of the Prop. 1A money is reserved for use in planning and building high-speed train lines, $950 million was earmarked for improvements to other passenger train networks that ultimately would connect to the high-speed system.
In the Central Valley, about $50 million would be spent by Caltrans to improve the Burlington Northern Santa Fe railroad tracks now shared by the Amtrak San Joaquin passenger trains. More than $40 million would allow Caltrans to build an 8.4-mile segment of double tracks between LeGrand and Planada in Merced County, along with overcrossings and improvements to signals and crossings. Another $9.8 million is proposed for modern train-control equipment in the Amtrak San Joaquin Corridor.