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Will a new oversight position help California's high-speed rail plans get on track?

A new state-level position will oversee development of California's high-speed rail, which has been plagued with cost overruns. Courtesy California High-Speed Rail Authority.

After a decade of cost, schedule, technical, regulatory, personnel and legal problems, the California high speed rail project will be getting an inspector general soon as part of a deal between Gov. Gavin Newsom and the Legislature.

The new investigative position is intended to intensify oversight and improve performance of the $105 billion railroad project. Enthusiasm for the change is high, but whether it will fix everything is uncertain, even among state leaders.

"There is nothing but problems on the project," said Speaker Anthony Rendon, a Lakewood Democrat. "The inspector general provides oversight and some sense of what is going on with management. That has been missing for a long time."

But will it work?

"We don't know," Rendon said. "We need to be vigilant. The IG will provide what we need to carry that out."

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Until now, a variety of outside agencies have advised the Legislature and the governor on the project, resulting in recommendations that often were not carried out. In some cases, they required changes that nobody had the power to make and in other cases carried too high a political price with outside interest groups.

In 2012, the Legislative Analyst's Office recommended against an appropriation to start construction, arguing the California High-Speed Rail Authority wasn't prepared. Gov. Jerry Brown lobbied the Legislature for it and won. Now, many agree the LAO was right. The Peer Review Group has long warned that the state needs a secure financing plan. But the project proceeds without one.

Such outside advisors have lacked the resources and the mission to intensively delve into the day to day work of the rail project, its army of consultants and its stable of international contractors.

"The IG will bring a level of oversight that we have not had before," said Helen Kerstein, the lone bullet train expert at the Legislative Analyst's office. "This is very powerful."

The law creating the inspector general lists a wide range of authorities the new office will have: full access to all the project's records; authority to review contracts and change orders; and issuing subpoenas for witnesses and records, among much else.

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"It is not some person sitting in a basement," said Laura Friedman, chair of the Assembly Transportation Committee who is widely credited with pushing through the inspector general idea. "It is going to be staffed. It is going to be real."

That would include investigating waste, fraud and abuse, as well as working with law enforcement and prosecutors, she said.

What the position might look like

How big an organization will it require? So far, there is no budget. But the inspector general for the high-speed rail project would be paid the same as the inspector general for the California Department of Corrections and Rehabilitation, who makes $192,382 and will have a staff of 212 in the coming fiscal year.

Fred Weiderhold, a West Point civil engineer who served for 20 years as Amtrak's inspector general, said if he were taking the California job, he would want to start with a staff of at least 50 people, half auditors, 30% investigators and 20% inspectors and evaluators.

"It is a daunting job," Weiderhold said about the California project. "You have to follow the money. I guarantee you that on any project this large you will have fraud, product substitution and waste."

By the time Weiderhold left as Amtrak inspector general, he had helped put several hundred people in jail and caused 2,000 people to be fired.

The high speed rail inspector general will not have authority to control actual spending, a decision that was considered and rejected by Newsom.

A more aggressive plan was followed by the Massachusetts Bay Transportation Authority in 2015, when it faced a breakdown in Boston area service and spiraling capital cost overruns. State lawmakers fired the authority's existing board and installed a new Fiscal and Management Control Board.

Estimated construction costs on a 4.3 mile extension of a light rail line had grown from $1 billion to $2 billion, said Joe Aiello, the board's chair. The board stopped work, threw out existing contractors and put in an independent team to evaluate what was going wrong, he said.

"There was outrageous scope creep," Aiello said.

By the time the board was dissolved last year, the construction cost had been hammered back down to $1 billion, he said.

State still needs actual train

Even while increasing oversight, the deal doubles down on the bullet train mission. An appropriation will release $4.2 billion from a 2008 bond fund, but only for completing a 171-mile Central Valley segment from Bakersfield to Merced.

"They need to deliver something soon that the public understands is a train," Friedman said.

Newsom met another Assembly demand by adding $3.5 billion for transit projects in the Bay Area and Southern California, as well as $300 million to fix an Orange County Amtrak rail that is ready to fall into the Pacific.

"You can't have enough oversight on a project like this," Friedman said. "This is not a minor change. It will be a very big change for the project."

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Email Ralph Vartabedian at [email protected]

CalMatters.org is a nonprofit, nonpartisan media venture explaining California's policies and politics. Read more state news from CalMatters here.

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Will a new oversight position help California's high-speed rail plans get on track?

by Ralph Vartabedian / CalMatters

Uploaded: Mon, Jul 18, 2022, 9:22 am
Updated: Tue, Jul 19, 2022, 9:41 am

After a decade of cost, schedule, technical, regulatory, personnel and legal problems, the California high speed rail project will be getting an inspector general soon as part of a deal between Gov. Gavin Newsom and the Legislature.

The new investigative position is intended to intensify oversight and improve performance of the $105 billion railroad project. Enthusiasm for the change is high, but whether it will fix everything is uncertain, even among state leaders.

"There is nothing but problems on the project," said Speaker Anthony Rendon, a Lakewood Democrat. "The inspector general provides oversight and some sense of what is going on with management. That has been missing for a long time."

But will it work?

"We don't know," Rendon said. "We need to be vigilant. The IG will provide what we need to carry that out."

Until now, a variety of outside agencies have advised the Legislature and the governor on the project, resulting in recommendations that often were not carried out. In some cases, they required changes that nobody had the power to make and in other cases carried too high a political price with outside interest groups.

In 2012, the Legislative Analyst's Office recommended against an appropriation to start construction, arguing the California High-Speed Rail Authority wasn't prepared. Gov. Jerry Brown lobbied the Legislature for it and won. Now, many agree the LAO was right. The Peer Review Group has long warned that the state needs a secure financing plan. But the project proceeds without one.

Such outside advisors have lacked the resources and the mission to intensively delve into the day to day work of the rail project, its army of consultants and its stable of international contractors.

"The IG will bring a level of oversight that we have not had before," said Helen Kerstein, the lone bullet train expert at the Legislative Analyst's office. "This is very powerful."

The law creating the inspector general lists a wide range of authorities the new office will have: full access to all the project's records; authority to review contracts and change orders; and issuing subpoenas for witnesses and records, among much else.

"It is not some person sitting in a basement," said Laura Friedman, chair of the Assembly Transportation Committee who is widely credited with pushing through the inspector general idea. "It is going to be staffed. It is going to be real."

That would include investigating waste, fraud and abuse, as well as working with law enforcement and prosecutors, she said.

How big an organization will it require? So far, there is no budget. But the inspector general for the high-speed rail project would be paid the same as the inspector general for the California Department of Corrections and Rehabilitation, who makes $192,382 and will have a staff of 212 in the coming fiscal year.

Fred Weiderhold, a West Point civil engineer who served for 20 years as Amtrak's inspector general, said if he were taking the California job, he would want to start with a staff of at least 50 people, half auditors, 30% investigators and 20% inspectors and evaluators.

"It is a daunting job," Weiderhold said about the California project. "You have to follow the money. I guarantee you that on any project this large you will have fraud, product substitution and waste."

By the time Weiderhold left as Amtrak inspector general, he had helped put several hundred people in jail and caused 2,000 people to be fired.

The high speed rail inspector general will not have authority to control actual spending, a decision that was considered and rejected by Newsom.

A more aggressive plan was followed by the Massachusetts Bay Transportation Authority in 2015, when it faced a breakdown in Boston area service and spiraling capital cost overruns. State lawmakers fired the authority's existing board and installed a new Fiscal and Management Control Board.

Estimated construction costs on a 4.3 mile extension of a light rail line had grown from $1 billion to $2 billion, said Joe Aiello, the board's chair. The board stopped work, threw out existing contractors and put in an independent team to evaluate what was going wrong, he said.

"There was outrageous scope creep," Aiello said.

By the time the board was dissolved last year, the construction cost had been hammered back down to $1 billion, he said.

Even while increasing oversight, the deal doubles down on the bullet train mission. An appropriation will release $4.2 billion from a 2008 bond fund, but only for completing a 171-mile Central Valley segment from Bakersfield to Merced.

"They need to deliver something soon that the public understands is a train," Friedman said.

Newsom met another Assembly demand by adding $3.5 billion for transit projects in the Bay Area and Southern California, as well as $300 million to fix an Orange County Amtrak rail that is ready to fall into the Pacific.

"You can't have enough oversight on a project like this," Friedman said. "This is not a minor change. It will be a very big change for the project."

Email Ralph Vartabedian at [email protected]

CALmatters.org is a nonprofit, nonpartisan media venture explaining California's policies and politics.

Comments

What Will They Do Next
Registered user
Old Palo Alto
on Jul 19, 2022 at 1:28 pm
What Will They Do Next, Old Palo Alto
Registered user
on Jul 19, 2022 at 1:28 pm

What a colossal waste of taxpayer money. By the time they finish this project, if they ever do, newer technology will make what they have built obsolete. And, they'll run out of money as costs continue to double in some instances as the article stated. Time to get rid of the people in Sacramento who claim to be governing the state with its citizens in mind. With November elections coming up, your vote can truly make a difference. Think about it.


Resident 1-Adobe Meadows
Registered user
Adobe-Meadow
on Jul 19, 2022 at 6:42 pm
Resident 1-Adobe Meadows, Adobe-Meadow
Registered user
on Jul 19, 2022 at 6:42 pm

A separate topic is the building of a new dam near HWy 152. That is the connecting highway between Merced and Gilroy, 101 and 5. That is also the transition point for the HSR to get from the valley to Gilroy so it can go up to San Jose and SFO. All of these massive efforts seem to be proceeding with no central planning as to how they will all fit in that area. I have no confidence in this state's ability to do anything at this point - all driven by publicity stunts vs good engineering at the state level.

They are also thinking of a pumping station that will move water from the large dam that is at 152 and Hwy 5 and move it to the 101 side to the new dam. But hey - there is the Anderson Dam that they just emptied. That would be easy to fix because it is not a energy producing dam. That flows down to Coyote Creek to San Jose. All od these massive projects seem to be discussed with no connection to the other projects that being planned in that area. They keep trying to isolate the topics so no other connections to the other topics will be addressed.


Annette
Registered user
College Terrace
on Jul 19, 2022 at 7:07 pm
Annette, College Terrace
Registered user
on Jul 19, 2022 at 7:07 pm

Boondoggle from the get-go. The Mercury News ran an article not too long ago that suggested putting HSR back on the ballot to see if CA voters want to continue spending money on this. That seems like a much better idea than building a HUGE forever bureaucracy around something that may either never be delivered or never pencil out b/c it is simply too da*n expensive. And the bureaucracy will only add to the cost.


MyFeelz
Registered user
JLS Middle School
on Jul 19, 2022 at 9:46 pm
MyFeelz, JLS Middle School
Registered user
on Jul 19, 2022 at 9:46 pm

"You can't have enough oversight on a project like this" !!! $$$ and :) :) :) all the way to the bank, for those chosen to be on the oversight committee.

"An appropriation will release $4.2 billion from a 2008 bond fund, but only for completing a 171-mile Central Valley segment from Bakersfield to Merced."

My question is where's the money going to come from to pay people to go from Bakersfield to Merced -- on purpose? I've been to both places. Ain't going back there again.

I'm more than a little bit skeptical about the need to throw more money at this imaginary train.


Leslie York
Registered user
Old Palo Alto
on Jul 21, 2022 at 1:20 pm
Leslie York, Old Palo Alto
Registered user
on Jul 21, 2022 at 1:20 pm

If you want to go from San Francisco, Oakland or San Jose to Fresno, Bakersfield or L.A., HSR can't compete. It will simply be too slow. The airlines will be much faster and cheaper. HSR sounds futuristic but the terrain in CA fights it. It has to go long way around east of the Tehachapis and double back through a 13-mile tunnel through the Pacheco Pass.

Given competitive fares and lackluster ridership, the billions spent on HSR construction will never, ever be recouped and will suck taxpayers dry.

Calif. voters were hoodwinked into approving the bond measure and it needs to be revoted.

Dick Blum, husband of Dianne Feinstein and HSR lead contractor, has passed away. He was doling out "campaign contributions" to Gavin Newsom, which may explain why HSR has never been revoted.


resident3
Registered user
Another Palo Alto neighborhood
on Jul 23, 2022 at 4:50 am
resident3, Another Palo Alto neighborhood
Registered user
on Jul 23, 2022 at 4:50 am

“The airlines will be much faster and cheaper.”

Guess it’s only the boondoggles or corruption that you know that matter. The airlines are “cheaper” only because of perpetual subsidies and bailouts. They deliver less and less and keep asking for more and more money.

I rode Caltrain the other day. It smelled like a locker room, antiquated sad. If money is going anywhere, I’d rather it go to fixing this and will support any option but air. Some of us will settle for clean and not necessarily need or want speed or visions of the Jetsons (which cannot and will never be appropriate for meeting the needs of the public.)

Machines in the air are dirty, loud and will continue to affect the health of populations with much greater damage than ever before and I wouldn’t hold my breath or bet on “technology” saving the day….


Mike Lincoln
Registered user
Old Palo Alto
on Jul 23, 2022 at 2:48 pm
Mike Lincoln, Old Palo Alto
Registered user
on Jul 23, 2022 at 2:48 pm

Unless time is of no matter, most people prefer planes to trains...better service on passenger planes as well.

@resident3:
One should not hold any high expectations when commuting via Caltrains, VTA, or SAMTRANS...it is what it is.


resident3
Registered user
Another Palo Alto neighborhood
on Jul 23, 2022 at 9:58 pm
resident3, Another Palo Alto neighborhood
Registered user
on Jul 23, 2022 at 9:58 pm

@ Mike Lincoln

"most people prefer planes to trains...better service on passenger planes as well."

Given that train transportation options serve very few in the state & most people rely on the 1 car per person formula, it's kind of irrelevant to compare service preferences. For that kind of comparison, better to gauge people's preferences in places where you actually have alternatives. Plus there's generational issues, and income levels.

But just comparing one mismanaged mode of transportation with another I still would prefer trains.


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