Hot Topics

2010 - 2011 Analyses

The CHSRA Knows Their Proposed High-Speed Train Will Forever
Need An Operating Subsidy - March 17, 2012
Written by Alain Enthoven, William Grindley, William Warren, and Alan H. Bushell

CHSRA was told several times during 2011 that the proposed train's operating costs may be about three or four times more than their current projections. This would eliminate any possibility of operating with a profit. As important as this finding is, the Authority's own staff and Parsons Brinckerhoff had access to the same information and did not use it in their profitability calculations. Unlike Europe and Japan, California's deregulated air transport marketplace, as well as its lower gasoline prices, will not allow higher high-speed rail ticket prices to cover higher operating costs.

To read the report CLICK HERE (.pdf)

An Analysis of Local Transit Agencies' Proposals to claim
High-Speed Rail Monies for their Capital Enhancements - March 7, 2012
Written by Alain Enthoven, William Grindley, and William Warren

Conclusions are that: current FRA grants cannot be used, that the $950M of Prop1A transit funds may be used with matching funds from the local agency, and that the $9B of Prop1A high speed rail funds may only be used with matching funds from the local agency and with conformance to specific conditions within AB 3034.

To read the report CLICK HERE (.pdf)

California High-Speed Rail Authority's 2012 Draft Business Plan
Assesment: Still Not Investment Grade - January 27, 2012
Written by Alain Enthoven, William Grindley, William Warren, Alan Bushell and Michael Brownrigg

Comments on the 2012 Business Plan to CHSRA by CEOs and Investors, including assessment of improvements and remaining weaknesses to the Plan from a financial point of view.

"....Is this what Californians voted for?"

To read the report CLICK HERE (.pdf)

Twelve Misleading Statements On Finance And Economic Issues
In The CHSRA's Draft 2012 Business Plan - January 12, 2012
From the authors of The Financial Risks Of California's Proposed High-Speed Rail Project

Michael Rossi, Governor Brown's jobs czar and a CHSRA Board member, said; ". . there was no plan to mislead anyone by manipulating the numbers."
San Jose Mercury News, December 21, 2011

To read the report CLICK HERE (.pdf)

The Financial Risks of California's Proposed High-Speed Rail Project

The Community Coalition on High-Speed Rail is proud to make available financial analyses of the proposed California High-Speed Rail Project, prepared by a citizen panel of business and financial experts.

2011 Edition

Click on the icon to the left to access a copy of The Financial Risks of California's Proposed High-Speed Rail Project - the 2011 Edition. This new 2011 edition of Financial Risks explores the even more devastating results of the project's increased costs and lack of new Federal grants.

2010 Edition

Click on the links below to access a copy of the 2010 The Financial Risks of California's Proposed High-Speed Rail Project and its appendices.

2010 Report (.pdf)

Appendix A (.pdf)

Appendix B (.pdf)

Appendix C (.pdf)

The review, released in October 2010, concludes that the California High-Speed Rail Authority's financing plans are not fiscally sound. Operating the High-Speed Train as currently proposed would be financially risky for any operator. Building it as currently planned could mean financial ruin for any investor and jeopardize the State's fiscal health. The review represents months of work, and its conclusions have been endorsed by over seventy knowledgeable, non-partisan reviewers ("Principal Reviewers"), who signed their names in support of its findings and conclusions. Names of the Principal Reviewers start on page two of the review.

Principal authors of the review are:

Alain C. Enthoven: Marriner S. Eccles Professor of Public and Private Management (emeritus), GSB Stanford; President, Litton Medical Products; Economist, Rand Corporation; President's Award for Distinguished Federal Civilian Service; Baxter Prize for Health Services Research; Fellow American Academy of Arts and Sciences; Founder, Jackson Hole Group (BA Economics, Stanford; Rhodes Scholar-Oxford; PhD Economics, MIT)

William H. Grindley: World Bank; Associate Division Director, SRI International; Founder and CEO, Pacific Strategies, ret. (Master of City Planning, MIT)

William Warren: Officer, US Navy. Forty years of Silicon Valley finance, sales and consulting experience and management, including CEO of several start-ups, Director/Officer at IBM, ROLM, Centigram, and Memorex (BA Political Science, Stanford; MBA, Stanford.

Financial Analysis of the Proposed California High-Speed Rail Project

The authors of The Financial Risks of California's Proposed High-Speed Rail Project released another report in June 2011. This report, entitled Financial Analysis of The Proposed California High-Speed Rail Project, measures the impact of four critical California high-speed rail project variables: 1) the decline, if not disappearance, of Federal grant money, 2) the near-certainty of increasing construction costs, 3) the certainty that cash-strapped cities and counties will not have money to contribute to the construction of the high-speed rail project, and 4) the high probability that the California High-Speed Rail Authority will not achieve its projected operating results. Using the Authority's business plan operating data, the forecasted financial results show insufficient monies from operations to service the construction debt. The burden of this debt will fall to the taxpayers, who will need to service it at the expense of priorities such as education and public safety.

Financial Analysis of the Proposed California High-Speed Rail Project - June 2, 2011 CLICK HERE (.pdf)

Executive Summary Of The Financial Analysis Report - June 17, 2011 CLICK HERE (.pdf)

Briefing Papers

The authors of The Financial Risks of California's Proposed High-Speed Rail Project have released a series of Briefing Papers. Each Briefing Paper discusses one of the topics addressed in The Financial Risks of California's Proposed High-Speed Rail Project.

1. Dubious Ridership Forecasts - November 3, 2010 CLICK HERE (.pdf)

2. Six Myths Protecting California's High-Speed Rail Project - November 13, 2010 CLICK HERE (.pdf)

3. Executive Summary - November 30, 2010 CLICK HERE (.pdf)

4. A Train To Nowhere But Bankruptcy - January 3, 2011 CLICK HERE (.pdf)

5. Seven Deadly Financial Facts - January 18, 2011 CLICK HERE (.pdf)

6. Big Trouble For California's $66 Billion Train - March 21, 2011 CLICK HERE (.pdf)

7. Will The High-Speed Train Benefit California's Middle Class? - April 4, 2011 CLICK HERE (.pdf)

Briefing Notes

The authors of The Financial Risks of California's Proposed High-Speed Rail Project have released a series of one-page briefs addressing claims frequently made by proponents of the California High-Speed Rail project. Each Briefing Note counters a specific claim and contains extensive footnotes and quotations from various sources. The Briefing Notes are focused on matters of subsidies, costs, jobs and other financial issues. They do not address local issues with the possible exception of matters related to immanent construction in the Central Valley.

1. ON THE LIKELYHOOD OF MORE FEDERAL CONSTRUCTION MONIES CLICK HERE (.pdf)

2. ON HIGH-SPEED RAIL RIDERS AND RIDERSHIP FORECASTS CLICK HERE (.pdf)

3. ON COST OVERRUNS WHILE BUILDING MEGAPROJECTS CLICK HERE (.pdf)

4. ON CONSTRUCTION JOBS IN THE HIGH-SPEED RAIL PROJECT CLICK HERE (.pdf)

5. ON PERMANENT JOBS CREATED BY THE HIGH-SPEED RAIL PROJECT CLICK HERE (.pdf)

6. ON HIGH-SPEED RAIL'S NEED FOR OPERATING SUBSIDIES CLICK HERE (.pdf)

7. ON PRIVATE CAPITAL FOR CALIFORNIA'S HIGH-SPEED TRAIN CLICK HERE (.pdf)

8. ON HIGH-SPEED RAIL TICKET PRICES VERSUS DRIVING CLICK HERE (.pdf)

9. ON CHSRA'S ASSUMED RAIL TICKET PRICES VERSUS AIRLINE FARES CLICK HERE (.pdf)

10. ON HIGH-SPEED RAIL'S FINANCIAL SHELL GAMES CLICK HERE (.pdf)

11. ON HIGH-SPEED RAIL'S PROBLEMS - DEJA VU ALL OVER AGAIN CLICK HERE (.pdf)

12. ON THE CHSRA'S ESTIMATED OPERATING EXPENSES CLICK HERE (.pdf)

13. ON THE CHSRA'S ESTIMATED OPERATING REVENUES CLICK HERE (.pdf)

14. ON EVIDENCE-BASED HIGH-SPEED RAIL FARES CLICK HERE (.pdf)

15. ON OPERATING COSTS OUT OF SYNC WITH THE FRA AND REALITY CLICK HERE (.pdf)

16. ON PHASE ONE'S COSTS, MARGINS AND ACCUMULATED DEBT OVER SIXTEEN YEARS CLICK HERE (.pdf)

17. ON THE 'ENTIRE SYSTEM'S' COSTS, MARGINS AND ACCUMULATED DEBT OVER THIRTY YEARS CLICK HERE (.pdf)

18. ON PRE-PHASE ONE CONSTRUCTION, MARGINS AND ACCUMULATED DEBT CLICK HERE (.pdf)

19. ON THE IMPACT ON THE STATE OF SERVICING DEBT ON THE 'ENTIRE SYSTEM' CLICK HERE (.pdf)

20. ON THE CONSEQUENCES OF THE INCREASING COST PER MILE IN THE CENTRAL VALLEY CLICK HERE (.pdf)

21. ON WHAT CAN ACTUALLY BE BUILT IN THE CENTRAL VALLEY CLICK HERE (.pdf)

22. ON CASH FROM OPERATIONS PAYING FOR HIGH-SPEED RAIL'S CONSTRUCTION CLICK HERE (.pdf)

23. ON A MOVE TO CHANGE HIGH-SPEED RAIL'S FINANCIAL PERFORMANCE METRICS CLICK HERE (.pdf)

Follow the Money

Click on the icon to the left, to view a fifteen page, graphics-driven presentation on the numbers surrounding the California high-speed rail project as proposed by 2008's Proposition 1A. The presentation touches on everything from the likely construction costs and ridership numbers for the proposed high-speed system, to jobs and to the devastating impact on California's General Fund. The authors of this presentation have used it throughout California to educate elected officials and others. It is a useful tool for explaining the project to the financially inexperienced.

Caltrain

Recent pronouncements by Peninsula elected officials, a statement by the California High-Speed Rail Authority's CEO, a recommendation found in the May 2011 report issued by the California Legislative Analyst's Office, and wording in the July 2011 Peer Review report suggest that high-speed rail could co-exist with Caltrain on the Caltrain right-of-way between San Jose and San Francisco. Because some of the funds that the Federal Railroad Administration (FRA) awarded to the Authority for the Central Valley portion of the high-speed rail project are not yet obligated, there has been some concern that the FRA might be pressured to allow those funds to be used for Caltrain right now.

CC-HSR has weighed in on this important question.
You can read CC-HSR's letter by clicking on the icon to the left.

February 10th Sacramento Subcommittee Hearings

CC-HSR and Central Valley residents from Preserve Our Heritage teamed up on February 10 to testify on high-speed rail funding at budget subcommittee hearings in both houses of the California legislature. The subcommittees voted to deny without prejudice a request for further staff positions and to reinstate oversight provisions that were improperly line-item vetoed by Governor Schwarzenegger last August. The testimony from CC-HSR'S Central Valley allies demonstrates the power of the alliances that CC-HSR is helping to build.

Watch the testimony - Click Here - of Madera County Supervisor David Rogers and Central Valley farmers Kole Upton and Craig Farmer before the State Assembly Budget Subcommittee No. 3. This subcommittee is charged with overseeing the high-speed rail project and Assembly Member Richard Gordon, who represents many San Francisco Peninsula communities, is its chair. The legislators seemed very interested in Preserve Our Heritage's testimony, which detailed the negative impact that the rail authority's current plans would have on farms and the Central Valley economy. This testimony also described how the rail authority planners ignored the community's concerns.

Also testifying was Assembly Member Diane L. Harkey, representing District 73. You can watch a clip of Ms. Harkey - Click Here.

On the Senate side, Senators Simitian and Lowenthal held a hearing of the Budget and Fiscal Review - Subcommittee No. 2.

Please watch this clip of Elizabeth Alexis from CARRD - Click Here. Elizabeth discusses costs, which continue to climb.

The senators continued to express their concerns about the rail authority's planning. Watch Senator Lowenthal - Click Here - and Senator Simitian - Click Here - as they continue to seek answers from the rail authority.

For your information, Senator Simitian announced that a new Senate Select Committee on High-Speed Rail has been formed. He will be a member and Senator Lowenthal will be the chair.

Peer Review Group Finds Fault with CHSRA

California law establishes a high-speed rail Peer Review Group, which consists of experts charged with reviewing the planning, engineering, financing and other elements of the proposed California high-speed rail project. The Peer Review Group is required to provide its independent judgment as to the feasibility and reasonableness of the plans the California High-Speed Rail Authority developed for the project. In carrying out its statutory responsibilities, the Peer Review Group filed a highly critical letter with the President pro Tem of the State Senate and with the Speaker of the Assembly, on November 18, 2010. Click here to read the Peer Review Group's letter.

The next job of the Peer Review Group will be to review the Authority's plan for the proposed first segment of the high-speed rail system, from Fresno to Bakersfield, which is popularly referred to as the 'train to nowhere'. Mike Brady, a member of CC-HSR's Board of Directors, has submitted a legal analysis outlining why the proposed Fresno to Bakersfield segment would not be eligible for Proposition 1A funding. Click here to read Mike Brady's letter.

Boondoggle Rally

High Speed Boondoggle, a San Francisco Bay Area-based grassroots advocacy group devoted to providing clarity about the real impact of California's proposed High-Speed Rail (HSR) system, held a rally on Sunday, Nov. 7 to protest the state's current plan for California HSR. Despite rain showers throughout the event, over 500 people attended.

Featured rally speakers included Environmental Lawyer Gary Patton, Burlingame Mayor Cathy Baylock, and San Mateo Councilman Robert Ross.

Mr. Patton highlighted how the project is a Boondoggle, citing examples of undisclosed, soaring costs, escalating ticket prices and an agency in charge that doesn't read the invoices before consultants are paid.

Ms. Baylock encouraged citizens to find out more about the project, get involved and put pressure on the California legislature by writing letters to elected officials.

Mr. Ross emphasized how concerned residents are asking the right questions of the CHSRA such as what is the business plan and the overall cost. He also said that we have a right to understand how the project with impact our city tax revenue and it is legitimate to fear that local businesses will be displaced.

After the speeches, attendees marched down Burlingame Avenue carrying signs and chanting "High speed rail underground, we don't want to hear a sound. Keep the Peninsula unified. Do not let the Rail divide."

Report on CC-HSR's Activities

HSR-Report CC-HSR is working hard to protect our communities from a badly planned high speed rail project. We have employed a top flight attorney and are undertaking both lobbying and litigation efforts, in addition to our effective public outreach and advocacy. As this report shows, we're making progress!

LEGISLATIVE AND GOVERNMENT ADVOCACY

CC-HSR members have testified at several legislative hearings in Sacramento. Tina Andolina, Legislative Director for the Planning and Conservation League (PCL), which has been working with us, continues to guide our legislative efforts. Here's what our lobbying efforts have accomplished so far:

Addressed Poor Business Plan: We arranged for our local elected officials and members of the community to testify before the Senate and Assembly regarding the California High Speed Rail Authority's (CHSRA) poor business plan. They have made a big impression! We also had a private meeting with Assemblyman Mike Eng, the head of the Assembly Transportation Committee, and are in continuing touch with the key staff members of both the Assembly and Senate Transportation Committees.
Pushed for legislative oversight: CC-HSR advocated for a change in the governance structure of the High-Speed Rail Authority, and have succeeded in getting increased oversight and accountability. We met with four chairpersons and over 40 legislative members of Budget and Policy Committees to advocate for these policies. We asked legislators to hold back funding until there is increased oversight of the CHSRA and an investment grade ridership study. We also wrote letters and provided informational packets to all Committee members. In short, the Legislature has now focused its attention on the governance of the high speed rail project, as we have been effectively demanding.
Bolstered Peer Review: Tina Andolina successfully got language added to the Budget Bill to increase the role of the Independent Peer Review Committee. This should have a major payoff in the future.
Stopped CEQA waivers: We testified about the need to uphold CEQA and urged opposition to bills seeking to waive CEQA for projects that could include high speed rail. Out of four bills proposing such waivers, none passed.
Supported State Auditor's findings: We attended a Senate Hearing on a very critical audit of the CHSRA. The State Auditor identified many problems: overspending by subcontractors; lax management; and grave doubts about whether private investors would really invest billions of dollars in this project. Our presence in the State Capitol made sure that these problems weren't ignored.
Revised bill language: Tina Andolina worked with the Senate Committee Staff to amend problematic bills such as SB 965, AB 289, AB 1375, and AB 1670, eliminating bill language that would have permitted the High-Speed Rail Authority to continue its mismanagement of our money.
Educated key legislators on high speed rail issues: We secured meetings with key Assembly members including:

Assembly Member Ma (San Francisco)
Assembly Member Beall (San Jose)
Assembly Member Ruskin (Peninsula)
Assembly Member Torlakson (Contra Costa)
Assembly Member Harkey (San Juan Capistrano)
Assembly Member Huber (Lodi)
Assembly Member Buchanan (San Ramon)
Assembly Member Monning (Santa Cruz)

Burlingame Mayor Cathy Baylock, Burlingame Council Member Michael Brownrigg, Menlo Park Council Member Heyward Robinson, and former Atherton Mayor Jim Janz attended these meetings with us.

COMMUNITY OUTREACH

We have connected and coordinated with groups throughout the state to create awareness and help others take action. Here's how we did it:

Gary Patton, Burlingame Public Library

Presented two eminent domain programs featuring Andrew J. Turner, Turner & Turner, P.C., a prominent San Mateo eminent domain attorney, and Gary A. Patton, of Counsel, Wittwer & Parkin, LP. Click here to view a portion of one of these presentations.
Helped members of the community respond to the Environmental Impact Report (EIR): The program-level EIR for the SF Bay Area was decertified in December as a result of the successful lawsuit. CHSRA had to re-do this EIR and accept new evidence and public comments. CC-HSR coordinated with peninsula cities, rail advocates, and the general public to make sure we built the strongest possible case under CEQA for a routing decision that didn't destroy our communities or undermine our economy.

We sent post cards to 7,000 homes along the Caltrain corridor urging participation in the EIR process.
Campaign leader and environmental attorney, Gary Patton led an "EIR 101" presentation to a packed room in Holbrook Palmer Park in Atherton.
We posted sample EIR letters on several community websites and blogs which enabled hundreds of residents to craft their own comments.
CC-HSR board members met with groups in North Fair Oaks, an unincorporated part of San Mateo County adjacent to Atherton, Menlo Park and Redwood City and provided presentations in both English and Spanish.
Our attorney, Gary Patton, spoke at the Peninsula Cities Consortium (PCC) meeting about the EIR Process and the need for our local elected officials to be coordinated.

Ensured that inflated ridership numbers were not considered in the EIR: Ridership is the basis for the routing choice and many other assumptions under the EIR. New evidence shows that the CHSRA's ridership estimates were unreliable. For this reason, the cities of Menlo Park and Atherton and TRANSDEF, the Planning and Conservation League, and the California Rail Foundation filed a legal action trying to re-open the lawsuit that challenged the SF Bay Area EIR. Gary Patton has provided critical strategic advice.
Advocated a current EIR for Caltrain electrification: Gary Patton has been negotiating with the Joint Powers Board (JPB), which governs Caltrain, over concerns that the EIR by which the JPB seeks to electrify Caltrain is outdated since it was developed in 2004. A lot has changed since then. In 2004 the public had no idea that high speed rail would be an issue, much less that Caltrain would partner with the CHSRA over the use of the Caltrain corridor. The public has the right to a current EIR and to know how this partnership and electrification will affect our communities.
Kept the community informed of key events: We notified the community about recent news, legislative hearings, and local CHSRA meetings. We follow key legislation and let the community know when and how they might take action.
Presented 'High Speed Rail 101', an educational program, to residents and homeowners' associations in Millbrae, San Mateo and Belmont.

LITIGATION

Program EIR Lawsuit: A coalition of three cities (Palo Alto, Menlo Park, Atherton), three environmental organizations (including the Planning and Conservation League) and two citizens groups (including the Community Coalition on High Speed Rail) filed suit under the California Environmental Quality Act on October 4, 2010 challenging the Program Level Environmental Impact Report for high speed rail routing into the San Francisco Bay Area. The California High-Speed Rail Authority's chosen alignment would run through the Peninsula and along the Caltrain corridor. In addition to questioning the EIR's analysis of impacts, a major goal is to force the Authority to fix its flawed ridership model, which has been questioned repeatedly and was the subject of a scathing report by UC Berkeley Institute for Transportation Studies. In addition, the lawsuit seeks to force the Authority to respond to the voluminous comments submitted on the EIR, many of which were brushed aside or deferred for future study.
Peterson/Roger Reynolds' Lawsuit: On June 22, the Superior Court in Sacramento ruled that the CHSRA and Caltrain must agree that no construction of high speed rail on the peninsula corridor can begin until the written consent of Union Pacific Railway Corporation has been obtained. This was the essence of the suit--to obtain a court order that will bind CHSRA and Caltrain.
Brown Lawsuit: This lawsuit was filed April l5. It raises fundamental funding and financing problems faced by the project. Although the CHSRA only have about 5% of the funds to do the work on the first stage of the project, the law requires them to have enough money in the bank to finish a given corridor before starting construction on that corridor. The suit also claims that the CHSRA plans to start work on four separate corridors simultaneously and that this runs the serious risk that they will run out of money on each corridor, leaving the work abandoned and uncompleted--a disaster for the communities. The suit notes that the law (Prop 1A and AB 3034) prohibits subsidies from the state for the train's operations, and yet CHSRA is desperate to receive such subsidies to attract private investment.