High Speed Rail Audit Pressure Increases

January 2018 – On January 23rd, State Senator Jim Beall (D-San Jose), Chair of the Senate Transportation Committee, announced he was lending his support for a call for an audit of the high-speed rail project. This raises the stakes on reviewing the project, as it is the first time since 2012 that a democrat member called for such an audit.

The project has always been controversial, for a variety of reasons, but new fiscal estimates, rerouting, and slow progress, have increased the pressure for such a review by the State Auditor.

The rail authority disclosed that its main consultant was forecasting that the cost of building the first 119 miles of the line in the Central Valley would jump to $10.6 billion from the original $6 billion estimate.  In addition, the project is running about seven years behind schedule.

These figures are expected to increase exponentially over the life of the project. Vastly expanding upon the original $64 billion cost estimate.

Another change is the rerouting of the tunneling project from the Central Valley to the coast at Gilroy.  This was originally going to be six separate tunnels, now the HSR authority has stated its goal to make a single tunnel through this run.  This will raise safety concerns if the train becomes operational through this earthquake prone area.

On Tuesday, the HSR authority sent a letter to the Legislature’s leadership saying it would need an extra 30 days to complete that business plan, noting that its new chief executive, Brian Kelly, and others would need more time. The delay would result in the Legislature getting the business plan June 1 rather than the May 1 legal deadline for the biennial report, the authority said. Providing less time for review before the legislature is required to authorize any funds through the budget process.

Assemblymembers Beall and Patterson, In their joint letter to the chair of the joint audit committee (JLAC), asked for an examination of contract costs, change orders, economic effect to communities, the use of small businesses and environmental outcomes that result from the project’s “green construction practices.” The letter stipulates that the Legislature bears the responsibility formaking sure the project “is on an effective path toward successful completion.” Beall has supported the rail project but has expressed some concerns about its execution and called an oversight hearing a year ago to take a closer look after the Federal Railroad Administration issued a confidential risk analysis that cited rising costs and a lagging schedule.

In a statement Tuesday, Beall cited the many benefits of the project. “I have always believed that the state must look for efficiencies and savings that can speed up HSR construction and cut costs,” he said. “Today, we are asking for a new set of eyes — the state auditor — to look at the project and identify ideas to lower costs and accelerate construction.”

Patterson, the former mayor of Fresno, has been an outspoken critic.

“Either the High-Speed Rail Authority is grossly inept or they knew of these problems and covered them up,” he said Tuesday. “There is only one way to get to the bottom of this and it is with an independent nonpartisan audit.”

HSR authority Chairman Dan Richard brushes aside the need for an review claiming that the program has been audited over the years internally, as well as at the federal and state levels, and that the authority will “work cooperatively with the committee to fully address the issues that are raised.”

Prior requests to JLAC for a review have been denied. Patterson requested such an audit in 2017, and Sen. Andy Vidak had asked for an audit in 2016. Earlier audits by the State Auditor Elaine Howle’s office in 2010 and 2012, cited even then a range of concerns about inadequate planning, rising costs, questionable ridership estimates and future operating costs.