Assembly Acts To End Independent Rail Authority
Posted: 5:55 pm PDT June 3, 2011
SACRAMENTO -- The state Assembly on Friday joined the Senate in tightening oversight of the state's high-speed rail project, voting to create a department to run a system that is expected to cost more than $43 billion. The Assembly voted 50-16 to place the rail project under a new Department of High-Speed Trains within the existing Business, Transportation and Housing Agency. The current board, now largely independent and seen by supporters as free of many bureaucratic constraints, would have an advisory role and set some policies. Democratic Assemblywoman Cathleen Galgiani, of Livingston, said her AB145 would ensure sufficient oversight of the project, intended to link San Francisco with Los Angeles and Anaheim at speeds of up to 220 mph. The bill goes to the Senate, which passed a similar bill Wednesday. That bill, SB517, placed the authority board within the same state agency, ended the terms of its board members early and changed the way they are selected. The tinkering by lawmakers comes amid rising criticism of the project, which under the terms of federal grants is supposed to start construction in the Central Valley near Fresno by September 2012. An outside oversight committee and the state's legislative analyst have questioned the costs and operations of the existing rail authority. The analyst's office said the project should be halted if it can't get federal waivers to delay construction and consider starting construction closer to a coastal city. It also called for moving authority over the project into a new unit of the state Department of Transportation. Assemblywoman Bonnie Lowenthal, a Long Beach Democrat and co-author with Galgiani of the bill passed Friday, said the changes were needed to assure the project is properly managed "as it evolves from concept to reality." Others said the concept itself is a loser, doomed to cost overruns and long-term debt. "Putting this under another bureaucracy is not the answer," said Assemblywoman Diane Harkey, a Dana Point Republican. She argued that California should halt the project before construction starts because it can't count on the federal government or private companies to foot the bill, which would leave the state's taxpayers on the hook and send debt soaring. The state's voters approved $9 billion in bonds for high-speed rail in 2008, but the most recent estimates to build the first phase of the project -- linking Anaheim and Los Angeles through the Central Valley to San Francisco by 2020 -- are at least $43 billion. Even if that price is accurate, extending the system to San Diego and Sacramento would boost the price more. "Don't fool yourself that you are going to get money from the federal government" beyond the roughly $3.5 billion already awarded, Harkey said. "The private market is not going to come forward until a route is profitable." The high-speed rail system in France runs with a profit margin of 25 percent and the one on Japan at 50 percent, Galgiani responded. The California High-Speed Rail Authority has argued in legislative committees against restructuring bills, saying they add wasteful layers of bureaucracy and impede efforts to forge agreements with private companies that could help finance the project. "The authority will continue to work with the Legislature to ensure the planning and implementation of the state's high-speed rail system moves forward," said Rachel Wall, spokeswoman for the authority, after Friday's vote. The Assembly vote came a day after the rail authority board elected a new head. Meeting in Sacramento on Thursday, the authority chose former Assemblyman and federal prosecutor Tom Umberg as its chairman. Umberg, a Santa Ana Democrat who served three terms in the Assembly and was appointed to the rail board in 2008, replaced chairman Curt Pringle, whose two-year term expired. Umberg is an attorney specializing in government policy and regulatory matters with Manatt, Phelps & Phillips LLC. He was out of the office Friday and could not be reached for comment.
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