January 3, 201
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The Honorable Darrell SteinbergSenate President Pro TemState Capitol BuildingRoom 205Sacramento, California 95814The Honorable Bob DuttonSenate Republican LeaderState Capitol BuildingRoom 305Sacramento, California 95814The Honorable John PerezSpeaker of the AssemblyState Capitol BuildingRoom 219Sacramento, California 95814The Honorable Connie ConwayAssembly Republican LeaderState Capitol BuildingRoom 3104Sacramento, California 95814Re: Response of the California High Speed Rail Authority to theReport of the Legislative Peer Review GroupThe California High Speed Rail Authority has reviewed the report submittedtoday to the California Legislature by the California High Speed Rail PeerReview Group.While some of the recommendations in the Peer Review Group report meritconsideration, by and large this report is deeply flawed, in some areasmisleading and its conclusions are unfounded.Unfortunately, many of the most egregious errors and unsupported assertionswould have been avoided with even minimal consultation with the CHSRA.Although some high-speed rail experience exists among Peer Review Panelmembers this report suffers from a lack of appreciation of how high speedrail systems have been constructed throughout the world, makes unrealisticand unsubstantiated assumptions about private sector involvement in suchsystems and ignores or misconstrues the legal requirements that govern theconstruction of the high speed rail program in California.
CHSRA Response to LPRG ReportJan. 3, 2011Page 2In recommending against proceeding with the high speed rail development“at this time,” the Report ignores many components of the CHRSA’s recentDraft Business Plan and attempts to promulgate a new standard of projectfeasibility that is inconsistent with national funding of transportation projects.The report’s conclusions, which would be premature at best, would place atrisk $3.5 billion of federal funding for High Speed Rail currently in hand forthe project and undermine extensive outreach efforts on the part of theAuthority to develop greater integration with regional rail systems.Consequently, the Authority believes this report does not provide a soundbasis for critiquing the Authority’s Finance plan, nor for the public policychoices facing the Legislature.A detailed response to specific issues is below:
1. Timing:
The Committee notes that it is responding to the Financing Plan submittedNovember 3, 2011 and concurrently preparing a response to the DraftBusiness Plan submitted November 1, 2011. The Committee notes that it is“unfortunate that the CHSRA Board certified the Funding Plan simultaneouslywith the issuing of the draft 2012 Business Plan” since the finalization of theBusiness Plan may (and likely will) result in some modifications to the FinancingPlan. The Authority released each of these documents in conformance withstatutory requirements. As noted, the finalization of the Business Plan mayresult in material changes to the Financing Plan. This should have been clearto the Committee and consultation with the Authority, which did not occur,would have eliminated any confusion on this point.
2. Feasibility:Phasing and Blending
The Committee endorses the decision by the CHSRA to adopt phasing and aso-called blended approach to intermediate high speed rail service in urbanareas. This blended approach, which makes use of existing track and rights-of-way, had been propounded by key state and federal legislators as ameans to reduce impacts, costs and public opposition to the development ofhigh speed rail. The CHSRA fully embraced the blended approach conceptin the Draft Business Plan. However, the Peer Review Committee thenrecommends that the Authority suspend further planning for further build outtowards the previously defined Phase 1. This recommendation, which has norelevance to the immediate Financing Plan, flies in the face of the plain
CHSRA Response to LPRG ReportJan. 3, 2011Page 3language of Proposition 1A. Moreover, as a consequence, the Authoritywould have to abandon further planning efforts to integrate high speed railinto the Transbay Terminal in San Francisco, which is specifically denoted asthe “northern terminus” for the high speed rail line.In addition, suspending planning for the full Phase 1 build out would have theunintended consequence of threatening the use of Proposition 1A bond moneyfor advanced investments in blended segments, in that the Authority could notfind that such expenditures were consistent with a segment “ready for” fullhigh speed rail service. This recommendation is ill-considered and was not anecessary element of analysis for the Financing Plan.
ICS/OIS Distinction
The Committee Report, after stating that it would not comment on legalquestions pertaining to Initial Construction Section, then proceeds to do so andarrives at the wrong conclusion, by stating that:“…the ICS as planned is not a very high-speed railway (VHSR), as it lackselectrification, a VHSR train control system and a VHSR compatiblecommunication system. Therefore it appears not to meet the requirements ofenabling State legislation.”The Committee has no legal competence to enable it to make such a statementand the Authority rejects this assertion. Attorneys for the Authority andothers elements of the State of California, as well as attorneys for the FederalRailroad Administration, have reached the opposite conclusion and are fullycomfortable that the Initial Construction Segment is complaint with the statebond measure. It is also noteworthy that the legislative author of the bondmeasure has embraced this view as well.The Committee states that “The fact that the Funding Plan fails to identify anylong term funding commitments is a fundamental flaw in the program.” In sostating, the Committee attempts to set a standard that is simply not used forany other transportation program. By this measure, none of theunconstrained regional transportation plans of any transportation authorityshould be pursued. No project, in our experience, has fully identifiedfunding sources for the entire project at this stage and it is both unfortunateand inappropriate for the Committee to apply this test only to high speed rail.The Committee attempts to distinguish the high speed rail project because itdoes not have a “dedicated funding source” such as the Highway Trust Fundor Airport Improvement Funds. This analogy ignores the fact that the HighSpeed Rail project has funding in hand for the Initial Construction Segment,
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CA High Speed Rail Authority Responds to Peer Review
CHSRA officials sent their response to the Legislature of concerns raised by the independent peer review panel.
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