High Cost Rail - Part 67 A Million Misteaks

It gets harder and harder to criticize the California High Cost Rail Authority because its public pronouncements get more ridiculous by the month.  In some ways it seems like picking on a defenseless person, but unfortunately for all of us when you line-up supporters like President Obama, Governor Brown, Congresswoman Nancy Pelosi and other lesser big wigs, they are still a threat to our neighborhoods, budget, schools and peace of mind.

So the fiasco of publicizing One Million Jobs from the high-cost rail project only to backtrack a day later and say that they meant one million man-years of work where two-thirds would be "spin-off jobs" at restaurants and retailers played out just before Christmas.  The San Mateo Mercury Times had some fun reporting on it here and then here.

The pull-out quote from Nancy Pelosi in the printed edition was the best

"The facts are clear:  Over 1 million good-paying jobs will be created"

Nevermind that a prediction can not be a "fact" until it happens, one wonders if Pelosi can really even comprehend "1 million" of anything.  As the Times wrote "One million people--more than the combined workforce of San Jose and San Francisco--would have to cram shoulder-to-shoulder just to fit along the rail line between San Francisco and Anaheim."  A real fact would be that if the people where all on the same side of the 520 mile track they would each have 2 3/4 feet of room to work and that would probably be an OSHA violation.

One sane voice appeared in print this week as the following Letter to the Editor ran on Dec. 24

Contrary to Roger Rudick's recent Op-Ed (Opinion, Dec. 11), California's high-speed rail project will do little, if anything, to alleviate local traffic congestion in the Bay Area or the Los Angeles basin. Worse, HSR will soak up public funds that would be better used to improve public transit.

Nor will HSR significantly reduce air traffic. In September, San Francisco International Airport released a thorough analysis of projected air traffic at Bay Area airports through 2035. It concluded that air traffic at SFO would be reduced by only 3.7 percent as a result of the proposed HSR system. And that was based on the inflated ridership projections of HSR's 2009 business plan. The lower ridership projections of the 2012 business plan would result in an even lower impact on future air traffic at SFO.

James R. Janz

President, Community Coalition on High Speed Rail

 Atherton

Well said, Mr. Janz.  Keep up the good work.  Same for Mike Rosenberg at the Times.

Comments

[Joe]

One of the fun things about the Voice that most of you don't get to see is the side e-mails that come in that are related to what happens on the blog. Here's a fun example from today:

The next time you hear a politician use the word 'billion' in a casual manner, think about whether you want the 'politicians' spending
YOUR tax money.

A billion is a difficult number to comprehend, but one advertising agency did a good job of putting that figure into some perspective in one of its releases.

A. A billion seconds ago it was 1959.

B. A billion minutes ago Jesus was alive.

C. A billion hours ago our ancestors were living in the Stone Age.

D. A billion days ago no-one walked on the earth on two feet.

E. A billion dollars ago was only
8 hours and 20 minutes, at the rate our government is spending it.

While this thought is still fresh in our brain...let's take a look at New Orleans...
It's amazing what you can learn with some simple division.

Louisiana Senator,
Mary Landrieu (D)
was asking Congress for
250 BILLION DOLLARS
To rebuild New Orleans. Interesting number...what does it mean?

A. Well .. If you are one of the 484,674 residents of New Orleans
(every man, woman and child)
You each get $516,528

B. Or... If you have one of the 188,251 homes in New Orleans, your home gets $1,329,787.

C. Or... If you are a family of four...your family gets $2,066,012.

Washington , D.C HELLO!
Are all your calculators broken??

[Joe]

For those who want the "big picture" on High-cost rail, here is the current state of affairs from Ken Orski at Innovation Newsbriefs:

Will California lawmakers pull the plug on the high-speed train?

In 2011 Congress effectively put an end to the Administration’s high-speed rail initiative by denying any funds to the program for a second year in a row. Does the same fate await the embattled $98 billion California high-speed rail project at the hands of the state legislature in 2012?

At a December 15 congressional oversight hearing, witnesses cited a litany of reasons why the projects is a "disaster" (Rep. John Mica’s words). Among them: unrealistic assumptions concerning future funding; quixotic choice of location for the initial line section ("in a cow patch," as several lawmakers remarked); lack of evidence of any private investor interest in the project; eroding public support (nearly two-thirds of Californians would now oppose the project if given the chance, according to a recent poll); a "devastating" impact of the proposed line on local communities and farm land; unrealistic and out-of-date ridership forecasts; and lack of proper management oversight.

More recently, the project came under additional criticism. The job estimates claimed by the project’s advocates ("over one million good-paying jobs" according to House Minority Leader Nancy Pelosi) have been challenged— and acknowledged by project officials— as grossly inflated. Four local governments in the Central Valley, including the City of Bakersfield, have formally voted to oppose the project, fearing harmful effect on their communities. And agricultural interests are gearing up for a major legal battle, according to the Los Angeles Times.

But most unsettling for the project’s future is the inability of its sponsors to come up with the needed funding. To complete the "Initial Operating Segment" to San Jose (or the San Fernando Valley) would require an additional $24.7 billion. To finance this construction, the California Rail Authority’s business plan calls for $4.9 billion in Proposition 1A bonds and assumes $19.8 billion in federal contributions – $7.4 billion in federal grants and $12.4 billion in the so-called Qualified Tax Credit Bonds (QTCB). But the latter assumptions came in for sharp congressional criticism as so much wishful thinking, given the bipartisan congressional refusal to appropriate funds for high-speed rail two years in a row.

Further challenges await the project early in 2012. A group of 12 congressmen led by House Majority Whip Kevin McCarthy (R-CA) has formally requested the Government Accountability Office (GAO) to review the project’s viability and "questionable ridership and cost projections." Also expected early in January are a critique of the Authority’s business plan by the Independent Peer Review Group and a follow-up report by the State Auditor.
Meanwhile, the governor and state legislature, are being asked by the Rail Authority to approve a $2.7 billion bond issue authorized by Proposition 1A to fund and begin construction of the initial Central Valley section of the rail line from Fresno to Bakersfield. Will they be swayed by the findings of the three respected reviewing bodies and by the increasingly negative editorial and public opinion? Or will they continue to hold on to the seductive vision of bullet trains zooming from northern to southern California in two and a half hours — however distant and uncertain that vision may be? At this point, we believe the decision could go either way. However, sharply critical reports by the Peer Review Group and the General Accountability Office could tip the scale against funding the Central Valley project.

[pat giorni]

Could anyone say this better...........
http://www.smdailyjournal.com/article_preview.php?type=opinions&title=Letter:%20High-speed%20rail%20yet%20again&id=226212

Letter: High-speed rail yet again
January 09, 2012, 03:30 AM

Editor,
This paper has printed a wide variety of erudite and thoughtful opinions on high-speed rail. Please allow me to continue this ongoing debate by providing a non-erudite opinion. Shoot high-speed rail in the head with the proverbial silver bullet. Then drive a stake through its heart. Next, cut the head from the body and bury in two different places. Then, just to be sure, after one year dig up the body and head and separately cremate them. Finally, scatter the ashes into our beautiful San Francisco Bay.
Vince Boston
San Mateo

[Joe]

Here is a funny letter to the editor in the Wall Street Journal today:

The energy industry made a fatal error in estimating the number of jobs likely to be created by the Keystone XL pipeline project. It didn't hire the consultants who calculated the ridership numbers for the California high-speed rail project.

Paul Chechak
Rochester, N.Y.

The same could be said about not using the spin-off job consultants!

[Russ]

Here's an editorial from down south:

High-speed rail reality
February 10, 2012, 05:00 AM — Long Beach Press-Telegram

It is becoming increasingly clear that it would be a grave mistake to spend another dime right now on California’s high-speed rail fantasy. The latest blow to the project comes from state Auditor Elaine Howle, who said that “the program’s overall financial situation has become increasingly risky.”

Her negative report comes on top of severe criticism from the Legislative Analyst’s Office and the rail authority’s own peer review group.

They all have accurately concluded that the rail project lacks anywhere near the state, federal and private financing required to build a $98 billion high-speed rail system from the Bay Area to Los Angeles.

Howle questions the rail authority’s ridership projections, saying the group that reviewed those numbers was “hand-picked” by the authority’s chief executive officer.

Ridership is the foundation of the fiscal viability of the rail system. Without an adequate number of riders, there will not be a sufficient revenue stream to pay for operational expenses and to attract private investors, both of which are requirements for the success of high-speed rail and to meet the mandates of the rail bond measure voters passed in 2008.

There is no way the high-speed rail system can meet the latest forecast of 36.8 million rides a year on a San Francisco-to-Los Angeles system. Where will the riders come from? There are only about 3.2 million airline riders a year going to and from Los Angeles and San Francisco and another 1.7 million traveling between Los Angeles and Oakland and San Jose.

That’s 4.9 million airline riders. Even if all of them quit flying and took the train, another 31.9 million riders would have to come from those who now drive. But why would huge numbers of motorists choose a 2.5-hour train ride when they have rejected a one-hour plane ride?

The auditor also found that:
The cost estimates do not include phase one operating and maintenance costs, yet based on data in the plan, these costs could total about $96.8 billion from 2025 through 2060.

There are no details about the current largest potential funding source, the federal government.
There have been inappropriate contracting practices such as splitting Information Technology services totaling $3.1 million into 13 individual contracts with one vendor. The State Contracting Manual prohibits agencies from splitting contracts to avoid competitive bidding requirements.

The authority is missing statements of economic interest for some of its contractors despite the conflict-of-interest code requirements; and the authority does not require any of its subcontractors to file statements of economic interest. As a result, the authority has no way to verify that subcontractors do not have real or perceived conflicts of interest.

It is time for Gov. Jerry Brown to face reality and kill the high-speed rail project as it is now configured. Committing billions of dollars of money that could be used for schools and other needed state services makes no sense at a time of large budget deficits and could undermine the governor’s ballot initiative asking for tax increases.