ALL RIGHT LIKE TO CALL THIS
MEETING TO ORDER.
GOOD MORNING EVERYONE WELCOME TO
THE OVERSIGHT HEARING.
A JOINT HEARING OF THE LOOK
JOINT LEGISLATIVE AUDIT
COMMITTEE.
AND THE ASSEMBLY COMMITTEE ON
TRANSPORTATION.
THIS MORNING WE'LL BE DISCUSSING
THE FINDINGS AND RECOMMENDATIONS
OF THE STATE AUDITOR AND HER
RECENT OUR REPORT.
RELEASED ON THE CALIFORNIA HIGH
SPEED RAIL AUTHORITY.
WANT TO THANK SENATOR BELL.
AND ASSEMBLY MEMBERS ARAMBULA
AND PATTERSON FOUR REQUESTING
THIS AUDIT ON THIS IMPORTANT
SUBJECT.
AND I ALSO WANT TO THANK
ASSEMBLYMEMBER FRAZIER.
THE CHAIR OF THE ASSEMBLY
COMMITTEE ON TRANSPORTATION. FOR
ARE REQUESTING TODAY'S HEARING.
TODAY WE'RE GONNA TAKE A LONG
HARD LOOK AT THE HIGH SPEED RAIL
PROJECT.
I ALONG WITH THE MAJORITY OF
CALIFORNIA VOTERS.
INITIALLY SUPPORTED THE DREAM.
OF OUR GREAT STATE BUILDING THE
NATION'S FIRST BILL BULLET TRAIN.
WE'LL BE PASSED PROPOSITION ONE
EIGHT AND TWO THOUSAND EIGHT
HOWEVER MANY CALIFORNIANS HAVE
BECOME.
INCREASINGLY DISILLUSIONED.
AFTER THE DREAM OF THE
CALIFORNIA BALL THE TRAIN.
HAS BECOME A NIGHTMARE OF COST
OVERRUNS AND PROJECT DELAYS.
TODAY THE LEGISLATURE WILL BEGIN
ITS COMMITMENT TO INCREASE
OVERSIGHT OVER THE HIGH SPEED
RAIL PROJECT.
AND ITS FUTURE.
SO THAT WE NOT ONLY TO CONTINUE
TO INVEST RESPONSIBLY.
AND TRANSPORTATION
INFRASTRUCTURE AND CREATE JOBS.
BUT ALSO SO THAT WE IN SURE THAT
TAXPAYER DOLLARS ARE BEING WELL
SPENT.
TODAY THIS COMMITTEE WILL BE
SEEKING ANSWERS TO MANY
QUESTIONS. FOR MOST OF MY MIND
WILL BE WHAT STEPS.
WELL THE HIGH SPEED RAIL
AUTHORITY BE TAKING. TO REGAIN.
TRUST AND CONFIDENCE IN THERE
ABILITY TO CARRY OUT THIS
PROJECT.
AT THIS TIME I'D LIKE TO TURN
OVER. TWO THE CHAIR OF THE
ASSEMBLY COMMITTEE ON
TRANSPORTATION --
MISTER FRAZIER.
THANK YOU MISTER CHAIRMAN.
WE'RE HERE TODAY TO REVIEW THE
AUDITOR'S FINDINGS AND HOW THE
STATE'S HIGH SPEED RAIL PROGRAM
IS BEING DELIVERED BY THE
CALIFORNIA HIGH SPEED RAIL
AUTHORITY [inaudible]
IMPACT.
THERE IS.
ARE.
IN PAST HEARINGS I RECOGNIZE THE
DIFFICULT TASK THE AUTHORITY HAS
HAD IN BUILDING THE HIGH SPEED
RAIL SYSTEM.
I READILY ADMIT I'VE BEEN
SKEPTICAL ABOUT THE LONG TERM
VIABILITY OF THIS PROJECT
HOWEVER HAVE ALWAYS BEEN WILLING
TO WORK WITH THE AUTHORITY IN
GETTING THIS PROJECT.
MOVING ALONG HENCE THE TOURS
THAT I'VE TAKEN WITH THE
AUTHORITY.
AND CONSTRUCTION STAFF. TO SEE
WHERE THEY'RE AT AFTER HIRTY
FIVE YEARS IN THE CONSTRUCTION
INDUSTRY.
IT'S NICE TO BE ABLE TO
COLLABORATE WITH THE FOLKS THERE
AND UNDERSTAND SOME OF THE
DIFFICULTIES ARE HAVING BUT ALSO.
NO THAT WITH THEIR NOT WHERE
THEY THOUGHT THEY WOULD BE.
UNFORTUNATELY HE'S LOT OF
RESULTS ARE MAKING ME QUESTION
MY FAITH IN.
THAT MY FAITH HAS BEEN VERY MUCH
BEEN MISPLACED.
THE SCOPING COST TO THE
TAXPAYERS IS ONGOING SYSTEMIC
PROBLEMS WITH BASIC CONSTRUCTION
MANAGEMENT TASKS LIKE CONTRACT
OVERSIGHT MEDICAL PLANNING.
ARE STAGGERING.
BUT WE STILL HAVE THE CONTINUAL
UNANSWERED QUESTION HIGHLIGHTED
BY THE AUDITOR.
ABOUT THE LARGE FUNDING GAP TO
GET HIGH SPEED TRAINS UP AND
RUNNING AND I GOTTA TELL YOU
EVERY TIME THAT I'VE HAD.
A HEARING THAT INCLUDED THE
STATE ARE THE PEOPLE OF
CALIFORNIA NEED TO THANK THIS
ORDER.
THIS IS BEEN A BLESSING TO THE
PEOPLE OF BEING ABLE --
TO GET THIS KIND OF TRANSPARENCY.
THERE'S THERE'S SET DATE THE
SUIT SECURE FUNDING FOR PROSTATE
TWELVE POINT SEVEN BILLION.
BUT TWENTY NINE POINT FIVE
BILLION IS NEEDED JUST TO FINISH
THE INITIAL OPERATING PROJECT.
THERE'S A GAP THERE FOLKS.
WHERE IS IT COMING FROM?
DO COOLEY PHASE ONE FROM SAN
FRANCISCO TO LOS ANGELES WILL
COST APPROXIMATELY SEVENTY SEVEN
BILLION DOLLARS.
LEAVING A CURRENT FUNDING GAP OF
OVER SIXTY FOUR BILLION DOLLARS.
BY FAR THE COSTLIEST DECISION TO
THE CALIFORNIA TAXPAYER WAS A
RUSH TO BEGIN CONSTRUCTION.
GROUND WAS BROKEN BEFORE THE
AUTHORITY EVEN KNEW OR HAD
POSITION OF WHAT PARCELS OF LAND
IT NEEDED AND ONE ENTITIES IT
NEEDED TO NEGOTIATE WITH IN
ORDER TO BUILD THIS
INFRASTRUCTURE.
AND I'VE LIKE IN THIS TO
BUILDING THE AIRPLANE ON THE
RUNWAY [inaudible]
MANY TIMES.
THE AUTHORITY IS SAID IT WAS
NECESSARY TO BEGIN CONSTRUCTION
QUICKLY IN ORDER TO TAKE
ADVANTAGE OF THE THREE POINT
BILLION DOLLARS OF FEDERAL FUNDS.
UNFORTUNATELY.
THE HAZE HAS RESULTED IN A
DOMINO EFFECT OF COST OVERRUNS
ESTIMATED TWO POINT TWO BILLION
DOLLARS SO FAR.
IT IS ENTIRELY POSSIBLE THAT ANY
GAINS CALIFORNIA RECEIVE BY
STARTING EARLY.
WILL BE ENTIRELY WIPED OUT.
WASTE OF ALMOST THREE BILLION
DOLLARS.
I AM ALSO DISAPPOINTED THAT ONCE
AGAIN CONTRACT MANAGEMENT HAS
BEEN FLAG AS AN ISSUE AT THE
AUTHORITY.
DAUGHTER POINTED UP CONTACT
OVERSIGHT DEFICIENCIES A TOOTH
TWENTY TWELVE WHAT IT WILL LOOK
AND ACT PASSED THE AUDITOR IF
THIS IS THIS A RECURRING THEME.
THE AUTHORS OF THE IF
AUTHORITIES OWN INTERNAL AUDITS
IN TWENTY FIFTEEN TWENTY SIXTEEN
ALSO POINT OUT SHORTCOMINGS IN
CONTRACT MANAGEMENT.
AND WE STILL FIND OURSELVES
TODAY WITH ONGOING OVERSIGHT
ISSUES.
MULTIPLE TIMES THE AUTHORITY IS
SEATED THAT THESE ISSUES THAT
WERE BEING ADDRESSED.
IT IS APPARENT THAT THE
AUTHORITY HAS BEEN LESS THAN
FORTHCOMING.
WITH THIS PROCESS.
I CONTINUE TO WORK ON INCREASING.
ACCOUNTABILITY IN LEGISLATIVE OR
THE OVERSIGHT OF THE AUTHORITY.
INCLUDING THE BOARD OF DIRECTORS
AFTER HAVING MY MOST RECENT
ATTEMPT VETOED.
I WILL BE BACK NEXT YEAR WORKING
WITH MY COLLEAGUES IN BOTH THE
SENATE AND ASSEMBLY TO PUSH FOR
INCREASED OVERSIGHT AND OPENNESS.
AT THIS AUTHORITY.
I LOOK FOR TODAY'S HEARING IN
TODAY'S TESTIMONY.
AND I WANT TO THANK YOU SO MUCH
OF CHAIRMAN MURATSUCHI FOR DOING
THIS HEARING.
THANK YOU THANK YOU VERY MUCH
MISTER CHAIRMAN AND ACTED LIKE
TO NOW TURN IT OVER --
TO INVITE --
THE SATYR FREIGHT --
SUMMER BELL.
THE CHAIR OF THE SENATE
TRANSPORTATION COMMITTEE AS WELL
AS WHEN AT THE REQUEST OF THIS
ON MY STATEMENT WILL BE VERY
BRIEF -- THE
AUDIT -- IS
HELPFUL AND REINFORCING
PREVIOUSLY IDENTIFIED ISSUES
.
THAT
in two issues highlighted in
that report so the auditor's
findings indicate that these
issues continue to be on going
and -- we want some answers from
our high speed rail authority
the the legislature's along
with the current and new in
ministration need to work
in partner Sir partnership
to determine what's next for
the high speed rail authority
this year I offered -- the
bill SB eleven seventy two
that were removed many of the
duplicate measures there because
the latest in the authorities
property acquisition process
the bill was signed into law
by governor brown and will
say the state time and money
but this is not -- the only
thing we need to do is be
eleven seventy two is just
the start this coming March my
committee will be holding an
oversight hearing to provide
the authority the opportunity
to report back on our progress
and they have made relative to
these auditor's findings and
and completion of the business
plan this will be part of
hearing of for the authorities
-- update report we hope to
see this project development
on time and on budget schedule
-- we need to make some major
changes and we need to make them
now thank you thank you very
much next I'd like to invite
to assembly member Patterson as
a co request through the audit
Mister chairman thank you --
I would have to be pretty blunt
this audit has
demonstrated to the
state of California what many
of us have been concerned about
for years now central California
is the Canary in the coal mine
it is the Guinea pig and all of
this and to date we have spent
billions of dollars putting
up concrete that's gonna run
a rump rail road between just
outside Madera just outside
Bakersfield this audit
along with other efforts to
get to the facts and the truth
that demonstrate that this
project is in fact collapsing
the last business plan came out
-- I suggested that it was
a going out of business plan
fact there's no money to
complete this fact you can't get
the disparate sections connected
fact the audit has
confirmed what many of us were
concerned about with respect
to the rush to put money out
when they did not have property
they did not have a plan with
respect to the location and
relocation of utilities and this
what it says it was their
fault that they knew it
going in and they made a
calculated decision to do it
and to not tell anybody
and until there were a
lot of concerns raised and
until a new executive director
Mister Kelly was put in place
we finally saw a business
plan that at least admitted
to those facts now
that that's
yesterday okay what's coming
tomorrow there is a federal
law that going on right now it
started in April and that
federal audit in part is
going to look at the mission
use of those funds early on
putting out billions of dollars
knowing full well they did
not have to property nor
plans to get the utilities
relocated they've been caught
and there's going to be huge
consequence in the federal on
number one you got to meet
their deadline this audit
says you're going to have to
move from very very slow slow
snail pace to warp speed
in four years just to
meet the deadline you fail
to meet the deadline or
the audit confirms that
that billions of dollars
were miss spent initially
means that there's going to
be the real potential for a
multi billion dollar clawback
by the federal government
not that's where we are
all the happy talk all
the -- already rosy
press releases up all of
the -- aerial shots
from drones over a lot of
concrete in the air around
central California is
not reality reality
is embedded in this audit
and as we proceed I wanna
dealt a little bit deeper
into the -- because it is
of what I consider to be
this is borderline deceit
and we're going to have
to get to the bottom of
it and I think the federal
it's going to do that but
beyond that we have a time
problem here that I
think cannot be met
and so I think the
mind my intention my intention
was to to perhaps go into some
more detail with respect to
some of that earlier concern
but I'm not going to repeat
them I we all aye aye other
members here have said so
what I would think we need
to be focusing on is what
the heck is your plan be
because plan nay has failed
and if you don't come
to terms with this this
project will die of its own
weight when you run out of
money it's going to end
and Fresno California is going
to be left with a bunch of
concrete in the air in a rump
railroad that's not good enough
thank you Mister Patterson
before we proceed with that
today's hearing I have a
few housekeeping items to
make sure that -- -- we're
all clear on today's agenda
of first I will be asking
the state auditor and her
staff to present -- summary
of the audit findings and
recommendations -- that --
will be -- I asked the honor
to keep it to about fifteen
minutes and and presentation
following that so will ask for
a response to the audit from
the California high speed rail
authority a similarly I ask
that you keep it to around
fifteen minutes Fong that to
members of the of -- numbers
up on the días will have --
some time to ask some
questions and then we will --
wrap up the hearing with an
opportunity for public comment
is there any questions
from anyone on the dies
at this time say none --
state auditor how in your staff
thank you for your attendance
thank you Mister chairman
and members for the record my
name's Elaine Howell in the
California state auditor to
my left is Tammy was on all
Tammy was the audit manager
on this particular project to
my right is mark Reiner the
mark was the audit supervisor
working with the team out in
the field and and engaging
in conversation discussions
with the high speed rail
authority what I what the way
will handle this presentation is
I'm gonna give very high level
overview of the issues that
we identified that I'll turn
it over to ms Lozano who will
talk about one specific issue
that we talk about in the
report and then Mr Reiner day I
will discuss some of the other
issues so as many of the
members have mentioned in their
opening comments this audit
covered a variety of different
issues that -- the joint
legislative audit committee
and particulates senator bail
Assemblymembers Arambula and
and Mister Patterson asked us
to look at and that was related
to cost containment contract
management -- contracting with
small disadvantaged disabled
veteran business is looking at
their sustainability policies
looking at economic impacts
recall at the hearing Mister
around a lot particularly --
focused on that and then also
asking us to look to determine
whether or not there are any
additional opportunities for
the high speed rail authority
to expedite this project to
try to get it done more quickly
so we have issues with all of
those as some of the opening
comments mentioned clearly
there has been -- some
cost over runs delays in the
project as far as consistently
and the authority having to
consistently push deadlines out
as you know we audited this
project -- many many years
ago contract management wasn't
issue we identified in the
very first thought it we did
which was back in twenty ten
we also did another audit --
in twenty twelve which was a
follow up contract management
was a significant problem in
those audits and it continues
to be a problem and that is
something that really the high
speed rail authority needs to
focus on and one of the issues
tied to that that we discussed
in the audit report is there's a
reliance on contractors we are
not bringing in the authority
is not bringing in and hiring
state employees ought to be able
to do some of these oversight
or perform some of these
oversight responsibilities why
is that important because you
have contractors overseeing
other contractors and there
could potentially be a
conflict of interest there you
INTEREST THERE YOU NEED TO HAVE
SOME STATE EMPLOYEES --
THE REASON I BRING THIS UP WE
ALSO LOOKED AT THEIR RESPONSE TO
THAT AND THEY AGREED AND THEY'VE
AGREED IN THE PAST.
WHAT THEY'RE SUGGESTING IS THAT
THEY WILL --
PUT A B. C. P. N. FOR FISCAL
YEAR.
TWENTY TWENTY ONE SO WE'RE
LOOKING AT ANOTHER YEAR AND A
HALF BEFORE THEY EVEN GET THE
FUNDING OR AT LEAST THEY'RE
PURSUING THE FUNDING TO HIRE
ADDITIONAL STATE EMPLOYEES WE
THINK THAT'S FAR.
TOO FOR FAR TOO LONG --
FAR TOO FAR OUT.
SO -- THE
AUTHORITY NEEDS TO ADDRESS THAT
SO.
COST OVERRUNS DELAYS IN
CONSTRUCTION THE ISSUE WITH
RESPECT TO THE FEDERAL DOLLARS
THAT IS A SIGNIFICANT RISK TO
THE STATE OF CALIFORNIA NOT JUST
TO THE AUTHORITY BUT TO THE
STATE OF CALIFORNIA WE ARE REFER --
TO GAO OPINION THE GOVERNMENT
ACCOUNTABILITY ARE FEDERAL
COUNTER POUT COMING APART THAT
AUDITS ON BEHALF OF THE FEDERAL
GOVERNMENT ON BEHALF OF CONGRESS --
IN IN THAT OPINION IT MADE IT
VERY CLEAR THAT THERE HAVE BEEN
INSTANCES IN THE PAST WHERE THE
FEDERAL GOVERNMENT CAN EITHER
RECOUP FUNDS OR OFFSET FUTURE
FUNDS TO A STATE AND THEY HAVE
DONE THAT. ONE MINOR AMOUNT FOR
CALIFORNIA BUT THEY HAVE THAT
DON'T HAVE DONE THAT WITH SOME
OTHER STATES SO THAT A LOOMING
DEADLINE OF THE FEDERAL DEADLINE
IS DECEMBER.
TWENTY TWENTY TO THE AUTHORITY
IS SUGGESTING THAT THEY WILL
COMPLETE MARCH OF TWENTY TWENTY
TWO BUT EVEN AT THE BOARD
MEETING WHEN THEY PRESENTED THAT
INFORMATION TO THE BOARD.
OF THE DEPUTY CHIEF OPERATING
OFFICER SAID WELL IT'S A VERY
VERY AGGRESSIVE SCHEDULE AND AS
WE INDICATE IN THE AUDIT REPORT.
THEY WOULD HAVE TO BE ABLE TO
PERFORM.
AT WORK AT TWICE THE PACE THAT
THEY HAVE BEEN ABLE TO DO SINCE
TWENTY THIRTEEN SINCE THEY
STARTED WORKING ON THIS
PARTICULAR PROJECT --
THEY HAVE --
ENGAGED IN BLENDING MISSILE IS
ON A WILL TALK A LITTLE BIT
ABOUT THE BENEFITS AND SOME OF
THE YOU KNOW THE OFFSETS OF
BLENDING.
WITH RESPECT TO THAT BUT THAT'S
CERTAINLY HAS ASSISTED IN IN
CONTROLLING COST MR WRITER HE IS
GOING TO TALK A LOT ABOUT
CONTRACT MANAGEMENT --%
AGAIN THIS IS AN AREA THAT WHERE
WE WE FIND SIGNIFICANT ISSUES
THE OWN THE INTERNAL AUDITOR FOR
THE HIGH SPEED RAIL AUTHORITY
HAS IDENTIFIED ISSUES WITH
RESPECT TO THAT.
POOR CONTRACT MANAGEMENT RESULTS
IN MORE CHANGE ORDERS --
WHICH INCREASES COSTS WHICH
PUSHES OUT TIME TIME IS MONEY AS
MR ARAMBULA SAID AT THE JAIL
LIKE HEARING.
SO THE MORE CHANGE ORDERS THE
MORE.
YOU'RE HAVING TO PUSH THE
PROJECT OUT THE COSTS ARE GOING
TO INCREASE ANOTHER CONCERN IS
THE MOST COMPLEX WORK THAT NEEDS
TO BE DONE IS IN THE FUTURE
WHERE THEY'RE CONSIDERING
TUNNELING.
AND AND THEY DON'T HAVE THE
ABILITY TO DO ANY KIND OF
BLENDING OR ANY OFFSETTING SO
THERE'S A SIGNIFICANT RISK THAT
THE THE COST OF THIS PARTICULAR
PROJECT IS GOING TO ESCALATE
EVEN MORE THAN IT HAS. TO DATE --
COUPLE OF OTHER ISSUES AND THEN
I'M GONNA TURN IT OVER AGAIN
SUSTAINABILITY WE ACTUALLY DID
HIRE AN OUTSIDE EXPERT A LOOKED
AT WHAT THE AUTHORITY A PUT
TOGETHER AS FAR AS THEIR
POLICIES AND AND THEY AGREED
THAT THEIR POLICIES LOOK PRETTY
GOOD.
BUT THEY DID HAVE SOME CONCERNS
WITH RESPECT --
TO ANALYZING THE EFFECT OF
CONSTRUCTION THEY'RE THEY'RE
BASICALLY COMBINING EVERYTHING
AND REALLY FOCUSING ON
SUSTAINABILITY IN LOOKING AT A
PROJECT THAT'S COMPLETE HOW MANY
CARS ARE GOING TO COME OFF THE
ROAD -- IF
PEOPLE USE HIGH SPEED RAIL SO MR
REINER YOU'LL TALK A LITTLE BIT
ABOUT THAT.
THE LAST ISSUE IS RELATED TO THE
USE OF SMALL BUSINESSES JUST
DISABLED.
VETERAN BUSINESSES --
THEY SAID OF PRETTY LOFTY GOAL
OF THIRTY SAW IN SOME OF THE
WORK THAT WE ANALYZE THAT THEY
THEY WERE ABLE TO ACHIEVE THAT
SO THERE IS.
A FAIR AMOUNT OF BUSINESS THAT'S
GOING TO SMALL AND DISADVANTAGED
AND CERTAINLY DISABLED VETERAN
BUSINESS IS WHAT WE THINK THEY
NEED TO DO A BETTER JOB OF THERE
IS TRANSPARENCY THERE ARE SOME
CONTRACTS THAT THEY HAVE
EXEMPTED FROM.
THAT REPORTING SO WE THINK THAT
THEY JUST NEED TO TO DISCLOSE
THAT INFORMATION AND BE A BIT
MORE FORTHRIGHT WITH RESPECT TO
THAT.
SO WE DO HAVE A VARIETY OF
RECOMMENDATIONS ONE KEY
RECOMMENDATION THAT WE WE TALK
TO CENTER BELL WHEN WE BRIEFED
HIM ON THIS REPORT IS.
REQUIRING THE AUTHORITY TO
PROVIDE QUARTERLY UPDATES TO THE
LEGISLATURE SO THAT THE
LEGISLATURE IS KEPT INFORMED OF
THEIR PROGRESS PARTICULARLY WITH
THIS DEADLINE.
OF DECEMBER TWENTY TWENTY TWO
RELATED TO THE FEDERAL DOLLARS --
IN THE FEDERAL GRANT THAT THAT
CALIFORNIA RECEIVED FOR THIS
PROJECT WE HAVE ALSO HAVE OTHER
RECOMMENDATIONS THAT WE'VE MADE
TO THE AUTHORITY --
AND THEY HAVE IN IN MOST CASES
EMBRACE THE RECOMMENDATIONS AND
INTEND TO IMPLEMENT THEM AS YOU
KNOW WE DO HAVE A FOLLOW UP
PROCESS.
WHERE WE WILL EXPECT PERIODIC
REPORTS TYPICALLY THAT SIXTY DAY
SIX MONTHS ONE YEAR --
AS I MENTIONED TO SOME MEMBERS
ONE WE BRIEF THEM ON THIS AUDIT
WE CAN CERTAINLY --
INCLUDE MORE FREQUENT BRIEFING
ARE MORE FREQUENT STATUS UPDATES
FROM THE AUTHORITY DOESN'T HAVE
TO BE THAT TIME FROM WE CAN
CERTAINLY CHANGE THAT.
AND THAT WOULD ALLOW US TO
PROVIDE YOU ARE PERSPECTIVE ON
WHAT THE AUTHORITY IS ASSERTING.
WITH THAT MISTER CHAIRMAN I'LL
TURN IT OVER THE MISSILES ON
WHEN SHE'S GOING TO TALK A
LITTLE BIT ABOUT --
THE DISCUSSIONS IN THE AUDIT
REPORT RELATED.
TO THANK YOU GOOD MORNING --
CHAIR AND MEMBERS OF THE
COMMITTEES --
AS THE STATE AUDITOR MENTION I'M
GOING TO TALK ABOUT --
BLENDING THE SYSTEM WAS
ORIGINALLY --
PLANNED A STANDALONE DEDICATE
SYSTEM TO COVER SEVEN HUNDRED
MILES IN CALIFORNIA.
AND BECAUSE OF THE RISING COSTS
THE THE AUTHORITY HAD STARTED
IMPLEMENTING --
THE BLENDING PROCESS --
IT FIRST IN INTRODUCED BLENDING
IN ITS TWENTY TWELVE BUSINESS
PLAN --
DISSECT THE SEGMENT BETWEEN SAN
FRANCISCO AND SAN JOSE WAS THE
FIRST --
SECTION TO BE BLENDED.
IN TWENTY SIXTEEN IT ADDED A-BLENDING OF A SECOND SEGMENT
BETWEEN GREAT.
BURBANK IN LOS ANGELES AND AGAIN
IN TWENTY EIGHTEEN IT ADDED A
THIRD SEGMENT --
BETWEEN SAN JOSE AND GILROY --
THERE ARE TRADE OFFS --
THAT COME WITH BLENDING OF
BLENDING --
PROVIDES A LOT OF COST SAVINGS.
FOR THE AUTHORITIES ESTIMATED
COSTS -- WE
DID AN ANALYSIS OF THE
COMPONENTS THAT WERE BLENDED AND
THERE IS ROUGHLY. TEN POINT NINE
BILLION DOLLARS IN SAVINGS
BECAUSE OF THE TRANSITION TO
BLENDING --
SO WE SEE THIS IS A POSITIVE --
POSITIVE MECHANISM.
WITH THE BLENDING COME STRAIGHT
OFF -- THE
COST SAVINGS --
SORRY.
WHAT POINTING?
THEY ARE SHARING TRACKING
CORRIDORS WITH OTHER REAL
PROVIDERS --
AND SO THERE ARE LIMITS ON THE
SPEED AT WHICH THE THE TRAINS
CAN TRAVEL IN THOSE SHARE
CORRIDORS.
ADDITIONALLY BECAUSE THEY'RE
SHARING --
OPERATIONS WITH TO RUN THE
TRAINS THEIR LIMITED IN HOW MANY
TRAINS THEY CAN RUN SO THAT'S A
TRADE OFF AS COMPARED TO THE
DEDICATED SYSTEM.
THE THE IMPACTS AS THE SPECIFIC
IMPACTS OF THOSE --
TRADE OFFS --
THOSE -- THE
BLENDING.
WILL NOT BE KNOWN AS NOT KNOWN
AT THIS TIME AND BECAUSE THEY
DON'T HAVE THE SYSTEM BUILT --
WE ALSO DID AN ANALYSIS TO
COMPARE THE COSTS THAT WOULD
HAVE OCCURRED HAD THEY NOT
BLENDED --
AND ARE NOW ALSO SHOWS THAT THE
COST ESTIMATES WOULD HAVE BEEN A
HUNDRED AND 11%.
HAD THEY NOT BLENDED --
WITH THE BLENDING IT'S THE COST
INCREASES ARE 81%.
WHILE BLENDING HAS REDUCE THE
SYSTEMS EXPECTED COSTS IT'S
IMPORTANT TO REMEMBER AS THE
STATE AUDITOR MENTIONED
PREVIOUSLY.
THERE ARE NO MORE OPTIONS TO
BLEND THEY BLENDED EVERYWHERE
THAT THEY CAN.
SO IT'S IMPORTANT THAT THEY FIND
WAYS TO CONTAIN THE COST AND
DEAL WITH THE COST OVERRUNS --
SO THAT THEY CAN DELIVER THE
SYSTEM.
NEXT --
MARKS GONNA TALK ABOUT THE
CONTRACT [inaudible]
THANK YOU.
GOOD MORNING MISTER CHAIR
COMMITTEE MEMBERS MY NAME IS
MARK RUNNER THE WITH A
CALIFORNIA STATE AUDITOR'S
OFFICE.
HI THE STATE ATER SUMMERS THE
BEGINNING I'M GOING TO TELL YOU
ABOUT --
THAT KIND OF CRITICAL MASS OF
OUR FINDINGS RECOMMENDATIONS
HAVE TO DO --
WITH A COUPLE DIFFERENT ASPECTS
OF THE AUTHORITIES CONTRACT
MANAGEMENT PROCESS SEES AND THEN
I WILL SUMMARIZE SOME OF THE
OTHER OBJECTIVES WE DISCUSSED --
IN THE REPORT. FOR BEING --
STARTING WITH THE THE CENTRAL
VALLEY CONTRACTS FOR
CONSTRUCTION THE AUTHORITY HAS
THREE ACTIVE CONSTRUCTION
CONTRACTS IN THE CENTRAL VALLEY.
WHICH RESCUED WITH AN INITIAL
VALUE OF TWO POINT FIVE BILLION
DOLLARS TO COMPLETE --
THAT ONE OF THE OBJECTIVES THAT
JOE INSTEAD OF AUDIT COMMITTEE
DIRECTED US TO EXAMINE WAS THAT
RELATED TO CHANGE ORDERS OF
THOSE CONTRACTS SO THOSE.
CHANGE ORDERS FUNCTIONS
AMENDMENTS TO THE CONSTRUCTION
CONTRACTS AND CAN ARISE WHEN.
GENERALLY --
ADDITIONAL SCOPE OF WORK IS
ADDED OR WHEN THE CIRCUMSTANCES
ARISE THAT.
INHIBIT THE COULD A CONTRACTOR
FROM CARRYING OUT THE PLANS AS
DESIGNED.
ON AN EXAMPLE OF THE OF THE
FIRST TYPE WOULD BE THE
AUTHORITIES DECISION TO EXTEND --
THE THE NORTH MOST CONSTRUCTION
PROJECT UP TO MADERA ASSETS AND
IT JUST A CLEAR ADDITION OF
SCOPE TO THE ORIGINAL CONTRACT.
HOWEVER WE ALSO.
IDENTIFIED MANY INSTANCES ARE
COSTING MANY MANY MILLIONS OF
DOLLARS RELATED --
TO CIRCUMSTANCES THAT --
EMERGE DURING CONSTRUCTION THAT
HAD TO DO WITH RISKY AUTHORITY
WAS AWARE OF WHEN IT EXCEEDED
THOSE CONTRACTS --
SPECIFICALLY --
CONTRACTS CHANGES TO THOSE THREE
CONTRACTS TO DATE AT THE TIME OF
OUR REVIEW HOW REPRESENTED TO
SIX HUNDRED MILLION DOLLARS
INCREASES OVER ORIGINAL VALUE
BRINGING THE TOTAL COMBINED I TO
THREE POINT ONE BILLION --
BUT ALSO AGAIN TO DATE EXECUTED --
A COMBINED ARE SHE WOULD HAVE I
SHOULD SAY NINE MONTHS TO THE
COMPLETION OF THE THREE
CONSTRUCTION PROJECT PRODUCT
PACKAGES AS A WHOLE.
HOW?
WE EXAMINED --
THE IS THE CHANGE ORDERS BOTH A
SUSPECT INDIVIDUAL CHANGE ORDERS
AND ALSO A KIND OF MORE GLOBAL
LEVEL.
I WITH RESPECT INDIVIDUAL CHANGE
ORDERS WE FOUND THAT AT CERTAIN
INSTANCES.
THE AUTHORITY WAS GOING AGAINST
THE INITIAL --
ADVICE DETERMINATIONS OF THE
OVERSIGHT FIRMS EMPLOYEES TO
HELP IT REVIEW I REQUEST A
CHANGES FROM THE CONSTRUCTION
CONTRACTORS TO ENSURE THAT THOSE
CHANGES HAVE MERIT AND ARE
PROPERLY PRICED --
WHEN WE ASK THE AUTHORITY ABOUT
ITS DECISION TO GO AGAINST THOSE
INITIAL DETERMINATIONS OF THE
AUTHORITY REPEATEDLY REFERENCED
ISSUES ASSOCIATED WITH --
AGREEMENTS IN PLACE WITH
EXTERNAL --
THIRD PARTIES SUCH AS REAL ROADS --
THE UNCERTAINTY SURROUNDING THE
LOCATION AND A RELOCATION.
OF UTILITIES SUCH AS GAS LINES
AND TELECOMMUNICATIONS.
AND ADDITIONAL NOTABLY --
THE FAILURE OF THE AUTHORITY TO
ACQUIRE --
SAYS --
SUFFICIENT LAND ON WHICH TO
CONSTRUCT THE PROJECT BEFORE IT
EXECUTED THOSE CONTRACTS.
ON A GLOBAL LEVEL. TO DATE WE'VE
WE'VE IDENTIFIED THAT A PROBABLY
60% OF THE SIX HUNDRED MILLION --
AND EXECUTE CHANGE ORDERS ARE
DIRECTLY RELATED TO THOSE THOSE
RISK AREAS.
OF WHICH THE AUTHORITIES AWARE
WHEN EXECUTED AS CONTRACTS ALSO
ONE POINT FIVE BILLION DOLLARS
AS OF NOW IN EXPECTED FUTURE
CONTRACT CHANGES.
AND PRICE ONLY 70% OF THOSE
FUTURE CHANGES ARE TREATABLE
THESE RISK AREAS.
SO -- THESE
THESE SCUM SMALL COLLECTION OF
CAUSES HAVE REPRESENTED A YOU
KNOW AN OUTSIZED IMPACT ON ON
COST OVERRUNS TODAY.
WITH RESPECT --
TO THE FUTURE A RISK AND THAT
FUTURE EXPECTED COSTS --
THE THIRTIES ALSO IN EXPECTING
INCREASED TIME DELAYS.
PUSHING BACK EXPECTED COMPLETION
FROM TWENTY TWENTY TO THE SPRING
OF TWENTY TWENTY TWO GUYS OF THE
STATE ARE ALLUDED TO THERE IS A
FEDERAL DEADLINE OF DECEMBER OF
TWENTY TWENTY TWO TO COMPLETE.
THESE THREE CONSTRUCTION
PROJECTS AS WELL AS A FOURTH
PROJECT THAT WILL ACTUALLY LATE
TRACK ACROSS THE CIVIL WORKS
THAT ARE BEING CONSTRUCTED NOW.
SO -- BASED
ON OUR ANALYSIS OF THE
AUTHORITIES AVERAGE PROGRESS TO
DATE COMBINED ACROSS THESE THREE
CONSTRUCTION CONTRACTS IT WILL
NEED.
TO DOUBLE THE RATE OF ITS
CONSTRUCTION BETWEEN NOW. TO
THAT END WE MADE SEVERAL
RECOMMENDATIONS TO THE AUTHORITY
SURROUNDING --
ITS CURRENT AND FUTURE CONTRACT
MANAGEMENT OF THESE TYPES OF
CONTRACTS.
WITH RESPECT TO ITS USE OF ITS
OVERSIGHT FIRMS --
TO HOLD THE CONTRACTORS
ACCOUNTABLE FOR CONTRACT TERMS
IN A RECOMMENDATION THAT IF YOU
THORLEY.
SIDES TO DIVERGE FROM THE ADVICE
OF HIS OVERSIGHT FROM TOO AGAIN
IT EMPLOYS TO HELP IT KEEP THE
CONTRACTOR --
TO THE STATE LETTER OF THE OF
THE AGREEMENT.
IT NEEDS.
TO STOCKTON JUSTIFICATION FOR
DOING THAT WE FOUND THAT WHEN
THE AUTHORITY HAD HAD DIVERGE
FROM FROM THAT OTHER THOSE
RECOMMENDATIONS --
IT HAD NOT DOCUMENTED IT'S
RATIONALE FOR DOING SO.
INCLUDING WHY IT OCCASIONALLY --
SET A SETTLED ON A HIGHER DOLLAR
AMOUNT AND THE OVERSIGHT FROM
RECOMMENDED.
WE ALSO --
MAKE RECOMMENDATIONS THE
AUTHORITY TO IMPROVE THE
CONSISTENCY AREN'T SURE THE
CONSISTENCY OF THE OVERSIGHT
FIRMS.
RISK PROJECTIONS THE OTHER SIDE
FIRMS THEMSELVES ARE THE
COMPILER RESOURCE FOR FUTURE
RISKS ASSOCIATED EACH OF THE
THREE CONTRACTS.
AND THAT IS THE THE SOURCE OF
THE ANALYSIS THAT WE CONDUCTED
ON FUTURE COSTS AND THEY'RE
THEY'RE LIKELY CAUSES --
AND SO THE THE RECOMMENDATION RE
DESPERATE FIRMS ACROSS THREE
SEPARATE CONTRACTS ARE ARE
CONSISTENTLY ACCURATE WE AND
TIMELY EVALUATING ALL THE KNOWN
RISKS.
FINALLY IS THE IS A C. R.
ALLUDED TO WITH RESPECT TO THE
THE FUTURE CHALLENGES FOR THE
CENTRAL VALLEY.
WE FEEL STRONGLY THAT THE
AUTHORITY HAS NAVIGATION TO TO
REPORT TO THE LEGISLATURE.
MUCH MORE FREQUENTLY ABOUT THE
ACTUAL TO DATE STATUS OF THESE
PROJECTS --
IN TERMS OF WHERE THEY ARE WHERE
THEY NEED TO BE AND SO WE MADE A
RECOMMENDATION ABOUT HAPPEN ON A
QUARTERLY BASIS.
AND WE WERE FAIRLY PRESCRIPTIVE
IN THE THE METHODOLOGY THAT THE
EMPLOYEE SHOULD OF IT THAT THE
AUTHORITY SHOULD EMPLOY.
IN REPORTING TO THE LEGISLATURE.
WE ALSO TOOK A LOOK MORE
GLOBALLY AT THE AUTHORITIES
CONTRACT MANAGEMENT --
THE THIRTY APART FROM ITS ITS
CONSTRUCTION CONTRACTS OPERATES --
YOU KNOW MORE THAN A HUNDRED
OTHER CONTRACTS FOR SERVICES
SUCH AS ENVIRONMENTAL
ENGINEERING PLANNING --
THE CONSTRUCTION OVERSIGHT THAT
I MENTIONED FINANCIAL ADVISORY
AND A LARGE CONSULTING CONTRACT
WITH AN IDIOT REFERS TO AS THE
RAIL DELIVERY PARTNER THE RDP --
AS THE STATE AUDITOR SUMMARIZING
HAS BEEN MENTIONED IN ITS
OPENING STATEMENTS THE
AUTHORITIES HAD A DOCUMENTED
HISTORY OF CHALLENGES RESPECT TO
ITS CONTRACT MANAGEMENT --
ARE OUR MOST OUR PRIOR OUT IN
TWENTY TWELVE AS WELL AS
INTERNAL LOT OF SENIOR THIRTY IN.
TWENTY FIFTEEN TO TWENTY SIXTEEN
NOTICING FORGET DEFICIENCIES IN
THE CONTRACT MANAGEMENT AT THE
AUTHORITY.
IN RESPONSE TO ITS INTERNAL
AUDITS OF THE MOST RECENT WAS IN
SPRING OF TWENTY SIXTEEN THE
AUTHORITY IMPLEMENTED --
BASICALLY COMPREHENSIVE IT'S
POLICIES AND PROCEDURES RELATED
TO CONTRACT MANAGEMENT OF ITS
CONTRACTS.
IN DOING SO IT CLEARLY
DELINEATED RESPONSIBILITIES FOR
THE STATE EMPLOYEES THAT OVERSEE
THOSE CONTRACTS RELATED --
TO AT THE END ENSURING THAT
INVOICE COSTS ARE APPROPRIATE
THAT A CONTRACTOR WORK IS TIMELY
OF QUALITY OF THE PARTY REQUIRED.
AND THAT ANY COST OVER RUNS ARE --
IT BASICALLY TO DETERMINE THAT
THE THE MARRIAGE AND
JUSTIFICATION FOR COST OVERRUNS
THAT THAT BEN MANIFEST
THEMSELVES IN THE FORM OF
CONTRACT AMENDMENTS OF WHICH
THERE VAN.
MANY -- WE
BEGAN BY TAKING A LOOK AT THOSE
THOSE --
POLICIES AND PROCEDURES FROM A
BEST PRACTICE PERSPECTIVE AND
FOUND THAT THEY WERE CONSISTENT
WITH WITH THE CRITERIA THAT
EXISTED INCLUDING THAT IN THE
STATE CONTRACTING MANUAL.
AND WE ALSO FIND IT THEY WENT
WELL BEYOND WHAT WAS IN THE
STATE CONTACT MANUAL BY NOT ONLY
DELINEATING THE SPECIFIC.
ROLES RESPONSIBILITIES AND
PROCESSES BY WHICH THE COUNTRY
MANAGERS ARE CONDUCT THEIR WORK
BUT ALSO BY REQUIRING A HIGH
LEVEL OF DOCUMENTATION FROM THIS
CONTRACT MANAGERS. TO PROVIDE A
RECORD OF THE DETERMINATIONS
THAT THEY HAVE MADE ABOUT
CONTRACTORS PERFORMANCE.
UNFORTUNATELY WHEN WE ARE TESTED
NINE CONTRACT WITH A COMBINED
VALUE OF ONE POINT THREE BILLION
DOLLARS WE FOUND AT THE THIRTY
WAS A VERY RARELY.
HAVE THE THIRTIES CONTRACT
MANAGERS WERE VERY RARELY
FOLLOWING THOSE POLICIES AND
PROCEDURES INSPECTOR PERFORMING
IN DOCUMENTING QUALITY CONTROL
REVIEWS.
AMENDMENT JUSTIFICATION REVIEWS
AND THE LIKE WE THE ONE AREA WE
FOUND.
GENERAL COMPLIANCE WAS OR WAS
WITH A AN ADMINISTRATIVE
REQUIREMENT THAT CONTRACT
MANAGERS --
BASICALLY COMPLETE AND SIGN A
CHECKLIST ASSOCIATED WITH EACH
INVOICE SAYING THAT THEY'RE
TESTING TO THE INVOICES
COMPLETENESS AND ACCURACY AND
ALLOW ABILITY OF COSTS.
HOWEVER IN MOST CASES WHEN WE
ASK THOSE CONTACT MANAGERS FOR
DOCUMENTATION RELATED TO HOW
THEY DETERMINED THAT THE COSTS
WERE ALLOWABLE THEY WERE NUMBER
UNABLE TO PROVIDE THOSE.
SO IN THAT INSTANCE WE MADE A
RECOMMENDATION OF THE AUTHORITY
STRENGTHENED ITS POLICIES AND
PROCEDURES TO REQUIRE CONTRACT
MANAGERS.
TO RETAIN AND UPON REQUEST
PROVIDE.
THAT DOCUMENTATION TO SHOW THAT
THESE COMPLEX INVOICES ARE IN
FACT ACCURATE COMPLETE --
THAT IS A MENTION IS THE ONLY
RECOMMENDATION WE HAD WITH
RESPECT TO THE POLICIES AND
PROCEDURES AGAIN WE FOUND OUT
THEY WERE FAIRLY STRONG ISSUES
WITH IT WITH COMPLIANCE.
SO WE MADE A SUITE OF
RECOMMENDATIONS INTENDED TO
INCREASE THE THE PROFESSIONALISM
AND THE OVERSIGHT OF CONTRACT
MANAGEMENT ROLE AT THE AUTHORITY.
THOSE INCLUDE BUT ARE NOT
LIMITED --
TO REPLACING --
OR I SHOULD SAY.
DEVELOP DEVELOPING A PROGRAM BY
WHICH TO RECRUIT AND HIRE FULL
TIME CONTRACT MANAGERS FOR
PROFESSIONAL QUALIFIED IN WHOSE
DUTY STATEMENTS REFLECT THE
RESPONSIBILITIES FOR CONTRACT
MANAGEMENT.
WE FOUND THAT --
ALMOST NONE OF THE CONTRACT
MANAGERS WE REVIEWED HAD ANY
MENTION OF THOSE
RESPONSIBILITIES IN THEIR DUTY
STATEMENTS.
WE ALSO MADE A RECOMMENDATION AT
THE THOSE --
THOSE CONTACT MANAGERS BE HELD
ACCOUNTABLE BY THEIR SUPERVISORS
WHO ARE NOMINALLY RESPONSIBLE
FOR DOING SO.
IN THE EXISTING POLICIES AND
PROCEDURES BUT WE FOUND THAT
THOSE CONTRACT MANAGERS
SUPERVISORS DO NOT OUT WE'RE NOT
ALWAYS EVEN TRAINED IN THE
CONTRACT MANAGEMENT POLICIES AND
PROCEDURES THEMSELVES.
FINALLY THE STATE AUDITOR
ALLUDED TO WE FOUND SOME ISSUES
WITH RESPECT TO THE OVERSIGHT OF
CONTENT MANAGEMENT INTERNALLY AS
PART OF THE REVISION TO ITS
POLICIES AND PROCEDURES IN.
TWENTY SIXTEEN TWENTY SEVENTEEN
THE AUTHORITY ALSO CREATED A
CONTRACT OR CONTENT MANAGEMENT
OVERSIGHT GROUP --
THAT WOULD BE RESPONSIBLE FOR
PERIODIC REVIEWS OF CONTRACT
MANAGERS COMPLIANCE WITH THE
REQUIRED POLICIES AND PROCEDURES.
HOWEVER WE FOUND THAT THAT THAT
COULD BE DONE --
VERY LITTLE BASICALLY NEXT TO
NOTHING WITH RESPECT TO ACTUALLY
CONDUCTING THE US REVIEWS.
I HAD THEY DONE THE THE WORK
THAT WAS LAID OUT FOR THEM IN
THEIR POLICIES PROCEDURES IS
VERY LIKELY THEY WOULD HAVE HIT
ON THE THE THE SHORTCOMINGS THAT
WE FOUND AT AN EARLIER DATE --
AT AS IT STANDS CURRENTLY THAT
OVERSIGHT GROUP IS STAFFED
ENTIRELY BY OUTSIDE CONSULTANTS --
IN ADDITION TO THAT POTENTIALLY
CREATING AN ACCOUNTABILITY ISSUE
WE ALSO FOUND IS THE IS THE
STATE AUDITOR LEAD TO THAT THAT
MIGHT.
INTRODUCE POTENTIAL CONFLICTS OF
INTEREST AYE IN INSTANCES WHERE
CONTRACT MANAGERS ARE IMPROPERLY
DEFERRING TO TO CONTRACTED THIRD
PARTIES --
WE WILL BE FELT IT WAS
INAPPROPRIATE FOR THE OVERSIGHT
FUNCTION TO ALSO BE FILL BOUNCE
OUTSIDE CONTRACTORS.
SO THAT SUMMARIZES OUR
RECOMMENDATIONS WITH RESPECT TO
THE OTHER CONTRACT MANAGEMENT OF
OF ALL OF THE CONTRACTS.
OUTSIDE OF THE OF THE THE
CONSTRUCTION CONTRACTS.
I'LL BRIEFLY TO SUMMARIZE SOME
OF THE OTHER AREAS WE WE
DISCUSSED IN OUR REPORT CHAPTER.
THREE WITH RESPECT TO THE
SUSTAINABILITY POLICY THAT THE
AUTHORITY HAS PUT IN PLACE --
THE STATE AUDITOR --
YOU KNOW CORRECTLY ASIDE ARE
CORRECTLY SUMMARIZED OUR EXPERTS
ASSESSMENT THAT THE POLICY
ITSELF CONTAINS.
LAUDABLE GOALS THAT ARE
GENERALLY CONSISTENT WITH BEST
PRACTICES HOWEVER WE DID FIND
ROOM FOR IMPROVEMENT AND IN
TERMS OF INCREASED EMPHASIS.
AND AND TO TRACKING AND ANALYSIS
WITH RESPECT TO THE IMPACTS OF
ONGOING CONSTRUCTION SO WE MADE.
SOME RECOMMENDATIONS THAT ARE
PRE TAILORED TO THE AUTHORITY IN
TERMS OF HOW THEY SHOULD --
INCREASED EMPHASIS ON THAT
CONSTRUCTION WILL BE.
THE MAIN BUSINESS OF HIGH SPEED
RAIL FOR THE FORESEEABLE FUTURE --
WITH RESPECT TO THE SMALL
BUSINESS UTILIZATION AGAIN AS
THE STATE AUDITOR ALLUDED.
TO THE WE FOUND THAT THE
AUTHORITY HAD --
JUSTIFICATION AND AND
APPROPRIATE DOCUMENTATION TO
SUPPORT GENTLY THAT THE THE
UTILIZATION RATES IT REPORTS ARE
ACCURATE AND SUPPORTED BY --
CONTRACTED INVOICES.
HOWEVER WE DETERMINE IT THERE
ABOUT NINE HUNDRED AND THIRTY
MILLION DOLLARS IN CONTACTED
VALUE THAT DO NOT SHOW UP ON THE
AUTHORITIES UTILIZATION REPORTS
OR CALCULATION.
AND THE THIRTY HAD SOME SOME
REASONS WHY THAT MIGHT BE THE
CASE --
THEY'VE ALLUDED TO GUIDANCE FROM
FROM THE DEPARTMENT GENERAL
SERVICES THAT NAY DIRECT STATES
TO OMIT.
CON ARTISTS ARE STATE AND HE'S
WILL MAKE CONTRACTS WITH PUBLIC
ENTITIES FROM ITS REPORTING --
AND THEY ALSO --
PROVIDED ACE SERIES OF OF SELECT
TASKS THAT IT WOULD BE
UNREALISTIC TO HOLD.
TO USING.
THE 30% UTILIZATION REQUIREMENT.
SO IN THE INTEREST OF
TRANSPARENCY GIVEN THE THE
PROMISE OF THIS PRODUCT IN A
LARGE DOLLAR AMOUNT BEING
CONTRACTED OUT WE MADE A
RECOMMENDATION THAT THE
AUTHORITY MAKE ITS REPORTING
MORE COMPREHENSIVE.
AND THAT IT --
IS MORE AGAIN MORE EXPLICIT
BUNCH JUSTIFICATION FOR THE
CONTRACT IT DOES CHOOSE TO
EXEMPT FROM THIS PROGRAMS.
THAT BE HAPPY TO TAKE ANY
QUESTIONS OR ALL RIGHT THANK YOU
VERY MUCH QUESTIONS FROM THE
COMMITTEE.
THIS FONG.
I THINK VERY MUCH THANK YOU FOR
YOUR WORK --
IT'S VERY COMPREHENSIVE --
AS MUCH YOU CAN BE I GUESS WITH
THE DOCUMENTATION YOU CAN GET --
I'VE ALWAYS SAID THE ONLY
PREDICTOR OF FUTURE BEHAVIOR IS
PAST BEHAVIOR AND KNOWING THAT
YOU'VE DONE AUDITS IN TWENTY TEN
AND TWENTY TWELVE AND AS A BEEN
INTERNAL AUDITS DONE --
AS WELL --
AFTER YOUR REVIEW HOW CONCERNED.
SHOULD THE PUBLIC BE ON YOUR
FINDINGS.
I THANK THE THE PUBLIC ON THE
LEGISLATURE THE STATE A
CALIFORNIA SHOULD BE VERY
CONCERNED AS AS I INDICATED IN
MY OPENING REMARKS --
AND THE ISSUES WE IDENTIFIED
BACK IN TWENTY TEN AND AGAIN AND
AND AND TWENTY TWELVE AND
CERTAINLY.
THE AUTHORITIES ONLY OWN
INTERNAL AUDITORS --
IDENTIFYING ISSUES WE LOOKED AT
SOME OF THOSE SOME OF THOSE
RECOMMENDATIONS AT THE INTERNAL
AUDITORS --
HAVE MADE --
HAVE NOT BEEN OUR
RECOMMENDATIONS HAVE NOT BEEN
FULLY IMPLEMENTED SO --
I THINK--
THE PUBLIC SHOULD BE VERY
CONCERNED ABOUT THIS PARTICULAR
PROJECT AND THOSE
RECOMMENDATIONS WERE PROPOSED IN
TWENTY TEN AND TWENTY TWELVE
CORRECT.
WELL SIMILAR RECOMMENDATIONS NOT
EXACT THE EXACT SAME.
RECOMMENDATIONS BUT CERTAINLY
THERE ARE SOME ISSUES THAT ARE
CONSISTENT FROM ONE AUDIT TO THE
NEXT -- AND
OF COURSE IT'S IT'S ONE THING TO
HAVE POLICIES ON PAPER IT'S
ANOTHER THING THAT TO ACTUALLY
IMPLEMENT THE POLICIES AS THEY
SHOULD BE IMPLEMENTED AND
EXECUTED WOULD YOU CHARACTERIZE
THESE ISSUES --
MISMANAGEMENT ISSUES AS SYSTEMIC
AND STRUCTURAL PROBLEMS WITHIN
THE AUTHORITY.
WELL AS AS MISTER IT INDICATED
AT AFTER THE TWENTY SIXTEEN
INTERNAL AUDIT THEY DEVELOP SOME
POLICIES AND PROCEDURES SO WE
LOOKED AND AS YOU INDICATE
POLICIES AND PROCEDURES ARE ON
PAPER.
THEY'RE ONLY AS GOOD AS THE
PEOPLE WHO ACTUALLY REQUIRED TO
IMPLEMENT THEM AND THAT'S WHY WE
HAD A VARIETY OF RECOMMENDATIONS
RELATED --
TO GETTING MORE STATE EMPLOYEES
SO YOU HAVE THAT INDEPENDENCE --
ALLOWING THE INTERNAL AUDITOR TO
DO THEIR THEIR WORK --
AND THEN.
REDUCING THE RELIANCE ON
EXTERNAL EXPERTS I'M YOU
CERTAINLY NEED EXPERTS IN
CERTAIN ASPECTS OF THIS
PARTICULAR PROJECT BUT SOME OF
THE OVERSIGHT REALLY NEEDS TO BE
DONE BY OUR STATE EMPLOYEES WHO
HAVE THE STATE'S BEST INTEREST
IN MIND.
SURE.
LET ME ASK YOU THIS QUESTION
WITH YOUR EXPERTISE AND YOUR
EXPERIENCE AND OF COURSE YOUR
STAFF AND YOURSELF DOING THE
PREVIOUS I DO YOU HAVE FAITH
THAT THE ALL THE AUTHORITY WILL
IMPLEMENT [inaudible]
THE RECOMMENDATIONS --
WELL WHAT I HAVE SOME CONCERN I
MEAN IT'S SPEAKING AS THE STATE
AUDITOR I THINK THAT THE
AUTHORITY IN THE PAST HAS
SUGGESTED THAT THEY'RE GOING TO
EMBRACE AND IMPLEMENT SOME OF
OUR RECOMMENDATIONS --
SOME OF AND SOME OF THOSE CASES
THEY HAVE IMPLEMENTED
RECOMMENDATIONS BUT THE REASON I
HIGHLIGHTED THE ONE RELATED TO
THEIR WITH.
THEIR RESPONSE TO US --
CONCERNING.
A REGARDING THE STATE EMPLOYEES
GONNA SUBMIT A B. C. P. AND A
YEAR AND A HALF FROM NOW OR FOR
THE TWENTY TWENTY ONE BUDGET.
I WOULD HAVE HOPED OR WOULD HAVE
EXPECTED THEM TO WANT TO TRY TO
GET THAT DONE MORE QUICKLY
BECAUSE THAT'S AN ISSUE WE
IDENTIFIED FIVE OR SIX YEARS AGO
NOW IN FAIRNESS TO THE AUTHORITY
IN OUR FIRST AUDIT.
THINGS WERE JUST GETTING UP AND
RUNNING AND YOU WOULD EXPECT YOU
WOULD BE RELIANT ON EXTERNAL --
CONSULTANTS TO ASSIST BUT YOU
NEED TO TRANSITION THAT THAT.
KNOWLEDGE AND YOU NEED TO HAVE
THAT INTERNALLY WITH STATE
EMPLOYEE SO --
I DO HAVE SOME CONCERN WITH
RESPECT --
TO HOW QUICKLY OR HOW --
VEHEMENTLY THE AUTHORITY WILL
IMPLEMENT THE RECOMMENDATIONS --
A FEW MORE QUESTIONS WHAT DOES
IT MEAN TO MAYBE --
A MARKETING.
COMMENT ON THIS BUT WHAT DOES IT
MEAN WHEN YOU SAY ON PAGE FORTY
THREE THAT THERE'S A LACK OF THE
DOCUMENTATION THAT PREVENTED US
REACHING CONCLUSIONS ABOUT THE
QUALITY TIMELINESS.
ACOSTA WORK PERFORMED UNDER
THESE CONTRACTS WHAT IS THAT DID
YOU ASKED FOR INFORMATION THEY
JUST GONNA PROVIDED --
THAT'S CORRECT THE THE POLICIES
AND PROCEDURES ARE VERY EXPLICIT
IN THE TYPES OF DOCUMENTATION
CONTRACT MANAGERS NEED TO CREATE
AND MAINTAIN.
DEMONSTRATING A RECORD OF
TRACKING THE TIMELINESS AND
QUALITY OF WORK AGAINST
ESTABLISHED CRITERIA AGAINST THE
CRIMES OF THE CONTRACT
FUNDAMENTALLY --
THIS HAS TO DO WITH RESPECT TO
THE DELIVERABLES OF THE
CONTRACTOR HAS.
AGREED TO PROVIDE IN EXCHANGE
FOR ITS CONTRACTED RATE --
WE FOUND THAT NONE OF THE
CONTRACT MANAGERS THAT WE THAT
WE DID THAT WE TALK TO AS PART
OF OUR AUDIT MAINTAINED THAT
DOCUMENTATION --
AND MANY --
WE'RE PERFORMING IF THE LITTLE
THAT WE COULD DISCERN ONE WAY OR
ANOTHER SO IT PRECLUDED US FROM
EVALUATING THEIR PROFESSIONAL
JUDGMENT BECAUSE THAT JUDGMENT
HAD NOT BANDLEADER DOCUMENTED
[inaudible]
AND SEC.
IT JUST TO TO THE STATE ARTIST
POINT IN IN KIND OF ADVOCATING
THAT RESPONSIBILITY FOR
DOCUMENTATION SEVERAL CONTRACT
MANAGERS.
TOLD US AND CERTAINLY THE
DOCUMENTATION REVIEWED FOR THIS
OUT THAT THEY WERE IN FACT
RELYING ON OUTSIDE CONSULTANTS
TO PERFORM A SUBSTANTIVE
CONTRACT MANAGEMENT DUTIES FOR
WHICH THEY ARE ACTUALLY
RESPONSIBLE SO THAT WAS A KIND
OF A COMPOUNDING FACTOR OF THE
LACK OF AUTHORITY.
DOT A FORTY GENERATED
DOCUMENTATION FOR US TO EVALUATE
IN TERMS OF CONTRACTOR WORK.
AND I JUST A QUICK SEARCH TO THE
DOCTOR AT THE DOT IT I MEAN THEY
WERE YOU'VE IDENTIFIED PROBABLY
CLOSE TO A HUNDRED INSTANCES
WHERE THERE IS A LOCKET LACK OF
DOCUMENTATION AND I COULD BE A
PLUS OR MINUS A LOFT.
IS THAT COMMON.
NO THAT'S NOT SOMETHING THAT WE
TYPICALLY SEE I MEAN
DOCUMENTATION IS AN ISSUE THAT
WE IDENTIFIED IN A LOT IN A LOT
OF AUDITS.
BUT THE THE SIGNIFICANCE OR THE
THE NUMBER OF ISSUES THAT WE
IDENTIFIED IN THIS PARTICULAR
REPORT AND A NUMBER OF TIMES AS
I WAS JUST DISCUSSING WITH MR
WRITER IN ANSWER YOUR QUESTION
IS.
OFTEN TIMES WHEN WE WENT TO A
CONTRACT MANAGER IS SUPPOSED TO
BE RESPONSIBLE FOR OVERSIGHT
THAT CONTRACT MANAGER WOULD
REFER US TO THE ACTUAL
CONSULTANT.
UP FOR WHICH HE OR SHE IS
SUPPOSED TO BE PROVIDING
OVERSIGHT TO GET THE ANSWERS
THAT IS NOT STRONG OVERSIGHT --
ON BEHALF OF THE THE AUTHORITY
SO THE THE THE NUMBER OF THE
VOLUME OF INSTANCES IN THIS
PARTICULAR AUDIT IS IS GREATER
THAN THAN WHAT WE TYPICALLY SEE
WHEN WE OUT WE GO OUT AND
CONDUCT ON AT WORK.
BY LAST QUESTION YOU AND YOU
FEEL FREE TO ANSWER THIS ANY WAY
YOU WANT BUT IF YOU ARE A
TEACHER AND YOU'RE GIVING A
GRADE.
IN TERMS OF THE MANAGEMENT OF
THE AYE SPIRO HOW ABOUT AN
INCOMPLETE --
I I SITE ASKING.
THAT'S NOT A PASSING GRADE AS I
INDICATED SOME OF THE CONCERNS
THAT WE HAVE ARE SIGNIFICANT
CONCERNS AND THEIR CONCERNS THAT
HAVE BEEN RAISED BY US IN THE
PAST.
AND CERTAINLY BEEN RAISED BY THE
INTERNAL AUDIT GROUP THE GAO
CAME IN AND DID SOME AUDIT WORK
SO IT'S NOT THAT THE AUTHORITY
AS MISTER PATTERSON INDICATED
THAT'S NOT THAT THE AUTHORITY
HASN'T BEEN AWARE OF SOME OF THE
ISSUES THAT HAVE BEEN IDENTIFIED
IN AUDITS.
ALSO WERE AWARE OF SOME OF THE
ISSUES --
WITH RESPECT TO LAND ACQUISITION
IT CETERA WE FOUND SOME OF THAT
EVIDENCE AT WHERE THEY KNEW SOME
OF THESE CONCERNS AS FAR BACK AS
TWENTY THIRTEEN PERHAPS FURTHER
BACK THAN THAT.
YET THEY DECIDED TO MOVE FORWARD
SO -- WE
REALLY DO HAVE SOME CONCERNS
ABOUT PAST DECISIONS AND AND
DECISION MAKING GOING FORWARD IF
THIS PROJECT IS GOING TO
CONTINUE AND BE SUCCESSFUL FOR
THE STATE OF CALIFORNIA.
THERE REALLY HAS TO BE SOME
CHANGE HAPPENING AT THE
AUTHORITY I APPRECIATE YOUR
CANDOR THANKS VERY MUCH.
THANK YOU CHAIRMAN FRAZIER.
THANK YOU MISTER CHAIR IN IN
YOUR IN YOUR AUDIT IN --
DID YOU HAVE THE ABILITY --
TO MEASURE TO SEE IF THE
MANAGEMENT TEAM WAS EVEN
QUALIFIED. TO BE IN THIS
POSITION.
WITH RESPECT TO THE THE STATE
APPOINTED CONTRACT MANAGERS WHAT
WE WHAT WE DID FIND SIR WAS THAT --
NEITHER THEIR OFFICIAL TITLES
NOR THEIR POSITION NAMES NOR
THEIR DUTY STATEMENTS.
REFLECTED THE TYPES OF
RESPONSIBILITIES WHICH THEY WERE
BEING HELD ACCOUNTABLE --
SO.
WHERE EVEN IF THEY WERE
QUALIFIED THEY WOULD WOULD BE?
QUESTIONABLE HAVE YOU THOUGHT
ABOUT HOLD ACCOUNTABLE FOR POOR
PERFORMANCE SO.
IN OUR RECOMMENDATIONS WE WE
TARGET THAT SHORTCOMING AND SAY
YOU KNOW IF THESE IF THESE
PEOPLE ARE TO BE CONTRACT
MANAGERS THEY NEED TO BE DOING A
FULL TIME.
THEY NEED TO HAVE THAT BE THE
CLEAR EXPECTATION TERMS OF THEIR
THEIR TO THEIR TITLE OR
DESIGNATION AS WELL AS THEIR
THEIR DUTY STATEMENTS OF THE BE
HELD ACCOUNTABLE TO IT.
SO I'M JUST GOING TO THE OTHER
COMPONENT OF IT DID YOU HAVE AN
OPPORTUNITY --
TO SEE IF THE AUTHORITY BOARD
WAS QUALIFIED FOR OVERSIGHT.
UP WHAT WE WHAT WE DID TALK
ABOUT IN THE REPORTED TO BE WE
WE WE ALLUDED TO REPORT THAT TO
SET OUT OR PUT OUT IN IN AUGUST
RELATED TO THE THE BAY BRIDGE
TOLL.
GRAHAM THE RETROFIT AND WE
DETERMINED THAT --
INCREASED EXTERNAL OVERSIGHT OF
THAT OF THAT PROGRAM AND MADE
HUGE STRIDES IN HELPING IT STAY
CLOSE TO BUDGET AND PUSH BACK ON
SOME SPECIFICALLY SOME OF THE
CHANGES TO CONTRACT AND TIME
LINES THAT HAVE PLAGUED THE
AUTHORITY.
I WILL SAY THAT WE WE DO NOTING
THE REPORT LAERTES BETWEEN THAT
PROJECT IN THE AUTHORITY NAMELY
THE EXISTENCE OF THE AUTHORITIES
FOR OF DIRECTORS.
AND SO THAT'S SOMETHING THAT
NEEDS TO BE ACKNOWLEDGED HOWEVER
THE YOU KNOW AS WE SAY THE
EXISTENCE OF THAT OF THAT BOARD
RECORDS HAS NOT ITSELF.
BY ITS NATURE PRESERVE PREVENTED
THE TYPES OF COST OVERRUNS AND
DELAYS THAT HAVE MANIFESTED
TODAY.
SO THIS COULD JUST BE A POSITION
FOR THE PEER REVIEW GROUP THAT
THEY COULD BE MORE EFFECTIVE OF
STEPPING UP THEIR ROLE
[inaudible]
SO THE WE'VE GROUP IS ALSO A
POOR COMPONENT --
OF EXT TAKE THE EXTERNAL
OVERSIGHT ALTHOUGH I MY
UNDERSTANDING THAT HASN'T UNTIL
RECENTLY BEEN FULLY STAFFED SO --
IN IN CERTAINLY IN DOING THAT
INCREASED OVERSIGHT IN ANY FORM
WOULD BE WOULD BE POSITIVE.
SO ONE OF THE REASONS THE
AUTHORITY GIVES FOR NOT HIRING
MORE STATE WORKERS AT THE
PROJECT HAS A FINITE LIFESPAN --
I MEAN IT.
LOOKS LIKE IT IS MORE THAN MY
LIFESPAN --
AND THAT IS THERE.
THAT THERE'S NOT MANY CONTRACT
MANAGERS IN THE STATE FOR
SERVICE.
ARE.
MAYBE CALL FIVE MANAGERS --
HOW WOULD YOU WOULD YOU RESPOND
TO THIS?
SAID TAKE TO TAKE YOUR YOUR
COMMENTS OUT OF ORDER SIR --
I'D I'M NOT AWARE OF ANY
ANALYSIS THAT THE AUTHORITY
PERFORM TO MAKE THAT
DETERMINATION BUT THE
AVAILABILITY OF THIS --
THIS TALENT IN THE STATE'S CIVIL
SERVICE POOL SO I CAN'T SPEAK TO
THAT.
I WILL SAY THAT IN TERMS OF THE
DURATION OF THE PROJECT.
IF THE AUTHORITY IS TO HAVE ANY
PERMANENT ROLE WITH RESPECT TO
THE SYSTEM THEY WILL BE IN
CONTRACT MANAGEMENT --
THE AUTHORITIES NOT GOING TO BE
OPERATING AT SYSTEM IS NOT GOING
BE DIRECTLY MAINTAINING ITS
SYSTEM THAT WILL BE MANAGING
CONTRACTORS TO DO SO.
SO I WOULD PUSH BACK ON THE
NOTION THAT THESE ARE.
LIMITED DURATION APPOINTMENTS
AND AS YOU POINT OUT SIR THAT.
EVEN IF IF THEY WERE TO FALL OFF
WHEN CONSTRUCTION THE SYSTEM IS
COMPLETE WE'RE STILL LOOKING AT
YOU KNOW MORE THAN A DECADE OF
WORK THAT NEEDS TO BE DONE.
A I JUST KNOW THAT WE'RE NOT
PRESCRIPTIVE --
PROPOSAL WAS GENERATED BY THE
THE AUTHORITY WE WERE NOT
PRESCRIPTIVE AND HOW THEY OBTAIN
THE STAFF AND WE IT'S DIDN'T
HIGHLY POSSIBLE THE AUTHORITY
COULD LOOK INTO SHARING STAFF TO
AND USE WITH OTHER AGENCIES SUCH
AS CALTRANS --
SO WE WE'VE BEEN FAIRLY OPEN
ABOUT HOW THE THIRTY CAN
ACCOMPLISH AND STAFFING NEEDS
THING TO GET THE AUTHORITY TO
MAKE THAT HAPPEN.
SOON IT ALSO IN YOUR CAPACITY
DID YOU HAVE AN OPPORTUNITY TO
CHECK IN.
ON THE PROJECTS ARE UNDER
CONSTRUCTION OF THE FISSION SEES --
WHEN I WAS DWN THERE TOURING IT
LOOKED LIKE THERE WAS A LOT OF
JUMPING AROUND TO MAKE WORK --
BECAUSE OF NOT HAVING RIGHT AWAY
ACQUISITION DID YOU HAVE THAT
OPPORTUNITY TO SEE THAT THE THE
PROJECTS WERE.
BEING DONE IN THE MOST EFFICIENT
MANNER.
THE SPECIFIC --
CONSTRUCTION SEQUENCING WAS NOT
THE FOCUS OF OUR OF OUR AUDIT
HOWEVER WE YOU KNOW WE WE
OBVIOUSLY GET TO THE QUESTION OF
ASSISTANCE EFFICIENCY THROUGH.
THE METHODOLOGY THAT WE APPLY TO
TRACKING PROGRESS TO DATE VERSUS
WHAT THE SCHEDULE PROGRESS
SHOULD BE AND FOUND THAT IT WAS
OBVIOUSLY LACK AND GIVEN TO THE
GROUND IF THEY NEED TO MAKE UP.
AND MY LAST QUESTION MISTER
CHAIR.
SO WHEN WE LOOK AT THE RIGHT
AWAY ACQUISITION --
PROBLEMS THAT HAVE OCCURRED HAVE
YOU.
GIVEN ANY KIND OF RECOMMENDATION
ON HOW --
THAT THEY SHOULD MOVE FORWARD
MAYBE LIKE THIS.
IS THERE A PLAN B. THAT IF IT'S
ONEROUS AND IT LOOKS LIKE IT'S A
LENGTHY PROCESS.
THAT MAYBE THERE SHOULD BE
ANOTHER ROUTE TO GO INSTEAD OF
JUMPING AROUND WASTING MONEY OR
MAYBE HOPE YOU KNOW NOT HALTED
PROJECT LOOKING AT HOW WE CAN BE
MORE EFFICIENT ABOUT.
UTILIZING THE FUNDS.
SO WE DID AND FORGIVE ME FOR NOT
MENTIONING DURING MY
PRESENTATION WE DIDN'T MAKE --
A COUPLE OF RECOMMENDATIONS
SPECIFIC TO FUTURE CONSTRUCTION
CONTRACTING WORK --
NOTABLY ONE OF THOSE WAS THAT
BEFORE IN AND PROCURING
ADDITIONAL CONSTRUCTION WORK AT
PLANTS TO DO --
FIRST AND CHECK A PASS IN THE
COMING YEARS THAT THE AUTHORITY
NEEDS TO SET AND ACHIEVE
BENCHMARKS RELATED TO THE
ACQUISITION OF RIGHT AWAY
IDENTIFICATION AND RELOCATION OF
TOADIES AND CERTAINLY.
REQUIRED AGREEMENTS WITH THIRD
PARTY STAKEHOLDERS TO PREVENT
EXACTLY THIS SORT OF SUCH
SCENARIO FROM REPAIR WE PLAYING
ITSELF.
YOU THIRTY HAS PUT IN PLACE A
DETAILED --
BASELINE SCHEDULE THAT DOES IN
THE THOSE SORTS OF ACTIVITIES
HOWEVER THE AUTHORITY EVEN
DURING OUR ENGAGEMENT.
SAID TO US THAT.
IT MAY HAVE TO REASSESS THAT
BASELINE DEPENDING ON THE
AVAILABILITY OF FUTURE FUNDING
THINK IT'S CLEAR FROM.
NEAR THE STATE AUDITOR'S REPORT
THAT.
WE DON'TAGREE WITH THE DECISION
TO TO TAKE ON THE REST THE
AUTHORITY DID WHEN IT ENTER
CONSTRUCTION CENTRAL VALLEY
NEARLY IN RESPONSE TO THE
FEDERAL --
GRANT MONEY.
JUST ONE MORE QUESTION BASED ON
THAT ANSWER STRUCTURE.
DID YOU LOOK AT THE NUMBER ONE A
CHANGE ORDER THAT WAS ISSUED OF
FROM I THINK WAS TO SALIVA.
ON AN EARLY MYT BAND --
AND THE VERY PART OF THE START
OF THE PROJECT.
OF KNOWING THAT IT WAS A CHANGE
OR BECAUSE OF THE CONTRACT WAS
ORDERED INTO REALLY.
AND THE AMOUNT.
SO I I'M NOT SURE I AND I COULD
SPEAK TO THE SPECIFIC CHANGE
ORDER YOU'RE REFERRING --
TO I WE DID AS PART OF OUR
REVIEW OF INDIVIDUAL CHANGE
ORDERS LOOK AT TWO THAT WERE
EXECUTED THROUGH SETTLEMENT
AGREEMENTS LEGAL SEVEN
AGREEMENTS OUTSIDE OF THE NORMAL --
PROCESS ONE OF THOSE WAS FOR THE
CONSTRUCTOR PACK CONSTRUCTION
PACKAGE --
CONTRACT WITH TO TO BRAINY
DOLLARS WITH --
AND BECAUSE THE DRIVING BECAUSE
OF THAT AS STATED IN A PUBLIC
CHANGER WAS RIGHT OF WAY DELAY --
THE HOW THE AUTHORITY DID A
CERTAIN --
ATTORNEY CLIENT PRIVILEGE OVER
THE DOCUMENTATION ASSOCIATED
WITH VERY ARRIVING AT THAT
DOLLAR AMOUNTS THAT'S NOT
SOMETHING THAT WE ADDRESS IN THE
REPORT.
THANK YOU VERY MUCH THANK YOU
VERY MUCH GERMAN BELL --
THANK YOU AND I APPRECIATE THE
JUST EVERYBODY ON THE TEAM THAT
WORKED ON THIS IS SUCH A GREAT
JOB BOND --
IN COMPLETING THIS --
ESPECIALLY --
THE TIMING OF YOUR REPORT IS
IMPORTANT.
SO -- I HAD
I HAD A COUPLE --
GOING BACK TO THE ORIGINAL
REQUEST.
I'M JUST GONNA DO SOME CHECK
COSTS -- ON
WHAT WE ORIGINALLY HAD SHOT --
REQUESTED AND SEE --
KIND OF WHAT HAPPENED WITH THE
AUDIT WHEN WE ORIGINALLY REQUEST
CERTAIN THINGS.
BECAUSE I WAS [inaudible]
SOMEWHAT SPECIFIC.
AND THINGS I ASKED.
FOR OKAY SO --
EVALUATING THE AUTHORITIES
PROCESS FOR REVIEWING APPROVING
DESIGN BUILD.
CONTRACT CHANGE ORDER YOU
ADDRESS SOME OF THAT --
WAS THERE ANY ADDITIONAL BEYOND
OR STATUTORY AUTHORITY WE NOW
HAVE THAT YOU NEED.
TO RECOMMEND TO THE STATE
LEGISLATURE ON THAT SUBJECT.
A WITH WE DON'T HAVE ANY CURRENT
RECOMMENDATIONS IN THE REPORT TO
THE STATE LEGISLATURE SENATOR
BUT WE WE DID DISCUSS THE THE
REPORTING --
ABOUT PROGRESS NOT REPORTING IS
PRIMARILY DRIVEN BY THE
INTRODUCTION AND EXECUTION OF
CHANGE ORDERS ANY CONCERN THAT
THE REPORTING WITH THE NEED FOR
THAT REPORTING --
AS WE AS WE DEMONSTRATE IN A
FIGURE IN OUR CHANGE ORDERS HAVE
A REAL MEASURABLE IMPACT IN
TERMS OF TIME AND DOLLAR AMOUNT
THAT PUSH THE AND THE LINE OR
THE GOAL LINE OUT AN UPWARDS FOR
THE AUTHORITY.
THEREBY INCREASING BY DEFINITION
THE RATE OF SPEED NEEDS TO TO A
FACT IN ORDER TO ACHIEVE THAT
DEADLINE SO.
CERTAINLY.
YOU KNOW WE'D.
BE HAPPY TO DO WHAT I'M TALKING
ABOUT IS ARE ANY --
PROCESS CHANGES OR LEGISLATIVE
STATUTE CHANGE STATUTORY CHANGES.
DAD NEED TO TAKE PLACE --
TO LOOK AT WAYS OF EXPEDITING
THE PROJECT.
SENATOR WE DIDN'T IDENTIFY
ANYTHING --
AS MR ENERGY INDICATED WE HAVE
THE ONE LEGISLATIVE
RECOMMENDATION --
REGARDING THE QUARTERLY
REPORTING BUT WE DIDN'T IDENTIFY
ANY STATUTORY CHANGES THAT NEED.
EITHER ADDITIONS TO STATUTE OR
STATUTORY.
OKAY TO THE TO THE EXTENT
POSSIBLE --
LOOK AT THE AUTHORITIES OF
EFFORTS TO DETERMINE THE
ECONOMIC IMPACT --
COULD YOU TALK ABOUT THAT A
LITTLE BIT AND ESERVER --
APPROPRIATE --
THE H. MARKS INDICATORS
REGARDING THE ECONOMIC IMPACT.
OF METRIC SO WE CAN HOUSE --
AVAILABLE TO US.
SENATOR FORGIVE ME FOR A MEETING
THAT SUMMARY FROM MY INITIAL
PRESENTATION WE WE DID.
WE DID.
WE DID LOOK AT THE AUTHORITIES
PROCESS BY WHICH IT --
CALCULATES AND REPORTS ON ITS
ESTIMATED ECONOMIC IMPACT OF
CONSTRUCTION CENTRAL VALLEY AS
WORLD SPENDING ELSEWHERE.
WE DETERMINE IF FORTY USES A
CHANNEL ACCEPTED --
TECHNOLOGY AND TECHNIQUES AND
PRACTICES FOR ESTIMATING IMPACT
BASED ON THE DOLLAR AMOUNT
EXPENDED AND TO THE ECONOMIC
SECTORS AND GEOGRAPHIC LOCATIONS
AND TO WHICH IT'S BEING SPENT --
WE DID IDENTIFIED SOME ISSUES
WITH THE THE PRECISION OF SOME
OF THE BACKUP DATA THAT THE
AUTHORITY HAD TO SUPPORT --
IT'S DATA ENTRY BUT ALREADY MADE
IN TERMS OF DESTINATION SOME OF
SOME OF THE METHODOLOGICAL
CHALLENGES THAT FACE THAT THOSE
ARE REASONABLE OUT OR AT LEAST
DO NOT DO NOT IN ANY SUBSTANTIVE
WAY IMPACT THE ACCURACY OF THE
OF THE ESTIMATES THAT IT REPORTS --
SO WE WE DON'T HAVE ANY CONCERN
AT THIS POINT THAT THE AUTHORITY
IS UNDER SIGNIFICANT UNDER ALL
REPORTING THE FINANCIAL IMPACT
OF ITS ACTIVITIES.
OKAY THAT'S THAT'S GOOD I THINK
WE'RE WE'RE I'M INTEREST OF
FOLLOWING UP ON THAT --
HOW ABOUT --
SMALL AND DISADVANTAGED
BUSINESSES AND MAKE IT EASIER
FOR SMALL DISADVANTAGED
BUSINESSES. TO ENGAGE WITH THE
AUTHORITY ON CONTRACTS.
IN TERMS OF BENEFITING --
OUR GOALS AND STATE --
TO EXPAND OPPORTUNITIES FOR ALL
BUSINESSES IN CALIFORNIA.
THAT WAS ONE OF THE REQUEST AN A
ON IT YEAH CAN YOU COVER THAT
THAT WASN'T COVERED IN REMARKS.
YES SIR --
AS AS WHAT WHAT AS WE DID JERRY
MARKS THE THE AUTHORITY IS CLOSE
TO ME IS 30% --
BENCHMARK SO TO THAT BY THAT
MEASURE IF THEY ARE DOING AT
LEAST THEY ARE CLOSE TO CHEATING
THEIR OWN ESTABLISHED GOAL FOR
FOR BRINGING SMALL INCIDENTS
BUSINESSES TO THE TABLE --
WHAT DID NOT SHOW UP IN A REPORT
OF WHAT WE DID PERFORM IN THIS
AREA AS WE ALSO INTERVIEWED A
SELECTION OF ITS CURRENT
CONTRACTORS? TO DETERMINE YOU
KNOW WHETHER THEY HAD ANY
FEEDBACK TO BE A STORY ABOUT THE
PROCESS BY WHICH THE THE PRIME
CONTRACTORS THE LARGER THE
LARGER CONTRACTORS FOR WHICH
THEY SUBCONTRACTED SMALL
BUSINESSES --
AND THEY HAD SOME SOME FEEDBACK
WAITED TO THAT THE TIMELINESS OF
SOME REIMBURSEMENTS --
SOME OF THE WITHHOLDING OF FUNDS
UNTIL CONTRA COMPLETION AN OWNER
SO WE DID SHARE THOSE COMMENTS
WITH THE AUTHORITY --
AS PART OF HEALTH IN A REPORT
THAT'S NOT IN THE REPORT.
SO THAT WAS ASKED OF WHEN WE
REQUEST OF THE AUTHOR BUT YOU TO
PUT A REPORT.
WITCHY BIT SO I'M A LITTLE --
CONCERNED ABOUT I'D LIKE TO HAVE
SOME.
SOME OF BECAUSE I ASKED FOR THE
INFORMATION NOT THE AUTHORITY
THE WEEK WE ASKED FOR IT IN OUR
DIRECTION DO YOU.
YOU YOU NEED TO REPORT TO US
WHEN WE ASK YOU FOR THAT KIND OF
STUFF.
SO I WOULD LIKE TO SEE.
IT WAS NOT INCLUDED IN THE AUDIT
SO I WOULD LIKE TO SEE THAT
INFORMATION.
BECAUSE I THINK --
THE LEGISLATORS COULD BE VERY
INTERESTED.
IN --
GROWING THE CONSTRUCTION
INDUSTRY --
ENCOURAGING SMALL DISADVANTAGED
BUSINESSES.
AND THAT'S WHY WE PUT THIS
QUESTION AND THIS.
AND PERSONALLY I THINK WE ARE
PUBLISHED YOU KNOW.
WE DID IT IN SB.
ONE AND BY THE WAY MR FRAZIER
[inaudible]
GRADUATIONS --
WE'RE VERY WE WERE VINDICATED
WARMING.
ALSO SO IT WAS IN SB --
ONE TO GROW THE SMALL BUSINESSES.
AND THE REASON WHY WE PUT THAT
IN THIS AUDIT REQUEST.
WAS WE NEEDED TO HAVE THAT
INFORMATION TO SEE IF THERE WAS
ANY IDEAS.
OF HOW TO DO A BETTER JOB.
IN DOING SO AND YOU DON'T PUT IT
IN YOUR AUTO.
SO YOU NEEDED WANTED TO YOU KNOW.
THAT WAS REQUESTED BUT WASN'T IN.
SENATOR WE DO HAVE A DISCUSSION
AND I UNDERSTAND I UNDERSTAND
YOUR CONCERN BASED ON MR
RIGHTIES A RESPONSE TO THE
QUESTION WE DO HAVE A DISCUSSION
IN THE AUDIT REPORT RELATED --
TO THE UTILIZATION OF SMALL
BUSINESSES DISADVANTAGED
BUSINESSES AND DISABLED VETERAN
BUSINESSES THAT WAS A QUESTION
YOU ASKED US AND SO WE DO --
DISCUSS AND THIS IS AN AREA AS
AS WE INDICATED IN OUR COMMENTS
THAT OVERALL THE AUTHORITY IS
DOING A GOOD JOB THEY SET A 30% --
GOAL -- AS
AS FAR AS WANTING THAT I FELT
THAT THEIR REPORTING OVERALL AS
TO THE PARTICIPATION UNDERSTAND
YOUR CONCERN AND WE CAN
CERTAINLY PROVIDE SOME
ADDITIONAL INFORMATION I WANT TO
KNOW MORE ABOUT THAT CERTAINLY.
YOUR YOUR COMMUNITY IS THE ONE
THAT'S GETTING THOSE.
CONTRACT SO --
THE LAST YEAR IT WAS --
SOMETHING THAT --
A LOT OF US ARE BEEN WORKING ON
FOR A LONG TIME.
AND WE PUT IT IN THE AUDIT
REQUESTED DETERMINE WHETHER
OPPORTUNITIES. FOR THE AUTHORITY
EXPEDITE THE PROJECT AND REDUCE
CROC COST.
THROUGH COOPERATION WITH OTHER
TRANSPORTATION AGENCIES.
OUR OWN SEARCHES TRANCE ARENA
LINES -- YOU
KNOW JOINT --
TRANSIT FACILITIES --
CAPTURING ADDITIONAL VALUE
THROUGH CONSTRUCTION PROJECT CAP
VALUE CAPTURES.
THE NEW ADDRESS --
THE AUDITS --
OR ANY KIND OF INFORMATION YOU
HAVE.
A REAL.
TO TO TO EXPEDITING THE PROJECT.
AND REDUCING COSTS IN THOSE
AREAS.
YES SENATOR WITH RESPECT AND I
WANTED.
TO SO WITH AND WE AND WE ENTER
THE AUDIT WITH THAT SO THAT IS
AN OPEN QUESTION AND AND
IDENTIFIED AND THE CONCEPT OF
SHARING INFRASTRUCTURE IS ONE
THAT CAN HELP EXPEDITE.
CONSTRUCTION BY LIMITING AT THE
SCHOOL OF CONSTRUCTION CERTAINLY
THE COSTS ASSOCIATED WITH IT.
AS AS AS WAS STATED EARLIER THE
AUTHORITY HAS UTILIZED THAT THAT
TECHNIQUE ON THE SENATE JUST
OPENED SO --
FROM ALL THE WAY FROM SENATE IS
GOING TO GILROY.
AND AGAIN THROUGH THE THE DENSE
URBAN ENVIRONMENT OF OF BURBANK
TO LA DOWNTOWN LA --
UNFORTUNATELY THE BETWEEN DID
THERE ARE NO CLEAR OPTIONS AT
THE AUTHORITY COULD USED --
TO TO YOU GET GET IN IN IN
COLLABORATION WITH EXISTING
INFRASTRUCTURE IF THERE IS
OPPORTUNITIES TO DO THAT THAT
WAS THE IN THE DIRECTIVE ON AUTO.
CORRECT CERTAINLY AND WE
IDENTIFIED IN AN EDIT NOTATIONAL
OPPORTUNITIES THAT EXIST --
IN ADDITION THE THE AUTHORITY
POINTED OUT THAT --
AND THIS IS A TRIBUTE TO THE
AUTHORITY BUT FOR THEIR TIME
TRAVEL ESTIMATES THEY ARE UP
AGAINST THE TO OUR FORTY MINUTE.
REQUIREMENT AND SO ADDITIONAL
BLENDING AS AS WE NOTED
PREVIOUSLY DOES CARRY WITH IT
LOWERED MAXIM TRAVELING SPEEDS.
SO THAT WOULD OBVIOUSLY BE A
CONCERN FOR BINDING ADDITIONAL
SEGMENTS OF THE SISTER WAY COULD
TECHNICALLY BE DONE IN TERMS OF
OPPORTUNITIES YOU KNOW LOOK AT
THE SO THAT'S THAT'S UNKNOWN.
WELL AS MISTER REGNERY INDICATED
WE WE TALK TO THE AUTHORITY
ABOUT THE BLINDING --
OPTIONS THAT THEY ENGAGED IN AND
AS MUCH RIDER INDICATED THE
SEGMENTS THAT THEY FELT THEY
COULD USE CALTRAIN OR EXISTING
TRACK AND HAVE THAT PARTNERSHIP --
THEY THEY HAVE EXHAUSTED ALL
OPTIONS FOR THAT SO FUTURE
CONSTRUCTION IN THE AREAS --
THAT THAT REMAIN THERE IS NOT
THAT OPPORTUNITY TO SHARE TRACK.
ARE WITH WITH OTHER ENTITIES AND
AS MISTER RIGHT INDICATED
THERE'S A STATE LAW THAT
REQUIRES THEM TO HAVE THIS TRAIN --
BE ABLE TO MEET TIME LINES AS
FAR AS TWO HOURS AND FORTY
MINUTES AND THEY'RE UP AGAINST
THAT THEY'RE WITHIN THREE
MINUTES OF THAT SO.
THAT STATE LAW POTENTIALLY COULD
CHANGE THE TIMING OF OF HOW LONG --
HOW QUICKLY A TRAIN SHOULD BE
ABLE TO TO GET A PASSENGER FROM
ONE POINT TO ANOTHER?
BUT AS FAR AS AS EXISTING
INFRASTRUCTURE --
WE DIDN'T SEE ANY OPPORTUNITIES
AND WE CERTAINLY DEFERRED OF THE
AUTHORITY IF THEY HAVE
ADDITIONAL IDEAS PERHAPS THEY
WOULD BE ABLE TO PRESENT THOSE
TODAY CUT.
DURING THE COURSE OF THE AUDIT
WE WE TRIED TO IDENTIFY --
WORKING WITH THEIR EXPERTS --
AND DID NOT SEE ANY ADDITIONAL
OPPORTUNITIES.
FOR YOU KNOW SHARING TRACKER
USING THE BLENDING OPTION WHICH
HAS BEEN BENEFICIAL FROM CERTAIN
PERSPECTIVE CERTAINLY COST
SAVINGS BUT THE FLIP SIDE IS IT
SLOWS THE TRAINS DOWN AND IT
REDUCES THE NUMBER OF TRAINS
YOU'RE GONNA BE ABLE TO RUN.
ABOUT -- THE
VALUE CAPTURE ELEMENT --
REGARDING --
YES SIR I WE DID WE DID LOOK
INTO VALUE CAPTURES AND INCLUDE
NOT ONLY TO THE THAT THE
FINANCING FINANCING DISTRICTS --
WITH LOCAL STATE PARTNERSHIPS
THAT WE FOUND THAT THE AUTHORITY
HAS AS HAS FORMALLY CONSIDER
THAT IS CERTAINLY AN OPTION
THERE THEY'RE PUTTING FORTH IS A
CONSIDERATION SPECIFICALLY IN
THEIR STATION PLANNING --
ENDEAVORS AND SO WE REVIEWED
SEVERAL STATION PLANS FOR CITIES --
PLAN TO INCLUDE A HIGH SPEED
RAIL SYSTEMS ULTIMATELY
INCLUDING FRESNO AND SO FORTH
THAT THAT DO IDENTIFY THOSE
VALUE CAPTURE TECHNIQUES AS A AS
A DISTINCT POSSIBILITY GOING
FORWARD.
HOWEVER WE DETERMINE THAT THE
THE THE STATION PLANNING PROCESS
IS STILL IN ITS INFANCY AND SO
WHILE THOSE THOSE AT THIS
TECHNIQUE CERTAINLY HOPE PROMISE
AND NOW IT WAS TOO EARLY FOR US
TO DETERMINE WHETHER THEY WERE.
IN THE AUTHORITY WAS GOING TO
MOVE ON THEM OR FOR THAT
DECISION WAS GONNA BE BENEFICIAL.
DO YOU THINK THAT THOSE
OPPORTUNITIES ARE TO BE FURTHER
EXPLORED.
YEAH I I YEAH I BELIEVE SO I
BELIEVE THAT THAT'S IT'S AN OPEN
A POTENTIALLY VERY INNOVATIVE
WAY OF HELPING OFFSET SOME OF
THE THE COST FOR SYSTEM THAT
NEEDS ALL THE HELP I CAN GET IN
TERMS OF REDUCING COSTS.
DO YOU --
DID YOU EXAMINED --
THE TUNNELING ASPECT ENTERS
EXPEDITING --
CONSTRUCTION TIME LINES THROUGH
THE TUNNELING OF THE TOTALING
ELLO ELEMENTS OF THE PROJECT.
SINCE I NOTICE ARE NOT
SPECIFICALLY WE BEYOND THE
KNOWLEDGE IN THAT TUNNELING IS
GOING TO BE SIGNIFICANT OF A
SIGNIFICANTLY MORE TECHNICAL
DIFFICULTY THAN EXISTING
CONSTRUCTION WHICH HAS BEEN
PLAYING WITH THE LAYS.
THE OBVIOUSLY EXPRESSED CONCERN
IN THE REPORT THAT --
YOU KNOW THE PAST COULD COULD
REOCCUR REEKER IN TERMS OF
DELAYS TO THE PLANNED SCHEDULE
FOR TUNNELING BUT WE DON'T HAVE
ANY TECHNICAL RECOMMENDATIONS
ASSOCIATED WITH THOSE ALIGNMENTS.
SO FURTHER EXPLORATION.
CERTAINLY PUT THAT IN THAT
CATEGORY --
WE HAVE SP ONE OH NO LOG THE
VOTERS APPROVED THE BY REJECTING
THE AND INITIATIVE --
WE HAVE AN INSPECTOR GENERAL --
DO YOU THINK YOUR WROTE HAVE YOU
HAVE YOU OF CONSIDERED --
THE INSPECTOR GENERAL --
ROLE IN OVERSIGHT ON HIGH SPEED
RAIL AUTHORITY.
OF FUNDING AND WITHOUT --
BE OF ASSISTANCE.
TO US THE LEGISLATORS TO GET
REPORTS.
ON THE HIGH SPEED RAIL LIKE THEY
REPORT ON OLDER TRANSPORTERS
SUPPOSED TO REPORT ON ALL.
TRANSPORTATION PROJECTS --
TO OUR COMMITTEE --
OUR COMMUNITIES OF BUDGET
COMMITTEES AND POLICY COMMITTEES.
THE AFFECTED SPECTER GENERAL
SHOULD PLAY A ROLE IN OVERSIGHT.
ON HIGH SPEED RAIL PROJECT.
ABSOLUTELY I THINK HAVING ANY
EXTERNAL THEY WOULD BE EXTERNAL
TO THE AUTHORITY AND BE WOULD BE
REPORTING TO THE LEGISLATURE AND
THEY WOULD BE ABLE.
TO DO CONDUCT WORK MORE
FREQUENTLY --
pSUPPORT I THINK THAT'S A AN
EXCELLENT IDEA THAT THEY MORE
OVERSIGHT AND MORE FREQUENT.
CHECKING IN WITH THE AUTHORITY
AND HAVING THAT EXTERNAL AUDITOR
BEING ABLE TO REPORT TO YOU --
AT THEIR PERSPECTIVE ON HOW WELL
THE AUTHORITY AS A DRESSING
RECOMMENDATIONS ADDRESSING
DIRECTIVES FROM THE LEGISLATURE
I THINK IS A POSITIVE --
A POSITIVE THING FOR THE STATE
THE THE OF THE FORTY AN
INSPECTOR GENERAL WAS PRETTY
BROAD WE WE LEFT IT BROUGHT ON
PURPOSE.
CORRECT JIM AND IT WAS DONE.
IT SAID ANY TRANSPORTATION
DOLLARS IN THE CALIFORNIA.
SO THE INSPECTOR GENERAL DOESN'T
NEED ANY LEGISLATIVE.
CHANGES OTHER THAN.
THE WE REQUEST AND I I WOULD
REQUESTED MAYBE.
OUR COMMITTEES WOULD REQUEST THE
INSPECTOR GENERAL TO ASSIST US
IN OVERSIGHT ON HIGH SPEED RAIL
PROJECT CERTAINLY IN ANYTHING
OUR OFFICE COULD DO TO ASSIST
THE INSPECTOR GENERAL AS FAR AS
WORK THAT WE'VE DONE IN THE PAST
OR WORK THAT THEY ARE INTENDING
TO DO WE'D BE HAPPY.
TO PROVIDE ANY SUPPORT WE CAN
THANK YOU.
I JUST GOT A CLARIFICATION THAT
WE DID FINALIZING WAS FOR
CALTRANS ONLY INSPECTOR GENERAL
BUT WITH LEGISLATION WE CAN
BROADEN.
IT WAS IT WAS WRITTEN IN A WAY
WHERE IT WAS CALTRANS.
BUT ANY FUNDS.
THAT WERE --
APPROVED.
SO THIS WORK ON IN MY ROOM MY
WAY I THINK WE ALREADY OUT THERE.
HOOKS INTO --
IF YOU WANT TO SET UP
[inaudible]
ONE THANK YOU [inaudible]
MISTER PATTERSON --
I WANTED TO ASK A COUPLE
QUESTIONS --
THE BE SIMILAR QUESTIONS THAT I
ASKED TO THE AUTHORITY FIRST OF
ALL WITH RESPECT TO THE MEETING
THE DEADLINE --
WE'VE GOT TWO ISSUES HERE THAT
ARE OF DEEP CONCERN FOR ME I
THINK AND I THINK YOU HAVE
EXPRESSED AS WELL.
THE EARLY USE OF THE FEDERAL
MONEY WHICH I THINK EXPRESSLY
DEMONSTRATES THAT.
I THINK THE FEDERAL WHAT IT IS
GOING TO HAVE --
GRAVE CONCERNS ABOUT THAT.
AND SECONDLY THAT THAT THE THE
DEADLINE THAT THAT THE THE TIME
HERE.
YOUR AT YOUR SAYING THAT IT
NEEDS TO YOU NEED TO DOUBLE.
THE CONSTRUCTION IN FOUR YEARS.
THERE IS MY MIND NO INDICATION
THAT PREVIOUS HISTORY AND
EXPERIENCE.
CAN EVEN BEGIN TO APPROACH THAT
EXPECTATION SO I THINK THERE IS
A SERIOUS QUESTION GOING FORWARD.
ABOUT THE CONSEQUENCES OF THE
FEDERAL AUDIT.
WHAT IS YOUR CONFIDENCE LEVEL?
IN THE ABILITY.
OF THIS STORY UNDER YOUR AUDIT
AND WHAT YOU KNOW TODAY. TO MEET
THAT DEADLINE AND AVOID THE
POTENTIAL.
OF CLAWBACK IN OTHER WORDS.
WHAT IS PLAN BE?
WELL FIRST OF ALL I WOULD DEFER
TO THE AUTHORITY FOR PLAN B. --
ANSWERING YOUR QUESTION THAT'S
WHY WE RAISED IT AS A CONCERN IN
THE AUDIT REPORT WE WERE VERY
CONCERNED.
AND AND AS I INDICATED IN MY
OPENING COMMENTS THE THE
AUTHORITY ITSELF WHEN IT
PRESENTED THEIR PLAN TO THE
BOARD --
QUALIFIED AND SAID THIS OF
SCHEDULE FOR US TO BE ABLE TO
MEET THE FEDERAL DEADLINE OR TO
MEET THE MARCH TWENTY TWENTY TWO
WHICH IS THE DEADLINE THEY'VE
SET FOR THEMSELVES BUT THE
FEDERAL DEADLINE IS DECEMBER.
TWENTY TWENTY TWO AND THAT'S WHY
WE DID THE ANALYSIS TO
DEMONSTRATE. TO BE ABLE TO
ACCOMPLISH THIS THE AUTHORITY
HAS TO YOU KNOW WORK TWICE AS
QUICKLY AS IT HAS THUS FAR AND
WE HAVE WE HAVE SERIOUS CONCERNS
ABOUT THAT.
WHETHER TO CHI MOBILE SO THEY'RE
DOING THE APT DESCRIPTION HERE
IS ONGOING SERIOUS CONCERNS
GOING FORWARD TO MEET THE
DEADLINE THAT IS THAT IS A FAIR
ASSESSMENT OF ONE ON ONE ALSO.
THE THE THE GENERAL --
VALUE PROPOSITION --
OF HIGH SPEED RAIL THAT WAS --
PRESENTED TO THE VOTERS.
I THINK CAN'T THREE ELEMENTS TO
IT SPEED TIME AND
COMPETITIVENESS.
WE ARE NOW HERE [inaudible]
YEARS LATER.
THE SPEEDS ARE GOING DOWN.
THE TIME IS GOING UP.
AND THE COMPETITIVENESS WITH
OTHER FORMS OF TRANSPORTATION I
THINK IS GOING DOWN.
AS A RESULT.
THE ARC OF THIS PROJECT APPEARS.
TO ME.
THAT IT SIMPLY.
IS NOT DELIVERING.
THE KIND OF SPEED TIME AND
COMPETITIVE ADVANTAGE THAT WAS
PROMISED DO YOU HOLD SIMILAR
SERIOUS CONCERNS.
ABOUT THE SPEED TIME AND
COMPETITIVENESS IF YOU DON'T
HAVE SPEEDS AND IF YOU DON'T
HAVE COMPETITIVE TIMES.
EACH YEAR THERE'S NOT THERE AT
THE THE MARKET PLACE ISN'T GOING
TO CHIU SOMETHING WHERE THEY CAN
STILL FLY FROM LA TO SAN
FRANCISCO --
IN ON AN AIRPLANE FOR HALF THE
COST.
WE NEED THIS IS THAT THIS IS A
COMPETITIVENESS.
VALUE PROPOSITION THAT I THINK
THE THE LONGER THAT THE
AUTHORITY HAS MADE THESE
DECISIONS. TO SCALE BACK AND
SCALED DOWN --
THE SPEEDS PUSH THE TIME'S UP IN
THIS ISSUE THAT'S GOING.
TO IMPACT THE SUSTAINABILITY OF
THIS PROJECT GOING FOR THIS ARC
CONCERNS ME AND DOES IT CONCERN --
YOU IS THE AUDITOR.
YES IT DOES --
THAT'S WHY WE POINTED OUT IN THE
REPORT MISTER PATTERSON THAT THE
EXACTLY WHAT YOU WERE REFERRING
TO AS FAR AS THE NUMBER OF
TRAINS EVEN THOUGH BLENDING.
HAS HAD A POSITIVE IMPACT ON THE
COST OF THE PROJECT BY REDUCING
COSTS.
THEY FLIP SIDE IS THAT YOU HAVE
FEWER TRAINS THEY'RE GOING TO BE
ABLE TO RUN.
WE CLEARLY DON'T KNOW AT THIS
POINT THE AUTHORITIES
ACKNOWLEDGE UNTIL IT IT IT'S
FINALIZED THEY WON'T KNOW THE
FULL IMPACT OF THAT AS FAR AS
THE NUMBER OF TRAINS THAT WILL
BE ABLE TO RUN --
AS FAR AS THAT TRACK THAT
THEY'RE SHARING WITH OTHER
OPERATORS AND CERTAINLY THE
COMPETITIVENESS.
WHEN SOMEONE'S MAKING A CONSUMER
IS MAKING A DECISION?
AS TO DO I TAKE THE HIGH SPEED
RAIL WHICH IS GONNA TAKE TWO AND
A HALF HOURS --
OR TWO HOURS FORTY MINUTES --
AND COST X. AMOUNT COMPARED TO
LOS ANGELES SO I THINK --
THE FACT THAT THERE HAVE BEEN
SOME CHANGES WITH RESPECT TO
SPEED NUMBER OF TRAINS
AVAILABILITY --
SHOULD CONCERN --
THE STATE OF CALIFORNIA AND
CONSTITUENTS THANK YOU
APPRECIATE.
MICHELLE I HAVE A FEW QUESTIONS --
YOU START OFF YOUR PRESENTATION --
BY.
STATING THAT WHAT ONE OF YOUR
KEY FINDINGS WAS CONTRACTORS
OVERSEEING CONTRACTORS --
AND THAT.
THAT COULD LEAD TO A POTENTIAL
CONFLICT OF INTEREST.
ARM.
AND YOU TALK ABOUT --
THEY NEED TO HIRE STATE
EMPLOYEES RATHER THAN THE
CONTRACTOR TO TRY TO AVOID THAT
CONFLICT OF INTEREST.
IN TERMS OF THE RDP CONSULTANTS --
THE THE RAIL DELIVERY PARTNER
CONSULTANTS --
THE DO YOU DISCUSS IN IN YOUR
REPORT.
WHO THEY ARE OR HOW MANY?
THAT'S CORRECT SURE WE DO WE DO
DISCUSS THE RTP IN A NUMBER OF
CONTACTS --
I'D HAVE TO REFER TO SPECIFIC
NUMBER IN THE REPORT BUT THERE
OR OVER THREE HUNDRED OF THOSE
POSITIONS --
AS OF THE TIME OF OUR REVIEW
THAT ARE STAFFED BY THE RTP
CONSISTING OF A CONSULTING FIRM
AND ITS SUBCONTRACTORS --
SPECTOR THE THE CONFLICT OF
INTEREST SPECIFICALLY THE WAY WE
SAW THAT MANIFESTING ITSELF WAS
THAT.
IN A IN SITUATIONS IN WHICH
STATE EMPLOYEE CONTRACT MANAGERS
WERE --
BASICALLY DELEGATING OR
DEFERRING THEIR RESPONSIBILITY
THEY WERE THEY WERE DOING IT TOO
RT P. CONSULTANT PROJECT
MANAGERS IN THE FIELD WHO ARE
WORKING HAND IN HAND WITH THE
WITH THE CONTRACTORS.
THE YOU KNOW THE CONTRACTORS OF
ORIGIN THERE --
AND THE COVER IS ITSELF WHEN THE
OVERSIGHT BODY THAT THE
AUTHORITY HAS CONSTRUCTED A
WHOLE CONTRACT MANAGERS
ACCOUNTABLE THAT IS THE STATE
WORKERS.
WOULD NEED TO STEP IN AND YOU
KNOW INTERVENE IN INSTANCES
WHERE STATE WORKERS WERE OVER
RELIANT ON RT P. CONSULTANTS
HOWEVER THE OVERSIGHT.
PERFORMING OVERSIGHT WITH
THEMSELVES ALREADY CONSULTANT SO
TO US THAT CREATED A POTENTIAL
CONFLICT.
SO A BIT BUT I MEAN WHO WHO WHO
ARE THESE ARE TO BE CONSULTANTS
OR ARE THEY ALL EMPLOYED BY ONE
FIRM IS IN MULTIPLE FIRMS.
W. S. P. USE YOU ESSAYS THE
CONTRACT HOLDER BUT THEY THEY
SUBCONTRACT WITH MANY OTHER
DIFFERENT TYPES OF ORGANIZATIONS
ARE COMPANIES IN AND BRING STAFF
AND AS NEEDED.
OKAY AND HAVE YOU SEEN ANY
EVIDENCE OF ANY OF THESE.
RTP CONSULTANTS --
BEING HELD ACCOUNTABLE FOR COST
OVERRUNS OR PROJECT DELAYS.
NO SIR WE WE DISCUSSED IN THE
REPORT THAT THE CONTRACT MANAGER
RESPONSIBLE FOR THE ITV CONTRACT
OURS IS --
GENERALLY UNABLE TO PROVIDE A
KIND BASIC FOUNDATIONAL EVIDENCE
RELATED TO THE ALREADY PIECE
PERFORMANCE --
FOR A TWO YEAR PERIOD THE
CONTACT MANAGER WASN'T ABLE TO
PROVIDE TO RECOVER ANY OF THE
ACTUAL WORK PRODUCTS ARE
DELIVERABLES AT THE ALREADY P.
REPORTED SUBMITTING.
THE AUTHORITY. TO BE CLEAR THE
THE RT P. REPORTS EMITTING IT OR
NOT AND PART OF THE PROBLEM IN
REACHING THAT DETERMINATION IS
THE POOR DOCUMENTATION ON THE
PART OF THE AUTHORITY.
SO THAT'S WHERE OUR FOCUS REALLY
IS IS THAT THE IF IT'S THE
AUTHORITIES ARE RESPONSIBLY TO
HOLD THAT CONTRACTOR ACCOUNTABLE.
AS IT STANDS NOW WERE UNABLE TO
REALLY WEIGH IN ON THE
EFFECTIVENESS OF THE RDP
ACCEPTING NOTING INSTANCES WHERE
THEY HAVE EXPERIENCED --
DELAYS AND AND SOME COST
OVERRUNS ASSOCIATED WITH THEIR
THEIR WORK PLANS I MEAN I LIKE I
CERTAINLY.
APPRECIATE THE NUMEROUS --
YOU KNOW.
PASSAGES IN YOUR REPORT TO ARE
YOU ARE YOU IDENTIFY THE THE THE
SHORTCOMINGS IN TERMS OF THE
DOCUMENTATION --
BUT I I DIDN'T SEE.
ANYTHING IN TERMS OF WHETHER ANY
OF THESE RTP CONSULTANTS.
WERE FIRED OR CHANGED AS A
RESULT OF ANY COST OVERRUNS OR
ANY PROJECT IN PLACE.
SO THE THE THE COMPOSITION OF
THE RT.
EMPLOYEE GROUP AS A WHOLE WILL
BE IN MORE OR LESS CONSTANT FLUX
BASED ON THAT THE AT THE NEEDS
OF THE THIRTY THAT.
THE THE THE CRISTINA FIRM AND
AND SO FORTH --
IN TERMS OF ACCOUNTABILITY FOR
PERFORMANCE SPECIFICALLY THOUGH
KNOW HOW AS YOU SAID IN THE
REPORT WE FOUND ONLY ONE
INSTANCE --
AMONG NEAR YOU TO WORK PLANS AND
AND THE AUTHORITY HAD EVER EVEN
ISSUED.
A CORRECTIVE ACTION PLAN TO THE
RT P. FOR AND I WAS FOR AN I. T.
DELIVERABLE THAT WAS MANY YEARS
IN THE IN THE WAY IN THE MAKING
AND HAVEN'T HAD SEEN MANY MANY
OVERRUNS AND DELAYS SO.
THERE'S BEEN.
A GENERAL LACK OF OF DOCUMENTED
ACCOUNTABILITY AND FOR BY THE
AUTHORITY FOR ITS CONTRACTORS AT
LEAST IN TERMS OF THE CONTRACTS
THAT WE REVIEWED.
SO FOR THIS MULTI BILLION DOLLAR
PROJECT --
THAT IF THERE IS NOT ONLY THE
NUMEROUS INSTANCES OF THE LACK
OF DOCUMENTATION OF THE THAT
THAT THE NATURE AND THE THAT THE
QUALITY OF THE WORK BEING DONE.
BUT THERE'S BEEN ONLY ONE
CORRECTIVE ACTION ISSUED BY THE
AUTHORITY OF FOR SUB.
WHO UNSATISFACTORY PERFORMANCE?
THAT IS CORRECT SIR INSOFAR AS
THE THE CORRECTIVE ACTION PLAN
IS IS A DOCUMENT OR THE RECOVERY
PLAN THIS IS ALSO REFERRED TO AS
A DOCUMENT.
CONTEMPLATED BY THE POLICIES
PROCEDURES TO THIRTY PUT IN
PLACE THAT STATE STIPULATE TO
THE CONTRACT MANAGER IF
PERFORMANCES SIGNIFICANT BEHIND
SCHEDULE OR OF A POOR QUALITY IS
YOUR RESPONSIBILITY.
TO WORK WITH THE CONTRACT TO IN.
TWO TO TO DEVELOP THIS PLAN TO
HOLD THEM ACCOUNTABLE FOR FUTURE
PERFORMANCE.
OTHER WHAT WITH THE RISK BEING
THAT IN THE ABSENCE OF THAT YOU
CONTINUE TO POTENTIALLY PAY
MISTAKEN TEAMS TO PAY FOR SUB
PAR OR OR DELINQUENT WORK --
I WILL SAY THAT.
MORE BROADLY IN TERMS OF OUR
REVIEW OF THESE NINE CONTRACTS
WE ALSO SELL ONLY LIMITED
INSISTED INSTANCES IN WHICH
CONTRACT MANAGERS HAD DISPUTED.
ANY PORTION OF ANY INVOICE AND
FURTHER WHEN WE WHEN WE
INVESTIGATED THOSE INSTANCES
THIS IS ANOTHER AREA IN WHICH
PERHAPS THEIR CREDIT IN THIS
CASE THE THE ORIGINS OF THOSE
DISPUTES WERE ACTUALLY FROM THE
RT P. CONSULTANTS IN THE FIELD
WORKING WITH THE CONTRACTORS SO --
THAT'S ANOTHER EXAMPLE OF THE HE
CERTAINLY WE YOU KNOW WE BELIEVE
STRONGLY AS THE AUTHORITIES YOU
KNOW CLAIMS TO IN ITS POLICIES
AND PROCEDURES THAT RESPONSIBLE
FOR IDENTIFYING AND FOLLOWING
THROUGH ON THOSE SORTS OF
QUALITY ISSUES NEED TO FALL TO
THIS THE STATE.
EMPLOYEE RESPONSIBLE FOR
OVERSEEING CONTRACT.
DID YOU SEE ANY --
I I I KNOW THAT ONE OF YOUR
RECOMMENDATIONS IS --
TO IS FOR THE AUTHORITY.
TO OF DEVELOP AND AND FURTHER
SPECIFY --
PERFORMANCE PARAMETERS --
FOR CONTRACTORS THAT DOES THAT
INCLUDE THE RT P. CONSULTANTS.
SO IF I'M CORRECT YOUR AB
REFERRING TO THE RECOMMENDATION
REGARDING THE OKAY KIND OF LIKE
IF CONTRACT MANAGERS THEMSELVES
YEAH YEAH SO.
THE THAT WOULD PERTAIN TO THE
THE STATE EMPLOYEE THAT IS THE
CONTRACT MANAGER FOR THAT
CONTRACT TO FIX IT THAT IN THAT
INDIVIDUAL IS NOT A CONTINUES.
TO TO FAIL TO COMPLY WITH THE
WRITTEN RULE OF THE POLICIES AND
PROCEDURES THEN YES WE BELIEVE
THAT INCREASED ACCOUNTABILITY
FOR THOSE INDIVIDUALS NEEDS TO
TAKE PLACE.
WE WE BELIEVE THAT ASSOCIATED
RECOMMENDATIONS SUCH AS ENSURING
THAT DUTY STATEMENTS ALIGNED
WITH WHAT THEY'RE EXPECTED TO DO
WILL WILL ASSIST THE AUTHORITY
IN AND HOLDING THEM ACCOUNTABLE
WHICH AS WE AS WE DISCUSSED IN
TERMS OF THE OVERSIGHT TODAY HAS
NOT HAPPENED.
THE D. HAVE YOU SEEN ANY
EVIDENCE OF MEASURES OF
ACCOUNTABILITY FOR THE RDP
CONSULTANTS.
AS AN ANSWER WE WE WE DID WE DID
NOT APART FROM THE THE FORMAL
THE RARE FORMAL INTERVENTION
THAT OCCURRED FOR ONE SPECIFIC
DELIVERABLE AND THAT WAS AND
REALLY LIMITED IN IN TERMS OF
OUR KNOWLEDGE. TO TO THE
CREATION OF THAT RECOVERY PLAN
BY WHICH THE RT P. HAD --
TO EXES SPECIFY HOW WOULD HOW
WOULD ADDRESS SHORTCOMINGS IN
ITS WORK IN THAT AREA.
EARLIER MR FONG ASK A QUESTION
ABOUT WHETHER THIS IS TYPICAL OR
NOT -- YOU
KNOW THE FOR THIS LEVEL OF
MEASURES OF ACCOUNTABILITY AND
BEING.
I I BELIEVE --
MS HOW YOU YOU ANSWERED IT IT'S
NOT TYPICAL TO RELY SO MUCH ON
OUTSIDE CONTRACTORS BUT I MEAN
IS [inaudible]
WE'RE IT TO HELP US COMMITTEE
TRY TO GET A SENSE OF THE I MEAN
YOU KNOW IT IS IS IS IS PAR FOR
THE COURSE OF WHETHER WE LIKE IT
OR NOT IN IN IN TERMS OF PUBLIC
PROJECTS OF THE SCALE OR ADD.
YOU TALKED ABOUT THAT THE BRIDGE
PROJECT IS A THE THE TOLL BRIDGE
PROJECT AS AS ONE YOU KNOW A
GOOD COMPARISON BUT IS THE DO
YOU DO YOU HAVE ANY OF OPINION
AS TO WELL AS I INDICATED --
MISTER MURATSUCHI AND AND
RESPONSE TO MR FUNG'S QUESTION
THE THE THE VOLUME AND THE THE
NUMBER OF INSTANCES THAT WE
IDENTIFIED PROBLEMS IS IS MUCH
BIGGER THAN WE TYPICALLY SEE IN
AN ARTICLE OFTENTIMES A FOR
GOING IN AND WE'RE LOOKING AT
WORK AND WE'RE EXPECTING TO SEE
DOCTOR.
IMITATION BUT MAY NOT BE
COMPLETE OR THERE MAY BE ONE OR
TWO INSTANCES IN THIS SITUATION
IT WAS.
MULTIPLE INSTANCES AND NUMEROUS
FOR EXAMPLE MISTER --
MISTER REINER YOU TALKED ABOUT
THE RTP CONSULTANTS AND THEY
WERE THEY WORK I'M GONNA READ
FROM MY NOTES BUT WE REVIEWED --
A HUNDRED AND EIGHTY FOUR
DELIVERABLES THAT RT P. CLAIMED
THAT THEY HAD PROVIDED TO THE
AUTHORITY THE AUTHORITY WAS
MISSING A HUNDRED FORTY FIVE ANY
EVIDENCE OF COMPLETION OF THOSE.
PARTICULAR DELIVERABLES --
FOUR HUNDRED FORTY FIVE THOSE IN
THE STATE YOU KNOW THE PAYMENT
TO RT P. WAS CLOSE TO TWO
HUNDRED MILLION DOLLARS SO A
PROJECT OF THIS SIGNIFICANCE WE
WOULD EXPECT TO SEE.
TIGHTER CONTROLS STRONGER
OVERSIGHT BETTER FIDUCIARY
RESPONSIBILITY ON ON THEIR
BEHALF OF THAT ARE THE AUTHORITY
ON BEHALF OF THE STATE OF
CALIFORNIA.
AND WE'RE JUST NOT SEEING THAT --
AND IT IS IT IS CONCERNING
BECAUSE OF THE AMOUNT OF THE
DOLLARS THE SIGNIFICANCE OF THIS
PARTICULAR PROJECT AND IT IS
QUITE DIFFERENT THAN WHAT WE
TYPICALLY SEE IN OTHER AUDITS --
CERTAINLY AUDITS THAT WE'RE
LOOKING AT THAT ARE NOT OF THIS
PARTICULAR MAGNITUDE AS FAR AS
THE INVESTMENT BY THE STATE OF
CALIFORNIA THIS PEOPLE OF THE
STATE OF CALIFORNIA AND
CERTAINLY THE FEDERAL GOVERNMENT.
SO YOU SAY YOU HAVE DOCUMENTED --
TO NUMEROUS --
INCIDENCE OF THE LACK OF THESE
CONTROLS AND THE LACK OF TRANS --
BASED ON YOUR OVERALL --
EXPERIENCE WITH THIS AUDIT AS
WELL AS YOUR PRIOR AUDIT --
ON THE HIGH SPEED RAIL.
DO YOU HAVE AN OPINION AS TO WHY
THIS APPEARS TO BE.
THE CASE BOY THAT'S A DIFFICULT
QUESTION TO ANSWER BECAUSE IT IT
IT IS A SITUATION WHERE WE'VE
MADE RECOMMENDATIONS IN THE PAST
THE THEIR OWN INTERNAL AUDITORS
I THINK HAVING THE INSPECTOR
GENERAL PARTICIPATE AS FAR AS AN
EXTERNAL ENTITY --
THAT WOULD BE ABLE TO REPORT TO
THE LEGISLATURE I REALLY DON'T
KNOW QUITE FRANKLY --
WHY THEY'RE RELUCTANT TO BRING
ON?
STATE EMPLOYEES TO PROVIDE --
OVERSIGHT IN PARTICULAR AREAS I
KNOW MISTER MISTER FRAZIER
MENTIONED YOU KNOW THE THEY'RE
SUGGESTING THAT THE PROJECT OR
SOMEBODY MAY NOT GOING TO WANT
TO WORK.
FOR THE HIGH SPEED RAIL
AUTHORITY BECAUSE IT'S A LIMITED
TERM COMPOSITION BUT WE'RE
TALKING WE'RE TALKING OUT --
TO TWENTY THIRTY THERE HAVE BEEN
INDIVIDUALS WHO HAVE WORKED IN
EXECUTIVE MANAGEMENT POSITIONS
FOR THE AUTHORITY FOR YEARS NOW
SO I DON'T I DON'T THINK THAT'S
A VERY STRONG ARGUMENT THAT THE
AUTHORITY CAN PUT FORTH --
WITH RESPECT TO BRINGING ON
STATE EMPLOYEES AND HAVING MORE
OF A STATE OVERSIGHT --
STRUCTURE FOR THIS PARTICULAR
PROJECT.
DO YOU HAVE ANY OPINION AS TO
WHY -- MORE.
INSTANCES OF RTP CONSULTANTS
BEING HELD ACCOUNTABLE FOR THE
COST OF RENTS FOR THE PROJECT IN
THE I I I WOULD DEFER TO THE
AUTHORITY I I DON'T KNOW WHAT
THEIR PERSPECTIVE MAY BE I MEAN
WHAT WE HAVE HEARD FROM OTHER
STATE AGENCIES AND I CAN DIFFER
STAFF WE'VE HEARD.
THIS FROM THE AUTHORITY
OFTENTIMES STATE PROJECTS BECOME
SO DEPENDENT ON OUTSIDE
CONSULTANTS WE'VE SEEN THIS AND
I. T. PROJECTS FOR THE STATE OF
CALIFORNIA WHERE.
WE NEED TO HAVE THAT KNOWLEDGE
TRANSFER WE'VE TALKED ABOUT THAT
AND OTHER REPORTS AND YOU BECOME
SO DEPENDENT ON EXTERNAL
CONSULTANTS ARE OUTSIDE VENDORS.
THAT YOUR YOUR RELUCTANT TO KIND
OF CUT THE CORD AND TAKE OVER
THE PROJECT OR CERTAINLY HAVE
MORE OF A STATE ROLE SO I DON'T
KNOW AGAIN I'LL DEFER TO THE
AUTHORITY.
ALLOW MY STAFF TO ANSWER IF THEY
HAVE ANYTHING TO ADD BUT I THINK
IT IS CONCERN ABOUT WE'VE GOT TO
KEEP THIS PROJECT GOING WE'VE
GOT A DEMONSTRATE WE HAVE SOME.
LANGUAGE IN THE REPORT WHERE.
THE DECISION TO MOVE FORWARD WAS
NOT JUST BECAUSE OF THE FEDERAL
GRANT BUT WE WANT TO DEMONSTRATE
TO THE VOTERS WHO APPROVED
PROPOSITION THE BONDS.
THAT THIS PROJECT IS GOING TO BE
SOMETHING THAT WILL HAPPEN FOR
THE STATE OF CALIFORNIA IT IT IT
IS RAIL IF YOU START SEEING
CONSTRUCTION IN.
CONCRETE ON THE GROUND IT CETERA
SO I THINK I THINK THAT SOME OF
THE PERSPECTIVE PERHAPS AT THE
AUTHORITY WOULD HAVE I DON'T
KNOW STAFF HAVE ANYTHING TO ADD.
BOBBI ASKING THE SAME QUESTION
TO THE THIRTY IN A FEW MINUTES
SO THANK YOU VERY MUCH THANK YOU
MISTER CHAIR YES MISS PATTERSON.
DID DID I HEAR ACCURATELY THAT.
FUTURE POTENTIAL CHANGE BORDERS
COULD BE IN THE MAGNITUDE OF ONE
POINT EIGHT BILLION.
AS ONE OF AT BASED ON THE MOST
RECENT AND HE'S OUR POINT IN
TIME CALCULATIONS OF COURSE WHAT
DURING THE TIME OF OUR REVIEW IS
ONE POINT SIX BILLION SEVEN
POINT SIX BILLION.
LET THAT SINK INVOKES
[inaudible]
SHARON FRAZIER.
JUST LIKE TO FOLLOW UP ON
ANOTHER QUESTION.
I DO YOU BELIEVE THAT HSR HIGH
SPEED REAL CAN I IMPLEMENT ALL
THE PROVISIONS.
IN THE BALLOT MEASURE ON PROP
ONE NAY --
THAT THE PEOPLE OF CALIFORNIA
VOTED FOR AND WAS JUST FOLLOW
THAT UP WITH.
WHAT IS YOUR UNDERSTANDING IF
THEY CAN ATTAIN THESE PROVISIONS?
YEAH WOOD MISTER FRAZIER WE
DIDN'T SPECIFICALLY LOOK AT
PROPOSITION ONE A AND COMPARED
IT TO WHAT WE SAW AS FAR AS
PROGRESS THE AUTHORITY HAD MADE
SO I DON'T I DON'T HAVE THE
ABILITY TO ANSWER THAT QUESTION
I APOLOGIZE.
THE OTHER WAS THAT IN THE IN THE
BALLOT [inaudible]
FOR NOT.
A PRICE THAT WAS SET FOR FAIR.
FOR THE FARE TO RIDE THE HE OR
WAS IT IN SOME KIND OF DOCUMENT
SAID THAT WHAT IT WOULD COST
RIGHT HIGH SPEED RAIL.
WHAT IT DO YOU KNOW WHAT THE
COST WOULD BE NOW IT IN TODAY'S
DOLLARS I'M HERE IS ALMOST
DOUBLED?
I AGAIN WOULD WHEN I'M LOOKING
AT STAFF AND THERE'S THERE TELL
ME WE KNOW WE DON'T HAVE THAT
INFORMATION SO AGAIN I WOULD
DEFER TO THE AUTHORITY FOR THE
ANSWER THAT QUESTION I THINK WE
NEED TO BE ABLE TO UNDERSTAND IF
THE SAYING IS AFFORDABLE DRUG.
YOU KNOW TO WRITE ON IT MOVES
FORWARD [inaudible]
YES.
ON THE LAST POINT WHERE YOU SAID
THAT THERE WAS PRESSURE TO TRY
TO SHOW SOMETHING. TO
DEMONSTRATE SOMETHING VISIBLE ON
PAGE THIRTY DIGITAL TRIGGERED
THIS THAT YOU YOU RIGHT.
OR IN THE AUDIT THAT STORY
REPORTED TOTAL COST ESTIMATES
WHEN BEGINNING CONSTRUCTION IN.
TWENTY THIRTEEN THERE WERE
UNREASONABLY LOW CAN YOU EXPOUND
ON HOW YOU CAME TO THAT
CONCLUSION SO IS UNDER THAT WITH
DID DID THEY KNOW THE ROUTE BUT
THE COSTS WERE LOW AND THEY JUST
SAID IT ANYWAYS.
WHAT SERVER THEY CERTAINLY KNEW
WAS THAT THEY DIDN'T HAVE
ADEQUATE INFORMATION TO PLACE
RELIABLE DOLLAR MONTH ON THOSE
COSTS THE DOLLAR AMOUNTS THAT WE
REFER TO IN THE REPORT FOR POINT
OF COMPARISON?
HAVE TO DO WITH THOSE IN THE THE
CONTINGENCIES AND OTHER OF
PROVISIONAL SUMS UP THE
AUTHORITY ESTABLISHED WHEN
EXECUTING EACH OF THE THREE
CONTRACTS.
WE COMPARED THOSE TO THE THAT
CHANGES TO DATE THE COSTS OF RUN
TODAY AS WELL AS THOSE IN THE
FUTURE AND THAT'S THE BASIS FOR
OUR CONCLUSION ABOUT.
THE ON RECENTLY LOW NATURE OF OF
THE WRITTEN OUR POINT ABOUT THE
ON REASON THIS THOSE NUMBERS IS
REALLY ROOTED IN.
AUTHORITIES KNOW IN KNOWN
UNCERTAINTIES SURROUNDING --
THESE ISSUES AND THAT.
THEY COULDN'T PUT A GOOD NUMBER
ON THEM BUT IT'S LED TO FORGIVE
ME BUT IF IT'S ONE THING TO SAY
I DON'T KNOW.
IT'S ANOTHER THING TO SAY I
DON'T KNOW BUT THIS IS THE
NUMBER.
CORRECT.
I WOULD AGREE INSOFAR AS YES
THEY THEY PUT OUT A THEY PUT OUT
A SEVERAL CONTRACTS WITH A
CONTINGENCY AMOUNTS THAT WERE
INADEQUATE SO.
SO THE NUMBER THEY PUT OUT.
WAS JUSTIFIED HOUSE IF THEY
DON'T KNOW THE INFORMATION --
THAT'S A QUESTION I CAN ASK THE
DOOR TO BE I WAS THE FOR THE
AUTHORITY ABOUT THE METHODOLOGY
FOR SAID THEY HAVE A WRIST THEY
HAD A RISK ASSESSMENT.
PROCESS BUT BY THEIR OWN
ADMISSION IN VARIOUS SPORT YOU
KNOW FORMS THAT THAT THE
INFORMATION THAT WOULD BE THE
INPUT TO THE SYSTEM.
WAS INCOMPLETE SO I DON'T KNOW
HOW THEY WOULD HAVE THEY WOULD
DEFEND THE OUTPUTS BUT AGAIN I
WOULD I WOULD FOR THEM FOR THE
METHODOLOGIES THANK.
ANY OTHER QUESTIONS FROM THE
COMMITTEE.
SAY NONE THANK YOU VERY MUCH.
NEXT TO LIKE TO INVITE.
REPRESENTATIVES FROM THE
CALIFORNIA HIGH SPEED RAIL
AUTHORITY
.
ALL RIGHT WELCOME GENTLEMEN --
YOU -- LIKE
AS I INDICATED TO THE AUDITOR
AND HER STAFF A YOU HAVE
APPROXIMATELY FIFTEEN MINUTES TO
MAKE A OPEN PRESENTATION AND WE
LIKE TO FOLLOW UP WITH THEM
QUESTIONS [inaudible]
THANK [inaudible] NINETY DEGREE.
NOW I'M HERE WITH.
YOU CAN PULL THE THE MICHAEL OF
A CLOSER YEAH --
AT THE TABLE WITH.
ACTIONS.
WHO IS OUR A YEAR AGO?
THANK YOU.
I WHO IS THE DEPUTY DIRECTOR AND
CHIEF OPERATING OFFICER FOR THE
CALIFORNIA HIGH SPEED RAIL
AUTHORITY AND IT'S BEEN WITH
THIS SENSE --
FEBRUARY OF TWO THOUSAND AND
EIGHTEEN I BELIEVE IT'S STILL
GOOD MORNING --
CHAIRMAN CHAIRMAN MARZUKI CHU
CHI.
AND COMMITTEE MEMBERS.
MY NAME IS TOM RICHARDS.
I'M VICE CHAIR OF THE CALIFORNIA
HIGH SPEED RAIL AUTHORITY BOARD.
I ALSO SERVE AS SERVE ON THE
FINANCE AND AUDIT COMMITTEE.
WITH ITS CHAIR MIKE ROSSI.
A SUBCOMMITTEE OF TO TO THE FULL
BOARD THAT WAS ESTABLISHED IN
TWO THOUSAND AND TWELVE THIS
COMMITTEE IS RESPONSIBLE FOR
OVERSEEING OFF FUNDING AND
FINANCE FINANCIAL MATTERS
BUDGETS [inaudible]
EXPENDITURES.
PERFORMANCE METRICS IN REVIEWING
AUDITS.
AND OUR RESPONSES TO THEM.
SUCH AS THE ONE WE ARE
DISCUSSING TODAY.
I'VE SERVED ON THE BOARD SINCE
DECEMBER OF TWO THOUSAND AND TEN
I WANT TO THANK YOU FOR THE
OPPORTUNITY TO DISCUSS THE
CALIFORNIA STATE AUDITOR'S
FINDINGS AND RECOMMENDATIONS.
BECAUSE OF THE PROJECT'S
IMPORTANCE FOR THE FUTURE OF
CALIFORNIA.
CALIFORNIA'S MOBILITY AND
SIGNIFICANT INVESTMENT REQUIRED
TO DELIVER THE SYSTEM.
A HIGH LEVEL OF TRANSPARENCY AND
OVERSIGHT IS APPROPRIATE TO HELP
US IMPROVE OUR PERFORMANCE.
WE WELCOME THE AUDIT.
WE TAKE IT VERY SERIOUSLY.
AND WE AGREE WITH THE
RECOMMENDATIONS THAT ARE MOVING
SWIFTLY TO IMPLEMENT ALL OF THEM.
I ALSO APPRECIATE THE
OPPORTUNITY TO PROVIDE YOU.
WITH SOME IMPORTANT CONTEXT.
SYSTEM TO SOME THE INFORMATION
PRESENTED IN THE AUDIT REPORT.
AS YOU KNOW.
THE AUTHORITIES CHALLENGES BEEN
TO OF ALL THIS ORGANIZATION.
AND IMPROVE ITS PROGRAM
MANAGEMENT PROCESS SEES.
AND AT THE SAME TIME. TO TO
BEGIN DELIVERING HIGH SPEED RAIL
TO CALIFORNIA.
WHEN PROPOSITION ONE A PASSED?
THERE WERE ABOUT TEN TEN STATE
EMPLOYEES WORKING FOR THE
AUTHORITY.
AND THEY'RE WORTH SEVENTEEN AS I
RECALL WHEN I JOIN THE BOARD AND
TWO THOUSAND AND TEN IN TWO
THOUSAND TWELVE WE'VE GROWN TO
APPROXIMATELY FIFTY STATE
EMPLOYEES.
CURRENTLY THERE IS A HUNDRED AND
EIGHTY EIGHT STAFF.
WORKING ON THE PROGRAM.
THOSE ARE STATE EMPLOYEES.
I THINKS IT'S IMPORTANT TO NOTE
THAT BY DESIGN.
WE DO NOT INTEND TO ESTABLISH A
LARGE STATE OR ORGANIZATION
BECAUSE WE ARE SINGLE PURPOSE
AGENCY WHOSE SOLE MISSION.
IS TO BUILD HIGH SPEED RAIL
WHICH WILL THEN BE OPERATED.
AND MAINTAINED BY THE PRIVATE
SECTOR.
THAT IS A PRIVATE SECTOR
OPERATOR [inaudible]
THAT SAID.
AS WE'VE CONTINUED TO GROW TO
OUR CURRENT STAFFING LEVEL.
WE'VE HAD TO QUICKLY TRANSITION
FROM A VERY SMALL PLANNING
AGENCY. TO AN EFFECTIVE PROJECT
DELIVERY ORGANIZATION.
WE'VE WORKED TO MEET THIS
CHALLENGE THROUGH.
A CONTINUOUS IMPROVEMENT PROCESS.
THE AUDIT REAFFIRMS SEVERAL
ISSUES.
THAT WE HAVE PREVIOUSLY
IDENTIFIED THROUGH OUR INTERNAL
REVIEWS.
IT OFFERS RECOMMENDATIONS THAT
ARE CONSISTENT WITH AND BUILD
UPON.
ACTIONS WE'VE BEGUN IMPLEMENTING.
WE ARE NOW PROCEEDING TO
IMPLEMENT THE AUDITOR'S
RECOMMENDATIONS.
WHICH WILL STRENGTHEN AND
SOLIDIFY OUR EFFORTS TO EXPEDITE.
THE ORGANIZATIONS TRANSITION TO
A FULLY INTEGRATED PROGRAM
MANAGEMENT AND PROJECT DELIVERY
ORGANIZATION.
BECAUSE OF THE SERIOUS NATURE OF
SOME ISSUE DISCUSSED IN THE
AUDIT REPORT.
WE BELIEVE IT IS ESSENTIAL TO
PROVIDE YOU WITH ADDITIONAL
CONTEXT PARTICULARLY AS IT
RELATES TO THE AUTHORITIES
DECISION. TO MOVE FORWARD WITH
CONSTRUCTION AND THE CENTRAL
VALLEY WHEN IT DID.
THIS IS THE PRIMARY ISSUE
DISCUSSED.
IN THE FIRST CHAPTER OF THE
AUDIT REPORT.
SPECIFICALLY THE AUDIT REPORT
CHARACTERIZES THIS IS FLAWED
DECISION MAKING.
AND CONCLUDES THAT OUR DECISION
RESULTED IN BILLIONS OF DOLLARS.
OF COST OVERRUNS.
AS I HOPE TO DESCRIBE FOR YOU
TODAY IN THE MEMBERS OF OUR TEAM.
WE BELIEVE THE DECISIONS WE MADE
REFLECTED CAREFUL CONSIDERATION.
OF HOW TO MAXIMIZE THE VALUE.
OF THE FEDERAL APPROPRIATIONS
WHILE ALSO MANAGING MYRIAD RISKS
WE FACED.
AS THE AUDIT NOTES IN TWO
THOUSAND AND NINE THE AUTHORITY
SECURE TWO POINT SIX BILLION
DOLLARS.
IN FEDERAL.
AMERICAN RECOVERY AND
REINVESTMENT ACT.
FUNDS FOLLOWED BY AN ADDITIONAL
NINE HUNDRED AND TWENTY NINE
MILLION.
IN FEDERAL FISCAL --
TWO THOUSAND TEN TRANSPORTATION
HOUSING AND URBAN DEVELOPMENT
GRANT FUNDS.
THE OUR A STIMULUS.
CAME WITH A PRESCRIPTION FOR HOW
WHERE AND WHEN AND THE DOLLARS.
WERE TO BE SPENT.
THE PORTION OF THE FEDERAL FUNDS
WERE TO BE DIRECTED TO
COMPLETING ENVIRONMENTAL REVIEWS
FOR THE ENTIRE FACE ONE SYSTEM
FROM SAN FRANCISCO TO ANAHEIM.
HOWEVER MOST OF THE FEDERAL
FUNDS APPROXIMATELY THREE
BILLION DOLLARS.
WE'RE SPECIFICALLY DIRECTED. FOR
STARTING CONSTRUCTION AND THE
CENTRAL VALLEY.
THIS WAS DONE AT A TIME TWO
THOUSAND AND TEN WHEN CALIFORNIA
HAD AN UNEMPLOYMENT RATE OF
TWELVE POINT 4%.
AND THE CENTRAL VALLEY FARED
MUCH WORSE.
WITH AN UNEMPLOYMENT RATE
APPROACHING 17%.
IN ADDITION.
THE OUR FINDS CAME WITH THE
CLEAR STATUTORY DEADLINE.
THAT THEY'D BE FULLY EXPANDED BY
SEPTEMBER.
THIRTY TWO THOUSAND SEVENTEEN
ANY REMAINING UNSPENT BALANCE.
OF THESE ARE A FUNDS WOULD NO
LONGER BE AVAILABLE FOR
CALIFORNIA.
SUBSEQUENTLY IN TWO THOUSAND
TWELVE THREE SENATE BILL. TEN
TWENTY NINE THE CALIFORNIA
LEGISLATURE APPROPRIATED TWO
POINT SIX BILLION DOLLARS.
IN PROPOSITION ONE A FUNDS TO
MATCH THE FEDERAL ARE.
IN FY TEN FUNDS CONSISTENT WITH
BOTH PROPOSITION.
ONE EIGHTY AND THE FEDERAL
REQUIREMENTS FOR MATCHING FUNDS.
THIS ALLOWED CONSTRUCTION TO
BEGIN IN THE CENTRAL VALLEY.
THE AUDIT REPORT QUESTIONS THE
AUTHORITY'S DECISION TO BEGIN
CONSTRUCTION.
DESPITE NOT HAVING A
SUFFICIENTLY ACCOUNTED FOR KNOWN
RISKS.
WHEN THE AUTHORITY MADE THE
DECISION TO START CONSTRUCTION?
AND THE CENTRAL VALLEY.
WE DID SO WITH A CLEAR
UNDERSTANDING.
THAT IT CAME WITH A NUMBER OF
UNKNOWNS AND RISKS FOR
ADDITIONAL COSTS.
AS OUR TWO THOUSAND AND EIGHTEEN
BUSINESS PLAN NOTED.
SOME OF THESE RISKS WERE
REALIZED.
AND WE DEVOTED A FULL CHAPTER IN
DISCUSSING THEIR IMPACT.
ON OUR PROGRAM COST AND SCHEDULE
[inaudible]
IDEALLY.
WE WOULD HAVE MOVED INTO DESIGN
AND CONSTRUCTION CONTRACTS WITH
PRELIMINARY PLANNING COMPLETE.
MAJOR THIRD PARTY AGREEMENTS IN
PLACE.
UTILITY RELOCATIONS IDENTIFIED.
AND A RIGHT OF WAY ACTIVE
ACQUISITION UNDER WAY.
THAT WOULD ENSURE THAT THESE AND
OTHER PROJECT ELEMENTS WERE MORE
TO FIND.
COSTED AND INCORPORATED IN THE
PROJECT BUDGET.
THE AUTHORITY MADE THE DECISION
TO ACCEPT THE THREE POINT FIVE
BILLION DOLLARS IN FEDERAL FUNDS
AND BEGIN BUILDING HIGH SPEED
RAIL.
WE WAIT THIS DECISION AGAINST
THE RISKS.
THAT CAME WITH MOVING TO
CONSTRUCTION EARLY.
INSTEAD OF DEFERRING.
CONSTRUCTION UNTIL ALL COSTS
WERE BETTER DEFINE.
DIFFERING CONSTRUCTION MEANT
TURNING AWAY BILLIONS OF DOLLARS
IN FEDERAL FUNDS AND FOR GOING
PROPOSITION ONE A REQUIRED
MATCHING FUNDS.
AT THAT TIME AS YOU KNOW CAP AND
TRADE FUNDS WERE NOT AVAILABLE
[inaudible]
WITHOUT.
THESE FEDERAL MATCHING FUNDS
THERE WAS NO HOPE OF STARTING
CONSTRUCTION UNLESS AND UNTIL
THE AUTHORITY COULD SECURE AND
OTHER SOURCES MATCHING FUNDS.
WE BELIEVE THE BENEFITS OF
PUTTING PEOPLE BACK TO WORK.
AT A TIME OF HIGH UNEMPLOYMENT
OUTWEIGH THE RISKS OF ADDITIONAL
COSTS.
THAT MIGHT BE INCURRED.
THAT BELIEF HAS BEEN VALIDATED
BECAUSE THE BENEFITS OF MOVING
FORWARD.
ARE BEING REALIZED.
APPROXIMATELY THIRTY SIX
THOUSAND JOB YEARS HAVE BEEN
GENERATED AND AN ESTIMATED SIX
POINT FOUR BILLION DOLLARS.
IN ECONOMIC IMPACT HIS RIPPLED
ACROSS THE STATE SINCE DECEMBER
SKEWS ME AS OF DECEMBER
SEVENTEENTH. FOUR HUNDRED AND
SEVENTY FOUR SMALL BUSINESSES
WERE WORKING ON THE PROGRAM.
AS THIS TO AS OF SEPTEMBER
EIGHTEEN AND THOUGH HAVE THOSE
ONE HUNDRED AND FIFTY SEVEN
DISADVANTAGED BUSINESSES.
AND FIFTY TWO WERE DISABLED
VETERAN BUSINESS ENTERPRISES.
AS OF OCTOBER 312-000-1820 FOUR
HUNDRED AND SIXTY SIX SIXTY SIX
CRAP CAPTAIN SKEWS ME CRAFT
LABORS.
HAD BEEN DISPATCHED TO WORK ON
OUR CONSTRUCTION PROJECTS IN THE
CENTRAL CALIFORNIA CENTRAL
VALLEY [inaudible]
HOWEVER.
AS THE AUDIT REPORTS NOTES OUR
ESTIMATE TO COMPLETE
CONSTRUCTION IN THE CENTRAL
VALLEY HIS INCREASED.
IN EARLY TWO THOUSAND EIGHTEEN
FOLLOWING A COMPREHENSIVE COST
REVIEW DIRECTED BY THE THE
BOARDS FINANCE AND AUDIT
COMMITTEE WE INCREASE THE
ESTIMATE FROM SEVEN POINT EIGHT
BILLION.
ESTABLISHED IN JANUARY OF TWO
THOUSAND SEVENTEEN TWO TEN POINT
SIX BILLION.
THE RESULTS ARE THIS REPRESENTS
A NEW ESTIMATE COMPLETION FOR
THE CENTRAL VALLEY PROJECT.
WE INCORPORATED THIS UPDATED
ESTIMATE IN THE TWO THOUSAND
EIGHTEEN BUSINESS PLAN.
AND THE BOARD ADOPTED.
TO TWO THOUSAND EIGHTEEN PROGRAM
BASELINE WHICH SETS THE SCOPE
SCHEDULE AND BUDGET REQUIRED TO
DELIVER THE GOALS SET IN THE TWO
THOUSAND BUSINESS PLAN.
THESE RICH NEW ESTIMATE IS WHAT
IS YOUR REFLECTED IN THE AUDIT
REPORT AND INCLUDES FULLY
ASSIGNED COSTS WE HAD PREVIOUSLY
IDENTIFIED. FOR THE MOST PART IT
RESENT REPRESENTS COSTS THAT
WOULD HAVE BEEN BUDGETED EARLIER
IF WE HAD BEEN ABLE TO COMPLETE.
A MORE --
OUR COMPLETE MORE OF THE PRE
REQUISITE WORK THAT IS IDEALLY
DOWN CONSTRUCTION STARTS.
INSTEAD THE PREVIOUSLY UNDEFINED
RISK COSTS HAVE NOW BEEN
BUDGETED FOR IN OUR NEW
ESTIMATED COMPLETION.
THE AUDIT REPORT FOR THE NEW
ESTIMATE AT COMPLETE SKEWS ME
THE AUDIT REPORTS STATES THAT
THE RISKS ASSOCIATED WITH EARLY
CONSTRUCTION.
CONTRIBUTED TO SIX HUNDRED
MILLION DOLLARS IN CHANGES TO
CONSTRUCTION COSTS AND THAT
FINISHING THE CONSTRUCTION.
THAT IS CURRENTLY UNDER WAY WILL
REQUIRE IN ANOTHER ANOTHER ONE
POINT SIX BILLION.
THESE AMOUNTS WERE ACCOUNTED FOR
AND ARE NOW BEING MANAGED
THROUGH THE TWO THOUSAND EIGHT
PROGRAM BASS LINE MOST OF THE
COST CHANGES.
APPROXIMATELY 80%.
RESULT IN THE VARIOUS SCOPE
CHANGES DRIVEN PRIMARILY BY
ADVANCING THE RAILROAD
AGREEMENTS UTILITY RELOCATIONS
AND OTHER THIRD PARTY AGREEMENTS.
AND SOME REFLECT NEW SCOPE WHICH
INCLUDES FOR EXAMPLE SOME
ADDITIONAL COSTS RESULTING FROM
THE BOARD'S DECISION. TO EXTEND
CONSTRUCTION PACKAGE.
ONE NORTH BY THREE MILES. TO
REITERATE THE COST ASSOCIATED
WITH THE SCOPE CHANGES.
REPRESENT RISKS WE RECOGNIZED
WHEN WE INITIATED CONSTRUCTION.
BUT HAD NOT FULLY ACCOUNTED FOR
IN OUR PROJECT BUDGET.
AND WERE HIGHER THAN THE
CONTINGENCY AMOUNTS THAT WE HAD
ESTABLISHED.
THEY HAVE NOW BEEN FULLY
ACCOUNTED FOR IN THE TWO
THOUSAND EIGHTEEN BASELINE.
THE REMAINING 20% IN COSTS.
CHANGES REFLECT TO ADDITIONAL
COST CATEGORIES.
THE FIRST HIS MISCELLANEOUS
SCOPE CHANGES THAT ARE NOT
NEATLY CAPTURED AND RAILROAD OR
THIRD PARTY AND UTILITY
RELOCATION SCOPE CHANGES.
THESE INCLUDE FOR ECSTATIC FOR
EXAMPLE COSTS.
AND DESIGN CHANGES.
THE SECOND CATEGORY REFLECTS
BOTH ACTUAL THAT'S APPROXIMATELY
ONE HUNDRED MILLION DOLLARS AND
POTENTIAL FUTURE DELAY COST.
WHICH WE BELIEVE WILL BE UP TO
AN ADDITIONAL THREE HUNDRED AND
FIFTY MILLION DOLLARS.
THE COSTS ARE PRIMARILY
ASSOCIATED WITH CONSTRUCTION
DELAYS DUE TO LITIGATION.
AND CONSEQUENTIAL AGE IN
ACQUIRING RIGHT OF WAY.
THE RIGHT OF WAY ACTUALLY ACT
ACQUISITION DELAYS WERE IN PART
DRIVEN.
BY PROPOSITION ONE A LITIGATION
AND TEMPER TEMPORARILY BLOCKED
ACCESS TO THESE PROPOSITION ONE
A FUNDS AND REQUIRED
RENEGOTIATION.
OF TERMS IN OUR FEDERAL GRANT
AGREEMENT THAT ALLOWED THE
EXPENDITURE OF FEDERAL FUNDS.
BEFORE STATE MATCHING FUNDS.
ALL OF THE LITIGATION RELATED
[inaudible]
DELAYED COSTS.
WE'RE OUTSIDE THE CONTROL OF THE
AUTHORITY.
HOWEVER THE AUTHORITY TOOK A
NUMBER OF MEASURES. TO MANAGE
THESE DELAYS INCLUDING FOR
EXAMPLE PROVIDING THAT
CONSTRUCTION PACKAGE ONE
CONTRACTOR BE ONLY LIMITED --
NOTICES HIT WAS THREE WAS GIVEN
A ONLY A LIMITED NOTICE TO
PROCEED FOR SEVERAL MONTHS IN
ORDER TO MITIGATE AGAINST THE
POTENTIAL OF HIGHER DELAY COSTS.
BASED ON THIS NEW A BASED ON
THIS NEW ESTIMATE COMPLETION THE
AUTHORITY COULD POTENTIALLY
ANCHOR UP TO FOUR HUNDRED AND
FIFTY MILLION DOLLARS IN TOTAL
DELAY COST IF IT OCCURS.
IT WILL REPRESENT APPROXIMATELY
5% OF THE TOTAL COST OF THE
CENTRAL VALLEY PROJECT.
BASED ON THIS WE CANNOT AGREE
THAT THERE HAS BEEN BILLIONS OF
DOLLARS IN COST OVERRUNS.
WE UNDERSTAND WHY SOME PEOPLE
MIGHT QUESTION THE DECISION.
BUT WE BELIEVE OUR DECISION TO
MOVE FORWARD WITH CONSTRUCTION.
TO HAVE ONE HUNDRED NINETEEN
MILES OF CONSTRUCTION UNDER WAY.
AN THE A CAN ECONOMIC BENEFITS
YIELDED SO FAR WAS NOT FLY FLIED.
BUT INAPPROPRIATE AND WELL
REASONED DECISION GIVEN THE
ALTERNATIVE.
WAS TO LEAVE BILLIONS OF DOLLARS
IN FEDERAL FUNDS ON THE TABLE
AND SHOW WE STAND BY.
OUR DECISION.
THE SECOND CHAPTER IN THE AUDIT
REPORT IS AN EVALUATION OF THE
AUTHORITIES CONTRACT MANAGEMENT
THE REPORT ACKNOWLEDGES THAT THE
AUTHORITY.
HAS ADOPTED CONTACT MANAGER
POLICIES TO HELP INSURE IT
MONITORS CONTRACTS AND CONTROL
AND CONTROL COSTS.
HOWEVER IT AGAIN OF VICE
CONCERNS.
WITH OUR CONTRACT MANAGEMENT
STRUCTURE.
DOCUMENTATION OVERSIGHT IN
COMPLIANCE WITH OUR POLICIES.
THE AUTHORITY HAS RECOGNIZED
THESE ISSUES.
THE TWO THOUSAND AND EIGHTEEN
BUSINESS PLAN DISCUSSED ADDING
CONTRACT MANAGEMENT EXPERTISE
AND EXPANDING PROJECT CONTROLS.
BOTH IN THE FIELD AND AT THE
PROGRAM LEVEL.
THOSE EFFORTS ARE BEING
IMPLEMENTED BUT AS JUST THE
AUDIT FOUND SOME OR NOT
CONSISTENTLY FOLLOWED.
AND IN SOME CASES FURTHER
IMPROVEMENTS ARE NEEDED.
WE RECOGNIZE THAT WHILE OUR
PROCEDURES ARE SOUND WE HAVE NOT
CONSISTENTLY FOLLOWED THEM BY
FULLY DOCUMENTING.
THE NECESSITY OF THE WORK WE'VE
REQUESTED OF ARE CONTRACTORS.
OR DOCUMENTING THAT THE WORK
THAT WAS COMPLETED WAS
APPROPRIATE.
AND OF HIGH QUALITY.
WE HAVE INSTITUTED CORRECTIVE
MEASURES AROUND THAT TO INSURE
THAT THESE ARE FULLY DOCUMENTED
GOING FORWARD.
THE AUTHORITY WILL IMPLEMENT THE
AUDIT RECOMMENDATIONS IN THIS
AREA. TO FULLY EXECUTE OUR
POLICIES AND PROCEDURES THROUGH
A STRONGER AND EXPANDED INTERNAL
AUG AUDIT PROGRAM.
THAT REPORTS TO THE BOARD OF
DIRECTORS.
THIS WILL INCLUDE REQUIRING
ADEQUATE AND APPROPRIATE TRAIN
CONTRACT MANAGERS.
MANAGEMENT STAFF AS WELL AS
PROVIDING GREATER OVERSIGHT
THROUGH ONGOING REVIEW OF
CONTRACT FILES IN IDENTIFYING
GAPS.
IN NECESSARY OCCM DOCUMENTATION.
THE AUTHORITY WILL ALSO INCREASE
THE CAPACITY AND CAPABILITIES OF
OUR INTERNAL AUDIT STAFF.
IN ADDITION.
THE AUTHORITY IS REVIEWING
OPTIONS FOR A DESK TOP AUDIT
SOLUTION THAT WILL PROVIDE A
CENTRALIZED REPOSITORY. TO HELP
INSURE CONTRACT MANAGERS CLIENTS
WITH POLICIES AND PROCEDURES.
THE AUTHORITY WILL THROUGH
PERIODIC REPORTING TO THE
CALIFORNIA STATE AUDITOR.
SHARE OUR PROGRESS.
IN IMPLEMENTING ITS
RECOMMENDATIONS AND THE OTHER
MEASURES.
WE ARE UNDER TAKING TO IMPROVE
OUR CONTRACT MANAGEMENT PROCESS.
WE RECOGNIZE THAT THE BURDEN IS
ON US TO PROPERLY DEMONSTRATE.
THAT PUBLIC DOLLARS ARE PROVIDED
ARE PROVIDING GOOD VALUE TO THE
STATE.
THE THIRD CHAPTER IN THE AUDIT
REPORT MAKES RECOMMENDATIONS FOR
IMPROVING THE QUALITY AND
TRANSPARENCY OF THE AUTHORITIES
MONITORING.
AND REPORTING OF KEY GOALS.
THESE INCLUDE ARE INVENTED Và
IRON MENTAL SYSTEM
SUSTAINABILITY AND SMALL AND
DISADVANTAGED VANTAGE BUSINESS
UTILIZATION GOALS.
THE AUTHORITY HAS COMPREHENSIVE
HINGED SUSTAINABILITY.
PROGRAM.
EXCUSE ME.
THIS IS THE FIRST TIME I'VE EVER
DONE THIS BY THE WAY.
AND I'VE GOT A MOUTH FULL OF
COTTON.
I DON'T KNOW IF THAT'S A BENEFIT
FOR YOU THAT I'VE NOT DONE THIS
OR WHETHER IT'S IT'S A RELIEF.
SHOW.
THE THIRD CHAPTER IN THE AUDIT
MAKES -- IN
THE AUDIT REPORT MAKES
RECOMMENDATIONS FOR IMPROVING
THE QUALITY AND TRANSPARENCY
PARENTS HE OF THE AUTHORITIES
MONITORING.
AND REPORTING OF KEY GOALS THESE
INCLUDE OUR ENVIRONMENTAL
SUSTAINABILITY AND SMALL AND
DISADVANTAGED BUSINESS
UTILIZATION PROGRAMS.
AND THEIR GOALS THE AUTHORITY
HAS A COMPREHENSIVE STATE ST
SUSTAINABILITY PROGRAM TO
ACHIEVE.
NET ZERO GREENHOUSE GASES COMMIT
OR EMISSIONS.
AND USE CLEAN POWER IN
OPERATIONS WE ESTABLISH WE
APPRECIATE THE AUDIT
RECOMMENDATIONS.
THAT WE BETTER ALIGN OUR
POLICIES WITH HOW WE COLLECT
INVALIDATE DATA. TO MAKE
EFFECTIVELY. TO MORE EFFECTIVELY
TRACK OUR PROGRESS IN THIS AREA
SIMILARLY.
THE AUTHORITIES ESTABLISH TITLES
FOR SMALL AND DISADVANTAGED
BUSINESS REALIZATION TO HELP
CREATE ECONOMIC OPPORTUNITY
PARTICULARLY.
IN DISADVANTAGED COMMUNITIES.
WE WILL EXPAND AND CLARIFY ARE
REPORTING IN THAT AREA IS
RECOMMENDED BY THE AUDIT.
WE ARE PLEASED TO NOTE THAT THE
AUDIT REPORT FOUND THAT THE
AUTHORITY.
FOLLOWED INDUSTRIES STANDARDS.
IN ESTIMATION OF AN ACT OF
ECONOMIC IMPACTS OF ITS SPENDING
ON IT CONTRACTING AND
CONSTRUCTION ACTIVITIES.
THE REPORT NOTED THAT THEY ARE
NOT SUBSTANTIALLY UNDER OR OVER
STATED.
IN CLOSING.
WE BELIEVE THAT THIS AUDIT AS
REQUESTED BY ASSEMBLY MANNER
MEMBER PATTERSON AND SENATORS
SHOULD BE ALL OUR SKEWS ME
THEY'LL.
AND ARAMBULA AND PRIOR AUDITS
HAVE ASSISTED THE AUTHORITY.
IN IMPROVING OPERATIONS AND
MAKING OUR WORK MORE TRANSPARENT
TO THE PUBLIC.
WE LOOK FORWARD TO IMPLEMENTING
THE RECOMMENDATIONS OF THIS
CURRENT AUDIT TO STRENGTHEN
ADMINISTRATION.
OF THE PROGRAM AS CONSTRUCTION
CONTINUES ON THIS TRANSFORMATIVE
PROJECT IN THE CENTRAL VALLEY.
AND AS THE BOOK AND PROJECTS
ADVANCE IN NORTHERN AND SOUTHERN
CALIFORNIA INCLUDING THAT
CALTRAIN ELECTRIFICATION PROJECT
IN THE BAY AREA.
AND THE UP CAME COMING LINK US
UNION STATION PROJECT IN LOS
ANGELES.
I WANT TO AGAIN THANK YOU.
I AND THE COMMITTEE MEMBERS
MISTER CHAIRMAN. FOR PROVIDING
THE AUTHORITY WITH THIS
OPPORTUNITY DISCUSS THE AUDIT
REPORT WITH YOU.
AND OUR TEAM IS PREPARED TO AND
TO ADDRESS ANY OF YOUR QUESTIONS
THANK YOU.
THANK YOU MISTER HAS IS.
SIR I HAVE NO ADDITIONAL COMMENT
OKAY [inaudible]
ALL RIGHT [inaudible]
FRAZIER MISSPELLED.
THIS BILL WOULD PURSUE.
OKAY ARE WE SAW THE RECORD HOW
MANY --
ADDITIONAL --
PROJECT MANAGEMENT TEAM I WOULD
YOU STRUCTURE AND CREATIVE
PROJECT MANAGEMENT TEAM --
AS RECOMMENDED THE AUDIT HOW
WOULD YOU DO IT WHAT TELL ME
TELL ME WHAT YOU'RE STRUCTURE.
AND HOW MANY PEOPLE YOU WOULD
NEED TO HAVE --
CREATED A MODEL.
YOU CAN SHARE WITH US --
A SPECIFIC MODEL --
TO MANAGE THE PROJECT ADEQUATELY.
SENATE DEBATE SENATOR BILL I'M
GONNA ASK --
MISTER HEDGES TO ADDRESS THIS
WHO HAS TAKEN THE LEAD OVER THE
PERIOD OF TIME SINCE HE JOINED
IN FEBRUARY --
AND RESTRUCTURED OUR ENTIRE
ORGANIZATION SO --
JUMP.
YES SIR --
GOING BACK TO THE SHIP KALLUS
TESTIMONY WHEN HE WAS HERE IN
APRIL.
HE BASICALLY FOR BACK TO THE TWO
THOUSAND EIGHTEEN BUSINESS PLAN
DECIDED BASICALLY CHAPTER FOUR
THREE KIDS THREE CRITICAL
ELEMENTS ONE WAS BASICALLY THAT
OF LEADERSHIP.
AS A RESULT OF THAT WE BROUGHT
IN SOME KEY PERSONNEL --
I JUST I GET REFERENCE IS BEING
ONE OF THEM BUT A VERY HUMBLE
HEARING ALL.
BUT WE REARRANGE THE WHOLE
ORGANIZATION TO TRANSCEND IT
FROM A WILL WAS FIND AS A
PLANNING ORGANIZATION. TO
PREDOMINATELY A PROGRAM TO LIVE
FOR OFFICES TOWARDS THAT
DELIVERY.
AS A RESULT OF THAT WHAT YOU'LL
SEE.
BROUGHT THE HORTON THE WHOLE
ORGANIZATION IS IT EMPHASIS NOW
YEAH.
YES YES ARE A IN AND OUT TO GET
ME THE STRUCTURE.
WE HAVE THAT STRUCTURE SIR.
AND THAT IS REFLECTED IN THE THE
THE THE PMP WHICH IS THE PROGRAM
MANAGEMENT PLAN WHICH WAS JUST
WRITTEN AND APPROVED.
OKAY YEAH.
LIKE HOW MANY POSITIONS OR FILL
HOW MANY POSITIONS ARE VAGUE AND
THAT IS ALL DOCUMENTS SIR IN
THAT IN OUR PMP AND IN OUR OR
TRUCKS OKAY IS THAT IS THAT
CONSISTENT WITH THE
RECOMMENDATION OF THE AUTO.
SIR I'M NOT SURE WHAT THE
AUDITOR REVIEWED WITH REGARDS TO
WE PRESENTED OUR ORGANIZATION
CHART AND OUR PMP SO --
I WOULD WHAT WE'RE IN THE
PROCESS IS JAIL NASSER THE
QUESTION YEAH.
WHAT WE'RE DOING IN THE PROCESS
AND NOW ARE THERE FOR THE SYSTEM
DOWN ON THE ON?
SENATOR WHAT WE'RE DOING IN THE
PROCESS NOW SENATOR PHIL IS.
MAKING SURE THAT THAT REAL AND
WHEN AND IF I DON'T BELIEVE THAT
THAT'S COMPLETE YET.
AS SOON AS THAT IS COMPLETE WILL
FOR YOU FOR YOU THE FINAL DONE
WE WANT TO KNOW LIKE HOW.
ABSOLUTELY RECOMMEND --
YOU'RE GOING TO HAVE A STRUCTURE.
THAT COMPLIES WITH THE AUDIT.
AND IT DOESN'T MEAN ANYTHING
JUST A CHART.
INTO YOU HAVE THE POSITIONS
FILLED AND THE QUALIFIED PEOPLE.
IN IN --
THOSE POSITIONS.
CORRECT.
YEAH SO LIKE WHAT I WHAT I'M
TRYING TO GET FROM YOU IS.
HAVE YOU GOT TWO THIRDS OF THAT
DON HALF OF IT --
THREE QUARTERS --
HOW MANY OF THOSE POSITIONS ARE
VACANT HOW MANY OF OUR OR HAVE
OF YOU YET TO DETERMINE --
ANY ADDITIONAL FOG QUALITY CD
THOSE POSITIONS HOW MUCH MORE
WORK YOU HAVE TO DO ON THE
ORGANIZATION.
CHART THE TO DO.
THE INITIAL --
OR A REORGANIZATION WAS
COMPLETED --
AND IT WAS COMPLETED PRIOR TO
THE TIME OF OF SEEING THE ARCTIC
CAT RECOMMENDATIONS.
SO THAT IS UNDER UNDER WAY
ESTIMATE WOULD BE THAT THAT
WOULD BE AVAILABLE BY.
THE FIRST OF THE YEAR
[inaudible]
YES SIR.
CURRENTLY RIGHT NOW WE HAVE --
THIRTY EIGHT VACANCIES RIGHT.
YES SIR.
WHAT KIND OF CATEGORIES?
THEREFORE DONLEY SPREAD
THROUGHOUT THE WHOLE
ORGANIZATION.
BUT AGAIN ISN'T MAJORITY OF
THOSE I WOULD SAY PREDOMINANTLY
AT MY I HAVE SKILLED TRY TO
REFRESH MYSELF SIR BUT AGAIN IS.
FROM AN EARLY AND ADMINISTRATION
TYPE POSITIONS ON MY OVERLY
EXECUTIVE LEVEL --
TALK MANAGER --
TALK --
PROJECT MANAGEMENT DECISIONS
STAR HAD TO GET OUT THE ORG
CHART WHAT LET'S GET BACK TO YOU
ON THAT OKAY --
SO I WITH THAT'S THE KIND OF
STUFF I WANT I WANT TO GET IT IS
NOT.
WHO'S IN CHARGE.
WHAT THEY'RE MANAGING --
DO YOU THINK THAT THERE'S A
DIFFICULTY HIRING QUALIFIED
STAFF -- IN
TERMS OF THE CIVIL SERVICE OR
WHAT BARRIERS.
YOU HAVE TO OVERCOME REGARDING
THAT PARTICULAR ISSUE.
SENATOR BILL I THINK THAT JUST A
BASED UPON MY OWN EXPENSE
VARIANCE IN ESPECIALLY WITH
FINANCE AND AUDIT OVER THE LAST
SEVERAL YEARS --
WE'VE ALWAYS ENDED UP RECEIVING
THAT THERE'S A DIFFICULT TIME
AND HIRING --
IT'S INTERESTING I WHETHER OR
NOT IT'S ENDEMIC STATEWIDE WHAT
WE WHAT WE ARE TOLD.
IS THAT ARE VACANCY FACTORS
ABOUT THE SAME AS OTHER AGENCIES
WHICH IS IT ACCEPTABLE TO ME AN
ACCEPTABLE ACCEPTABLE OUR STATE
GOVERNMENT THAT'S RIGHT.
YEAH SO --
IF YOU KNOW IF WE HAVE TWO
HUNDRED AND FOURTEEN POSITIONS --
I'M QUESTIONING OF ON A
REASONABLY FREQUENT RATIONS WHY
AREN'T THEY FILLED.
AND BASICALLY WHAT WE ARE WE'VE
CONCLUDED IT THEY'RE NOT FILLED.
BUT WE'RE CONCERT WE ARE
BASICALLY CONSISTENT WITH OTHER
AGENCIES IN THE STATE WHICH IS
AN ACCEPTABLE ANSWER TO US --
HOW WE RE ALLOCATE?
POSITIONS IN TWO OTHERS THAT WE
FIND MORE CRITICAL IS THE
QUESTION WE'VE ASKED FOR
INSTANCE.
IN CONTRACT MANAGEMENT.
SO -- WE I'M
NOT SUGGESTING IT IS THE THERE
ARE ISN'T TALENT IN THE STATE.
IT'S WHETHER OR NOT WE CAN AT
JUST HOW WE ARE.
HOW THE US PHYSICIANS THAT WE
HAVE WERE DESIGNATED IF WE CAN
RE ALLOCATE THOSE POSITIONS
AREAS THAT WE FEEL ARE MORE
CRITICAL TO THE FILM AND OF THE
OF THE --
PROJECT.
SO HERE AND COMPETITION WITH ALL
THESE OTHER PEOPLE ARE HIRING
PEOPLE.
KIND OF WHAT YOU HAVE A UNIQUE
JOB WHICH IS KIND OF OFF.
LIKE IF I WAS AN ENGINEER OR
PROJECT MANAGER I CERTAINLY WANT
TO HAVE THIS JOB ON MY RESUME I
MEAN I THINK IT.
WE HAVE SOME ATTRACTION.
BUT THE QUESTION IS --
DO YOU HAVE TO WHEN YOU SAY TO
CIVIL SERVICES THAT INCLUDE THE
SAME SALARY.
LEVEL IS A SALARY.
YES LEVEL AN IMPEDIMENT TO
NG BECAUSE IT'S SO LOW.
THE STATE'S HOURS ARE WAY LOWER
THAN --
DISPARITIES.
LOCAL GOVERNMENTS TRANSIT
AGENCIES ALL OVER THE STATE
THING.
WE HAVE RIGHT NOW MORE THAN.
THEN -- LIKE
A CALTRANS DIRECTOR GETS THE
SAME PAY IS A MID SIZE CITY AND
MY PUBLIC WORKS DIRECTOR IN MY
AREA.
SO.
WE COULD DO --
WITH WE CURRENTLY HAVE WE HAVE --
I THINK TODAY WE HAVE FORTY NINE
CONTRACT MANAGERS.
EVERY CONTRACT WE MET MANAGER WE
HAVE IS A STATE EMPLOYEE
[inaudible]
OKAY GOOD.
OKAY I THINK I THINK THIS IS
IMPORTANT ISSUE IF YOU WANT TO
RAMP UP THOUSAND GET THE
POSITIONS FILLED YOU HAVE TO BE
YOU HAVE.
TO YEAH PAY THEM ADEQUATELY
COMPETITIVE.
YOU KNOW IF WE'RE GONNA HAVE A
CIVIL SERVICE.
I THINK THE IDEA OF HAVING THE
DAUGHTERS RECOMMENDATION HAVING
A TEAM.
DAD HAS CONTINUITY THAT STICKS
TOGETHER.
THAT BECOMES --
THE KNOWLEDGE CENTER OF THE
PROJECT.
TERMS OF MANAGING AND
CONSTRUCTING THE PROJECT.
HAVING THE KNOWLEDGE CENTER SO
IMPORTANT IN COMPLETING A
PROJECT ON TIME AND ON BUDGET.
SO IF YOU CAN'T DO THAT BECAUSE
OF THE COME COMPETITION ON THE
SALARIES.
THAT THAT THAT'S AN UNFAIR VERY
FOR YOU.
YEAH AND I THINK --
TO ME THAT HAS TO BE ADDRESSED.
IT IN A GREEN WITH THE
RECOMMENDATION WE WANT THAT TEAM
TO STICK TOGETHER.
THROUGHOUT THE PROJECT SO.
I I THINK YOU SHOULD TAKE A
WASTE.
ACCOMPLISH WHAT I TRYING TO SAY --
IN TERMS OF STICKING THAT MAKING
THAT THOSE PEOPLE STAY.
AND AND BECOME THE KNOWLEDGE
CENTER FOR AND AND URGENCY
CENTER FOR THE PROJECT.
YES SURE YOU CAN'T JUST KEEP
HIGHER CANCELED BECAUSE THEY
COMMON GOAL TO LEAVE.
YOUR FULL.
CONTROL AND I THINK THE AUTHORS
CORRECT BECAUSE THE LESS.
LESS OF A SENSE OF URGENCY ON
THE PROJECT.
WE CREATED SERVE --
LESS IF.
YOU DON'T HAVE THE SENSE OF
URGENCY MAYBE A NEW.
WE HAVE A TEAM.
AND SEE IF YOU CREATE A GOOD
TEAM.
WITH GOOD TEAM LEADERS NIGHT.
I DON'T HAVE ANY OTHER QUESTIONS
I THINK THIS IS A VERY IMPORTANT
STRUCTURAL THING.
THE GUTS OF THE AUTUMN MY PAIN.
COMMITTEE CAME DOWN COMMITTEE
STAFF -- TO
TAKE OF A LOOK AT IT I WAS DOWN
THERE A COUPLE YEARS AGO --
DURING A PROCESS TO SO I
APPRECIATE HIS WILLINGNESS TO
TAKE A DAY AT THIS TIME AND SHOW
MY STAFF WHAT'S GOING ON IN REAL
TIME --
MISTER RICHARDS IN YOUR OPENING
STATEMENT YOU SAID YOUR DECISION
TO START CONSTRUCTION WAS THE
DELIVER WELL THOUGHT OUT
DECISION.
YET IN THE AUDIT --
THE AUTO QUOTE YOUR CHIEF
ENGINEERS ST MOTIVATING FACTOR
WAS THE DESIRE TO SHOW PROGRESS
BECAUSE OUTSIDE GROUP FOR TRYING
TO STOP THE PROJECT.
EXPLAIN THIS DISCONNECT --
I'M NOT YOU KNOW I QUESTIONS.
AT THAT --
INTERVIEW WITH OUR CHIEF
ENGINEER.
AND THE AUDITOR AND I DON'T KNOW
IF IT.
I DON'T KNOW IF IT WAS CAPTURED --
THE WAY HE INTENDED IT BUT I
CAN'T TELL YOU IT WASN'T --
I CAN TELL YOU THAT THE DECISION
THAT WAS MADE.
BY THE BOARD WAS NOT IN RESPONSE
AN OVERRIDING SENSE THAT WE HAD
TO SHOW PROGRESS.
THE DECISION THAT WAS MADE BY
THE BOARD WAS.
WAS CAPTURED IN THE OVER RIDING.
CONCERN ABOUT DOING THE RIGHT
THING.
AND FACED WITH THE LOSS OF THREE
AND A HALF BILLION DOLLARS OF
FEDERAL FUNDING.
SO LOOKING BACK ON THAT DECISION
THAT YOU MADE NOW AND GET THE
PUBLIC'S PERCEPTION OF THE
OPTICS.
THAT IT WAS --
A MISTAKE.
BASED ON THE ABILITY TO GET
RIGHT AWAY AND WHAT NOT --
WHAT CHANGES HAVE BEEN MADE?
WELL --
MISTER FRAZIER.
WHEN I DO WHEN I GO BACK AND I
LOOK AT ALL THE NUMBERS YET?
WE GOT THREE AND A HALF BILLION
DOLLARS FROM THE FEDERAL
GOVERNMENT --
AND I LOOK AT WHAT IS HAPPENED
IN TERMS OF COST.
OTHER TH A LOT OF THINGS THAT WE
THAT WE ARE BEING CONSIDERED
COST OVER RUNS.
A REALLY UNDEFINED CAUGHT
UNDEFINED AT THE TIME --
SCOPE.
WHICH WAS ON KNOWN.
YES PRIMARILY IN THE AREAS OF
THIRD PARTY AND RIGHT AND RIGHT
OF WAY AMONG A COUPLE OR THREE
OTHERS --
WHICH TURNS OUT TO BE THE BALK
OF WHAT THE ISSUES ARE BUT THOSE
THOSE COSTS IF THEY HAD BEEN
ABLE TO BE DEFINED AT THE OUTSET.
WOULD HAVE BEEN CAN WOULD HAVE
BEEN INCLUDED IN THE COST AS
OPPOSED TO DATE --
CHARACTERIZATION AND THAT THEIR
OVER RUNS WE KNEW THEY WERE
THERE WE ATTEMPTED TO PROVIDE
FOR THEM WITH PROVISIONAL
FUNDING CONTINGENCY WE CLEARLY
UNDER ESTIMATED BOTH.
CONTINUE CONTINGENCY FUNDS
PROVISIONAL FUNDS.
THAT AND THE S. WE AS THE
CONTRACTS IN THE AGREEMENTS WITH
OUR THIRD PARTY --
PARTNERS --
AS WELL AS UTILITY RELOCATIONS
BECAMEMORE --
COULD HELP CLEAR --
WE INCORPORATED DOES IN THE TWO
THOUSAND AND EIGHTEEN PLAN.
THE THE NEGOTIATIONS THAT WENT
ON BEHIND THE SCENES AND DURING
THAT PERIOD OF TIME BETWEEN THE
TIME WE STARTED CONSTRUCTION.
AND INTO THE TWO THOUSAND
SEVENTEEN TIME FRAME WE'RE
PRETTY COMPLEX --
WITH A LOT OF PUSHING AND
PULLING WITH REGARDS TO WHAT.
THE THIRD PARTY PARTNERS ARE AT
CONTRACTORS ARE THE THIRD PARTY --
AGREEMENTS THAT IF PEOPLE ON THE
OTHER SIDE OF THOSE AGREEMENTS
WANTED --
INTRUSION BERRIES WERE ONE OF
ROACH.
SHOW -- THEY
WEREN'T THINGS THAT WE COULD
EITHER ONE DIVINE DEFINED
CLEARLY BEFORE NOW.
AND SECONDLY WITHOUT QUESTION.
THEY WERE MUCH HIGHER THAN WHAT
WE CONTEMPLATED BUT WHEN WE LOOK
AGAIN IT DID THIS MAKE SENSE. TO
TAKE THREE AND A HALF BILLION
DOLLARS.
THOSE COST WOULD HAVE BEEN THERE
IF WE COULD HAVE TO FIND AND
THEN WE WOULD HAVE LOVED IT THEN
THE ONES DOING THAT AND WITH A
SHORT CONVERSATION I HAD WITH
YOU EARLIER WITH REGARDS TO YOUR
DEVELOPMENT CONSTRUCTION
BACKGROUND WE BOTH UNDERSTAND
THAT.
AND WE WOULD WE WOULD.
HAVE TO TAKE SOME PRETTY SEVERE --
CONDITIONS BEFORE WE WOULD AGREE
TO START SOMETHING WITH THE LACK
OF INFORMATION THAT WE HAD IN
CERTAIN AREAS.
BUT THREE AND A HALF BILLION
DOLLARS OF FUNDING THAT WE HAD
NO -- REASON
TO BELIEVE WOULD BE AVAILABLE
LETTER LATER --
HOW WE HOW I LOOK AT THAT RIGHT
NOW WE'RE FACED ARE WE'VE
ALREADY --
EXPANDED A HUNDRED MILLION TO A
FEES WITH ONE OF OUR CONTRACTORS --
WE THINK THAT WE ARE LIKELY
FACING MAYBE AS MUCH AS THREE
HUNDRED AND FIFTY MILLION MORE.
IN THE LAKE GOOD DELAY COST IN
LARGE EX CONVICTS REASON FOR
BEING.
AFTER WE STARTED CONSTRUCTION
WE'RE GETTING READY WE WERE HELD
UP FOR OVER A YEAR BECAUSE OF
LIQUID LITIGATION --
THAT'S WHY IT IS IT WAS
MENTIONED WE HELD BACK ON IT
WHICH IS IT WAS A IT WAS A
NOTICE TO BEGAN TO THE C. P. ONE
CONTRACTOR BUT WITH MAJOR
LIMITATIONS SO WE COULD HIGH.
TRY.
TO RESOLVE THE ISSUE AND AT THE
SAME TIME REDUCE WHAT THE
EXPOSURE WAS GONNA BE --
BUT WHEN WE LOOK AT ALL OF THAT.
THE STATE OF CALIFORNIA GOT
THREE AND A HALF BILLION DOLLARS
IN WITH THAT MONEY IT IS BEEN
BUILDING ASSETS.
OF THAT THREE AND A HALF MILLION
FIVE HUNDRED THOUSAND IN ROUND
NUMBERS HAS BEEN LOST TO THE
DELAY.
I STILL THINK THAT THE STATE OF
CALIFORNIA IS THE BENEFICIARY OF
ABOUT THREE BILLION DOLLARS.
OF ASSETS THAT IT DIDN'T HAVE
BEFORE AND ABSENT THAT --
WE WOULD PROBABLY BE SITTING
HERE IF WE WERE EVEN SITTING
HERE TODAY AT ALL.
BEING QUESTION IS WHY HAVEN'T WE
A COP RE NEVER ABLE TO BUILD
ANYTHING.
KING ALL THOSE THINGS INTO
ACCOUNT WE HAD A LOT A LOT OF
INFORMATION ABOUT WHAT THE COST
OF CONSTRUCTION WERE IN THE C.
P.'S.
BUT WE DIDN'T HAVE THE
INFORMATION ON THE AREAS THAT I
TOLD YOU ABOUT.
AND WE WERE ALSO TAKING
ADVANTAGE OF SOMETHING ELSE WE
WERE IN A MASSIVE RECESSION.
IN TWO THOUSAND AND TEN AND
MOVING FORWARD.
WE WERE THE BENEFICIARY OF LOWER
CONSTRUCTION COST WHEN WE WENT
AHEAD AND MOVE FORWARD ON CP.
ONE THAT CP ONE CONTRACT CAME
AND THREE HUNDRED MILLION
DOLLARS LESS THAN ARE AND SHE
ENGINEERS ESTIMATE.
THANK YOU FOR THAT EXPLANATION --
CAN WE TALK ABOUT THE THE BRIDGE
[inaudible]
THAT -- IT
WAS INITIALLY --
DIDN'T MAKE IT --
UNION PACIFIC STANDARDS SO THE
OUGHT TO REPORT --
THAT THE STORY WAS TOLD THAT THE
CONSTRUCTION CONTRACTOR SHOULD
BEAR THE COST OF THE REDESIGN.
AND THE BEAT BECAUSE OF THE
AUTHORITIES.
LATER APPROVAL --
TO APPROVED A CHANGE ORDER
AGAINST THE ADVICE --
CHANGER OR WE JUST ALWAYS TO
FIND -- THE
EXPERTS TO TELL THE AUTHORITY OF
WHAT NOT TO DO AND JUST MOVE
FORWARD WITH IMPUNITY --
I CAN'T GIVE YOU THE EXACT --
THE THE EXACT --
CONDITION WITH REGARDS TO THAT
REQUEST.
ARE THAT THAT BIT OF ADVICE
WE'VE GOT BUT I CAN I CAN
SUGGESTION ENERGY IN GENERAL
SENSE.
WE CERTAINLY DO HAVE --
A LOT OF OUTSIDE CONSULTANTS.
WE FIRED FOR AS FOR AS THEIR IT
WE WE ACCEPT THE ADVICE AND WE
CONSIDER IT WITH EVERYTHING ELSE
THAT WE KNOW THAT MAY BE GOING
ON AND ON A SPECIFIC ISSUE.
IN THIS --
ONE I SUSPECTED.
THE ADVICE MAY HAVE BEEN GIVEN
HERE AND BY THE TIME THAT WE HAD
INTERVIEWED AND WE HAD ALL THE
FACTS FROM.
OTHER SOURCES ABOUT THE SAME
THING WE MAY NOT TAKE THE ADVICE
OF THE CONSULTANT EVERY INSTANCE.
AND WHAT I THINK HAPPENS HERE
AND WHAT'S HAPPENED THROUGHOUT
THIS WHICH IS REALLY --
TROUBLING AND EMBARRASSING IS
THAT WE HAVE NOT APPROPRIATELY --
RECORDED KEY AND DOCUMENTATION
WHY WE'VE DONE THINGS AND I CAN
SIT HERE AND JUST TELL YOU IT'S
ON INEXCUSABLE.
AND I AM FRANKLY OF EMBARRASSED
ABOUT IT IT'S CERTAINLY NOT WHAT
WE HAVE EVER INTENDED --
IN OUR FINANCE AND AUDIT --
MEETINGS WHICH OCCUR MONTHLY AND
I SUSPECT I I AM SURE I
RECOGNIZE SOME OF YOUR STAFF
MEMBERS HERE WHO HAVE.
MADE A HABIT OF COMING TO THOSE
BUT I THINK THAT THEY PROBABLY
HAVE BEEN ABLE TO REPORT BACK.
THOSE ARE PRETTY --
THOSE ARE PRETTY STRAIGHT UP
STERN MEETINGS.
AND LOOKING.
FOR LOOKING FOR THEY WERE NOT
SATISFIED WITH.
SO DO YOU THINK THE AUTHORITY
STAFF IS KEPT YOU WELL INFORMED
[inaudible]
AS DIRECTOR.
THAT'S TRUE THAT'S A GOOD
QUESTION I THINK THAT --
I THINK WE'VE GOT A GREAT TEAM.
I THINK AT THE WE HAVE WE HAVE
AYE THIS YEAR IS THAT I SHOULD
AND I SUSPECT ALL OF YOU WOULD
IT.
WOULD CONCUR --
WE WERE MORE THAN FORTUNATE TO
HAVE BRIAN KELLY JOINED.
AS A CEO OF THIS ORGANIZATION.
JOE HEDGES JUST COME --
WITH A VERY IN DEPTH
CONSTRUCTION BACKGROUND AND A
HUGE PROBLEM ON A PROJECT THAT
HE WAS.
RESPONSIBLE FOR UP IN SEATTLE A
TUNNEL PROJECT.
GOING DOWN BILL THAT THAT LEVEL --
I BELIEVE THAT OUR SENIOR
MANAGEMENT --
I'M PROUD OF EVERYONE OF THEM.
TO BREAK DOWN THAT WE HAVE I
THINK IS NOT IN PEOPLE NOT
TRYING TO DO THE RIGHT THING.
I THINK IT'S I THINK IT'S AND AS
DEMONSTRATED BY THIS AUDIT.
IT'S MORE IN DAMAGE IT'S IT'S
YEAH IN.
THE DOCUMENTATION NOT BEING
THERE TO THE PROBLEMS ARE.
WHICH IS WHY THIS WHOLE THING
WITH REGARDS TO CONTRACT MANAGE --
CAN'T CONTRACT MANAGEMENT CAME
AS A RESULT OF THE FINANCE AND
AUDIT MEETING OUR COMMITTEE.
ARE REQUIRING AN INTERNAL AUDIT
ON ONE OF OUR CONTRACTS IN TWO
THOUSAND FIFTEEN AND WE DIDN'T
LIKE THE RESULTS.
SO WE THEN HAD THE INTERNAL
AUDIT OFFICE.
THAT AUDIT ALL OF THEM AND WE
LIKE IT EVEN LESS.
AND THE DIRECTION WE THEN YEAH
IT GAVE US WE WANT POLICIES AND
PROCEDURES TO BE DRAFTED AND
APPROVED.
WHICH OCCURRED LE IN TWO
THOUSAND AND SEVENTEEN AS I
RECALL.
AND BY THE END OF TWO THOUSAND
SEVENTEEN ALL OF OUR CONTRACT
MANAGERS --
ALL STATE EMPLOYEES RECEIVED A
TRAINING AND CERTIFICATION
INTERNALLY.
AT FOR THE JOBS THEY WERE
SUPPOSED TO BE DOING.
WE FELT COMFORTABLE ABOUT THAT
AND THE STAFF KEPT AS WELL
ADVISED OF THAT.
AND I THINK THAT THEY'VE DONE
THAT PRETTY MUCH.
ALL UP AND DOWN BASED UPON THE
INFORMATION WHAT I DO THINK IS
WE'VE GOT TO IMPROVE.
DRAMATICALLY THE INFORMATION
THAT --
STAFF MEMBERS KNOW AND THE ONLY
WAY I KNOW TO DO THAT IS TO
ADEQUATELY DOCUMENT.
WHAT WE'RE DOING SO APPRECIATE
HAD THE ADDITIONAL INFORMATION
THE BASICALLY THE QUESTION ARE
YOU WILL INFORM MY STAFF I AM ON
A DAILY BASIS YES?
SO IF THAT'S THE CASE THEN HOW
FAR BACK WERE YOU INFORMED ABOUT
THE ON GOING PROCEDURAL PROBLEMS
WITH CONTRACT OVERSIGHT AND
MANAGEMENT.
AS A DIRECTOR.
I THINK THAT --
I CAN'T I CAN'T SUGGEST TO YOU
THAT -- DEBT
THAT HE HAS COME TO MEET
DIRECTLY WITH SOMEBODY
SUGGESTING THAT.
I THINK THAT WE DISCUSS THINGS
LIKE THAT AND FINANCE AND AUDIT
AND WE GIVE DIRECTION FOR
ADDITIONAL INFORMATION.
SO HOW DO YOU PROPOSE TO FIX
THIS -- THIS
DISCONNECT.
AND IS IT SOMETHING MONEY WITH
YOUR AND BASICALLY IT'S THE
INTERFACE WITH YOU.
AS A DIRECTOR WAS STAFF.
LIGHTING UP YEAH COME ON AND
UNDERSTANDING WHAT'S.
I I THINK THAT WE'VE ACTUALLY
ALREADY MOVED IN THAT I THINK
WHICH I THOUGHT WHAT'S HAPPENED
HERE.
I WOULD GIVE ANYTHING IF.
WE WERE DOING THIS SHOT A YEAR
FROM NOW.
AND AND THAT'S NOT A COP OUT
[inaudible]
BUT PRETTY EVERYTHING THAT I
HAVE SEEN IN CORPORATE IT IN THE
AUDIT.
AND ALL OF WHICH I AGREE.
ARE THINGS THAT WE HAVE LOOK AT
INTO SOME GREAT EXTENT
INTERNALLY WITH OUR OWN INTERNAL
AUDIT AND THROUGH FINANCE AND
AUDIT -- AND
THESE WERE ALL IN THE PROCESS OF
BEING IMPLEMENTED IF THERE'S ONE
THING I'VE BEEN REALLY
DISAPPOINTED BY IS THAT BECAUSE
WE THAT WE WE HAVE BEEN TOO SLOW.
ON THE OVERSIGHT OF OUR CONTRACT
MANAGERS WHICH IS VERY CLEAR
WITH WHAT THE AUDITOR AUDITOR
FOUND OUT.
AND I CAN TELL YOU WITH REGARDS
TO THAT.
THAT THE ASSESSMENT OF WHAT
YOU'RE DOING IN THE FIELD IS
UNDER WAY NOW AND WILL BE
COMPLETED WITH ALL.
ROUGHLY FIFTY OF THEM.
BY THE END OF FEBRUARY --
I WOULD HAVE ASSUMED AND I DID
NOT KNOW THAT --
IN HAND FRANKLY.
IT'S ON ME I DIDN'T ASK THE
QUESTION WHERE ARE WE ON THE
OVERSIGHT [inaudible]
SO.
THE THIRTY CAN CURRENTLY
AUDITOR'S SUGGESTION THAT THE
CONTRACT MANAGE SUPPORT.
OF IS UNDERSTAFFED AND TO BE
STAFFED WITH STATE WORKERS
INSTEAD OF CONTRACT COMPLIANCE.
HOWEVER NOT ASKING THIS UNTIL.
FOR THIS UNTIL TWENTY TWENTY
TWENTY TWENTY ONE IN DC PEAK.
OF WHEN EARLIER.
I THINK WE SHOULD MOVE IT BACK
ALSO.
IT SO IT WILL BE ON MY AGENDA AT
OUR NEXT FINANCE NOTED MEETING.
K. THE THE SOLUTION WITH AND
THANK YOU VERY MUCH FOR THAT --
AND SENATOR BILL IT MENTION THAT
YOU WOULD TALK ABOUT --
OR HIT MENTIONED SOMETHING ABOUT --
PAYROLL LIMITATIONS OR COMPARE
WHAT YOU PAY THE THE STAFF --
WHEN YOU LOOK AT HOW WAS IT
ESTABLISHED BY THE AUTHORITY
WHAT WOULD BE PAID?
YOU KNOW I AND MISS FRASIER I'M
I DON'T WANT AND I IF I AND
ABOUT SENIOR SENIOR MANAGEMENT --
WE'VE BEEN TRYING WE'VE WE'VE
WE'VE WE'VE HIRED PEOPLE AND
SENIOR MANAGEMENT POSITIONS TO
RUN A SEVENTY SEVEN BILLION
DOLLAR PROJECT THAT.
THROUGH THE PROCESS PLEASE DON'T
TAKE THIS PERSONALLY.
BUT THROUGH THE PROCESS THROUGH
THE PROCESS OF TRYING TO FIND --
CANDIDATES FOR THESE POSITIONS
ME NOBODY WAS YOU KNOW WE COULD
NOT WE WOULD GENERALLY HAVE A
VERY DIFFICULT TIME FINDING
PEOPLE WHO WOULD.
BE WILLING TO WORK AND RUN A
PROJECT LIKE THIS FOR THE AMOUNT
OF THERE BEING COMPENSATED.
BECAUSE AS OPPOSED TO THE
PRIVATE SECTOR WHEN YOU GET
BELOW THAT LEVEL --
I DON'T THINK THE CHALLENGES AND
I DON'T I I MUST TELL YOU I'M
NOT QUITE SURE.
WHAT THE CHALLENGE IS WHY IF
YOU'VE GOT TWO HUNDRED AND?
FOURTEEN PHYSICIANS WHY YOU
DON'T HAVE ALL TWO HUNDRED AND
FOURTEEN FILLED AND YOU PROBABLY
KNOW MORE ABOUT THAT THAN I DO I
DON'T BUT THAT SEEMS TO BE
ENDEMIC IN THE STATE.
WELL I JUST.
YOU I KNOW I KNOW THAT YOU
BROUGHT BRIAN KELLY OVER HIS
PAYS THREE HUNDRED EIGHTY SEVEN
THOUSAND DOLLARS A YEAR.
SO I'M WONDERING HOW WHY WOULD
BE A PROBLEM TO PAY CONSTRUCTION
MANAGERS WHO ARE BOOTS ON THE
GROUND IN THE FIELD DOING THE
WORK BASICALLY I THINK --
THAT IT BY AND LARGE THEY ARE.
UNLESS THEY ARE APPOINTEES OF BY
THE GOVERNOR I THINK THEY AND
THEIR COMPENSATION IS SUBJECT TO
THE PAYMENT SCALE OF STATE IN
PLACE STATE OF CALIFORNIA
EMPLOYERS.
I THINK THAT MIGHT BE A THAT IF
IT IS AND HAS BEEN A HELPER.
TO OF OVERSIGHT OF THE PROJECT
TO SEVENTY SEVEN BILLION PROJECT
ADDRESSED AND IT MIGHT HAVE TO
BE ADDRESSED THROUGH.
LEGISLATION THAT TO WORK TOWARDS
SOMEBODY THAT CAN ACTUALLY BE
THE WATCHDOG FOR THE PEOPLE.
LIKE HEY I REALLY LIKE THE IDEA
THE OTHER THING IS IF YOU COULD
DO ONE OTHER THING AT THE SAME
TIME.
WOULD BE DEFINED USE --
TO HEALTH CLASS --
BREAK THROUGH THE CAP THAT WE'VE
GOT THAT WE CAN PAY FOR
ADMINISTRATION WELL IN AGAIN
I'VE BEGGED TO BE A PARTNER FOR
THE AUTHORITY FOR YEARS.
BUT I ONLY GET TRICKLES OF
INFORMATION.
THIS IS THE FIRST TIME YOU AND
I'VE EVER MET ME AND I'VE BEEN
THE CHAIR FOR THREE AND A HALF
YEARS.
AND SO I THINK THAT WHAT WE NEED
TO DO IS BETTER PARTNER WITH THE
LEGISLATURE NOT CREATE THIS WALL
OF SECRECY.
OF THE GOES ON BECAUSE I ONLY
GET INFORMATION.
INJUST DRIBBLES AND I THINK
THAT HAS TO STOP ALSO I THINK
THE INSPECTOR GENERAL THAT WE
DID IN IN THE IN THE CALTRANS --
COME HOME ACTUALLY HAS SOME OF
YOU ANSWER TO IS THERE'S NO
ACCOUNTABILITY AND THERE'S NO
PUNITIVE.
OF ACTIONS AGO ONE NOBODY GETS
FIRED AS MISTER MURATSUCHI THE
CHAIRED GERMAN J. LIKE HIS.
IS A AT DENOTED TODAY --
YOU YOU.
YOU'RE YOU'RE SORT IS GONE ON
WITH.
WHATEVER THEY WANTED TO DO
WITHOUT ANY OVERSIGHT FROM THIS
BODY SO AND AND WE WE APPRECIATE
THE OVERSIGHT YEAR YOUR IDEA
FUNDERS.
YEAH I MEAN IF YOU CAN MAKE THIS
IS THE I. G. THING WORK --
YOU'RE GONNA HAVE A LOT OF HAPPY
PEOPLE AT THE AUTHORITY.
MISTER CHAIRMAN TO GIVE MY TIME
TO THE NEXT MEMBERS THANK YOU.
THANK YOU THANK YOU [inaudible]
THIS PATTERSON.
THANK YOU --
THREE THREE QUICK.
AREAS --
YOU'RE GONNA HAVE TO EXPLAIN TO
ME THE FUTURE POTENTIAL CHANGE
ORDERS OF ONE POINT SIX BILLION
DOLLARS FOUR HUNDRED NINETEEN
MILE SEGMENT.
THAT APPEARS TO ME TO BE A A
HUGE -- BUMP
AND THAT'S FUTURE POTENTIAL IN
OTHER WORDS THAT'S JUST AN
ESTIMATE.
WHY ISN'T GOING TO GET BIGGER
AND WHY IS IT SO BIG NOW?
I THINK THAT --
IF YOU COULD JUST GIVE ME ONE
MOMENT I'M LOOKING FOR ONE OF
THE DOCUMENT.
I THINK CITY --
WITH REGARDS TO THE THE THE COST
THAT THE AUDITOR IS USING --
MISTER PATTERSON WE CONCLUDE
WEEK WE COME UP WITH THE SAME
COST IT'S HOW WE ARE CLASSIFYING
THE COST THAT.
THAT AND AND I WOULD ONLY SHOULD
SAY THIS THE AUDITOR HASN'T HAD
AN OPPORTUNITY TO EVEN LOOK AT
ANYTHING THAT I'M JUST SAYING SO
IT'S NOT THAT --
AND THAT.
I'M NOT SUGGESTING THAT THE
AUDITOR WOULD AGREE OR DISAGREE
BUT I THINK THAT WHAT WE LOOK AT
AND WHAT WE'RE LOOKING AT IS
THAT.
THIS START NUMBER THAT THE
AUDITOR USED DID NOT INCLUDE
SOME.
THINGS IN ADDITION TO WHAT
ACTUALLY IS THE THE CP CONTRACTS
WE'VE GOT CP ONE TWO THREE AND
FOUR THAT'S THE NUMBER THAT WAS
USED WELL IN ADDITION TO THOSE
FROM THE VERY OUTSET OF THE
PROJECT.
WE HAD OTHER COST WHICH INCLUDED
PROVISIONAL SOUNDS AND
CONTINGENCY.
WE ALSO HAVE THE STATE WE CAUGHT
AS AS YOU MAY KNOW BECAUSE OF
YOU AND I BOTH BEING FROM FRESNO
NINE WAS RELOCATED --
BETWEEN OUT BY GOLDEN STATE
COMING COMING SOUTH THAT
RELOCATION WE DIDN'T DO THE WORK
BUT IT'S PART OF OUR PROJECT WE
CONTRACTED WITH CALTRANS.
THAT'S A NUMBER THAT IS IT AS WE
WOULD LOOK AT IT WE WOULD IN
HAVE INCORPORATED THAT THE NORM
NORM NORTHERN EXTENSION THE
THREE MILES THAT WE TALKED ABOUT --
IN IN THE IN MY S. STATEMENT --
WE INCORPORATE THAT --
AND WE HAVEN'T WE HAVEN'T HEARD
AND WE HAVE A WE HAVE A CHANGE
ORDER THERE.
BUT WHAT WHEN YOU WHEN YOU TAKE
THAT INTO ACCOUNT AT THE START
POINT.
WHAT WE HAVE IS?
THE AS WE SEE IT THE FUTURE WORK --
THAT THE I THINK THE AUDITOR IS
TALKING ABOUT WE'RE SEEING THAT
IS IT AS ABOUT NOT A ONE POINT
SIX BILLION DOLLARS REACHING
THAT IS ABOUT SEVEN HUNDRED AND
FORTY MILLION DOLLARS.
BECAUSE THESE OTHER COSTS HAVE
TO BE CAPTURED FROM THE BACK
BEFORE THAT BECAUSE THEY WEREN'T.
OVER RUNS THEY WERE COSTS THAT
AREN'T CAPTURED AT THE OUTSET
AND WE DID HAVE THOSE CAPTURED
IN OURS.
OKAY BUT AGAIN I HER TESTIMONY
THAT YOU CAN COOPER.
WITH THE AUDIT BUT I GUESS
TIGHTLY CHIRLA CONCURRENT WITH
THE ON I CONCUR WITH THE TOTAL
COST IS A MATTER OF HOW YOU
CLASSIFY THE CAR OKAY LET'S
LET'S MOVE ON TO THE DEADLINE
ISSUE AND THE THE CLAWBACK ISSUE --
I REALLY THINK THIS IS THE THIS
IS THE NEXT SHOE TO DROP YOU YOU
ARE FACING AN AUDIT.
A BY THE FEDERAL GOVERNMENT --
THAT.
FEDERAL ON IT --
BEGAN IN APRIL --
WE THINK THAT IT IS PROCEEDING
AND WE MAY HAVE SOME RESULTS IN
SEVERAL MONTHS THERE ARE.
HEY EXPLICIT IN THE AUDIT.
REAL CONCERNS ABOUT NUMBER --
ONE THE EARLY USE OF THE FEDERAL
MONEY.
WITH ALL DUE RESPECT SIR IT
SOUNDED LIKE YOUR TESTIMONY HERE
WAS PREPARED BY A LAWYER
ANTICIPATING THE FEDS GOING OVER
YOUR SHOULDER.
THANK YOU BUT IT WAS.
WELL THEN YOU CREATED MAYBE HAVE
A LAWYER IS NOT.
WHAT I HEARD WHAT I HEARD AND
THAT?
WAS A DEFENSE.
OF WHAT OUR AUDITOR HAS
CONCLUDED IS NOT DEFENSIBLE.
SO THERE'S GOING TO BE SOME SOME
ISSUES WITH THIS AND THAT BUT
THAT'S JUST PART OF IT.
BUT THE BIGGER PROBLEM HERE.
WITH THE WITH THE CLUB ACT ISN'T
MISSING THIS DEADLINE --
AND SO THE THE THE THE AND WHAT
THE AUDITOR AT THE END OF THIS
[inaudible]
RECOMMENDED WITHIN.
DAUGHTER USED THE TERM
CONTINGENCY PLAN.
I'M USING THE TERM [inaudible]
PLAN B..
MR RICHEST PLAN A IS FAILING.
YOU CAN'T COMPLETE THE THREE
DIFFERENT SEGMENTS.
AND WE'RE LEFT IN CENTRAL
CALIFORNIA WITH THE RAIL ROAD
THAT GOES FROM OUTSIDE MADERA
OUTSIDE BAKERSFIELD.
HI THE AND IF YOU IF YOU CAN'T.
BRING IT IN ON TIME [inaudible]
THAT CLAWBACK.
COULD BE THE TWO THREE BILLION
DOLLARS THAT YOU STATE WE SO
FORTUITOUS LEAST.
GOT PAID TO US AND SO I'M ASKING
YOU ABOUT.
YOUR CONCERN OVER FEDERAL ON
HAVE YOU BEEN INTERVIEWED BY THE
FEDS.
OR OTHERS IN YOUR AUTHORITY
LEADERSHIP --
AND IF I ASK THE QUESTION ABOUT
CONFIDENCE WITH THE AUDITOR'S
I'M ASKING YOU CONFIDENCE.
ARE WE GOING TO END UP HAVING TO
GIVE BACK THREE BILLION DOLLARS
TO THE FEDS BECAUSE THAT'S THE
POTENTIAL HERE.
WELL YOU KNOW IT'S NOT IT'S IT'S
NOT IT'S DECEMBER BUT IT'S SHE
THERE'S SOME SOME SIMILARITIES
WE HAD.
WE HAD THE SAME ISSUE OR A A
KIND SIMILAR ISSUE AND SPENDING
THE MONEY HAD WE NOT SPENT IT BY
SEPTEMBER SEVENTEEN WHATEVER WE
HAD SPENT.
WE WOULD NOT HAVE HAD MADE IT
WOULD NO LONGER BEEN MADE
AVAILABLE TO US.
WE THOUGHT BUT SERRANO I GUESS
I'M THAT.
OR USE IT AND YOU KNEW GOING IN
THAT YOU HAVE TO DO IT AND YOU
MADE A CALCULATED DECISION. TO
DO WHAT YOU DID IT BACK WITHOUT
REPORTING IT TO US WITH WE WE
HAD TO FIND THIS OUT MISTER
KELLY HAD TO COME IN AND SAY WE
MADE THIS TERRIBLE MISTAKE WE'RE
NOT GONNA DO IT AGAIN.
SIR IT'S NOT ABOUT YESTERDAY
THIS IS ABOUT TOMORROW AND THIS
AUDIT.
IS COMING AND YOU'RE GONNA HAVE
TO DEAL WITH IT I'M ASKING WHAT
IS YOUR PLAN B. AND IT'S
REASONABLE TO ASK --
I THINK GIVEN WHERE WE ARE.
IT HOW ARE YOU WHAT CONFIDENCE
DO YOU HAVE IN MEETING.
THE TIMELINE AND IN DEFENDING
YOUR USE OF THE MONEY.
I THINK THE ALL THOSE ARE FAIR
QUESTIONS I WAS JUST I WAS JUST
GIVING.
A SIMILARITY.
IN WHAT WE HAD TO DO TO MEET THE
SEVENTEEN DEADLINE WITH REGARDS
TO GOING FORWARD.
FIRST OF ALL I I THINK EVERYBODY
WOULD UNDERSTAND THE FOLLOWING.
WE STARTED CONSTRUCTION AND
THIRTEEN BUT WE WHAT WE LOST
OVER A YEAR.
BECAUSE OF OF LITIGATION.
WE ALSO HAVE HAD DELAYS BECAUSE
OF RIGHT OF WAY.
AND WE'RE TAKING FULL
RESPONSIBILITY FOR THOSE THINGS
SO WHILE WE MAY HAVE BEEN UNDER
CONSTRUCTION IN.
THEORETICALLY HAVING EXECUTED
CONTRACTS.
THE CONSTRUCTION IS RAMPING HAS
BEEN RAMPING UP.
NOT SINCE THIRTEEN BUT REALLY IT
IS SINCE WE WERE ABLE TO START
BUILDING SO AS WE AS WE HAVE NOW
WE'VE GOT 77% OF THE RIGHT AWAY.
FOURTEEN HUNDRED AND SOME
PARTIALS OUT OF THE EIGHT NEED
FOR THAT HUNDRED NINETEEN MILES.
WHAT WE'VE DONE AS YOU POINTED
OUT EARLIER TO MISTER PATTERSON
WITH I THINK YOU DID WITH SOME
CONSTRUCTION HERE AND SOME
CONSTRUCTION THEIR AND NOTHING
IN BETWEEN?
THAT THAT WAS BY DESIGN BECAUSE
THOSE PARCELS THAT WE'RE
BUILDING ON WERE CALLED PRIORITY
PARCELS BECAUSE THOSE ARE IN THE
AREAS WHERE YOU HAVE THE MOST
COMPLEX CONSTRUCTION.
TAKES THE LONGEST PERIOD OF TIME
DESTRUCT INSTRUCTION IT IS JUST
ON THE GROUND.
THAT IS --
EARTH WORK FOR IN A LOT OF WASTE
AND PUTTING RAIL ON TOP OF THAT
IS REGION IS NOT REALLY COMPLEX
DISCUSS.
CONSTRUCTION BUT IF WE HAD ALL
OF THAT BUT WE DIDN'T HAVE THESE
THESE LARGE STRUCTURES WE WOULD
HAVE THOSE INSTRUCTIONS WOULD BE
SITTING THERE SO WE MADE A
CONSCIOUS DECISION --
THAT WE NEEDED TO GET THE
CRITICAL PARCELS DONE FIRST.
WHEN WITH SO I IT HAPPENS I HAVE
A BELIEF?
AND I THINK A REALISTIC ONE THAT
YOU WILL SEE AND IT'S ALREADY
BEEN OCCURRING THAT OUR RATE OF
CONSTRUCTION SPEND IS INCREASING.
WHAT WE WILL DO BY NEXT MARCH IS
WE WILL HAVE YOUR PLAN BE IT
WE'RE WORKING ON IT RIGHT NOW?
AND WHAT PLANNED BE WILL MEET
ONE OF THEM ONE ALTERNATIVE WITH
TIME THE IS LIKELY GOING TO BE
ISSUE WOULD GAS.
GOING TO OUR FEDERAL --
PARTNER THE FEDERAL --
RAIL ADMINISTRATION AND TALK
ABOUT AN EXTENSION.
I DON'T THINK TODAY AS I'M
SITTING HERE THAT I THINK IT
EXTENSION IS GOING TO BE
NECESSARY.
BUT I WANT TO PLAN FOR OR THEY
THOUGHT OR WHAT IF IT BECOMES
NECESSARY WE'RE NOT GOING TO SIT
AND WAIT UNTIL TWENTY TWENTY ONE
TO FIGURE OUT HOW TO DEAL WITH
IT -- SO
TUNNELING THROUGH THE SAN
GABRIEL MOUNTAINS AND THROUGH
PACHECO PASS IS NOT COMPLICATED
EXPENSIVE AND COULD BLOW THIS
WHOLE THING UP I MEAN HONESTLY.
YOU'RE SAYING YOU'RE BUILDING ON
TWO ENDS IT THERE'S NO
CONNECTIVITY THAT I CAN SEE THAT
YOU CAN POSSIBLY.
PUT UP.
MONEY INTO AT THAT AND HAVE IT.
HAVE IT BE DONE AND SO I I STILL
COME BACK WHEN I SAY PLAN B..
WHAT IS PLAN B. WHEN YOU CAN'T
COMPLETE?
THE SEGMENTS WHAT WHAT PLAN B.
IS IS HOW DO WE ENSURE.
THAT WE HAVE SPENT THE MONEY AND
COMPLETED AND WE SPENT A SPENT
THE MONEY AND COMPLETED THE WORK
FOR THE HUNDRED NINETEEN MILES.
BY.
TWENTY TWENTY TWO IT'S NOT
DRILLING THROUGH ANY ANY THE
CHECK A PASTOR ANY OF THOSE
THINGS THAT'S NOT UNDER THAT
THAT'S NOT UNDER CONSTRUCTION.
WITH THIS MONEY THAT WE'VE GOT
RIGHT NOW WE'VE GOT TO BUILD A
HUNDRED AND NINETEEN MILES WITH
THE FUNDS OKAY DO YOU CONCUR
THAN THAT YOU DON'T HAVE THE
MONEY TO COMPLETE.
WITH THE ENTIRE PROJECT CAN YOU
DON'T HAVE THE K. ONE WE NEVER
HAD THE ENTIRE MONEY TO COMPLETE
FROM DAY.
ONE IT'S NEVER CHANGED.
TALK ABOUT AND AND ASK ABOUT
THIS --
SPEED TIME IN COMPETITIVE.
FROM THAT THE HUNDRED THOUSAND
FOOT LEVEL LOOK AT THE VALUE
PROPOSITION HERE.
BACK IN TWO THOUSAND AND NINE
WAS WITHIN THE SPEED YOU BETWEEN
LOS ANGELES AND SAN FRANCISCO A
TWO HUNDRED AND FIFTY MILES AN
HOUR.
AND YOU CAN YOU MAKE THE CLAIM
ON SPEED TIME AND
COMPETITIVENESS IN OTHER WORDS
WE'RE GOING TO HAVE AN
ALTERNATIVE TO FLYING AIRPLANES
FROM LA. TO TO SAN FRANCISCO
YOUR SPEED.
IS GOING DOWN.
YOUR TIME IS GOING UP.
I THINK THE COMPETITIVE
ADVANTAGE IS GETTING A ROAD IT
HERE.
ARE YOU SIMILARLY CONCERNED
ABOUT THE COMPETITIVENESS BEING
A WROTE IT AND THE COMPETITIVE
VALUE.
OFTEN OF AN ALTERNATIVE FORM OF
TRANSPORTATION THAT ISN'T AS
FAST AND TAKES MORE TIME --
THEN WHAT YOU PROPOSED NO I'M
NOT.
AND OUR SPEED.
IS ALWAYS BEEN AT OR ABOVE TWO
HUNDRED AT TWO HUNDRED AND
TWENTY NINE ARE NOT AT OR ABOUT
THE SPEED IS TWO HUNDRED AND
TWENTY MILES AN HOUR IT WAS
NEVER DESIGNED OR SIGN.
THAT FOR THE ENTIRE DISTANCE
YOU'D BE GOING TO HUNDRED TWENTY
MILES AN HOUR THAT WAS NEVER
INTENDED AND WOULDN'T BE
INTENDED.
IN IN IN URBAN AREAS EVEN IN OUR
CITY AND FRESNO THAT TRAIN IS
NOT GONNA COME FLYING THROUGH.
FRESNO IT TWO HUNDRED TWENTY
MILES AN HOUR IT'S GOING TO BE
CLOSER TO SPEED IS ONE THING I
ALSO ASKED ABOUT TIME IF A BLACK
HEART.
LOW DOWN BUT YOU'RE GOING TO DO
YOUR TIME AND ROUTE IS GOING TO
GO UP EVERY EVERY DESIGN
DECISION WE'VE MADE FOR THE
EIGHT YEARS THAT I'VE BEEN AT
HIGH SPEED RAIL.
IS WITH A ABSOLUTE FOCUS ON HOW
MANY.
HOURS MINUTES AND SECONDS WE I
THINK RIGHT NOW OR TWO HOURS.
THIRTY SIX MINUTES AND FORTY
SECONDS WE HAVE NEVER BEEN ABOVE
TO TO HOURS AND FORTY MINUTES
WHICH IS WHAT'S REQUIRED BY
PROPOSITION ONE DAY.
AND WE'VE NEVER BEEN MUCH BELOW
WHERE WE ARE NOW EVERY DECISION
WE'VE NAY.
AND ESPECIALLY AS WE LOOK INTO
BLENDING IS CAN WE PLANNED AND
SAVE THE TAXPAYERS OF THIS STATE
MONEY.
AND STILL MEET THE REQUIREMENTS
OF PROPOSITION ONE A AND WE ARE
STILL TODAY ON TRACK TO DO THAT.
SO YOU.
ALTHOUGH SAYING YOU CONCUR WITH
THE AUDIT YOU ARE AGAIN SAYING
YOU DO NOT CONCUR WITH THE
SERIOUS CONCERN RAISED BY OUR
AUDITOR THAT THE COMPETITIVE
ADVANTAGES BEING A ROAD IT.
BY VIRTUE OF THE DECISIONS --
TO SPLIT BASICALLY SLOW IT DOWN.
WELL WE'RE NOT THE THEIR THE
TRAIN IS NOT SLOWING DOWN IT'S
STILL AT WHAT WE VOIGTS.
OF WHAT WE'VE ALWAYS BEEN
OBLIGATED TO PROVIDE UNDER
PROPOSITION ONE A WITH REGARDS
TO THE COMPETITION --
I KNOW FOR MYSELF EXPECT IT I
MEAN.
WE FOUGHT WE ALL GO TO AIRPORTS
AND WE GET THERE AN HOUR AND A
HALF BEFORE WE NEED.
TO WE NEED TO GET ON THE
AIRPLANE.
AND THEN WE GOT A WONDER WAY OUT
OF AN AIRLINE TERMINAL TO
WHEREVER WE'RE GOING --
YOU HAVE AND YOU HAVE NONE OF
THAT GOING ON WITH HIGH SPEED
RAIL AND YOU MAY DECIDE TO GO ON
AN AIRPLANE AND TAKE IT WHAT IS
IT ABOUT AN HOUR AND THIRTY
MINUTES TO GET TO LOS ANGELES
FROM SAN FRANCISCO.
ARE YOU COULD GO TO OURS AND
FORTY MINUTES BUT ADD ON TO THE
SAN FRANCISCO IF YOU'RE STARTING
THEIR ADD ON ANOTHER HOUR AND A
HALF.
WHERE YOU COULD HAVE WALKED TO
THE A HIGH SPEED RAIL TERMINAL
AND WALKED ON THE TRAIN AND GO
ON?
THE ELAPSED AND I I I I I LOOK I
HOPE YOU'RE RIGHT I THINK IT'S A
LOT OF SPECULATION.
AND THE TRUST LEVEL THAT MANY OF
US HAVE HERE.
THAT YESTERDAY'S MISTAKES ARE
GOING TO BE CORRECTED SO THAT
TOMORROW IS NOT THE SAME OUTCOME.
I CAN ONLY TELL YOU I CONTINUE
TO HAVE REALLY SERIOUS
RESERVATIONS ABOUT WHETHER YOU
CAN EVEN DELIVER RECKONED A
COMPLETED PROJECT AND THE BIG
QUESTION FOR CENTRAL
CALIFORNIA'S WHAT YOU GONNA
LEAVE BEHIND.
A HUNDRED NINETEEN MILES FROM
SOMEWHERE TO SOMEWHERE WHERE
WEARING THAT TO ME IS THE BIG
BIG PICTURE HERE THAT KEEPS ME
AWAKE AT NIGHT.
I'VE I APPRECIATE THAT TOO SURE.
YEAH WE ARE REQUIRED ALSO TO
HAVE INDEPENDENT UTILITY.
AND WHAT DAY AND THAT THAT
SHOULD THAT NEVER REVEALED IN
THE EVENT THAT THE PROJECT IS
STALLED FOR SOME PERIOD OF TIME
OR PERMANENTLY AGE ISSUE REGIS
SUGGESTING.
THAT WHAT WE'VE BUILT HE'S GOT
TO HAVE INDEPENDENT UTILITY
WHICH MEANS BE USABLE TO SOME.
SOME FOR IT SOME OTHER OPERATOR
IN THIS INSTANCE LIKELY AND
CENTRAL CALIFORNIA --
AMTRAK.
SO THE EIGHT WHAT WE'RE BUILDING
HOSTAGE SURE WE'VE BEEN TALKING
ABOUT THIS. FOUR YEARS THAT YOUR
PLAN BE HAS ALWAYS BEEN KNOWN
THAT -- YOU
CAN'T CONNECT AND YOU BASICALLY
NOW READ MEETING PUBLICLY THAT
IT IS A MULTIPLE BILLION DOLLAR
UPGRADE TO AMTRAK.
UNLESS YOU CAN HAVE A PLAN AND A
FINANCE AT YOUR DISPOSAL TO
CONNECT THESE TWO WE'RE GOING TO
HAVE.
BILLIONS OF DOLLARS SPENT IN LA
SAN FRANCISCO AND IN CENTRAL
CALIFORNIA TO WHAT.
ULTIMATE PURPOSE THAT'S THE BIG
PICTURE THAT.
I'M CONCERNED ABOUT AS AS A
RESIDENT OF THE AREA
REPRESENTING IT UP HERE AND ALSO
THE FORMER MAYOR YOU PLEASE
DON'T LEAVE BEHIND. NINETEEN
HUNDRED NINETEEN MILES OF MOUTH
IT.
I WOULD TELL YOU TODAY WE'RE NOT
GOING [inaudible]
TO WE'LL SEE [inaudible]
THANK YOU.
I THANK YOU VERY MUCH --
US THE SAME QUESTION I ASKED THE
AUDITOR BUT ALL A LEAVE WITH
THIS.
THE LAST SENTENCE OF OF THE
FIRST PAGE OF THE AUDIT SAYS
DESPITE ITS CHALLENGING
FINANCIAL SITUATION WE DETERMINE
THAT THE AUTHORITY HAS FAILED TO
IMPLEMENT SOUND CONTRACT
MANAGEMENT PRACTICES.
AS A RESULT WE CANNOT
DEMONSTRATE THE THE LARGE
AMOUNTS OF HAS SPENT ON ITS
CONTRACTS HAVE BEEN NECESSARY OR
APPROPRIATE.
AND THEN NOW WE FEAR THAT THEIR
WE KNOW THAT THERE ARE AUDITS IN
TWENTY TEN AND TWENTY TWELVE
DONE BY THE DOCTOR.
THAT THEIR INTERNAL AUDITS DONE
IN TWENTY FIFTEEN AND TWENTY
SIXTY WHAT GRADE DO YOU GIVE THE
AUTHORITY IN ITS MEASURE
PRACTICES.
WELL -- YOU
KNOW I DON'T KNOW WHAT GRADE DO
IT PUT IT PUT TO IT AS YOU GIVE
HAS ALREADY AUDITOR'S SUGGESTED
INCOMPLETE --
I WHICH I WOULD ONLY SUGGEST
THAT.
AS A RESULT OF AT LEAST VERY
POOR DOCUMENTATION --
IF I HAVE PUT A GREAT ON AND I
WOULD SAY IT'S CORRECTABLE AND I
WOULD SAY IT'S BEING CORRECTED
RIGHT NOW SO YOU DON'T GET A
PASSING GRADE RIGHT NOW.
I I I I THINK YOU'RE STILL IN
CLASS.
OKAY WELL I'M GRADING RIGHT NOW
AND GIVE ME A PASSING GRADE --
HOW LAW?
IN TERMS OF BEING THIS BEING A
STRUCTURAL.
MANAGEMENT SYSTEMATIC FAILURE IN
THE AUTHORITY DO YOU AGREE WITH
THAT ASSESSMENT.
I WOULD SAY IT'S BEEN PRETTY
CHALLENGING THAT IN THE PAST AND
IT AS AS AS YOU MISTER PATTERSON
SAID WITHOUT WITHOUT.
FOCUSING TOO MUCH ON THE PAST I
AM VERY.
CONFIDENT IN OUR CURRENT SENIOR
LEADERSHIP FOR THIS PROGRAM --
AND I THINK WHAT'S INTERESTING
TO ME.
WITH THIS AUDIT AND I TELL YA I
I REALLY APPRECIATE IT AND I'M
HAPPY I'M HAPPY WE'VE GOT IT BUT
WHAT I'M ALSO HAPPY ABOUT.
IS IT'S IDENTIFYING NUMBERS OF
THINGS THAT WE ALREADY KNEW
ABOUT AND WE WERE IN THE PROCESS
OF CHANGING AND I WOULD.
YOU KNOW I WOULD ENCOURAGE AND
ALL IT COULD BE SCHEDULED AGAIN
BY THE STATE AUDITOR.
AND I WOULD EXPECT TO SEE
MASSIVE IMPROVEMENT IN ALL THE
AREAS THAT THEY'VE IDENTIFIED.
WE HAVE TO WE HAVE TO FOCUS ON
THE PAST BECAUSE THAT'S THE ONLY
PARTICULAR.
RIGHT AND SO RIGHT NOW I HAVE
[inaudible] FIVE AUDITS. FIVE
ARE AT THAT OUTLINED THE SAME
MANAGEMENT STRUCTURAL FAILURES.
AND ANY AND ME FORTUNATE
UNFORTUNATELY YEAR ON THE AUDIT
COMMITTEE.
SO YOU ARE ON THE THE PERSON
THAT HAS TO ANSWER THE QUESTION --
AND SO --
FROM THAT STANDPOINT YOU KNOW.
CALIFORNIANS ARE RIGHTFULLY
UPSET.
AT WHAT'S HAPPENING AND AND CAN
IF IT'S A SYSTEMATIC STRUCTURAL
PROBLEM.
THEN THROWING MORE MONEY WHICH I
MUST AND REMIND YOU IS NOT YOUR
MONEY IN IS NOT OUR MONEY.
THE HARD EARNED TAX DOLLARS OF
THE PEOPLE OF CALIFORNIA.
IN SO HOW CAN YOU JUSTIFY AND
DEFEND THROWING MORE MONEY INTO
A SYSTEM THAT IS FAILING.
WELL I DON'T THINK THE I THINK
THAT I THINK THAT IN OUR
MANAGEMENT OF OF SOME OF THE
ADMINISTRATIVE REQUIREMENTS TO
THE SYSTEM.
WE HAVE NOT DONE A GOOD JOB FOR
THE TAXPAYERS OF THE STATE OF
CALIFORNIA.
AND FOR THE TAXPAYERS ANOTHER
STATE BROUGHT IN THE FEDERAL
MONEY.
I BELIEVE THAT WE WERE ALREADY
IN THE PROCESS OF FIXING THAT I
CAN'T CHANGE.
THE PERCEPTION FROM THE PAST AND
I I'M IS TROUBLED BY IT ISSUE
ARE AND WELL I MEAN I'M I DON'T
FEEL BADLY ABOUT BEING ON THE
AUDIT COMMITTEE.
I AM VERY HAPPY I AM ON THE
AUDIT COMMITTEE.
AND THAT'S WHY IN TWO THOUSAND
AND FIFTEEN AND SIXTEEN WHEN WE
WHEN WE REQUIRE THOSE AUDITS --
WE DID THAT BECAUSE OF CONCERN
AND WE WERE WORKING ON IT --
THROUGH TWO THOUSAND AND
SEVENTEEN AND PUT IN PLACE AT
LEAST THE POLICIES AND
PROCEDURES WHICH ARE FAR GROUP
FAR MORE THAN THE STATE'S.
S. THE THE M. SEM --
WE HAVE EIGHTEEN SPECIFIC
POLICIES THAT WE'VE IT WITH THAT
WE'VE INCORPORATED AND IT.
I THINK THAT WHAT THE ONLY
CHALLENGE IS HERE AND IT'S VERY
HARD TO OVERCOME PERCEPTIONS
FROM THIS PAST.
BUT WHAT WE ARE DOING TODAY AND
IN THE FUTURE IS WHAT YOU WOULD
HAVE EXPECTED TO SEE AN BEFORE.
IN TERMS OF FUNDING AND MAYBE --
MAYBE SHE HAD JUST CAN ANSWER
THIS HOW MUCH MONEY HAVE YOU
SECURED.
SIR CAN ANSWER QUESTION AGAIN
HOW MUCH MONEY DO YOU HAVE.
HOW MUCH BY HOW MUCH MONEY THE
AUTHORITY HAVE?
THE BILL WHICH MONEY DO WE HAVE
TO AVAIL ARCH TO TO BUILD.
THIS PROJECT --
MISTER MISTER FONG WHAT WE HAVE
IS WE HAVE ALL THE MONEY
NECESSARY TO COMPLETE THE
HUNDRED NINETEEN MILES.
HOW MUCH MONEY IS THAT?
THE THE ENTIRE PROJECT YEAH --
IT'S IT'S IT'S IT WOULD CRUSH
CENTRAL VALLEY RIGHT NOW THE
BUSINESS PLAN EIGHTEEN IS
REPORTING THAT A TEN POINT.
SIX IF YOU WANT TO THE BOOKENDS.
I ENCOMPASSES THE BOOKENDS ADDED
INTO THAT THAT MAKES IT ABOUT --
THIRTEEN POINT.
FOUR OKAY THE ORDER HAS SECURED
FUNDING TWELVE POINT SEVEN TO
THE THE RIGHTS AND ALL THAT.
ALL THAT IS WORTH WITH IN OUR
CURRENT.
CAP AND TRADE BUDGET AND WITHIN
OUR CURRENT PROPOSITION ONE A
FUNDING AND IN YOUR BUSINESS
PLAN HAS THE FULL SYSTEM AT
SEVENTY SEVEN BILLION TO NINETY
EIGHT BILLION.
PHASE.
ONE PHASE.
PHASE ONE THAT YOU ARE UP AND
TWENTY TEN WHAT WAS THE ORIGINAL
ESTIMATE OF THE SYSTEM.
AT THE BEGINNING.
YOU KNOW EN.
GOING BACK TO TWENTY NINE AT TWO
THOUSAND AND NINE AND TWO
THOUSAND AND TEN THIRTY FIVE THE
I I THINK THE FIRST ONE WHEN
THEY ACTUALLY USED A YEAR OF
EXPENDITURE WAS SOMETHING LIKE.
FORTY TWO SIX FORTY TWO SIX VIA
CELL I APPRECIATE YOU TRYING TO
SAY THAT THERE'S THE COST
OVERRUNS AND CAR [inaudible]
EMBEDDED BUT I'M LOOKING AT A
SIGNIFICANT COST OVER A FROM
FORTY TWO BILLION. TO SEVENTY
SEVEN TO NINETY EIGHT BILLION.
IF IT CAN I TAKE A MOMENT TO
START DRESSING --
I HAVE --
I'LL JUST PUT IT I HAVE A GOOD
DEAL OF COMPASSION.
FOR THE PEOPLE WHO --
PRECEDED US --
ON THE BOARD --
YOU'VE SEEN JUST BY WHAT IS
HAPPENED ON THIS AUDIT AND THE
TESTIMONY --
THE CHECK OUT A CHALLENGE OF THE
PROJECT IS NOT HAVING ALL THE
INFORMATION.
GOING BACK TO TWO THOUSAND AND
NINE AND TWO THOUSAND AND TEN I
DON'T KNOW WHERE THEY WHAT
INFORMATION THEY HAD EITHER.
AND WHAT I THINK YOU'VE SEEN
THAT WE'VE DONE YOU FONG SINCE
THEN.
IS THAT WHEN WE WHEN WE FIRST
CAME ON THE THE BULK OF THE
BOARD THAT IS IS CURRENTLY ON
THE HIGH SPEED RAIL AUTHORITY --
WE WERE INVOLVED IN THAT THERE
ARE FOR OUR FIRST.
BUSINESS PLAN TO YOU IS IN TWO
THOUSAND AND TWELVE WE WENT
THROUGH TWO OR THREE DRAFTS AND
ONE FINAL --
WE HAD MORE INFORMATION THEN
ANYBODY WHO WOULD WORK ON IT AND
ALL THE WAY BACK TO WHEN
PROPOSITION.
ONE EIGHTY PLUS NINE AND TEN OUR
NUMBER WAS.
SIXTY EIGHT FOUR OUR NUMBER IN
OUR TWO THOUSAND TWELVE BUSINESS
PAN IS. SIXTY EIGHT FOUR EIGHT
YEARS LATER --
EXCUSE ME SIX YEARS LATER WE'RE
TOO WE'RE AT SEVEN WHO WERE AT
SEVENTY SEVEN ONE IT'S ABOUT A
12% INCREASE.
I CAN I UNDERSTAND WHAT YOU'RE
SAYING BECAUSE WE'RE ALL LIVING
WITH IT.
WHAT WAS ESTIMATED IN TWO
THOUSAND AND EIGHT AND?
NINE I DON'T KNOW WHAT THE BASIS
FOR THE INFORMATION WISE I DO
KNOW THE BASIS FOR THE
INFORMATION FROM THE TIME WE CAN
WE CAME IN.
AND WE'VE BEEN PRETTY CONSISTENT
WITH IT.
SO I APPRECIATE YOUR POINT
BECAUSE WE ALL MAKING DECISIONS
ON AND PERFECT INFORMATION AND
WE WORK TOGETHER MORE
INFORMATION YOU THE PROBLEM
RIGHT NOW THAT EXISTS IS THAT
THE MORE INFORMATION WE GET.
THE MORE WE WANT TO STOP THIS
PROJECT AND THAT'S THE CONCERN.
NOW CAN YOU OUTLINE TO ME.
HOW THE PROJECT HAS CHANGED OR
EVOLVED SINCE? TWO THOUSAND FOR
FROM THE FIRST BUSINESS PLAN TO
WHAT IT IS NOW.
FROM.
IT FROM --
COST PERSPECTIVE ON FROM THE
FROM THE ACT AT MINUS ANYWAY AS
TO THE AUDITOR AND AND EVERYONE
UNDERSTANDS IS THAT WHEN THE THE
VOTERS VOTED. FOR HIGH SPEED
RAIL OR WHEN A IT WAS TO BE A
STANDALONE PROJECT.
IS THAT THE CASE CURRENTLY.
IT NOT TO THE EXTENT THAT THERE
IS THERE IS BLENDING AND UTILIZE
UTILIZING AT OTHER EXISTING
RIGHT AT BOTH RIGHTS OF WAY AND
IMPROVEMENTS.
AS PRIMARILY IN YOU KNOW IN THE
IN THE SHED IN THE CORNER AT SAN
JOSE SAN FRANCISCO.
AND MORE RECENTLY AS WE'VE
IDENTIFIED IN THE TWO THOUSAND
EIGHTEEN PLAN FROM GILROY. TO
SAN JOSE AND THEN FROM OF
BURBANK IT DOWN TO LOS ANGELES
UNION STATION.
AND IS AUDITOR POINTED OUT I
THINK WAS TEN SOMETHING.
THAT BILLION OR TWELVE SOMETHING
BILLION IN TERMS OF WHAT THE
REDUCE COSTS WERE.
WHAT WE FOCUSED ON MISTER
MYSTERY AT FONG?
IS HOW DO WE CONTROL COSTS.
AND HOW DO WE AT THE SAME TIME
CONTROL COSTS.
AND COMPLY WITH PROPOSITION ONE
A SO BY I BUT TO MY ORIGINAL
POINT RIGHT WHICH IS THAT IT'S
NO LONGER WHAT THAT WHAT THE
VOTERS VOTED.
WITH THREE WITH RESPECT TO THE
WAS NO LONGER STAND ALONE
PROJECT WITH RESPECT RESPECT
RESPECT --
TO THE STANDALONE PROJECT TAX
CORRECT.
WHEN MISTER KELLY TESTIFIED
BEFORE US AND WE PROBABLY BACK
OF THE ENVELOPE ESTIMATED THAT
THE PROJECT --
PASSES PROBABLY FIFTY FOUR
BILLION DOLLARS BY.
A MADE IF YOU IF YOU FACTOR IN
IN MAY AND IF YOU READ THE
BUSINESS THE PROJECT A PASS AS
AN UNFUNDED ASSET.
THAT IS CORRECT THAT'S CORRECT
SO WHERE THERE IS NO FOR FUNDING
FOR RIGHT NOW THAT'S GRAND RIGHT
SO SO AS MISTER PASS AND
PATTERSON ALLIED WE HAVE.
A CENTRAL VALLEY SEGMENT THAT
RIGHT NOW IS.
WE GOT.
TO FIGURE THAT OUT AND THEN
YOU'VE GOT THE BAY AREA SEGMENT.
RIGHT BUT IT DOESN'T CONNECT.
RIGHT SO IS THAT THAT'S A THAT
IS A TRUE STATEMENT.
IT'S A TRUE STATEMENT THAT WE
HAVEN'T IDENTIFIED THE FUNDING
FOR ANYTHING THAT BEYOND WHAT
YOU MENTIONED A FEW MOMENTS AGO.
RIGHT I'VE ADDED BY THE FUNDING
FOR IT AND FIND IT A WE COULD
YEAH THAT'S RIGHT NUMBER SO NOT
STUDENTS IN TERMS OF HOW TO
DEFINE THAT BUT RIGHT NOW THERE
IS NO MONEY FOR THAT SECTION
THAT'S GREAT SO WE DO HAVE SO
RIGHT NOW THE PUBLIC IS LOOKING.
AT A PROJECT THAT IS.
THAT DOESN'T CONNECT.
WITHOUT ADDITIONAL FUNDING THE
THAT THAT'S CORRECT [inaudible]
RIGHT.
AND AND SO DO YOU THINK THE
PUBLIC UNDERSTANDS THAT.
I THINK FROM --
FROM THE EIGHT YEARS OF BOARD
MEETINGS THAT --
I'VE ATTENDED I THINK THAT AT
LEAST THE PUBLIC BECOMES AND
ADDRESSES THIS BOARD CLEARLY
UNDERSTANDS THAT YOU THINK THE
PUBLIC WOULD ACCEPT THAT.
THAT I CAN'T SPEAK FOR THE
PUBLIC I MEAN I THINK THE
DECISIONS THAT WE MADE OUR CLEAR
WITH IS IT WITH REGARDS TO
BLENDING --
WERE NOT NECESSARILY
CONTEMPLATED IN PROPOSITION ONE
NAY BUT I THINK THAT WHAT THE
RESULT OF IT IS IS IT
DRAMATICALLY REDUCE THE COSTS
THAT WE WERE SEEING.
WHEN WE CAME IN AND JOINED THE
BOARD IN TWO THOUSAND AND?
TWELVE I'LL JUST IN MY AND MY
LAST STATEMENT IS IT IS IT IS
AYE AYE AYE REPRESENT.
OF COURSE KERN COUNTY THEM AND
SO WE ARE AFFECTED AS WELL FROM
THIS PROJECT AND THE
FRUSTRATIONS I HEAR FROM MY
CONSTITUENTS --
AB ARE PRETTY INTENSE AND SO.
WHEN THE REPORT CONCLUDES?
AND THAT THE AUTHORITIES FLOOD
DECISION MAKING REGARDING THE
START OF HIGH SPEED WITH OF THE
HIGH SPEED RAIL SYSTEM
CONSTRUCTION IN THE CENTER
VALLEY.
ITS ONGOING POOR CONTRACT
MANAGEMENT FOR A WIDE RANGE OF
HIGH VALUE CONTRACTS HAVE
CONTRIBUTED TO BILLIONS OF
DOLLARS IN COST OVER RUNS FROM
COMPLETING THE SYSTEM WHICH IS
IN THE FIRST PARAGRAPH THIS
AUDIT.
THAT IS A TRUE STATEMENT.
I DON'T BELIEVE I DON'T I WOULD
NOT CHARACTERIZE IT THAT WAY NOW
BUT THE PERCEPTION IS NOW
BECOMING A REALITY AND I THINK
WELL AND AND AND AND NO MATTER
HOW YOU DEFINE WHAT YOU'VE BUILT
IN THESE OVER RENTS ARE NOT.
I'M LOOKING AT EIGHT FORTY TWO
BILLION DOLLAR ESTIMATE AT THE
BEGINNING IN TWENTY TEN AND I'M
LOOKING OUT A PROJECT SEVEN
SEVEN BILLION TO NINETY EIGHT
BILLION DOLLARS WHICH IS A
PRETTY WIDE RANGE.
RIGHT IT'S TWENTY BILLION
DOLLARS.
AND SO THAT IS A SIGNIFICANT
INCREASE AND OF COURSE YOU NOW
YOU TELL ME THAT A DOCTOR CAN
ACT AS UNFUNDED AND THEN NOW WE
DON'T EVEN KNOW IF IT'S GOING TO
GO OVER A HUNDRED BILLION
DOLLARS.
WILL.
I DON'T BELIEVE THAT THE
COMPLETELY FUNDED FROM THE
OUTSET TO FORTY TWO BILLION OR
THIRTY FIVE BILLION OR WHATEVER
IT MAY HAVE BEEN AFFECTED YOUR
POINT TO THAT POINT I DON'T
THINK THE CAP THE CALIFORNIA
PUBLIC KNEW THAT WAS EVEN THE
CASE EITHER.
DID YOU DID WHEN YOU WENT TO THE
CALIFORNIA PUBLIC AND SAID WE
WANT YOU TO BOND FOR A HIGH
SPEED RAIL SYSTEM FOR SOMETHING
THAT WON'T COVER THE COSTS OF
THE WHOLE PROJECT.
DID ANYONE EVER SAY THAT.
IT WAS BEFORE MY TIME I REALLY
CAN'T ANSWER THE QUESTION CELL I
I JUST LIKE THIS IS I MEAN I I
KNOW.
IT'S YOUR FIRST TIME TESTIFYING
AND I I HATE TO BE A LITTLE HARD
ON YOU BUT I MEAN THESE ARE REAL
CONCERNS.
AND AND AS THE AS US WHO HAVE
BEEN ELECTED TO BE STEWARDS AT
CALIFORNIA TAX DOLLAR.
WE HAVE TO ASK THESE HARD
QUESTIONS BECAUSE WE THE PEOPLE
LOAN AS THE POWER FOR TWO YEARS
AND THIS IS A VERY IMPORTANT
DECISION WE HAVE TO MAKE SO I
THANK YOU FOR YOUR TIME AND I
APPRECIATE APPRECIATE THE
QUESTIONS THINKING.
TWICE YOUR OFFICE THANK YOU
MISTER CHAIR MISTER RICHARDS
MISTER HEDGES THANK YOU FOR YOUR
TESTIMONY.
I CAN TELL YOU IS A LAWYER I GET
CAUGHT MOST.
TO I ALSO WANT TO TELL YOU THANK
YOU VERY MUCH FOR UNDERSTANDING
AND SO I ALSO WANT TO TELL YOU
THAT -- YOU
KNOW PERSONALLY I HAVE THE
HIGHEST RESPECT FOR BRIAN KELLY.
DID SOME EXTRAORDINARY WORK IN
HIS OTHER POSITIONS AROUND HERE
AND YOU'RE LUCKY TO HAVE HIM WE
ARE I HAVE A QUESTION I GUESS IS
SORT OF A CONCERN YOU KNOW THE
AUDIT REPORT.
AND CERTAINLY THIS HEARINGS
PROPERLY FOCUSED ON HAS BEEN THE
DEFICIENCIES --
IN THOSE AREAS THAT --
IMPACTED PROJECT COMPLETION COST
AND OF COURSE THE DELAYS HAVE
BEEN SIGNIFICANT [inaudible]
AND FROM THE PERSPECTIVE OF SOME
OF US THE COST INCREASES OF BEEN
BREATHTAKING.
BUT I WANT TO STEP BACK AND AND
AND ASK A QUESTION BUT FIRST.
SET THE STAGE FOR MY QUESTION.
YOU KNOW IT'S MY UNDERSTANDING
THAT MODERN DAY HIGH SPEED RAIL
PROBABLY DATES BACK TO THE JAPAN
MAYBE IN NINETEEN SIXTY FOUR
BEFORE THE OLYMPICS.
AND THEN FOLLOWED BY ITALY AND
FRANCE THAT'S ALMOST FIFTY YEARS
AGO.
AND IT'S ALSO MY UNDERSTANDING
THAT AT LEAST SOME FORM OF A
HIGH SPEED RAIL SYSTEM WAS
OPERATIONAL IN GERMANY.
AS EARLY AS NINETEEN THIRTY
THREE MAYBE FROM THIRTY THREE TO
THIRTY NINE AND THAT'S CERTAINLY
OVER. EIGHTY YEARS AGO SO.
THIS IS NOT A A NEW TECHNOLOGY
AT LEAST IN ITS BASIC FORM.
AND WHEN WE TALK ABOUT
PROJECTIONS FOR COMPLETION OF
PHASE ONE OF TWO THOUSAND THIRTY
THREE MAYBE LATER MAYBE MUCH
LATER MAYBE. TWENTY FIFTY GIVEN
ALL THAT AND GIVEN THE
EXTRAORDINARY SPEED WITH WHICH
TECHNOLOGY IS CHANGING WITH
RESPECT TO TRANSPORTATION IN THE
TRANSPORTATION OF OF PEOPLE FROM
ONE PLACE TO ANOTHER WHETHER
WE'RE TALKING ABOUT A TON WAS
VEHICLES --
HYPERLOOP --
TRANSPORT.
I GUESS THIS IS MY QUESTION.
HAS ANYONE INSIDE YOUR
ORGANIZATION OR OUTSIDE YOUR
ORGANIZATION --
TO YOUR KNOWLEDGE TAKEN A STEP
BACK CLIMBED UP TO THIRTY
THOUSAND FEET.
AND REASSESS THE CONTINUED
VIABILITY OF A OF THE CONCEPT OF
A HIGH SPEED RAIL SYSTEM.
IN TWO THOUSAND THIRTY THREE OR
TWO THOUSAND FIFTY OR BEYOND
BECAUSE SEVENTY SEVEN BILLION
DOLLARS IS A LOT OF MONEY AND
IT'S PROBABLY NOT GOING TO BE
THE END OF THE QUESTION BECAUSE
WE GOT A FACE.
TO OR ARE WE SIMPLY BENT ON AUTO
PILOT SENSE.
NOT A CRITICISM BUT SIMPLY BEEN
ON AUTO PILOT SINCE NINETEEN
NINETY SIX OR TWO THOUSAND OR
EVEN. TWO THOUSAND AND EIGHT
WITH RESPECT.
WELL IN THE AUTO PILOT NEVER GOT
ENGAGED ON THIS FORTUNATELY BUT
WE PAID WE PAY ATTENTION.
TO WHAT APPEARS TO BE GOING ON
AT LEAST --
BEING CONSIDERED TO HAVE
POTENTIALLY DEVELOP AND THAT
SORT OF THING WHAT WE ALSO
NOTICES THAT WHAT IS ACTUALLY
BEING BUILT ALL AROUND THE WORLD.
CONTINUES TO BE HIGH SPEED RAIL.
IT'S A PROVEN AT TRANSPORTATION
ALTERNATIVE AT SPEECH THAT ARE --
GREATER THAN ANY OTHER.
FORM OF SURFACE TRANSPORTATION
AND WHILE WE READ ALSO ABOUT
HYPERLOOP AND MAGLEV AND ALL
THAT SORT OF THING --
WE DON'T WE DON'T GET IS SICK WE
DON'T SIMPLY --
TAKE A POSITION THAT IT'S IT IT
MAY NOT BE VIABLE AT SOME POINT
IN THE FUTURE BUT WHAT WE'RE
DOING IS WE DON'T SEE IN THE
NEAR TERM --
OR DURING DURING THE LIFE OF A
HIGH SPEED RAIL SYSTEM THAT'S
JUST BEING BUILT THAT IT IS
NECESSARILY GOING TO BE SURE
PASSED BY OTHER FORMS OF SURFACE
TRANSPORTATION.
IT CERTAINLY LOOKS AS THOUGH IT
MEETS PERFECT ROUGHLY GEOGRAPHY
GEOGRAPHY SIMILAR TO WHAT WE'VE
GOT HERE IN CALIFORNIA WELL I
UNDERSTAND THAT'S THE HIGH SPEED
REAL STORIES YOU IN THE PORTS
YOU AND I'M SURE YOU TALK ABOUT
IT.
BUT HAS THERE BEEN A TIGER TEAM
PUT TOGETHER OR PROJECT TEAM.
SOME OTHER GROUP TO ACTUALLY
STUDY THE IMPACT OF EXTRA.
A CHANGING STRUCTURE CHANGES IN
TECHNOLOGY JUST IN THE SIX YEARS
THAT I'VE BEEN HERE TO COMPARE
THAT TO THE BUSINESS PLAN THAT
WAS.
TO BE STARTED TO PUT TOGETHER IN
NINETEEN NINETY SIX AND TWO
THOUSAND THAT'S NINETY SIX IS A
LONG TIME IN TWO THOUSAND IS
RAPIDLY APPROACHING NINETEEN
YEARS AND I'M JUST WONDERING IF
ANYBODY IS REALLY TAKING THIS
THING DOWN TO THE TO THE ROOTS
AND AND TAKEN A LOOK AT IT.
OR ARE WE SIMPLY MOVING AHEAD
BECAUSE WE'VE SPENT.
WHATEVER IT IS TWO POINT SIX
BILLION DOLLARS OF THREE POINT
FIVE BILLION IN WE NEED TO KEEP
MARCHING HONOR WE HAVE.
TO CONSIDER WHAT THE OFFRAMP IS
OR HOW WE PAY IT BACK.
IS THAT A FAIR QUESTION I THINK
IT'S A FAIR QUESTION --
AND I AM NOT AWARE OF IT AT THE
TIGER TEAM THAT HAVING BEEN
FORMED --
WHAT I HAVE THOUGHT ABOUT WITH
REGARDS TO THIS IS TO WHATEVER
THE FORMER TRANSPORTATION MAY BE --
WITH WHATEVER HOWEVER TECHNOLOGY
CHANGES --
ONE THING THAT IS A ASSET THAT
SURVIVES ALL OF THAT IS THE
RIGHT OF WAY.
THAT THE STATE OF CALIFORNIA --
AND IT HAS IN THE TAXPAYERS HAVE
PAID -- FOR
WHETHER THAT RIGHT OF WAY AT
SOME POINT MAY SUPPORT MAG LEV
OR HYPERLOOP OR SOME OTHER FORM
OF TRANSPORTATION.
I REALLY DON'T KNOW.
BUT CERTAINLY IT'S AN ASSET THAT
IS NOT A LOST ASSET FOR THE
TAXPAYERS OF THE STATE OF
CALIFORNIA.
WELL THANK YOU I DO THINK YOU
KNOW WHOEVER'S LISTENING I DO
THINK IT'S TIME --
TO MAY BE.
AT THE SAME TIME THAT YOU PUT
CONTINUE TO PROCEED FORWARD
MARCHING ON MAYBE BUT THAT.
PERHAPS IT'S A TIME FOR SOMEBODY.
TO TO TAKE A LOOK AT THIS IN.
AND REALLY.
THINK IN TERMS OF FUTURES YOU
KNOW ORGANISER PRIVATE --
FORMING FUTURES GROUPS NOW AND
IT'S NOT --
WITHOUT GOOD REASON AND MAYBE WE
OUGHT TO DO THE SAME THING BUT
THANK YOU FOR YOUR TESTIMONY
SHOWS LIKE REFERENCE CHECK YOU
FOR THE ADVICE [inaudible]
SARAH -- THE
FIRST TO COMMENT THAT --
JUST REFLECTING ON SOME OF YOUR
STATEMENTS THE I THINK IT'S TIME
FOR THE NATIONAL LEADERS. TO
FOLLOW CALIFORNIA'S LEAD.
AND INVEST IN INFRASTRUCTURE.
LET'S WAKE UP AND SMELL THE
COFFEE FOLKS WE NEED MORE
INFRASTRUCTURE IN THE UNITED
STATES.
IT'S TIME FOR THEM TO COME
TOGETHER IN A BIPARTISAN WAY.
AND SMELL THE COFFEE PUT
TOGETHER AN INFRASTRUCTURE BACK.
IN -- WE ARE
WE ARE ALL WORK AS A BIPARTISAN
TEAM IN CALIFORNIA. TO OUR HOUSE
OR LEGISLATIVE DELEGATION. TO
HELP CALIFORNIA AND THE REST OF
THE COUNTRY --
SURVIVE ECONOMICALLY BY CONTINUE
TO INVEST IN INFRASTRUCTURE
WHICH HASN'T BEEN DONE AT THE
NATIONAL LEVEL SINCE THE LATE
EIGHTIES.
THE LATE EIGHTIES HAVEN'T THEY
HAVEN'T DONE IT.
SO I TAKE I THINK IT'S TIME --
FOR SOME --
STRONG EFFORTS AT THIS POINT I
HOPE I CAN GET THE MOMENTUM.
GOING ON THAT I THINK
CALIFORNIA'S VOTERS DIRECTED US
IN AND GAVE US SOME DIRECTION
THAT THEY WANT SO MOMENTUM.
IN THIS AREA SO I HAD A QUESTION
FOR YOU --
MISTER VICE CHAIRMAN --
YOUR FROM FROZEN CORRECT YES SIR --
CAN YOU TALK ABOUT --
BECAUSE PER THE AUDIT --
THAT KIND OF WASN'T COVERED
FULLY.
WAS THE ECONOMIC --
IMPACT [inaudible]
AND I I REALLY WANT TO SEE A
CONNECTION BETWEEN SILICON
VALLEY AND FRESNO AND IS IN THE
BAY AREA I THINK IT WOULD HAVE
AN ECONOMIC.
STRONG ECONOMIC IMPACT.
BOTH WAYS SO I MEAN.
YOU HAVE ONE OF THE GREATEST
UNIVERSITIES IN THE IN THE STATE
TO ABOUT IT HAS ONE OF THE BEST
ENGINEERING SCHOOLS COMPUTER
SCIENCE --
UNKNOWN.
BECAUSE PRESS OF ITS ISOLATION
FROM OTHER PARTS OF THE STATE
BUT UNKNOWN.
FRESNO STATE HAS A WONDERFUL --
HIGHER EDUCATION SYSTEM THERE
[inaudible]
AND I KNOW THAT PEOPLE IN
SILICON VALLEY WANT TO CONNECT
WITH.
FRESNO BECAUSE QUITE FRANKLY.
PEOPLE ARE ALMOST LIVING IN
FRESNO IN COMMUTING TO SILICON
VALLEY AS WE SPEAK.
AND WE WOULD LIKE TO C. OF SOME
OF THE COMMUTERS MAYBE GO IN THE
OPPOSITE DIRECTION.
OKAY IF WE HAD.
SOME OF THE COMPANIES MAKE
INVESTMENTS.
COULD YOU TALK ABOUT THE
ECONOMIC POTENTIAL IMPACT. FOR
THE FRESNO METROPOLITAN AREA OF
THE HIGH SPEED RAIL ON THAT HAVE
YOU KNOW WE DID STUDY THAT FULLY
IN THE AUDIT.
BUT THAT WAS A DIRECTIVE OF THE
AUDIT. TO SO COULD YOU IT CAN
YOU OF FROM YOUR EXPERIENCE.
AS A BUSINESSMAN AND FRESNO GIVE
US SOME PERSPECTIVE.
YEAH I'D LIKE TO DO THAT THANK
YOU SENATOR DEAL OR I'M SORRY I
KEEP DOING ITS --
SENATOR BILL --
JUST A COUPLE OF OF OF QUICK
FAXES YOU.
OFTENTIMES PEOPLE WHO AREN'T
FROM THE CENTRAL VALLEY DON'T
REALLY.
REALIZE --
WHAT THE POPULATION IS THERE
WE'VE GOT IN A IN THE EIGHT
COUNTY AREA WE'VE GOT ABOUT FOUR
POINT TWO BILLION ARE SKEWS ME
MILLION PEOPLE RIGHT NOW?
BY TWO THOUSAND AND SIXTY IS IT
IT'LL INCREASED BY FIFTY BY 50%
UP TO ABOUT SIX AND A HALF.
IN TERMS OF ECONOMIC IMPACTS --
BOTH STATEWIDE AND FOR THE
CENTRAL VALLEY THEN I I
APPRECIATE THE OPPORTUNITY TO
SAY WHAT I THINK IT'S DOING FOR
THE FRESNO COMMUNITY --
FOR THE REPORTING PERIOD --
ENDED DECEMBER OF TWO THOUSAND
SEVENTEEN IT THE STATE WIDE IT'S
REPRESENTED INVESTMENTS OF FOUR
POINT ONE FIVE BILLION DOLLARS.
IN EMPLOYMENT STATEWIDE.
THERE'S BEEN APPROXIMATELY
THIRTY SIX THOUSAND JOB YEARS
CREATED.
AND THE ECONOMIC IMPACT PACKED
ACROSS THE STATE ABOUT SIX POINT
FOUR BILLION.
IN THE CENTRAL VALLEY ALONE --
OF THAT THIRTY SIX THOUSAND JOB
YEARS. FOURTEEN THOUSAND ONE
HUNDRED OF THEM ARE RIGHT IN THE
CENTRAL VALLEY IN AND AROUND
FRESNO.
AND THE ECONOMIC IMPACT ALREADY
HAS BEEN OVER TWO AND A HALF
BILLION DOLLARS AND THAT'S GOING
TO GROW DRAMATICALLY AS WE
FINISH.
THIS HUNDRED NINETEEN MILES.
FROM THE PERSPECTIVE OF A
COMMUNITY --
THAT -- I A
ONLY HOPE THAT EVERYBODY HAS AN
OPPORTUNITY TO HAVE GONE THERE
ARE MORE THAN ONCE HOPEFULLY AND
GOT TO KNOW IT A LITTLE BIT I'VE
BEEN THERE.
FORTUNATELY.
EVERY TIME SOUNDS A STATE POLICE
PRESENCE AT THE BULLDOGS WENT
HOME AND YOU KNOW TO BE HONEST
I'M SORRY BUT YOU KNOW WE JUST
CAN'T BEAT THAT --
SPECIALLY IN --
THE BULLDOG I MEAN IT'S JUST.
WELL WE'VE GOT A GREAT SENSE OF
YOU KNOW --
THE THE YOU KNOW FOR THE CENTRAL
VALLEY.
HIGH SPEED RAIL REPRESENTS I I'M
NOT FROM FRESNO I MOVE THERE --
AFTER AFTER COLLEGE I THINK
THINKING I'D BE THERE FOR THREE
OR FOUR YEARS AND THEN MOVE BACK
OVER THE COAST WHICH DIDN'T
HAPPEN BECAUSE YOU END UP
STAYING WHERE YOUR FRIENDS ARE.
AND I MADE A LOT OF FRIENDS HERE.
AND I'VE STRUGGLED OVER THE
YEARS THINKING WAS IT REALLY
WISE TO STAY HERE BECAUSE I IT
EARLY ON MY REACTION TO FRESNO
I'VE NEVER.
SEEN A COMMUNITY THAT IT
APPEARED TO HAVE SUCH A LOW SELF
ESTEEM.
AND IT REALLY WAS IT WAS REALLY
ALARMING --
BUT WHAT I A RECOGNIZED OVER THE
YEARS THIS LOW ESTEEM WAS THE
RESULT OF A LACK OF OPPORTUNITY
[inaudible]
AND THERE'S A PERCEPTION IN THE
VALLEY THAT WHEN THINGS HAPPEN
IN THIS STATE.
THEY NEVER FIND THEIR WAY OUT OF
THE BAY AREA AND THEY NEVER FIND
THEIR WAY OUT OF SOUTHERN
CALIFORNIA SO SITTING IN A
POSITION LIKE THIS WHERE I
REALLY REPRESENT THE INTEREST OF
THE STATE OF CALIFORNIA.
I TRIED AND I TRY TO MONITOR HOW
I REALLY FEEL ABOUT.
MY JOB BUT WHEN I GET THE
OPPORTUNITY TO THINK ABOUT WHAT
IS IT DOING FOR CENTRAL
CALIFORNIA IT'S UNBELIEVABLE --
WE HAVE GENERATED THOSE JOBS IN
SOME PART WITH PEOPLE WHO HAVE
BEEN UNEMPLOYED FOR YEARS.
WE HAVE BEEN THROUGH A THE GRANT
THAT THAT OUR WORKFORCE
INVESTMENT BOARD WHEN I WAS THE
CHAIR OFTHAT.
RECEIVED FROM THE GOVERNOR A
HALF DOLLARS IT DIDN'T SOUND
LIKE I'M ON A LOT OF MONEY BUT
WITH THAT MONEY DID IS IT WENT.
IT WENT TO SUPPORTING COHORTS
FOR TRAINING.
AND THE INTERESTING THING IS
THESE PEOPLE GOING THROUGH THOSE
CORE HOOKED CO WORDS ARE GETTING
JOBS.
THAT DIDN'T HAPPEN WITHOUT HIGH
SPEED RAIL AND AS YOU MENTIONED
EDUCATION.
UP AND DOWN THE VALLEY CAL STATE
BAKERSFIELD FRESNO STATE UC
MERCED --
NOW SAY THOSE THREE BECAUSE
THEY'RE ALL PUBLIC INSTITUTIONS
I'M NOT QUITE IS AWARE OF OF
WHAT TO DEPRIVE ONES ARE BUT
THEY HAVE THEY HAVE MEANT
EMBRACED.
HIGH SPEED RAIL AND ESTABLISH
PROGRAMS.
FOCUSED ON ENGINEERING IN FOR
THE DEVELOPMENT AND OPERATION OF
HIGH SPEED RAIL.
AND A I IN THE AREAS OF
CONSTRUCTION OF HIGH SPEED RAIL.
THE SECONDARY AND TERTIARY
BENEFITS FROM THESE JOBS NOT
ONLY PUTTING PEOPLE TO WORK BUT
THEM ADDITIONAL MONEY THAT IT'S
BROAD AND TO THE COMMUNITY AS I
MENTIONED --
THE ECONOMIC IMPACT TWO AND A
HALF BILLION DOLLARS UNHEARD OF
OFTEN WHAT I THOUGHT.
AND I THINK THIS ABOUT HIGH
SPEED RAIL --
A LOT YOU KNOW AND WE WERE
FORTUNATE IN MY MIND TO GET THE
OUR SONS AND WE HAD 17%
UNEMPLOYMENT.
BUT WHAT I SAID WHEN I'VE HAD AN
OPPORTUNITY TO TALK TO GROUPS.
IS THAT.
THE NEAR TERM JOBS WHICH WERE ON
THE CAKE.
BECAUSE THE REAL OPPORTUNITY
FROM BEING THE FIRST.
AND THAT'S NOT JUST CENTRAL
CALIFORNIA IT'S THE ENTIRE STATE
OF CALIFORNIA WE ARE THE FIRST
TO BE DOING THIS.
NOT ONLY IN CALIFORNIA IN THE
ENTIRE UNITED STATES AND IN FACT
ALL OF NORTH AMERICA THERE IS
NOT A HIGH SPEED RAIL.
CONSTRUCTION PROJECT UNDER WAY
IN ANY OF THAT AREA.
THE REAL BENEFITS.
THAT COME TO THIS STATE AND I
BELIEVE STRONGLY FOR CENTRAL
CALIFORNIA.
IS THE EXPERIENCE THAT IS BEING
GAINED BY ACTUALLY HAVING BEEN
INVOLVED IN THIS DEVELOPMENT.
AND ITS CONSTRUCTION AND ITS
OPERATION WHEN WE GET STARTED.
THE S. HIGH SPEED RAIL FINDS IT
SWAY FROM STATE TO STATE TO
STATE AND AS YOU PROBABLY ARE
WHERE.
I MEAN KEPT THEIR WORKING ON IT
TEXAS THERE WORKING ON IT AGAIN
I BELIEVE IN OHIO AND WISCONSIN.
IN FLORIDA --
WHEN LIKE CALIFORNIA HAS DONE SO
WELL WHEN PEOPLE START LOOKING
AT WHERE WHERE WE GONNA GET THE
EXPERTISE? TO DEVELOPER BUILD
HIGH SPEED RAIL THAT EXPERTISE
IS GONNA COME FROM CALIFORNIA.
WE'RE GONNA EXPORT THAT
EXPERTISE TO THE OTHER STATES IN
THESE COMPANIES THAT HAVE COME
UP AND LEARN THE WAY.
AND WE'VE GOT A LOT OF COMPANIES
THAT ARE WITH SMALL COMPANIES --
NOW DEVELOPING AND BUILDING HIGH
SPEED RAIL THAT THEY WILL BE THE
ONES WHO CAN GENERATE THESE
OPPORTUNITIES AND BE THE LEADERS
NOT IN CALIFORNIA.
BUT THE LEADERS IN THE EXPANSION
OF HIGH SPEED RAIL ACROSS THE
COUNTRY IT'S ONLY THE SCRATCHING
THE SURFACE THE BENEFITS WERE
GETTING TODAY.
IT'S JUST THE BEGINNING.
I I THINK GOOD JOB JUST.
YOU KNOW IT'S A GOOD STORY AND I
THINK.
PERHAPS ONE OF THE REASONS WHY
US A QUESTION AND THE AUDITOR'S
THEY WANTED A SYSTEMATIC
REPORTING ON THE ECONOMIC.
BENEFITS OF ALL THESE
INFRASTRUCTURE PROJECTS
CERTAINLY SP ONE AND HOUSING
BOND THOSE OF THE TWO I'VE BEEN
INVOLVED IN YEAH AND THEN I
THINK.
WE ARE WE ARE OF KEEP TRACK OR
ECONOMIC.
BENEFITS.
FROM ALL THESE PROJECTS IN A
SYSTEMATIC --
WAY.
AND SO IT IS SO I I WANNA I
WANNA MOVE DOWN ON A MORE FORMAL
BASIS -- FOR
CALIFORNIA I THINK CALIFORNIA
THE PEOPLE NEED TO SEE --
OF THE ECONOMIC.
DEVELOPMENT STORY.
BETTER THAN THEY'VE BEEN IN THE
PAST THEY LOOK AT THESE THINGS
IS LIKE.
COST RATHER THAN AN INVESTMENT.
HANNAH AND I THINK --
THAT'S PART OF IT.
SO -- DO YOU
HAVE DO YOU HAVE ANY COMMENTS
ABOUT --
LAKE VISION WISE AFTER HIGH
SPEED REELS BUILD.
JUST -- SO I
CAN TELL MY PEOPLE IN SAN JOSE.
HOW?
SILICON VALLEY AND FRESNO.
WHAT WOULD HAPPEN IN TERMS OF
THE?
SYNERGY BETWEEN THE TWO AREAS
YEAH YOU KNOW WHAT IT WHAT IT
WE'VE ALWAYS WANTED TO IN AND
THE CENTRAL VALLEY WE JUST
WANTED TO YOU KNOW IT AT A CHAIR
AT THE TABLE THE ECONOMIC TABLE
CALIFORNIA.
AND THE BIG ONE OF THE BIGGEST
CHALLENGES TO CENTRAL VALLEY IS
HAD AND STE SPECIFIC
SPECIFICALLY FRESNO IS JUST HOW
DIFFICULT IT IS TO GET THERE.
IF YOU'RE DEALING.
IN SOME SORT OF THE BUSINESS
ENVIRONMENT WHO --
AIRLINE TRANSPORTATION IS NOT
THE WAY IT USED TO BE AS YOU AS
WE ALL KNOW --
TO HAVE READY ACCESS TO THEIR
POWER CENTERS OF CALIFORNIA
NORTHERN CALIFORNIA SAN SOUTHERN
CALIFORNIA THE THE SILICON
VALLEY FROM CALIFORNIA FROM
FRESHNESS PERSPECTIVE WE'VE GOT.
A GROWING AND VIBRANT TECHNOLOGY
INDUSTRY A. --
IN FRESNO OVER THESE LAST THREE
OR FOUR YEARS --
WERE ONE PROBABLY ONE MAJOR A
BREAKTHROUGH AWAY FROM BUSTING
OUT OF BEING A MASSIVE NUMBER OF
SMALL COMPANIES TRYING TO FIGURE
OUT WHAT'S THE NEXT BEST THING
IN TECHNOLOGY.
AND WHAT WE BELIEVE.
IS THAT AS YOU POINTED OUT
SENATOR.
IT'S NOT JUST WHAT THIS TO WHAT
THAT SILICON VALLEY FOR INSTANCE
OFFERS TO US IT'S GOING TO BE
WHAT WE CAN OFFER YOU THEM AND
WE BECOME VIABLE PLAYERS IN THAT.
WHEN WE'VE GOT READY ACCESS TO
GET TO OTHER MARKET PLACES WHICH
WE'VE REALLY NOT HAD EVER?
WITHTHE EXCEPTION ISSUE IN THE
YEARS I'VE LIVED THERE WITH THE
EXCEPTION OF AGRICULTURE.
AND AGRICULTURE IS OUR MAIN
STAGE YOU RIGHT NOW BUT
AGRICULTURE CANNOT SHOULDER THE
BURDEN ALONE.
AND WE ARE FINALLY BUILDING
OTHER AREAS THAT ARE GOING TO
TAKE ON A LARGE PART OF THE
ECONOMIC GROWTH OF OUR AREA
[inaudible]
THIS ROUND.
THANK YOU AND APOLOGIES FOR
GETTING HERE LATE TODAY THEY
HAVEN'T FULLY DEVELOPED THE HIGH
SPEED RAIL AND GETTING ON THE
HIGHWAY NINETY NINE WAS A LITTLE
MORE DANGEROUS THAN I HAD
EXPECTED.
I WANTED TO THANK MY COLLEAGUES
IN A BIPARTISAN BICAMERAL
FASHION FOR ASKING FOR THIS
AUDIT IN REQUESTING THIS
INFORMATION.
IN MEDICINE WE OFTENTIMES ASKED
FOR TEST WHEN WE WERE AT AN
INFLECTION POINT AND I BELIEVE
THIS MAY BE AN INFLECTION POINT
FOR HIGH SPEED RAIL.
WHERE WE HAVE AN OPPORTUNITY
WITH THE NEW GOVERNOR TO MAKE
SURE THAT WE ARE BEING FISCALLY
RESPONSIBLE WITH OUR PUBLIC
RESOURCES?
THE RECOMMENDATIONS FROM THE
AUDIT ARE EXEMPLARY AND TO JUST
WANTED TO THANK THE AUDITOR
AGAIN SHE IS CONSTANTLY BEEN
TIMELY AND PROFESSIONAL AND DOES
HER JOB WELL AND GIVES MANY OF
US CONFIDENCE --
IN THE SHE PUTS FORWARD.
I'M REALLY WANTED TO TALK TO YOU
IF I COULD ABOUT THE SPECIFIC
SUGGESTION THAT SENATOR PELL
MADE REGARDING THE INSPECTOR
GENERAL AND WHETHER OR NOT THAT
WOULD BE.
AMENABLE TO THE HIGH SPEED RAIL
AUTHORITY BOARD.
AND WHETHER QUARTERLY REPORTS
SEEMED AS IF IN AN APPROPRIATE
AMOUNT OF TIME --
WITHOUT BEING OVERLY BURKE --
THANK YOU A ASSEMBLYMAN ARAMBULA
I I CAN'T --
I'M NOT SPEAKING FROM MY
COLLEAGUES THAT I WOULD SAY THAT --
I NORMAL PRETTY WELL I FOR
MYSELF I WOULD ABSOLUTELY
EMBRACE THE IDEA --
I WANTED TO TALK AS WELL IF I
COULD ABOUT THE SENATE BILL --
ELEVEN SEVENTY TWO WHICH I FOR
MANAGED TO WANT TO THANK THE
AUTHOR HERE FOR CARRYING IT AND
WANTED TO SEE WHAT THOSE
IMPROVEMENTS --
IN RIGHT OF WAY ACQUISITIONS HOW
THAT WOULD BE ABLE TO HELP WITH
THIS PROCESS.
IT DOESN'T APPEAR THAT THAT WAS
ADDRESSED AT ALL IN THE AUDIT AS
IT WAS PASSED AFTER THE ON IT
WAS REQUESTED.
BUT I'M HOPING THAT YOU CAN
SPEAK -- TO
THE MERITS OF THIS BILL AND HOW
YOU SEE IT AFFECTING.
GOING.
FOR I DON'T KNOW IF JOE WANTS TO
ADD ANYTHING TO IT BEYOND THIS
BIT -- FOR
THIS FOR A NUMBER OF YEARS AND
WE THANK YOU VERY MUCH FOR
GETTING IT DONE --
IT IT.
IT TIME COMPLICATES --
A PART OF RIGHT OF WAY
ACQUISITION AND SPEECH THE
PROCESS.
AND IT GIVES US THE SAME A
RIGHTS ARE THIS DON'T SAY RIGHTS
BUT THE SAME AUTHORITY THAT
CALTRANS OPERATES UNDER AND WE
WERE FOR YEARS ASK WHY HAVEN'T
YOU GOT THE SAME.
ABILITY THAT CALTRAIN ARE
CALTRANS HAS TO GENERATE A RIGHT
OF WAY -- IT
WAS JUST IT WAS JUST NOT EASY SO
WHAT YOU DID IS GREATLY
APPRECIATED IT WILL HELP IN THE
EFFICIENCY.
AND THE SUCCESS OF OUR OF OUR
ASSEMBLY OF RIGHT OF WAY.
FROM ISLAND WITH IF I CAN --
WANTING TO ECHO YOUR SENTIMENTS
OF LOOKING AT THIS A YEAR FROM
NOW AND MANY OF US ON THIS DíAS
ARE GONNA WANT TO SEE AND TO
ENSURE THAT THE RECOMMENDATIONS
OF THE AUDITOR ARE COMPLETED AND
JUST WOULD LOOK FORWARD.
TO THAT DISCUSSION ON THAT DAY.
BUT WOULD BE REMISS IF I DIDN'T
ALSO HIGHLIGHT THE ECONOMIC
IMPACTS THAT ARE HAPPENING IN MY
BACKYARD.
AND THE BENEFITS THAT ARE
OCCURRING EACH AND EVERY DAY
BECAUSE OF HIGH SPEED RAIL --
IS TACTILE.
EACH CHANGING THE WAY WE FEEL IN
THE VALLEY WHEN YOU CAN THINK
ABOUT BEING FIFTY TWO MINUTES
AWAY FROM THE SILICON VALLEY.
AND YOU'RE RIGHT IT'S NOT JUST
WHETHER THOSE START UPS ARE
GONNA COME TO US BUT WHETHER OR
NOT THEY LIVE IN THE CENTRAL
VALLEY WHETHER OR NOT WE DEAL
WITH SOME OF OUR COMPLEX.
PROBLEMS LIKE HOUSING
AFFORDABILITY BY ACTUALLY
INVESTING IN INFRASTRUCTURE
WHICH IS WHAT MOST.
INDUSTRIALIZED COUNTRIES AND
STATES ARE AND SO I LOOK FORWARD --
TO CONTINUING THE SUCCESS THAT
HAS STARTED --
AND INSURING THAT --
WE ARE BEING RESPONSIBLE --
WITH OUR PUBLIC RESOURCES.
THANK YOU THANK YOU.
I THINK IT'S MY TURN.
THIS RICHARD SAID THANKS.
FOR COMING BEFORE THIS COMMITTEE
TODAY AND I I WANT TO START OFF
BY SAYING THAT I AGREE WITH THE
CENTRE BELL.
AND ASSEMBLYMEMBER AROUND A LOT
IN TERMS OF THE TREMENDOUS
BENEFIT FOR THIS.
PROPOSAL FOR A VALLEY TO VALLEY --
CONNECTION THAT --
HAS BEEN DISCUSSED --
MAG WE SPENT A LOT OF TIME.
TALKING ABOUT TO THAT NOT ONLY
ARE TRANSPORTATION NEEDS BUT ARE
AFFORDABLE HOUSING NEEDS AND TO
BE ABLE TO EXPAND THE SILICON
VALLEY WORK FORCE TO THE CENTRAL
VALLEY -- AS
A POTENTIAL COMMUTING --
WORKFORCE I I THINK YOU KNOW THE
THE POTENTIAL.
FOR A STATE WIDE YOU COPYING
IMPACT IS IS A VERY CLEAR. TO TO
ALL OF US --
HAVING SAID THAT I YOU KNOW I AM
VERY CONCERNED --
WITH THE FINDINGS OF THE STATE
AUDITOR AND YOU KNOW HIGH --
NOT SURE THAT --
NOTHING PERSONAL BUT YOUR
TESTIMONY HERE TODAY IS A GONE
FAR.
IN TERMS OF REGAINING MY TRUST
AND CONFIDENCE IN THE HIGH SPEED
RAIL AUTHORITY TO EXECUTE THIS
PROJECT --
THAT THAT'S COMING FOR ME AS A
AS A FIRM BELIEVER IN THE
IMPORTANCE OF INVESTING IN ENTRY
AND INFRASTRUCTURE --
AND AND IMPORTANCE OF OF OF
CREATING JOBS --
ESPECIALLY AND THE ECONOMICALLY
DISC --
DEPRESSED AREAS OF WHAT IF OUR
STATE --
BIKE BIGGEST CONCERN AS I I
THINK -- HAS
BEEN THE CENTRAL THEME OF THIS
WHOLE HEARING HAS BEEN.
WHETHER.
TAXPAYER DOLLARS ARE BEING WELL
SPENT.
AND WHETHER WE ARE DOING
EVERYTHING POSSIBLE TO ENSURE
THAT HAS PRETTY BE DOLLARS ARE
BEING WELL SPENT --
AND I I HEARD YOU SAY THAT --
YOU KNOW I THE BASICALLY THAT
YOU'RE.
ACCEPTING AS REPRESENTATIVE WITH
HIGH SPEED RAIL AUTHORITY THAT
THE LACK OF DOCUMENTATION IN
PARTICULAR HAS BEEN.
IN YOUR WORDS --
THE EMBARRASSED INEXCUSABLE TOO
SLOW WITH OVERSIGHT.
AND THAT IT'S ON ME YOU WERE AND
IN TERMS OF NOT ASKING WHERE ARE
WE WITH OVERSIGHT.
AND AND THAT COMES ONLY AFTER I
CORD TO THE AUDITOR'S REPORT
AFTER TWO POINT SIX BILLION
DOLLARS IN SPENDING.
CORRECT ME IF I'M WRONG ON THAT
BUT THAT'S A AND SO.
MY CONCERN IS IS GOING FORWARD
IN THE UNITED I CERTAINLY WOULD
LIKE TO HERE MORE ABOUT TO THE
PROPOSAL THEM INSPECTOR GENERAL
[inaudible]
BUT YOU KNOW WE A LOT OF THE
CONVERSATION IN TODAY'S HEARING
IS BEEN FOCUSED ON ON HIRING
STATE EMPLOYEES RATHER THAN.
BE --
OUTSIDE CONSULTANTS BUT I I
THINK WE'VE ALSO.
THERE'S BEEN ENOUGH TESTIMONY
TODAY OF THE CHALLENGES OF
ATTRACTING --
THE TALENT NECESSARY ORDER.
TO PROPERLY MANAGE THE THE SCOPE
OF OF OF OF THIS TYPE OF PROJECT
WHAT I'M CONCERNED ABOUT.
IS THAT WE'RE JUST GONNA GO
THROUGH THE MOTIONS YOU'RE GONNA
PUT BUT THE B. C. P. OUT FOR
STATE EMPLOYEES.
WE'RE GONNA ADVERTISE THE
POSITION IN THOSE POSITIONS ARE
COULD BE LEFT UNFILLED AND
YOU'RE GONNA HAVE.
THE THE THE THE OPPORTUNITY OR
THE EXCUSE TO SAY WELL WE CAN'T
FILL THESE POSITIONS WHO HAVE TO
CONSULT WITH TO CONTINUE WITH
THE CONSULTANTS.
IN THE MEANTIME THE THE TWENTY
TWENTY TWO DEADLINE IS LOOMING --
YOU KNOW BUT I APPRECIATE YOUR
TESTIMONY ABOUT.
HOW PART OF PLAN B. MAYBE DO IT
REQUESTED EXTENSION?
BUT THAT'S CERTAINLY NOT
GUARANTEED AND FROM OUR AND WE
HAVE TO DO EVERYTHING POSSIBLE --
TO TO TRY TO AVOID THAT SCENARIO.
I AND ONE ASK GOOD --
MISTER HEDGES.
I MEAN I MY MY MY FOLKS LIVE IN --
IN IN SEATTLE AND SO I KNOW THAT
THAT [inaudible]
TO THAT --
PROJECT THEY WORKED ON UP THERE
WAS A WITH WAS A BIG DEAL --
IMMEDIATE IT'S IT'S ART AREN'T
THERE ARE.
MODELS OR OR OR OPPORTUNITIES --
FOR PUBLIC PROJECTS TO BE ABLE
TO PROPERLY --
SCOPE --
CONSULTANTS WITH MEASURES OF
ACCOUNTABILITY AND WITH THE
ACTUAL COMMITMENT AND AND AN
ACTUAL IMPLEMENTATION OF OF
ACCOUNTABILITY. TO TO ENSURE ONE
THAT WE HAVE COMPETENT
EXPERIENCED PEOPLE TO MANAGE THE
SCOPE OF THESE PROJECTS BUT AT
THE SAME TIME.
YOU KNOW.
ENSURING THAT WE COULD WE CAN
HOLD THEM ACCOUNTABLE AND AND
AND YOU KNOW I I I JUST DON'T
NECESSARILY SEE.
HIRING STATE EMPLOYEES TO DO THE
JOB AS BEING.
THE THE BE ALL AND END ALL HERE
ABSOLUTELY AGREE WITH YOU.
THAT MODEL IS VERY VIABLE.
IT'S BEING.
BASICALLY APPLIED AS WE SPEAK WE
SHIFTED TO THE NEW ORGANIZATIONS
THAT'S EXACTLY WHAT WE JUST DID.
WE MOVED THE STATE WE DEFINE IT
IN A RACY ROLES AND
RESPONSIBILITY AND
ACCOUNTABILITY IS THE ROLES OF
THE STATE EMPLOYEES SPECIFICALLY
FOR THIS AUTHORIZATION OVERSIGHT.
BUT TO BE AUGMENTED WITH THOSE
OF CONSULTANTS AND THAT'S
BASICALLY WHAT DID YOU PM P.
DOES.
NOW THE THE OBJECTIVE HERE IS IS
EXACTLY THAT IS TO APPLY THE
LESSONS LEARNED OF SEATTLE.
WHICH WE HAVE APPLIED YOU RIGHT
NOW YOU'RE SEEING WITH THIS.
I DON'T WANNA PLAN B. IS IT'S
ALWAYS BEEN MY PLAN.
AND THAT IS VERY SIMPLE HERE
RIGHT LIST WHICH GIVE.
WHICH IS ORGANIZATION WAS GET
REORGANIZED WE'VE DONE THAT
LET'S GET A WINE TO THE
CONTRACTORS WE'VE DONE THAT.
OKAY AND LET'S GET TO OUR
PROCESSES IN OUR PROCEDURE.
VERY MUCH APPRECIATE --
SP YOU ONE ONE SEVEN TWO SOFT
LITERALLY FOR MONTHS OFF OFF THE
ACQUISITION OF REAL STATE
PROPERTY.
THE BIG THING WHAT YOU'RE SEEING
RIGHT NOW FOR THE FIRST TIME IS
ALIGNMENT WE HAVE IN THIS WHAT I
CALL THE GET TO WORK SCHEDULES.
IS VERY METHODICAL OF BALLING
CORD THAT GOES BAG BACK AND
FORTH WITH A GARCIA. TO THE
SEQUENTIAL DEFINABLE FEATURES A
WORK THAT OF CONSTRUCTION
SCHEDULE IT'S WORKING.
WE'VE MADE TREMENDOUS GAINS IN
THE LAST SIX MONTHS IN RIGHT
AWAY.
YOU'RE SEEING NOW THAT THE LEFT
WITH REGARDS TO TO A ARE EIGHT
EXCLUDABLE ROW AS DOUBLED IN THE
LAST SIX MONTHS.
WE GIVE WHAT YOU'RE EXPERIENCING
RIGHT NOW IS THE TRADITIONAL S.
CURVE OF CONSTRUCTION.
RIGHT YOU WILL SEE IT COMING UP
WE WE HAVE THOSE CONTROLS.
IN PLACE RIGHT NOW THE BILL THE
TO SHARE IF PROMISED YOU WITH
THAT WITH REGARDS.
TO THE INTERACTIONS WITH YOUR
STAFF ALREADY ONE START SHARING
THIS INFORMATION AND PROVEN TO
YOU I SAID IS MAYBE ON ABOUT THE
SIX STATES.
IN NG EAST OF MISSOURI
PERSON SHOWING YOU.
AND THAT'S WHAT WE WANT TO START
DOING ALL THE LEADING INDICATORS
ARE THERE ARE STARTING TO TAKE
HOLD.
AND AND WORK ITS WAY OUT CAR.
ALRIGHT SO WHAT I HEAR IS THAT
[inaudible]
WE DON'T NECESSARILY WANT --
TO ABANDONED THE THE POTENTIAL
TO CONTINUE TO USE --
CONSULTANTS OUTSIDE CONSULTANTS
BUT IN A WAY THAT WE CAN
PROPERLY ENSURE THAT THEY'RE
BEING HELD ACCOUNTABLE.
ABSOLUTELY SURE THERE'S A ROLE
FOR STATE PAROLE FOR CONSULTANTS
AND SPECIAL THE REALIZATION IS --
THAT EVENTUALLY HOPEFULLY.
THAT THAT THE CONSTRUCTION WILL
AND AND WILL THEN TRANSITION
INTO OPERATIONS AND MAINTENANCE.
IN IN TERMS OF FOCUSING ON THIS
VALLEY TO VALLEY --
A MAJOR RIVER OVER THE CALL THAT
THAT CENTER BILL ONLINE
ASSEMBLYMEMBER ARRIVAL ARE
TALKING ABOUT.
HAS -- THE
HIGH SPEED RAIL --
BOARD HAD ANY CONVERSATIONS
ABOUT [inaudible]
FOCUSING ON THAT --
PROJECT OF TO COMPLETE THAT
FIRST BEFORE --
CONTINUING WITH THE REST OF THE
THE PROPOSED --
PROJECT --
BEFORE CONTINUING NORTH FLETCHER
I'M SURE IT'D BE IT THE THE REST
OF THE ORIGINAL PROPOSITION ONE
A A PROPOSAL TO CONNECT TO SAM
CISCO.
TO UTILIZE ANGELES --
THAT IS SET.
I'M SURE.
IN THE SAME CLASS SERVICE LET
THE BIRD.
IN THE EVENT THAT QUESTION I I
COULD LIKE RESTATING WHAT I MEAN --
BASICALLY IT HASN'T BEEN ANY
CONVERSATIONS ABOUT TRYING TO
FOCUS ON COMPLETING THE VALID
VALLEY PROJECT FIRST YEAH.
YES AND THEN REVISITING THE
VIABILITY OF OF CONTINUE WITH
THE REST OF THE PROPOSED PROJECT.
I THINK THAT --
IT THAT.
EXACTLY I MEAN WHAT WE ARE DOING
IS IS FOCUSING ON COMPLETING
VALLEY TO VALLEY --
IT IS ALWAYS BEEN THE WORD.
IT'S IT'S ONE OF THE IT'S ONE OF
THE STRATEGIES WITH REGARDS TO
HOW DO WE FIND.
A FUTURE --
SEGMENTS OF THE OF THE HIGH
SPEED RAIL.
OF SPEED SYSTEM --
BY BEING ABLE TO SELL --
BY FRANCHISE WHAT WE'VE ALREADY
WHAT WE'RE ALREADY OPERATING ON
SO OUR WHOLE FOCUS IS.
WE IS HEADING FROM THE CENTRAL
VALLEY TO THE BAY AREA.
BECAUSE IT WAS THE LEAST
EXPENSIVE ALTERNATIVE OF EITHER
GOING NORTH OR SOUTH
[inaudible]
ALRIGHT.
AND I I THINK BY --
LAST.
LINE OF QUESTIONING IS IS AT TWO
AS TO MY EARLIER CONVERSATION
WITH THE STATE AUDITOR ABOUT --
THE STATE.
TO HIGH SPEED RAIL AUTHORITY
HOLDING CONTRACTORS AND
CONSULTANTS ACCOUNTABLE --
FOR ANY OF THE PAST COST
OVERRUNS OR THE PROJECT DELAYS --
WE WOULD YOU AGREE WITH THE
AUDITOR'S ASSESSMENT THAT.
TO THAT --
AS FAR AS THEY WERE ABLE TO FIND
THAT THERE WAS ONLY ONE INSTANCE
OF OF A CONTRACTOR BEING HELD
ACCOUNTABLE IN TERMS OF A
CORRECTIVE ACTION IS SHE BEING
ISSUE WHEN WE ACTUALLY.
IN IS THAT WOULD BE THE POLICY
OF THIS BOARD THAT WE THAT THERE
THEY WOULD ABSOLUTELY BE HELD
THAT'S MY QUESTION MY QUESTION
IS AT EIGHT WOULD YOU AGREE THAT
THERE IS ONLY ONE INSTANCE OF OF
CORRECTION CORRECTIVE ACTION
BEING TAKEN.
NO SIR NO I YEAH I DON'T I DON'T
WE HAVE THE ANSWER TO THAT WE
SENT OVER --
AND GET IS --
IT'S A LITTLE BIT THINK OF
COMMUNICATION HERE THE GARCIA
CORRECTIVE ACTION DEFINITION OF
DELIVERABLES.
BUT THERE'S BEEN OVER.
A DOZEN LETTERS SENT TO THE R.
E. P. WITH REGARDS TO
PERFORMANCE.
AND I KNOW THERE'S MORE THERE'S
A LEAST ONE BECAUSE I PERSONALLY
SIGNED WENT OUT TO THE PRESIDENT
OF W. S. P. ON THIS EXACT ISSUE.
SO AGAIN IS IT IT IT'S IT'S
APPLE LEVEL OF THE CEO AND THE
SEAL.
ALRIGHT SO --
ALL RIGHT WELL.
I'M LIKE TO PASS OUT ITS A WIN
OF THE BENEFITS OF OF THIS AUDIT
COMMISSIONED BY THE LEGISLATURE
IS THAT WE HAVE --
FIRST YEAR AGREEMENT --
IT'S MY UNDERSTANDING THAT THE
HIGH SPEED RAIL AUTHORITY IS
ACCEPTING ALL OF THE
RECOMMENDATIONS OF THE THE
AUDITOR --
AND THAT THERE ARE SPECIFIC --
TIME LINES AND BENCHMARKS FOR
THE HIGH SPEED RAIL AUTHORITY TO
REPORT BACK --
AND SO.
WE WILL BE LOOKING FORWARD --
TO THE HIGH SPEED RAIL
AUTHORITIES DEMONSTRATED
PROGRESS AND IT STATED
COMMITMENT --
TO ADOPT ALL OF THE AUDITOR'S.
RECOMMENDATIONS.
THANK YOU VERY MUCH THANK YOU
SIR.
YOU EVER THINK YOU'D THINK YOU'D.
LIKE TO OPEN UP --
FOR FOR PUBLIC COMMENTS --
BEFORE WE START WANT.
TO ASK YOU THAT EACH SPEAKER
KEEP THE COMMENTS TO NO MORE
THAN TWO MINUTES.
HEY GOOD AFTERNOON MY NAME IS
ROLAND ROAD BROWN I'M FROM SAN
JOSE AND THE REASON I'M A
ADDRESSING YOU IS THAT I BELIEVE.
WE CAN CONNECTS TO LINCOLN
VALLEY TO FRESNO WITHIN THE
EXISTING FUNDING APOLO WHICH ON
THE THAN THE ADDITIONAL FUNDING.
BUT WE REALLY GOT TO START
RETHINKING MY WHAT WHAT YOU
DOING SO I HAVE PREPARED A FEW
THINGS HERE.
NOW THE ONE THING IS THAT YOU
GOT TO UNDERSTAND I'M GONNA TRY
TO EXPLAIN THIS TO YOU IN TWO
MINUTES WITHOUT ON THEIR
CREDENTIALS.
MY RECOMMENDATION TO YOU AND
OPPOSE OF AN INDEPENDENT
ENGINEERING ALL DATA.
NOT JUST ANOTHER PEER REVIEW
PANEL.
SO -- VERY
BRIEFLY IN THE NORTH --
I'M GOING TO GO OVER IT IS VERY
QUICKLY I'M VERY FRUSTRATED DAY
BECAUSE THE AUTHORITY OF JUST
APPROVED AND ALIGNMENTS.
THAT.
MANDATES TWENTY EIGHT MILES OF
TUNNELS BETWEEN BURBANK IN
PALMDALE.
COMPLETELY IGNORING THE FACT
THAT BACK IN TWO THOUSAND AND
TWO WE KNEW HOW TO CONNECT
BURBANK TO BAKERSFIELD WITH
EIGHTEEN MILES OF TUNNELS.
NOT ONLY THAT WE HAD THE NOT
GREAT A LYMAN THAT CROSSES THE
FOLD AND PROVIDED THE
CONNECTIVITY TO OUR LANCASTER
AND PALMDALE --
NOW MOVING TO THE NOLES.
I BELIEVE I HAVE SOMETHING TO DO
WITH FAMILY TO GET WELL AND AND
I AM THANKFUL TO DEAL THIRTY FOR
LISTENING TO WHAT I HAVE TO SAY.
BUT I DO BELIEVE THAT WE NOW
HAVE TO DO IS TO CONTINUE WHAT
WE STOPPED IT.%
AND GO TO HOLLISTER THE THE
LINES ALREADY EIGHT UNION
PACIFIC SOLD A LINE THREE YEARS
AGO WHY AREN'T WE USING IT.
AND THEN AFTER THAT.
FORGET BUDGET DEAL BASS FORGET
THE TWELVE MILES OF TUNNELS USE
PAN NO J. PASS.
THESE LITTLE ALL NEW COMING
REQUIRED.
TO AND WHAT GETS EVEN MORE
INTERESTING IS THAT BY THE TIME
YOU GET --
TO I FIVE YOUNG NOW 440- MILES
SOUTH OF IF YOU CARRY ON DOWN I
FIVE YOU SEE IF TWELVE MINUTES.
BETWEEN SAN FRANCISCO AND LOS
ANGELES WHICH YOU CAN CARRY ON
THREE TO FRESNO.
AND NOW GUESS WHAT MORE BLENDING.
THE NOT YOUR THREE G. DID NOT
KNOW.
THAT IT WAS A LINE TO MEN DON'T.
THANK YOU SIR.
JUST SAID I JUST SENT OVER FROM
AMERICA NOTE SHE PASSIVELY.
I WORKED UP ON A CATTLE RANCH
WHEN I WAS A TEENAGER OF US.
I HATED THAT WORK ACROSS.
IS REAL HOT AND DRY IT.
BUT I I'M VERY FAMILIAR WITH THE
THAT AREA.
MISTER CHAIRMAN MEMBERS OF THE
COMMITTEE OKAY HENRY PRAYER
FORMER FRESNO COUNTY SUPERVISOR
AND VERY INVOLVED IN THIS
PROJECT FOR SEVEN YEARS WHILE I
WAS A SUPERVISOR.
FIRST I WANT TO COMMEND YOU FOR
FOR INITIATING THIS REPORT I
THINK IT'S IT'S WHITES IS TIMELY
AND IS JUST SETS THE PATH FOR
CONTINUED SUCCESS I BELIEVE ON
ON THIS PROJECT.
THE THEY DO IDENTIFY STRUCTURAL
ISSUES THAT ARE JUST TOUCH ON
REAL BRIEFLY AT THE END BUT I
JUST WANT TO DISAGREE SLIGHTLY
AND THAT WASN'T A GOOD IDEA BAD
IDEA TO START A CENTRAL VALLEY I
THINK WAS ABSOLUTELY.
A GREAT IDEA FOR ALL THE REASONS
THAT ALREADY BEEN STATUS I WON'T
RESTATE THEM.
BUT BUT CERTAINLY --
BEING INVOLVED IN COMING TO MAY
TEENS WHERE THE DECISION MAKING
WAS MADE TO MAKE THOSE FIRST
STEPS IT WAS A DELIBERATE
PROCESS AND THERE WAS SOLID
BACKGROUND TO MAKE THOSE
DECISIONS SO.
I WILL SUPPORT VERY GOOD
DECISION TO START A CENTRAL
VALLEY.
BUT ONE ASSEMBLY MEMBER --
OR IS.
WHO IS NOT HERE BUT YOU KNOW
KEPT TALKING ABOUT SPEED TIME
AND COMPETITIVENESS AND
CERTAINLY WE WANT TO SEE THAT IN
ANYTHING THAT THAT WE DO --
BUT AS HE WAS SPEAKING AND OTHER
FOLKS MAKING COMMENT I GOT ON MY
EXPEDIA COUNTY AND I LOOKED AT A
FLIGHT FROM FRESNO FROM ON
DECEMBER FIRST COMING BACK ON
DECEMBER THIRD. FOR FIVE HUNDRED
EIGHTY FOUR DOLLARS.
YOU COULD GET THERE IN SEVEN
HOURS AND SIX BENEFIT TO STOP
FRESNO TO SAN FRANCISCO TO LAS
VEGAS. TO LOS ANGELES NOW YEAH
THE TWO HOURS WAITING TIME GOING
TO THE AIRPORT THAT'S OVER NINE
HOURS TO GET DAILY FROM FRESNO.
BUT IF YOU WANT TO PAY EIGHT
HUNDRED AND TWENTY THREE DOLLARS.
ARE YOU CAN TAKE A DIRECT FLIGHT
FOR AN HOUR AND FIFTEEN MINUTES
AT THE TWO HOURS OF WAIT TIME
NOW YOU HAVE THREE HOURS --
TO GET FROM FRESNO LA FOR FOR
THAT MUCH MONEY SO I THINK IT
UNDERSCORES THE FACT THAT.
THIS PROJECT HAS MANY MANY
BENEFITS TO IT AND AND A LOT OF
IT IS THE ECONOMIC BENEFIT THAT
GIVES US TO CONNECT IN THIS
OTHER PARTS OF THE STATE WHICH
IS WHY.
THE DECISION WAS MADE TO START
IN THE CENTRAL VALLEY TO GIVE
THAT CONNECTIVITY.
AND OF THE SOLOMON ARAMBULA SAID
WHEN YOU GET IN THE AT FIFTY
FIVE TO FIFTY EIGHT MINUTES IS A
GAME CHANGER FOR US ECONOMIC SO.
BUT DOESN'T MEAN WE WE HAVE TO
BE SMART ABOUT HOW WE SPEND OUR
MONEY -- HOW
WE COULD PUT THE MONIES TOGETHER?
TO COMPLETE THE PROJECT BUT THIS
IS DEFINITELY A NO BRAINER NOT
JUST FOR THE STATE OF CALIFORNIA
BEFORE UNITED STATES OF AMERICA.
LETTER THE LETTING I JUST SAY
I'M SORRY VERY BRIEFLY IT IS
THAT.
IS THAT --
THE THE THE ISSUE OF STRUCTURAL.
VERY BIG ISSUE AND HAVING BEEN
IN GOVERNMENT FOR MANY YEARS.
WHEN YOU HAD WHEN YOU HAVE A 20%
21% VACANCY RATE AT THE
AUTHORITY NOW A SHOCK ACTUALLY
BE HERE THAT NUMBER TODAY I
DON'T KNOW HOW YOU GET THAT JOB
DONE WHEN YOU HAVE THAT HIGH
VACANCY RATE BUT WHEN YOU LOOK
AT HOW LONG IT TAKES TO FILL A?
POSITION IN ANY GOVERNMENT
STRUCTURE SIX TO NINE MONTHS IF
YOU'RE LUCKY YOU CAN OPERATE
THAT WAY --
SO IF I WERE TO ASK YOU TO TO
USE THE AUTHORITY YOU HAVE AS
THE LEGISLATURE TO MAKE SYSTEMIC
CHANGES WITHIN THE STATE
BUREAUCRACY WEATHER'S DEPARTMENT
GENERAL SERVICES OR OR HUMAN
RESOURCES.
CHANGE THE PROCESSES MAKE THEM
AND GIVE THEM THE ABILITY THESE
FOLKS THE ABILITY TO HIRE PEOPLE
QUICKLY SO THAT THEY CAN GET THE
JOB DONE.
BUT THANK YOU AGAIN FOR FOR THIS
HEARING AND THANK SILVA.
THANK.
GOOD AFTERNOON SENATOR MEMBERS
OF THE COMMITTEE MY NAME IS
MICHAEL MURPHY I'M CEO OF SORE
ENVIRONMENTAL CONSULTING.
AND IT'S ACTUALLY IN FRESNO
CALIFORNIA.
IN TWENTY FOURTEEN I SORT OF THE
COMPANY IN TWENTY FIFTEEN ALMOST
LEFT -- THE
CENTRAL VALLEY FOR THE PURPOSES
THAT YOU DESCRIBED EARLIER WHICH
WAS THERE WASN'T MUCH
OPPORTUNITY THERE.
LIKELY I RECEIVED A CALL FROM
THE HIGH SPEED RAIL.
AND BECAME THE ENVIRONMENTAL --
OVERSIGHT MANAGER FOR
CONSTRUCTION PACKAGE.
ONE WITH THAT I WORK WITH A
SMALL BUSINESS DIED LEADS FOR
THE HIGH SPEED RAIL.
BUILT MY COMPANY MET SOME PEOPLE
I KNOW HAVE I THINK FOURTEEN OF
MASTER SERVICE AGREEMENTS WITH
THE END OF THE CENTRAL VALLEY.
FIVE OF WHICH ARE WITH THE TOP
TEN ENVIRONMENT FIRMS IN THE
COUNTRY.
AND ALSO HAVE BEEN ABLE TO
ACQUIRE --
FOURTEEN EMPLOYEES AS OF TWENTY
NINETEEN SO BE BRINGING ON TO
MORE THAN.
TWENTY NINETEEN SO THE SMALL
BUSINESS PORTION OF THE HIGH
SPEED RAIL IS WORKING.
IT'S ALLOWING ME TO STAY IN THE
AREA THAT I WANT TO HIRE THOSE
PEOPLE THAT --
THAT I BELIEVE.
IS MY COMMUNITY OBLIGATION
WITHIN THE COMMUNITY KEEP THOSE
PEOPLE IN IN TOWN WHERE THEIR
FRIENDS ARE WHERE THEIR FAMILIES
ARE.
AND MAKE A CAREER THERE SO I
JUST WANT TO COME UP AND THANK
YOU FOR SUPPORTING THOSE SMALL
BUSINESS MEASURES.
AND KNOW THAT.
WERE TIED TOGETHER WITH THE
AUTHORITY YOU KNOW AS A SMALL
BUSINESS AS A CONSULTING FIRM
WHAT WE DO.
IS IS BY REPUTATION AND OUR
REPUTATION IS TIED TO THE
AUTHORITY SO WE WORK AS HARD AS
WE POSSIBLY CAN TO ENSURE THE
SUCCESS.
OF THE AUTHORITY AND THE PROJECT
THAT WE REPRESENT.
THANK YOU VERY MUCH THANK YOU.
I SEE NO FURTHER PUBLIC COMMENTS --
WE LIKE TO GIVE AN OPPORTUNITY --
TO COMMITTEE MEMBERS ARE STILL
HERE FOR ANY CLOSING COMMENTS
MISTER CHAIRMAN.
THANK YOU MISTER CHAIR AND I
APPRECIATE THE TIME EVERYONE
TOOK TO COME HERE AND TESTIFY
TODAY.
I LOOK FORWARD TO THE QUARTERLY
REPORTS --
THE LARGEST THE AUTHORITY WILL
BE SUBMITTING TO LEGISLATURE
STARTING IN JANUARY --
I BELIEVE ME I'LL BE
SCRUTINIZING THEM.
ALSO LOOK FORWARD TO HEARING
DIRECTLY FROM THE AUTHORITY
BOARD ON THE PROGRESS MADE
TOWARD ADDRESSING THE ISSUES IN
THE AUDIT IN THE NOT ACCEPTING.
THAT THERE ARE INITIAL.
PROBLEMS GOING FORWARD.
LASTLY I WANT TO STRESS THAT THE
PEOPLE OF CALIFORNIA ARE LOOKING
TO US [inaudible] FOR ANSWERS.
I WANT TO BE ABLE TO TELL MY
CONSTITUENTS AND ALL
CALIFORNIANS.
THAT THEY'RE DOING ARE THAT WE
ARE DOING OUR DUE DILIGENCE AND
BEING RESPONSIBLE STEWARDS OF
THEIR MONEY.
IN I WILL ENSURE YOU THAT THE
TWENTY NINETEEN YEAR IS GOING TO
BE A VIGOROUS YEAR OF OVERSIGHT
PLUS.
CORRECTIVE LEGISLATION.
OF LOOKING FORWARD --
TO THAT PROCESS GOING FORWARD.
I ALSO WANT TO MENTION IS IS
BACK IN THE YOUR TO AGO THERE
WAS AN INDIVIDUAL WHO WAS LET GO
FROM THE AUTHORITY.
THAT WAS JEFF ROUSE.
I THINK THAT WAS A MISTAKE.
JEFF WAS A PROJECT A AND
UNDERSTANDING THAT THAT THE THE
BUCK STOPS WITH THE THE
INDIVIDUAL AT THE TOP.
I REALLY FIRMLY BELIEVE IT
SHOULD HAVE BEEN THE CHAIRMAN OF
THE BOARD DAN RICHARD SHOULD
HAVE BEEN LET GO.
AS AS THE PERSON RESPONSIBLE FOR
ALTMAN OVERSIGHT OF ALL OF THIS
FIASCO HAS BEEN GOING ON AND FOR
THAT I CALL FOR HIS RESIGNATION
GOING FORWARD.
I THINK IT'S APPROPRIATE.
AND I THINK THE PEOPLE OF
CALIFORNIA DESERVE UNDERSTAND
THAT AT LEAST THERE WAS ONE
ACTION TAKEN.
IN THE APPROPRIATE FASHION FOR
THIS GOING FORWARD.
AND I THINK THE BOARD NEEDS TO
LOOK FORWARD. TO BETTER BETTER
REPRESENTATION FROM THE CHAIRMAN
BUT ALSO KNOWING THAT.
THEY HIRED A CONSTRUCTION STE I
HAVE A LOT OF FAITH IN WHAT JOE
AND THE TIME THAT HE AND I SPENT
TOGETHER.
I HAVE A FEELING THAT HE HAS AN
ABILITY TO BRING THIS BACK ON
TRACK.
BUT SOMEBODY WAS RESPONSIBLE FOR
THIS AND ULTIMATELY I THINK THAT
INDIVIDUAL NEEDS TO GO.
THAT MISTER CHAIR I THANK YOU.
FOR MAKING SURE THAT WE HAD AN
OPPORTUNITY TO WEIGH OUR VOICE
INTO THIS.
AND THAT --
LOOK FOR TO WORKING WITH YOU AND
SENATOR BILL.
OF MOVING FORWARD TO MAKE SURE
THE PEOPLE'S MONEY SPENT
CORRECTLY AND THEY GET EXACTLY
WHAT THEY PAY FOR THANK YOU.
HI THANKS THE AUDITOR FOR
COMPLETING DAUGHTER THAT WE
REQUESTED --
AND LOOK FORWARD TO THE FOLLOW
UP ON THE AUDIT RECOMMENDATIONS
WE WANT THEM ALL IMPLEMENTED.
AS QUICKLY AS POSSIBLE I THINK
THE THE TROUBLE SOME --
ISSUE FOR ME IS MAINLY A HIRING
THE STAFF.
GETTING THE STAFF TO STATE.
AND RETAIN A GOOD QUALITY TEAM.
OF I I KNOW THIS THIS COULD BE A
VERY ATTRACTIVE JOB. FOR A LOT
OF PEOPLE THAT DESIRE. TO DO A
SIGNATURE JOB AND THEY'RE COOL
YOUR FOR AS A PROJECT MANAGER SO
I THINK.
I THINK THIS --
COULD BE AN EXCITING JOB WE WE
WANT TO MAKE SURE OUR OUR TOP
LEVEL --
PEOPLE ARE PAID OUT QUICKLY SO
THAT.
WE CAN RECRUIT AND NOT.
HAVE --
RETENTION PROBLEMS IN --
HIGH SPEED RAIL AUTHORITY.
WE WANT A TEAM THAT STICKS
TOGETHER AND COMPLETES THE
PROJECT ON TIME AND ON BUDGET --
AND ANYTHING WE KNEW TO REMOVE
IMPEDIMENTS TO THEIR ON TIME AND
ON BUDGET ON ON ON TIME AND ON
BUDGET --
GOAL SHOULD BE TAKEN --
AND RECOMMENDED BY THE HIGH
SPEED RAIL FOR INCLUDING AS MR
FRAZIER SAYS LEGISLATION THAT WE
WOULD.
REVEAL IN OUR RESPECTIVE
COMMITTEES I ALSO THINK --
INCREASED OVERSIGHT WOULD BE IS
ESSENTIAL --
WE WILL WORK --
TOGETHER --
WITH -- AND
TO ENSURE THAT WE HAVE INCREASED
OVERSIGHT.
AND SEE THAT --
THIS PROJECT IS COMPLETED ON
TIME AND ON BUDGET.
WE MUST --
WE MUST LOOK AT CREATIVE WAYS OF
FINANCING AND I THINK THAT THAT
WAS AN AREA OF OF THE AUDIT THAT
COULD HAVE BEEN EXPLORED MORE
FULLY.
AND NO -- WE
WE WILL HAVE TO LOOK AT
INCREASING OUR OUR LOOK AT HOW
WE FINANCE AND COMPLETE THIS
PROJECT.
AS I SAID EARLIER I THINK THE
NASH AT THE NATIONAL LEVEL --
CALIFORNIA IS KIND OF GOING
AHEAD AND TAKEN THE CAKE AND THE
LEAD -- IN
FINANCING INFRASTRUCTURE.
AND WE NEED A NATIONAL LEADERS
PAY THEIR FAIR SHARE.
AND NOT CONTRIBUTE TO
INFRASTRUCTURE IN UNITED STATES.
THEY HAVEN'T DONE SO FAR BUT WE
WE URGE CONGRESS AND THE
PRESIDENT --
TO COME TOGETHER ON A A QUALITY --
BIPARTISAN INFRASTRUCTURE PLAN
SIMILAR TO WHAT'S BEEN DONE IN
THE PAST --
MANY YEARS AGO THEY USED TO BE
ABLE TO GET TOGETHER ON A
BIPARTISAN BASIS.
IT WOULD --
IT WOULD BE A GOOD BIPARTISAN
MOVE ON TO BUY BEHALF OF THE
CITIZENS OF CALIFORNIA IN THE
UNITED STATES TO HAVE A A
NATIONAL INFRASTRUCTURE PROGRAM.
INCLUDING --
RAIL TRANSIT ALL THE NEEDS IN
INFRASTRUCTURE HOUSING AND I
THINK TO BE DONE SO --
TO THANK YOU FOR YOUR PATIENCE
AND HARD WORK.
ON ON CAN A MEMBER OF THE
COMMITTEE I APPRECIATE --
YOUR SUPPORT FOR THIS AUDIT
THANK YOU.
THANK YOU VERY MUCH AND ALASKA --
LIKE I'D JUST LIKE TO THINK
ABOUT CHAIRMAN OF OF THE
COMMITTEES OF TRANSPORTATION IN
BOTH HOUSES --
MISS FRAZIER AND SOME REBEL.
THANK YOU SAID AT THE STATE
AUDITOR -- I
THINK THIS.
AUDIT IS GOING TO BE --
A BENCHMARK THAT THE THIS
LEGISLATURE IS GOING TO BE
REFERRING --
TO FOR FOR YEARS TO COME IN
TERMS OF WHERE WE ARE AT THIS
POINT AND WHERE WE NEED TO BE
ESPECIALLY AS WE APPROACH SOME
OF THOSE IMPORTANT.
TO DEADLINES THAT TO WERE
IDENTIFIED IN THE IN THE AUDIT
REPORT --
LOOK FORWARD.
TO A STRONGER --
YOU KNOW --
COMMITMENT --
TO INCREASED OVERSIGHT ACTIVITY
NOT ONLY THAT'S REQUIRED THROUGH
THE FOLLOW UPS THROUGH FOR FROM
THE THE STATE AUDITOR AND AND
THE HIGH SPEED RAIL AUTHORITY --
BUT ALSO FROM THE QUARTERLY
RECOMMENDED A TO THE LEGISLATURE
AND OF COURSE THE CONTINUE
LEADERSHIP FROM BOTH --
CHAIRMAN OF THE TRANSPORTATION
COMMITTEES OF BOTH HOUSES.
I FOR ONE I BELIEVE THAT --
THE HIGH SPEED RAIL AUTHORITY IS
GOT A LOT OF WORK TO DO. TO
REGAIN THE TRUST AND CONFIDENCE
OF CALIFORNIANS AND THEIR
ABILITY TO TO EXECUTE THIS
PROJECT.
HI BUT I WOULD LIKE TO SEE.
YOU KNOW A A COMMITMENT AND OF
AND OF REDOUBLED FOCUS ON THIS
VALLEY TO VALLEY PROJECT AND
THAT THIS COMPONENT. TO GET THAT
DONE TO DEMONSTRATE TO
CALIFORNIANS THAT WE CAN --
YOU KNOW GET SOMETHING OUT OF
THE BILLIONS OF DOLLARS THAT
RIGHT BEEN INVESTED IN THIS
PROJECT.
AND TO SEE WERE AT AFTER THAT --
SO WITH THAT.
I SEEING NO --
FOR THE COMMENTS --
THIS LIKE THE LA INSURANCE
MEETING