CA Submits Second Federal HSR Stimulus Application - Up to $10 Billion Could Be Headed Our Way

Across California the California High Speed Rail Authority is hosting rallies in support of the state's application for federal rail stimulus funds. You can follow along at the Authority's official Twitter feed, @cahsra.

The official application was unveiled today in a press conference with Governor Arnold Schwarzenegger, Speaker Karen Bass, and a whole host of other dignitaries, including most of the CHSRA board. The total amount of the application is $4.7 billion, which closely tracks the $4.5 billion the board approved on September 23. When combined with state and local matching funds, including funds from Prop 1A that would be eligible to be spent with the 50% match required under AB 3034, the total funding this could generate for the HSR project is $10 billion, more than enough to get actual construction work underway.

Some of the statements from the LA event:

At a news conference at Union Station, Gov. Arnold Schwarzenegger said he is a high-speed rail "fanatic" and asserted the project would provide a $10 billion economic boost to the state.

"I think it is disgraceful for America to be so far behind when it comes to infrastructure," Schwarzenegger said. "In Europe and Asian countries, they're traveling now up to 300 miles (per hour on bullet trains) while we're traveling on our trains at the same speed as 100 years ago. That is inexcusable. America must catch up."

Schwarzenegger said California deserved to get more than half of the $8 billion in federal stimulus money set aside for high-speed rail development because it is further along in planning than other states and is ready to break ground in 2011, a year before the federal deadline for getting the money.

Also, Schwarzenegger said "those stimulus dollars will go further in California than in any other state because California has pledged to match -- dollar for dollar -- all money received" from the federal government....

In a statement, Los Angeles Mayor Antonio Villaraigosa touted the project's environmental benefits.

"A high-speed rail system that runs faster on one-third the energy of air travel, and one-fifth the energy of car travel, will dramatically reduce CO2 emissions and the time people spend stuck in traffic on our state's freeways," he said.

Among the backers of the application is Senator Barbara Boxer, who put out this statement:

Senator Boxer said, “I am pleased to support the request that the California High-Speed Rail Authority is making today. California voters have already committed nearly $10 billion in state bonds for this effort. This investment of federal high-speed rail funds could help us create more than 130,000 jobs in California, reduce air pollution and congestion on our roads, and accelerate our push for a cleaner and more efficient transportation system.”

Of course, CHSRA's approved application wasn't the final version. The applications for federal stimulus come from the governor's office. And that is where things are starting to get interesting. No small amount of money was shifted around between the September 23 proposal and today's proposal. From the September 23 application:

$1.28 billion for San Jose to San Francisco, including station improvements, grade-separations, electrification and safety state-of-the-art "positive train control" in an upgraded, shared alignment with Caltrain.

$466 million for Fresno to Merced, including right-of-way acquisition, grade-separations, utility relocation, environmental mitigation, earthwork, guideway structures and track.

$819.5 million for Bakersfield to Fresno, including right-of-way acquisition, grade-separations,
utility relocation, environmental mitigation, earthwork, guideway structures, track relocation and new track.

$2 billion for Los Angeles to Anaheim, including high-speed train facilities at Los Angeles Union Station (LAUS), Norwalk Station, and the Anaheim Regional Transportation Intermodal Center (ARTIC); right-of-way acquisition, grade-separations, utility relocation, environmental mitigation, earthwork, guideway structures, tunneling, and track work.

And from the October 2 application:

$2.18 billion for Los Angeles to Anaheim, including high-speed train facilities at Los Angeles Union Station, Norwalk Station and the Anaheim Regional Transportation Intermodal Center; right-of-way acquisition, grade-separations, utility relocation, environmental mitigation, earthwork, guideway structures, tunneling, and track work. Total jobs created: 53,700.

$980 million for San Francisco to San Jose, including station improvements, grade separations, electrification and safety state-of-the-art "positive train control" in an upgraded, shared alignment with Caltrain. Total jobs created: 34,200.

$466 million for Merced to Fresno, including right-of-way acquisition, grade-separations, utility relocation, environmental mitigation, earthwork, guideway structures and track. Total jobs created: 10,500.

$819.5 million for Fresno to Bakersfield, including right-of-way acquisition, grade-separations, utility relocation, environmental mitigation, earthwork, guideway structures, track relocation and new track. Total jobs created: 16,500.

$276.5 million for preliminary engineering and environmental work in all system segments including Los Angeles to San Diego via the Inland Empire, Los Angeles to Palmdale and Bakersfield, Sacramento to Merced and the Altamont Rail Corridor. Total jobs created: 12,000.

The differences appear to be:

-$300 million on the Peninsula

+$180 million for LA-Anaheim

We still don't know yet what the details of the shift have been, as the detailed application information has yet to be provided to the public.

Apparently the funding request for the Transbay Terminal train box is still in the plan, but due to a lack of political lobbying leadership on the Peninsula, other voices on behalf of other parts of the state were more successful in retaining funding.

There are also rumors flying around about money for Caltrans' Division of Rail, which operates the popular and important Amtrak California routes. Some reports I've heard claim that $300 million was moved out of HSR and into Caltrans rail projects. Richard Tolmach, a die-hard HSR denier, put out a press release quoted in the comments to yesterday's post, where he claims that CHSRA staff "successfully convinced the Governor's office on the afternoon of Thursday October 1 to block about $3 billion of conventional rail proposals under development by Caltrans."

The problem here is that under Track 2 of ARRA, most of the money is intended to serve high speed rail projects. It is likely that Amtrak California has gotten some funding, as they should. But the notion that $3 billion would ever have been dedicated by the state to funding non-HSR intercity rail is ridiculous, and it is simply not credible to believe that the USDOT would have ever been willing to fund $3 billion in non-HSR intercity rail even if the state of California asked it to do so. Tolmach is spinning - and that's being generous - when he says, without producing any evidence, that the CHSRA tried to undermine other passenger rail. We have no reason to believe any such thing occurred, in no small part because we have no reason to believe any other passenger rail was likely to get a whole lot of money.

And despite Tolmach's claims, the most persistent stories I've heard on this all day is that Caltrans rail programs actually got MORE money than they were expecting.

While we try to sort out what, if anything, was left on the cutting room floor, we should not forget the movie itself. California High Speed Rail is poised to get around $4 billion in federal funding, which will enable the project to spend potentially $9 or $10 billion by 2012 to get underway.

That is a tremendous accomplishment. Now it's up to the US Department of Transportation to deliver the goods. And based on what the White House has said, California can expect to receive most or even all of the money requested in this application.

Despite what the deniers, NIMBYs, and naysayers may argue, this train is leaving the station. California high speed rail is going to happen.

Should California bid for the 2020 Summer Olympics?

by Rafael

Earlier today, Southeastern Rail in the UK conducted the first trial run of its "Olympic Javelin" service based on its new Japanese-built electric class 395 trains. The service will shuttle passengers from St. Pancras station in downtown London to the sports arenas being constructed for the 2012 summer Olympics near Stratford station on HS1, the UK portion of the high speed line to France. Each of the the 28 trainsets consists of 6 cars and is capable of a top speed of 140mph. Together, the fleet will transport up to 24,000 passengers per hour (!) during the games.

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Of course, the games are just the catalyst for a permanent high speed commuter service (cp. NS HiSpeed in Holland) between densely populated Kent and central London - albeit at the expense of reductions in slower, less profitable services.

This news led me to the following question: Should California bid for the 2020 summer Olympics?

By tradition, the event is nominally awarded to a single city. In practice, the number of events is so large venues can easily be spread out over a much wider area, especially if fast, high-capacity public transportation is available. It just so happens that California is on track to have just that for much of the state by 2020: bullet trains between San Francisco and Anaheim plus upgraded Amtrak California services to Sacramento and San Diego. Metrolink service in the San Gabriel Valley could also be beefed up for the occasion.

The last time the summer Olympics were held in the US California was in Los Angeles in 1984. Those were also the first games to turn a profit and, many of the venues could presumably be refurbished and re-used. What if the Golden State as a whole entered a bid to host the 2020 games? Winning would surely do wonders for both the construction and the tourism industry. If by then DesertXpress to Las Vegas is operational and connected to the California network - a big IF - I imagine many visitors would want to head over to Sin City as well, regardless of whether any Olympic events were hosted there.

Of course, there would be quite a few obstacles to overcome:

• First, the IOC has never awarded the Olympics to an entire state or country. However, there's no fundamental reason it could not break with tradition if presented with an attractive, innovative bid.
  
  
• Second, the state of California is effectively broke, so virtually all of the up-front investments in sports venues etc. would have to come from individual counties, cities and private investors. The feds would chip in via their contribution to the HSR network. For the next governor of California, that would create an opportunity to take an active marketing role on behalf of a no doubt popular bid without having to actually fund anything over and above the $9.95 billion in prop 1A(2008) bonds that voters have already approved for HSR.
  
  
• Third, the HSR starter line and its feeders would have to be fully operational in time for the games. IMHO, this is actually a great argument for submitting a bid, since delays invariably come with cost overruns and carry opportunity costs.

However, perhaps the most important consideration is that there's a very good chance Chicago will get to host the 2016 games. I fully expect President Obama may yet lend his considerable powers of persuasion to help clinch the deal. If successful, three cheers for the Windy City and Midwest HSR, which would surely be a beneficiary.

The IOC will render its final decision on the host city for the 2016 games on October 2, 2009. Californians would have to decide soon after that whether or not to reach for the brass rings four years later.

Special Elections Have Consequences

by Rafael

Future HSR feeder services cut back, raise fares

The San Francisco Chronicle reports today that Caltrain will raise fares and cut service:

The board took no action on the $99.4 million budget plan Thursday - that will come later this month or early next month - but voted unanimously to declare a fiscal emergency. That move allows the transit agency to bypass state environmental reviews and enact service cuts and fare hikes at an accelerated pace.

The decision follows similar ones by BART, SF Muni and AC Transit in the East Bay. Squeezed by cuts in the state budget, reduced commuter ridership and lower sales tax revenues at the county level, all of these bureaucrats essentially have no choice but to increase revenue and/or cut services to plug rapidly expanding holes in their respective budgets.

Down south, Metrolink is also raising fares, but LA Metro will maintain both fares and service levels in FY2010. Indeed, it boasts of service enhancements, even as it cuts expenses by $130 million and taps into reserves. Note that many of these "enhancements" are actually cuts in selected bus routes.

NCTD also intends to maintain both service levels and (most) fares in the coming fiscal year, having already implemented cuts and fare hikes in the current one. MTS in San Diego has passed a framework budget but warns of further cuts to come as it fills in the details.

The mixed picture suggests that Southern California, long considered a bastion of the automobile, now actually has a mass transit network in better fiscal health than the Bay Area. However, the reprieve will only be temporary if the recession last longer than expected.

Special elections have consequences

Amtrak California aka Caltrans' Division of Rail is funded by the state of California, which is all but bankrupt. Since voters rejected a delicate compromise in a complex package of propositions put to them last month, chances are subsidies for the Pacific Surfliner, Capitol Corridor, San Joaquin may well be slashed severely in coming weeks as lawmakers in Sacramento figure out how to balance their budget through cuts alone. Unfortunately, while service cuts and/or fare increases are required at multiple levels in the short term, they also set in motion a vicious circle of ever-decreasing ridership and ever-greater traffic on the state's highways. That's exactly the opposite of what is required for a sustainable recovery and population/economic growth in the long term.

Of course, California is hardly alone in its budget woes, but very few states require a 2/3 majority to pass a balanced budget. Considering its population now exceeds that of Canada, which requires just a simple majority, perhaps it's time to admit the obvious and amend the pertinent sections of the state constitution in 2010 such that the change is hard to reverse. You can either have high taxes and high-quality public services (e.g. dense transit networks at multiple distance scales) or, low taxes and few public services. The other permutations are simply not sustainable, there is no tooth fairy and also no prospect of reasonable compromise.

Having sole authority and responsibility for balancing the budget tends to concentrate the minds of politicians on both sides on drafting feasible, coherent multi-year policies instead of engaging in ideological trench warfare. In addition, there could well be a drop in the number of spending decisions taken via single-issue ballot propositions, especially expensive ones without a dedicated revenue stream. And yes, while I am in favor of California HSR, I do believe direct democracy was a bad way to get it off the ground. Such mega-projects ought to be proposed and promoted not by bureaucrats but by elected officials who are directly accountable to the people.

Turning a vicious circle into a virtuous one

Meanwhile, Secretary of Transportation Ray LaHood is trying to plug a hole of his own in the federal highway trust fund. With healthcare and electricity infrastructure high on the President's domestic agenda, it is possible the next major transportation bill won't be passed before the 2010 midterm elections. For now, expect Congress to kick the can down the road, i.e. to take on more debt rather than raise federal fuel taxes, a concept that is widely perceived as politically impossible. Then again, so was electing an African-American POTUS a couple of years ago.

However, at some point, both the state of California and the Obama administration will have to reconcile their lofty ambitions of green energy and transportation systems with the hard reality that investments in such infrastructure will only pay off if perpetuating the status quo becomes prohibitively expensive for private businesses and consumers alike. No pain, no gain. Both should cut other taxes if and when they can, but they really need to ramp up those on petroleum-based fuels to gradually reduce total vehicle-miles traveled per capita, to partially shield consumers from oil price volatility and, to boost the utilization rates of fixed-cost transit infrastructure (incl. bicycle paths).

Ironically, sharply higher gas prices are also exactly what the domestic auto industry needs to increase profits per sale after it sheds excess unit volume capacity in the context of its present restructuring effort. GM in particular is risking the farm - soon to be your farm - on its expensive E-Flex architecture, essentially electric drive with an "emergency" generator to extend the range.

Meanwhile, HSR already has a proven track record of returning operating surpluses after an initial ramp-up period, overseas and even in the Acela corridor. There is every reason to believe it will thrive without annual subsidies and perhaps even cross-subsidize local and regional connecting transit operations. In the long run, HSR will prove a far superior investment to paving over ever more land with asphalt, precisely because it promotes an alternative to land development patterns that rely on cheap oil while creating additional new opportunities for the US manufacturing sector.