The California High-Speed Rail Project

To Have The Train OR To Obey The Law: That Is The Question

We have posLed 42 reporLs, LoLallng more Lhan 1,200 pages of nanclal and pollcy analysls over Lhe pasL 47 monLhs. Lach has been glven
Lo Lhe Covernor(s), Lhe Callfornla Plgh Speed 8all AuLhorlLy (CPS8A), Lhe 1reasurer's omce, Lhe 33 key members of Lhe LeglslaLure (and
Lhelr sLas) ln >30 Lrlps Lo SacramenLo and much of lL Lo key Members of Lhe uS SenaLe and Pouse of 8epresenLauves ln 7 Lrlps Lo
WashlngLon uC. lL can all be found aL www.slLes.google.com/slLe/hsrcallr
22 Apr|| 2014 - Senate 1ransportanon & nous|ng Comm|uee - Mark DeSau|n|er, Cha|rman
resentanon |n support of 8|||s |ntroduced by Senator Andy V|dak - 16
th
Senate D|str|ct

1he
Governor
1he
ub||c
1he
Author|ty
8efore ou Are 1hree Documents
1hey are the bas|s of my thes|s that the cho|ce before the Leg|s|ature |s e|ther to have a
h|gh-speed ra|| pro[ect that v|o|ates the |aw, or a State Government that obeys |ts |aws
1he hrst document, LUS A CnANGL, LUS C'LS1 LA MLML CnCSL, shows
that among |ts m|sstatements and m|srepresentanons, the Drah 2014
8us|ness |an connnues to |gnore key aspects of A83034
1he second document, II CU 8UILD I1 1nL WILL NC1 CCML, shows that
for at |east the hrst hve years of operanng the ICS, trave|ers us|ng the
h|gh-speed ra|| system w||| ga|n no cost or trave| nme advantages
1he th|rd document, Wn CA & 1kADL IUNDS CANNC1 8L USLD 1C
IINANCL nIGn-SLLD kAIL IN CALIICkNIA, |s a compend|um of four papers
on the |ega| and hnanc|a| fo||y of try|ng to subsntute Cap & 1rade Iunds
for rop 1A bonds to match federa| funds
age 2
1hree Lxamp|es Cf Where 1he Author|ty's
Drah 2014 |an Ignores 1he Law
Irom LUS A CnANGL, LUS C'LS1 LA MLML CnCSL
In Lxh|b|t 6.3 [page S2] the Author|ty adm|ts |t w||| |n|na||y need an
operanng subs|dy, v|o|anng not [ust the wor|dw|de rea||ty of h|gh-speed
ra|| operanons and prom|ses to voters, but most |mportant|y A83034.
1here |s no prov|s|on |n the |aw for need|ng 'on|y' a 5S0 m||||on subs|dy.
Desp|te Secnon 8 (f) of A83034 say|ng ""!"# #%&'# "()"*+,##- !'.(% +/+!#0
+".11 2# 3 3 450,1#!#- %5 1.!#' !".% 6767 3 3 ." the Author|ty adm|ts that not
even the 300-m||e In|na| Cperanng Segment (ICS) w||| be comp|eted by 2020.
In the|r |an, ICS opens |n 2022 and 8ay-to-8as|n |n 2027
A83034, Secnon 2704.08 (k)(f)(2 demands the proposed h|gh-speed ra|| (nSk)
system have 8!'.(%+ 5,#'.&%) .! +,##-+ 59 667 0(1#+ ,#' "5:' 3 3; Now the
2014 |an says, 8 3 3 .! +,##-+ 4.,.21# 59 #<4##-(%) 677 0(1#+ ,#' "5:'3;
1he Leg|s|ature and Adm|n|stranon are charged w|th not on|y pass|ng
|aws, but a|so assur|ng government agenc|es adhere to them
age 3
Dur|ng 1he I|ve ears Cf 1he ICS, 1he Author|ty Cers 1he
1rave||ng ub||c An Infer|or Serv|ce 1o Dr|v|ng Cr I|y|ng
Irom II CU 8UILD I1 1nL WILL NC1 CCML
Dr|vers get between the metropo||ses'
suburbs at |east 4S m|nutes qu|cker
Lven us|ng the Author|ty's unbe||evab|e 586
LA-SI fare, the costs of dr|v|ng are sn|| cheaper
I|y|ng takes |ets than ha|f the door to door
nme - a huge advantage for the nSk's pr|mary
demograph|c - the bus|ness trave||er
Dr|v|ng |s cheaper and y|ng |s more expens|ve
between LA and SI when the Author|ty's fares
are taken at face va|ue
I know no beuer way to destroy the h|gh-speed ra|| brand than prov|d|ng |nfer|or serv|ces
age 4
A Compend|um Cf Iour apers Deta||s Wn CA & 1kADL IUNDS
CANNC1 8L USLD 1C IINANCL nIGn-SLLD kAIL IN CALIICkNIA
1he Author|ty says the 300-m||e In|na| Cperanng Segment (ICS) |s not hn|shed unn|
2022, wh|ch makes the proposed use of Cap & 1rade funds |||ega| s|nce
construcnon po||unon w||| not he|p ach|eve CA A|r kesources 8oard's |nter|m
carbon footpr|nt reducnons for 2020
- 1he hrst paper shows the Author|ty's awed [usnhcanon for us|ng us|ng Cap & 1rade funds rests on se|f-serv|ng assumpnons.

- 1he second shows that to advance the goa|s of A832's goa|s, aucnon proceeds must be used 8!5 9.4(1(!.!# !"# .4"(#=#0#%! 59
'#-:4&5%+ 59 )'##%"5:+# ).+ #0(++(5%+ (% >?.1(95'%(.@ 45%+(+!#%! A(!"; A832, wh|ch the pro[ect doesn't.

- 1he th|rd po|nts out how |ncompetent the Author|ty's Green nouse Gas ana|ys|s |s when on|y based on construcnon of the
hrst 29 m||es, wh||e |||ega||y prom|s|ng 83 3 -('#4! BCB #0(++(5%+ 4.14:1.&5%+ A(11 2# 4.''(#- 5:! 95' #.4" +:2+#D:#%!
45%+!':4&5% ,.4E.)#3;

F 1he fourth paper deta||s the h|story of try|ng to fund the nSk, u|nmate|y resornng to GH%.%4# 2/ +!#.1!"I and how ||u|e Cap &
1rade funds w||| br|ng.
If Cap & 1rade aucnons ach|eve 518]yr. - then assum|ng present-day tota| per m||e
costs, 5200 m||||on (20 of 518) wou|d he|p comp|ete |ess than three m||es per year
- WnICn MLANS 1C 8UILD CNL 1nL ICS WILL 1AkL ANC1nLk 80 LAkS -
Among other |awsu|ts, A832's (Cap & 1rade) very ex|stence |s be|ng cha||enged s|nce |t passed the Leg|s|ature
by a s|mp|e ma[or|ty, wh||e |a|nns argue that |t |s a tax and requ|red a two-th|rds ma[or|ty
age 3
1he Author|ty has produced noth|ng more than assernons c|oaked |n secrecy, unpa|d
b|||s and broken prom|ses, wh||e pretend|ng that po||nca| announcements are rea||ty
j now D|d Ca||forn|a Squander nundreds Cf M||||ons ?
rop1A - the 2008 ba||ot measure that a||ows the State to match up to 598||||on w|th Iedera|
or r|vate funds to bu||d hase 1 (SI-to-LA centers on h|gh-speed ra||) passed by S2.7.
What d|d nSk proponents prom|se ?
- nSk tra|n wou|d operate at 220mph

- A one-way SI-LA ncket for 5S0

- A LA to SI 2hour 40m|nute r|de

- 90 - 117m||||on annua| r|ders

- hase 1 construcnon cost of 5338||||on

- hase 1 (LA-SI v|a nSk) operanona| by 2020

- Sav|ngs of greenhouse gases


- No operanng subs|dy
What are today's CA nSk rea||nes ?
- no nSk tra|n operates at 220mph - mosL operaLe
<183mph. now CPS8A speaks of 200mph 'capablllues'
- A 5SS fare went to 510S. At 586 now. 1haL's 60
more, and sull noL based on 30 years of comparauve fares.
- In 2013, CnSkA adm|ued there was no
ev|dence to back the 2008 c|a|m. Mlnlmum ls 3 hrs.
and only lf lL crosses Lhe 1ehachapl mounLalns aL +200 mph

- Now |ess than 40 m||||on annua| r|ders

- In 2011 CnSkA adm|ued costs were 51178.
llrsL 130 mlles (Lhe lnlual ConsLrucuon Secuon) cosLs have rlsen
30, so a $130 8llllon hase 1 ls feaslble
- 1he ICS |s now prom|sed for 2022 - hase 1 ls
now promlsed for 2030. ConsLrucuon sLarL ls already 20 monLhs laLe

- I1S 8erke|ey says the pro[ect w||| be carbon neutra| |n 70 years

- now can fares be a quarter to ha|f or |ess of wor|dw|de
fares and CpLx be ha|f or |ess than the wor|dw|de nSk
exper|ence ?
1hls has been my
colleagues and
my focus for
nearly four years
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34799.030
lnakl 8arron de Angolu, ulrecLor of Plgh Speed 8all aL Lhe lnLernauonal unlon of 8allways/ulC,
presenLed Lhls charL Lo Lhe uS Congress Cn Aprll 19
Lh
2007
At about 2.S hours - 270 to 3S0 m||es - a|| nSk system's share of r|ders drops prec|p|tous|y.
CnSkA's SI-to-LA downtown to downtown route |s approx|mate|y 48S m||es
1he 1rave| 1|me rom|se (2:40) Is Not Supported 8y Iacts
age 7
In Iebruary 2011 the IUk to|d the Author|ty JB#%#'.11/ +,#.E(%) K,#'.&%) ?5+!+ 4.% 2# 45=#'#- 2/ 9.'#25< '#=#%:#+3J
Internanona| nSk kevenues and CpLx reect 40 per passenger m||e (M), yet the Author|ty p|ans |ts revenues at about 23 M.

CnSkA roposes Its Iares W||| 8e na|f Cf kea||ty And W||| Cperate At A uarter
Cf +1h|rty ears Cf Wor|dw|de n|gh-Speed ka|| Cperanng Lxper|ence
Avg. SI-LA a|r||ne fares = 29 M
We presenLed an earller verslon of Lhls graphlc Lo Messrs. 8lchard, Morales and 8ossl on 17 november 2011.
1hey sald: We'll geL back Lo you on LhaL."
age 8
A83034 2704.08 ([) Says
CnSkA's 1ra|n Cannot nave An Cperanng Subs|dy
Desp|te c|a|ms of 'transparency' and |aws that are supposed to
g|ve the pub||c access to the work|ngs of government agenc|es,
we found that 'outs|ders' have no access to the sohware and
a|gor|thms that CnSkA's contractors use to compute and
promu|gate statements on Cperanng Lxpenses (CpLx) and
prohts.

'Cuts|ders' |nc|ude the US Government
Accountab|||ty Cce (GAC) that noted the
|nadequacy of CpLx data
We showed that on a per passenger m||e bas|s CnSkA's fares are a fracnon of wor|dw|de nSk fares
1o compute prohtab|||ty, we made a ub||c kecords'
kequest for the data and sohware used to ca|cu|ate
Cperanng and Ma|ntenance Lxpenses (CpLx)



1he key phrase ls 8L"(+ (+ !'.-# +#4'#! (%95'0.&5% ,:'+:.%! !5 M=(-#%4# ?5-#
+#4&5% N7O7 P (%45',5'.!#- (%!5 !"# ?.1(95'%(. Q:21(4 R#45'-+ S4! !"'5:)"
B5=#'%0#%! ?5-# +#4&5% O6TU VEWP .%- !"#'#95'#P A(11 %5! 2# ,'5=(-#-;
NCW 1nL AU1nCkI1'S 8USINLSS LAN ADMI1S 1nL kCLC1 WILL NLLD A SU8SID
DUkING 1nL INI1IAL CLkA1ING SLGMLN1'S CLkA1ICNS
(Callfornla Plgh-Speed 8all ura 2014 8uslness lan, LxhlblL 6.3, page 32)


age 9
? now Can CnSkA's Cha|rman C|a|m nSk Systems Are rohtab|e ?
kevenues
Account 1
Lxpenses to operate
ro|||ng stock
Account 2
Lxpenses to ma|nta|n ra||s,
ra|| beds and e|ectr|ca|
d|str|bunon systems
Account 3
Nanona| nea|th
Care and
ens|on Systems
1o |ntegrate Lurope's 27 government-owned and operated
ra|| systems, LU D|recnve 91]440 demanded separanon of
ro|||ng stock organ|anons and accounts from hxed
|nfrastructure organ|anons and accounts
1aken care of ln nauonal
healLh and penslon programs
Account 1 |s shown pub||ca||y
!L"# ,:21(4 .:!"5'(&#+X+54(#!/ )#%#'.11/ 2#.' !"# 45+!+ 59 (%=#+&%) (% %#A (%9'.+!':4!:'#P 45%+!':4&%) .%-
0.(%!.(%(%) !"# (%9'.+!':4!:'# .%- '#1.!#- #D:(,0#%! " " " M45%50(4 4.14:1.&5%+ 95' (%9'.+!':4!:'# ,'5Y#4!+ (% M:'5,#
(%41:-# .11 !"# +54(5#45%50(4 2#%#H!+ 59 9:!:'# '.(1 (%9'.+!':4!:'# .%- (!+ 45%!'(2:&5% !5 +54(#!/ 3 3! Leuer and pollcy
sLaLemenL from Lhe ulrecLor Ceneral of Lhe lnLernauonal unlon of 8allways Lo 8oelof van Ark, 8 lebruary 2011.
As a pr|vate|y-operated nSk system,
CA's tra|n must obey US accounnng
systems that are based on GAA, a
SINGLL, un|hed accounnng system
USA
- Cne accounL -

Luropean Un|on
- 1hree or more, accounLs -
CovernmenL lnfrasLrucLure owners
(e.g. 88l, Aull) oen conLracL wlLh
operaLors for Lhe malnLenance
nea|th Care,
ens|on Systems
and L|ab|||nes
Lxpenses to ma|nta|n
ra||s, ra|| beds and
e|ectr|ca| d|str|bunon
systems
Lxpenses to operate
ro|||ng stock
kevenues
State, federa| and
|oca| taxes
$% &'()%(
%* +,-'.
/'0,1.'
+2'3 4%(5+
6,3 +,-'.
age 10
7 $'8. +2,+ +2' 9:,(./,3 9':&;(,< ;. .%&'+2;(= <;>' ?@AA &;<<;%( %B': /14='+
.2%1<4 (%+ 0%&' ,. , .2%0> +% ,(3%('" Z# .1A./+ E%#A !"# (%(&.1 45%+!':4&5%
#+&0.!# A.+ A./ :%-#' !"# '#.1 45+!3 C1.+ <;>' A# %#=#' ".- !"# '#.1 45+! 95' !"#
?#%!'.1 [:2A./ 5' !"# \./ \'(-)# 5' .%/ 5!"#' 0.++(=# 45%+!':4&5%
,'5Y#4!" [5 )#! 5] (!" D( +2' 8%:<4 %* 0;B;0 6:%E'0+.F +2' G:.+ /14='+ ;. :',<<3 E1.+
, 4%8( 6,3&'(+" D* 6'%6<' >('8 +2' :',< 0%.+ *:%& +2' .+,:+F (%+2;(= 8%1<4 'B':
='+ ,66:%B'4" 92' ;4', ;. +% ='+ =%;(=" [!.'! -())(%) . "51# .%- 0.E#
(! +5 2()P !"#'# (+ %5 .1!#'%.&=# !5 450(%) :, A(!" !"#
05%#/ !5 H11 (! (%3J (lormer Speaker Wlllle 8rown's !uly 28
Lh
2013 column on 1rans8ay CenLer ln Lhe Sl Chronlcle )

A Iormer Member Cf 1h|s "August 8ody" Spoke 1he
1ruth About 1he n|gh-Speed ka|| Author|ty's Strategy
W||||e 8rown '1o|d It L|ke It Was' - L|e 1o 1he ub||c, 8ut ush Ahead -
And Instead of Go|ng 1o a||, W||||e Got 1he 8r|dge Named Aher n|m
age 11
Is 1he n|gh-Speed 1ra|n ust Another Case Cf 1he Way It Sn|| Is ?