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The momentum gained since voters passed a $9 billion bond initiative to jump-start the state’s high-speed rail project may be snuffed out if state funding is not provided soon. The project’s forward progress is now contingent on the state’s Pooled Money Investment Board, which will consider in mid-April whether to loan the project the approximately $29.1 million necessary for the California High-Speed Rail Authority to continue operating through the end of June.
Quentin Kopp, chairman of the Authority, is confident that it will get this lifeline. If not, the Authority will shut down and all 75 existing contracts will be canceled, Kopp said.
Design engineering for the first phase of the project, from San Francisco to Anaheim, is progressing nonetheless. The first phase entails eight sections of track encompassing approximately 530 miles, which could be traversed in two and a half hours as the train whistles along at 220 miles per hour. In November, voters passed the bond measure that serves as a down payment on the project, which will be funded by a combination of public and private financing.
In addition to the $9 billion approved by voters, other sources of funding for the project, according to Kopp, include: $2 to $3 billion from local and regional agencies; $12 to $16 billion from federal grants, including the recently-passed stimulus bill; and $6.5 to $7.5 billion from private sources. Interest from private sources is strong, Kopp said. A year ago, the Authority solicited private interest and 28 firms responded in writing. Twenty-three of these expressed interest in supplying construction, operations and/or equipment, and five proposed supplying capital. The Authority’s consulting firm in Washington, D.C has reverified continuing interest from 12 of the 28 entities, Kopp said.
Federal funding sources include an anticipated portion of the $8 billion allocated for high-speed rail in President Barack Obama’s stimulus package and an expected piece of the recommended $1 billion for high-speed rail projects across the country in the 2010 fiscal year budget. In fact, Obama has recommended $1 billion funding for five years, Kopp said. Also, renewal of the Surface Transportation Act, which expires at the end of the year, is expected to provide between $9 and $15 billion for high-speed rail nationally. And, $1.5 billion is anticipated for high-speed rail projects around the country from the Federal Railroad Safety Improvement Act. This measure was adopted last October, but hasn’t been appropriated yet. The Authority also anticipates seeking funding from the renewal of another federal transportation bill set to expire at the end of September, known as the SAFETEA-LU bill. Kopp estimates the Authority will apply for about $3.5 billion, which will include funding for projects under the auspices of local entities, such as the Peninsula Corridor Joint Powers Board and Metrolink, in Los Angeles and Orange counties. Some of these projects include grade separations, which have been environmentally cleared, and electrification of the Caltrain system, which has not received environmental approval yet, Kopp said. The Authority hopes to qualify to start this electrification process by September, 2012, he added.
To ensure a dedicated, consistent source of high-speed rail funding from Washington, the Authority — along with other entities overseeing high-speed rail projects across the country — are lobbying for a permanent funding mechanism so that they can enter into full funding agreements with the U.S. Department of Transportation, Kopp said, likening the proposal to a “high-speed rail trust fund.”
As far as the stimulus bill is concerned, capturing a piece of the $8 billion pie depends on several Bay Area transportation agencies collaborating to create a viable plan that all can agree on. While this is no easy task, entities such as the Metropolitan Transportation Commission (MTC), Caltrain, and agencies in San Francisco and San Jose are actively engaged in this process, said Randy Rentschler, director of legislation and public affairs for MTC.
“How much the Bay Area gets is a subset of how much California gets,” Rentschler said. “California could get a lot of money and the Bay Area could get none. We don’t want that.”
The discussions among the Bay Area agencies involve the scope of the package of improvements that need to be made to get the high-speed rail to the anticipated terminus of a new Transbay Terminal in San Francisco, Rentschler said. The size and dimensions of the terminal are all part of the discussion, he added.
The Department of Transportation has some options as to how it allocates the money, Rentschler said. The department could make a series of improvements on the East Coast that would expedite existing trains. It could also use the money to lay the groundwork for high-speed rail that could be built at a later time, as with California’s project. Or it could find a proposed high-speed rail line and deliver the whole enchilada — the line, the train, and everything that goes with it. In California, that’s an expensive proposition, Rentschler said, since the route is so long and traverses urban areas like the Bay Area and Los Angeles.
“The kind of money we’d spend on [just] the Peninsula and in San Francisco is the kind of money they could spend on the entire line [somewhere else], including a whole train set, because it wouldn’t go through a heavily industrialized area,” he said.
But the need for high-speed rail is precisely in urban areas like the Bay Area, Rentschler emphasized.
Regarding state funding, Governor Arnold Schwarzenegger recommended $123 million for high-speed rail projects across the state for the 2009-2010 fiscal year, according to Kopp. The Authority’s urgent need for the $29.1 million loan is due in part to the freezing of funds resulting from the state budget crisis, according to Joe de Anda, a spokesman for State Treasurer Bill Lockyer. Whether the loan will be provided hinges on the state’s cash flow, which in turn, depends on a $6.5 billion bond sale that took place in late March.
The bond sale was a huge success, according to Tom Dresslar, another spokesman for Lockyer. The state went to market expecting to sell $4 billion in bonds, but there was so much demand, the amount was increased. Of the total proceeds generated, $2.6 billion will be distributed directly to projects, Dresslar said. And, he is cautiously optimistic that the Authority will get its loan from that amount.
“I think it’s safe to say that the success of this sale makes it more likely that the loan will be approved when the board meets next,” Dresslar said.
If the Authority does not receive the loan and shuts down, it would ultimately reopen, along with the contracts, whenever money becomes available, Kopp said. If it does receive the loan, design engineering of the first phase will continue. It will likely take about two years to complete the complicated design and accompanying environmental analysis, Kopp said. The project will open to the public section by section as early as 2014. The first phase will be completed between 2018 and 2020.
Public meetings regarding the environmental review process started in late January for the San Francisco to San Jose section, and are continuing for the other seven sections until the end of March. The public comment period ends in early April. A general program environmental report was certified by both the Federal Railroad Administration and the Authority — the two sponsoring agencies — last July. Now, the environmental review is taking place on a more specific project level, Kopp said.
Visit www.cahighspeedrail.ca.gov for future updates.
We hope you enjoy the piece and the note from the editor of the Bay Area Monitor below.
The development of California’s high-speed rail system will affect countless people here in the Bay Area and across the state — but exactly how is up to them. They are entitled to help direct this massive project, given that it is funded by their tax dollars and managed by their government. To exert their influence effectively, however, they must be well-informed.
This concept guides all articles published by the Bay Area Monitor, which, as a publication of the League of Women Voters of the Bay Area Education Fund, seeks to facilitate its parent organization’s mission of encouraging citizens to participate in government in an active and educated way.
Collaborating with Spot.Us to produce freelancer Deirdre Newman’s article on high-speed rail uniquely advances this mission. Not only has this partnership provided Monitor readers with educational content, it has also created an opportunity for several individuals to take a more active role in the process. By donating funding for this article, these individuals have made a substantive commitment to seeing that the public not be excluded from what government does. The Monitor would like to thank them for their generosity, as well as Spot.Us and Deirdre for putting in difficult and valuable work.
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