California High-Speed Rail: A Legacy or a Pipe Dream?


     SACRAMENTO (CN) - When California lawmakers approved funding for the state's high-speed rail project - by one vote - Gov. Jerry Brown lauded them for their "bold action." But the project may never leave the station.
     Brown, perhaps seeking to leave the final office of his long and meandering political career with a legacy other than overspent budgets, trigger cuts and tax hikes, has put all his eggs into the high-speed rail basket. Approved by voters as bond measure Proposition 1A in 2008, the project is ambitious - a first-in-the-nation network linking Los Angeles and San Francisco with trains that can reach 220 miles per hour.
     It's a huge public works project. The finished 800-mile network would connect 24 cities throughout California.
     The California High-Speed Rail Authority (CHSRA) claims riders will be able to go from Los Angeles to San Francisco in 2 hours and 40 minutes, with spur lines to Sacramento and San Diego.
     It's also hugely expensive. Sold to voters with a $42.6 billion price tag in today's dollars for a single line from Anaheim to San Francisco, CHSRA now estimates the cost of that leg at $65 billion, and potentially as high as $100 billion, when adjusted for inflation. The agency acknowledged that the price may balloon to nearly $120 billion, depending on final route and construction costs.
     Problems and controversy dogged the project even before voters approved the $10 billion bond measure. In 2008, a coalition of taxpayer groups led by the Howard Jarvis Taxpayers Association accused the CHSRA of overestimating everything - ridership, top speeds, safety goals, CO2 reductions - except the true cost.
     In early 2011 a Legislative Analyst's Office report said that while high-speed rail could be developed successfully, the Legislature would be wise to shift responsibility away from CHSRA and fund only its administrative tasks.
     By the end of 2011, however, the office declared CHSRA's development plan illegal.
     According to that report, the voter-approved measure "identifies certain requirements that must be met prior to requesting an appropriation of bond proceeds for construction. These include identifying for a corridor, or a usable segment thereof, all sources of committed funds, the anticipated time of receipt of those funds, and completing all project-level environmental clearances for that segment."
     The analyst's office report continued: "Our review finds that the funding plan only identifies committed funding for the ICS (San Joaquin Valley segment), which is not a usable segment, and therefore does not meet the requirements of Proposition 1A. In addition, the [CHSRA] has not yet completed all environmental clearances for any usable segment and will not likely receive all of these approvals prior to the expected 2012 date of initiating construction."
     In January this year, an independent peer review panel created to safeguard the public interest recommended that the Legislature not approve issuing bonds to fund the project. According to the panel, forging ahead with the high-speed rail without credible sources of funding presented an unacceptable financial risk to California.
     Despite this, Gov. Brown and legislators moved the plan forward with last week's vote to spend the first $8 billion - mostly federal money - to build a 130-mile segment in the middle of the network, between the Central Valley cities of Madera and Bakersfield.
     If lawmakers had recessed for summer break before approving the expenditure, the billions pledged by the Obama administration for the nation's first high-speed rail network would have been lost, according to Brown's State of the State address this year.
     Senate Pro Tem President Darrell Steinberg, D-Sacramento, called the vote a turning point for California, a state battered by economic malaise, shrinking revenue and an unemployment rate more than two points higher than the national average. "We decided to say yes to hope, yes to progress, yes to the future," Steinberg said in a statement.
     Brown and some legislators think the rail project will return the shine to the Golden State, spurring economic growth not seen since World War II. The rail authority agrees: According to its website, the project will create up to 100,000 construction-related jobs for every year of construction. It claims economic growth from the project will bring 450,000 permanent new jobs statewide over the next 25 years.
     The agency's reports of environmental benefits are impressive. In its Environmental Impact Report (EIR) for the Central Valley leg, CHSRA says the system will use one-third of the energy used by airplanes and one-fifth of the energy used by family cars. The agency touts improved air quality: 12.7 billion fewer barrels of foreign oil used yearly by Californians, and a 12 billion pound reduction in greenhouse gas emissions every year because of high-speed rail.
     "Not only will California be the first state in the nation to build a high-speed rail system to connect our urban centers, we will also modernize and improve rail systems at the local and regional level," CHSRA chair Dan Richard said in a statement after last Friday's vote. "This plan will improve mobility for commuters and travelers alike, reduce emissions, and put thousands of people to work while enhancing our economic competitiveness."
     But none of CHSRA's glowing reports or public statements mention another specter threatening to derail the project: lawsuits.
     Since voters approved the project, no fewer than 12 legal complaints have been filed in courts around California - three this year. Most of the complaints mention environmental matters, with a similar theme: Not in My Back Yard.
     The three lawsuits filed this year claims that CHSRA sidestepped federal and state environmental protection laws in approving the Central Valley leg of the system.
     The agency tells a different story on its website, claiming it is implementing "the most thorough environmental review process in the nation."
     The most recent lawsuit, filed June 4 in Sacramento Superior Court by Timeless Investment Inc., Millennium Acquisitions, Horizon Enterprises and Everspring Alliance, claim that CHSRA approved the Fresno-to-Merced leg by certifying an inadequate Environmental Impact Report. Doing so violates California's environmental quality law, or CEQA, the plaintiffs say.
     Specifically, they say the rail authority "did not adequately and accurately describe the project, did not give adequate consideration to the project's impacts on the environment, failed to propose mitigation measures to address the project's significant impacts, failed to provide a fair and adequate consideration of feasible alternative routes to the approved project, and failed to provide fair adequate responses to comments on the draft EIR/EIS submitted by other public agencies, as well as concerned organizations and individuals, including petitioners."
     The companies object to CHSRA's choice of a "hybrid alignment," which follows Union Pacific and BNSF tracks from Fresno to Merced. And they criticize the agency's refusal to adopt a route along Interstate 5 - a common theme among the recent spate of legal actions.
     A second complaint, also filed in June, also alleges CEQA violations. In this action, private farms are joined by government agencies, including Madera County, the Chowchilla Water District, and the Farm Bureaus in Madera and Merced counties.
     Again, petitioners criticize CHSRA's violation of environmental law and its abuse of discretion in approving the 75-mile Fresno to Merced section.
     "[CHSRA] prejudicially abused their discretion, in violation of CEQA, by failing to consider the project as a whole, of which this section is but a piece. The whole of the project that should have been analyzed in this FEIR includes the proposed east-west connection to the Bay Area sections of the project. Respondents improperly deferred comparative analysis of three possible alternative east-west wye [sic] connections until a later stage of environmental review. In doing so, respondents failed to conduct an appropriate comprehensive environmental review, as is required by CEQA, for all project infrastructure that will significantly impact the Merced to Fresno region," the lawsuit states.
     Again, CHSRA's refusal to look at an I-5 alternative is addressed, with petitioners claiming that public comments urged the rail authority to consider the I-5 corridor. They claim that CHSRA "improperly rejected feasible alternatives from the alternatives analysis, and analyzed only a narrow range of alternatives that would each have significant and unavoidable impacts."
     The small city of Chowchilla's complaint against the rail authority, filed the same day as Madera County's action, paints an even more frightening picture. It claims that CHSRA's plan will split the town in half, and the agency refuses to do anything to mitigate it.
     Chowchilla also claims that environmental reports fail to address noise, dust generated by trains, or any of its residents' comments. CHSRA also failed to address the trains' impact on the city's traffic projects or school bus routes, though it did so for the city of Madera, the city complains.
     "No evaluation is made of blight impacts from potential population flight due to noise, traffic impacts, severance of town into two parts, and other negative impacts on Chowchilla's way of life, as was done for the City of Madera," the city says in its complaint.
     Chowchilla also claims that by adopting the 2012 business plan of "blending" high-speed trains and old rail systems on shared infrastructure, CHSRA voided the 7-year-old EIR. CEQA allows use of environmental reports more than 5 years old "only if there have been no substantial changes to the circumstances under which the master EIR was certified, or that no new information has become available," the city says in its complaint.
     "The Authority's 2012 plan envisions changes which include, in part, a much different 'blending' of High Speed Train and local systems than that upon which the master, 2005 Statewide Program EIR/EIS, was based," the city claims.
     The common denominator among the three recent complaints filed against the rail authority, more than CEQA violations and allegations of not-so-public public decision-making, is Interstate 5.
     According to a Los Angeles Times article on Monday, the effort to route the network through the more-populated center of the Valley rather than along I-5 was politically motivated from the beginning.
     Desperate for federal funding, congressmen from districts from Bakersfield to Stockton pushed for the State Route 99 corridor plan and received then-House Speaker Nancy Pelosi's blessing. According to the Times, political experts agree that bypassing Fresno - California's fifth-largest city - would have killed any deal for federal funding.
     But the Route 99 corridor requires more track and more stations, stops which will keep trains from traveling the distance required to reach the system's touted 220 mph. The decision to blend CHSRA and old rails will also hamper speed. And it's a decision that, while it might save some money down the road, cost CHSRA important, and much-needed, outside partnerships.
     Japan Central Railway, which runs the famous Shinkansen bullet train in Japan, bailed on California's project after CHSRA decided on the rail-blending plan. And, according to the same LA Times story, the rail authority told the SNCF - which operates France's famous TGV network - that its help and opinions weren't wanted.
     In 2010, SNCF offered California its expertise in building and operating the most successful high-speed railway in the world. The company suggested a competitive bidding process to partner with it or another experienced HSR builder, to identify a profitable route, keep building costs down, develop realistic ridership figures and attract private investors: all of which are requirements of voter-approved Prop 1A, and all of which have proven difficult for CHSRA.
     SNCF recommended running the bullet train along I-5 through the Central Valley, where the rail authority could use state-owned and utility easements to avoid the costly and contentious eminent domain battles brewing along the Route 99 corridor. The company says it told the rail authority that I-5 is also the shortest, fastest and cheapest route to link San Francisco and Los Angeles, and estimated the cost of the link at $38 billion - far less than the CHSRA's wildly fluctuating $68-100 billion-plus estimates.
     But in late 2011 CHSRA told the French company it wasn't interested in partnerships, and the agency's chairman said in a statement that it had never intended to have private companies involved in the development stage.
     "Our business plan is predicated on having private operations after the initial system is built. Turning the design of the system over to a private operator would have been a bad financial move for California taxpayers," CHSRA Chairman Dan Richards said in a statement. He added: "SNCF's proposal was self-serving and not in the public interest."
     For now, the rail authority plans to plunge develop along the Route 99 corridor despite the lawsuits, rising costs and a target completion date that's been pushed back from 2020 when voters approved Proposition 1A to at least 2028 today.
     Voters have soured on the project, with an LA Times poll finding that 59 percent of voters would reject Prop 1A if it were on the ballot today.
     And, as the plaintiffs in the Madera County action point out in their complaint, Sacramento judges have twice ruled in favor of a broad collection of Bay Area cities and organizations, and forced the CHSRA to rescind prior approvals and conduct new environmental reports. A ruling in February ordered the rail authority to decertify EIR approvals for the entire San Francisco-area network, according to the Madera complaint.
     Nor is the language of Prop. 1A working in CHSRA's favor, which prohibits starting work on the rail network in the middle of nowhere and building "non-usable segments." In fact - as the LA Times reported this week -even the French are scoffing at California's fledgling rail authority.
     "Simply put, the California High-Speed Rail Authority has a wish list, not a plan," SCNF said in a presentation. "This lack of an investment-grade business plan is a deadly defect, particularly in a project that by law cannot rely on government subsidies for its operation and maintenance."