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Lawmakers Probe Bullet-Train Switcheroo

SACRAMENTO, Calif. (CN) - At a California Assembly oversight hearing Monday on the status of the bullet train project, legislators questioned the High-Speed Rail Authority's major shift to the plan and how the decision will affect the project's cost and schedule.

Committee Chair Jim Frazier kicked things off by noting that the release of the California High-Speed Rail Authority's 2016 draft plan earlier this year "signaled a shift, a big, big change in expectations."

That shift involves the authority's decision to first build the stretch from the Central Valley to San Jose, and not to Burbank as originally planned. The authority claims building the Bakersfield-to-San Jose phase first will lower the estimated cost of the project from $68 billion to $64 billion.

But critics of the switch-up have said ending that stretch of the bullet train in the Central Valley town of Shafter - population 17,000 and 18 miles north of Bakersfield - is not a common-sense choice, as many more potential passengers will take the train to or from much more populated Southern California.

The authority is mandated to release a new business plan every two years and it must be approved by the Legislature.

Frazier noted he recently toured part of the train route already under construction.

"I've seen how this project has put people to work and it's impressive, but it won't be easy and it definitely won't be cheap," Frazier told the committee.

Committee members heard from multiple members of the authority as well as other regional transportation representatives from across the state. The committee also heard from the nonpartisan Legislative Analyst's Office, which recently released a 12-page report identifying large holes in the train's $64 billion finance plan.

"We could easily spend several days of hearings, but I don't think you have that many sleeping bags," Frazier joked. "Past Legislatures have shown us this can turn into a he-said-she-said brawl."

Authority chair Dan Richard said the high-speed rail board is "cognizant" of the financial risks associated with the project, but that "the endeavor is one of solving problems" and that "there are going to be things that go wrong and are unexpected."

Richard reiterated that while the construction plan may have changed, the shift is about sequencing.

"No part of the state will be left behind. This represents our best thinking to accomplish that objective in sequence. We cannot reach LA with those available funds at this time, but can make an important connection to Silicon Valley. For the first time, we can look at you and take a big step to accomplish this program," Richard said.

Jeff Morales, executive director of the authority, noted that environmental approvals are currently underway and they hope to complete the first stretch by 2024.

But Jessica Peters with the Legislative Analyst's Office called the committee's attention to "uncertainties in funding" identified by her office having to do with cap-and-trade funds. The funds come from state-run auctions where businesses subject to a cap on their greenhouse gas emissions can buy allowances to continuing emitting at reduced levels.

At least half of the cap-and-trade funds would come in after 2020 and would need the Assembly's approval to be used for completing the first leg of the project, Peters said. She noted that there is currently a $40 billion gap in funding to complete Phase 1 of the bullet train.

While acknowledging that the $10 billion in lower construction costs "has some merit," Peters told the committee that the authority's previous plan "would have connected a higher population of the state and had higher projected ridership."

Peters and other representatives told the committee that additional funds should be identified to connect the Central Valley line all the way to downtown Bakersfield in order to accommodate the expected hordes of daily passengers.

The Legislative Analyst's Office also raised concerns about ensuring adequate legislative oversight of the project, calling for giving more detailed information to legislators when comparing how the plans have changed.

"The scope has changed; parts have been taken out and added. It's difficult to track what was originally presented to the Legislature and what has changed," Peters told the committee.

Authority secretary Brian Kelly disagreed with Peters over the "uncertainties" involved with securing cap-and-trade funds for the bullet train project beyond 2020. He noted the program is necessary for meeting state-mandated emissions guidelines and the authority's draft plan assumes the "continued availability of such funds."

The high-speed rail project receives one-fourth of cap-and-trade dollars earmarked for improving transportation, according to Kelly.

Southern California Association of Governments executive director Hasan Ikhrata, who represents the region losing out on high-speed rail connections for now, told the committee the Southern California portion of the project "is not shovel-ready."

Ikhrata pointed out he represents nearly half the state's population in six counties and 191 cities.

"All we're asking is that the commitment is there. These projects are not shovel-ready; a lot of them are in the engineering and environmental phase. I hope the final business plan is clear about that," Ikhrata said.

In a survey conducted by the Public Policy Institute earlier this month, the majority of Californian voters still favor building high-speed rail, eight years after voters passed the $10 billion bond greenlighting the project. A little more than 50 percent of adults and 44 percent of likely voters continue to favor building the bullet train. A California High-Speed Rail Authority board meeting is scheduled for April 12 in Los Angeles, and the final 2016 plan will be adopted by the authority in May.

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