AFTERNOON. WE'LL GO AHEAD AND
CALL THE SENATE TRANSPORTATION
COMMITTEE INFORMATIONAL HEARING
TO ORDER FOR TODAY'S HEARING.
WE'LL BE HEARING ALL OF THE
PANELS OF WITNESSES ON THE
AGENDA, PRIORITY, TAKING ANY
PUBLIC COMMENT, AND ONCE WE'VE
HEARD ALL THE WITNESSES, WE WILL
HAVE A PUBLIC COMMENT PERIOD FOR
THOSE WHO WISH TO COMMENT ON THE
TOPICS ON TODAY'S AGENDA. I'D
ALSO LIKE TO ANNOUNCE THAT OUR
DISTINGUISHED COLLEAGUE, SENATOR
DRA WILL BE JOINING US TODAY ON
THE COMMITTEE FOR PURPOSES OF
THIS AND WE WILL HAVE AN
OPPORTUNITY FOR QUESTIONS AND
ANSWERS AFTER EACH PANEL
SEPARATELY FROM THE COMMITTEE
MEMBERS THOSE HERE ON THE DAIS.
DAY AND TODAY'S HEARING. IS TO
REVIEW THE CALIFORNIA HIGH-SPEED
RAIL AUTHORITY'S 2024 DRAFT
BUSINESS PLAN AND TO DISCUSS
NEXT STEPS FOR THE PROJECT. UM
YOU CAN SEE THE PROJECT. I
UNDERSTAND THAT'S LIVE REAL TIME
. UM ON THE SCREENS HERE. IS
THAT RIGHT? OR IS IT FROM A
DRONE OF VIEW? ALL RIGHT. UM
LAST YEAR, THE COMMITTEE HELD A
HEARING ON THE 2023 PROJECT
UPDATE REPORT, WHICH PROVIDED
EXTENSIVE UPDATES ON COST
SCHEDULE AND RIDERSHIP ESTIMATES
SINCE THE 2020 2022 BUSINESS
PLANS. THE 2024 DRAFT BUSINESS
PLAN KEEPS THE SAME COST
ESTIMATES AND SCHEDULES AND
PROVIDES DETAILS OF ACTIVITIES
HAPPENING ON THE PROJECT SINCE
LAST YEAR. THE BIGGEST NEWS IS
THAT THE AUTHORITY RECEIVED OVER
$3 BILLION IN FEDERAL GRANT
AWARDS, ALTHOUGH THIS IS NOT
FULLY FUND THE EARLY OPERATING
SEGMENT, THE CENTRAL VALLEY IS
EXCITING THAT OUR FEDERAL
PARTNERS ARE AGAIN SHOWING THEIR
COMMITMENT TO THE PROJECT.
MEMBERS PLEASE RECALL THAT IN
2022 AS PART OF A $10 BILLION
TRANSPORTATION BUDGET PACKAGE,
THE LEGISLATURE APPROPRIATED THE
FINAL 4.2 CENTS BILLION PROP 108
BONDS FOR THE HIGH SPEED RAIL
PROJECT. WITH THE APPROPRIATION,
THE LEGISLATURE INCLUDED
PROVISIONS TO REFOCUS THE
PROJECT AND INCREASE OVERSIGHT.
SPECIFICALLY WE REQUIRED THE
AUTHORITY TO PRIORITIZE THE
COMPLETION OF A USABLE SEGMENT
FROM MERCED TO BAKERSFIELD IN
THE CENTRAL VALLEY AND
RESTRICTED SPENDING OUTSIDE OF
THAT. WE ALSO CREATED AN
INDEPENDENT OFFICE OF INSPECTOR
GENERAL TO NOT ONLY CONDUCT
AUDITS AND INVESTIGATIONS OF THE
PROJECT BUT TO ALSO CONDUCT
INDEPENDENT FISCAL ANALYSIS AND
REVIEWS OF FUTURE PLANS. WE ARE
HAPPY TO HAVE OUR INAUGURAL
INSPECTOR GENERAL BEN BELKNAP
HERE TO TESTIFY TODAY ON THE
SECOND PANEL. CALIFORNIA HIGH
SPEED RAIL IS THE LARGEST
INFRASTRUCTURE PROJECT IN THE
COUNTRY. IT CONTINUES TO FACE
SERIOUS CHALLENGES AS ALL MEGA
PROJECTS DO. TO DATE THE PROJECT
HAS CREATED OVER 12,000
CONSTRUCTION JOBS IN THE CENTRAL
VALLEY AND GENERATED OVER $18
BILLION IN ECONOMIC ACTIVITY.
HOWEVER THERE IS NOT ENOUGH
FUNDING TO COMPLETE THE 171
MILES FROM ME TO BAKERSFIELD,
THE CENTRAL VALLEY LINE.
SPECIFICALLY THE AUTHORITY
IDENTIFIES ROUGHLY 7 BILLION TO
GET HIGH SPEED RAIL TRAINS UP
AND RUNNING. THE AUTHORITIES
TARGETING NEARLY $5 BILLION MORE
IN FEDERAL GRANTS. IS THIS GOAL
ACHIEVABLE? IF NOT, WHAT WILL
THE STATE NEED TO DO TO DELIVER
A USABLE SEGMENT? TODAY WE'LL
HEAR FROM THE AUTHORITY AND OUR
RESPECT OVERSIGHT PARTNERS FROM
THE L A. Ó UH, INDEPENDENT PEER
REVIEW GROUP AND THE INSPECTOR
GENERAL'S OFFICE. I WILL NOW ASK
VICE CHAIR SENATOR NEIL FOR ANY
OPENING REMARKS RIGHT ON CUE,
AND, UM WE'LL PAUSE BEFORE
MAKING SOME FURTHER
ANNOUNCEMENTS DURING WHICH I'LL
INTRODUCE THE FIRST PANEL.
SENATOR NIEGO VICE CHAIR, NEGO.
THANK YOU VERY MUCH PERFECT
TIMING. UM I'M LOOKING FORWARD
TO THE PRESENTATIONS. I'VE READ
A LOT OF THE MATERIAL AND, UH, I
HAVE LOTS OF QUESTIONS, AND I'M
QUITE FRANKLY, VERY CONCERNED
ABOUT THE STATUS OF THIS PROJECT
AND SOME OF THE THOUGHTS THEY
HAVE RELATIVE TO THE RAISING OF
REVENUE FROM THIS POINT FORWARD,
SO WITH THAT, I'LL LOOK FORWARD
TO THE PRESENTATIONS AND WE'LL
HAVE A GOOD DISCUSSION. OK,
THANK YOU, UM, APPRECIATE THE
OTHER TRANSPORTATION COMMITTEE
MEMBERS BEING HERE WE WILL GO
RIGHT TO THE FIRST PANEL AND
JUST SAVE COMMENTS AND REMARKS
FOR AFTER THE FIRST PANEL, AND
THEN AGAIN, AS I SAID AFTER THE
SECOND PANEL, LET'S HEAR FROM
OUR FIRST PRESENTERS, UM BRIAN
KELLY èC E Ó OF THE CALIFORNIA
HIGH SPEED RAIL AUTHORITY AND
BRIAN ANNA èC F Ó. OF THE
CALIFORNIA HIGH SPEED RAIL
AUTHORITY. I DO WANT TO NOTE
THAT THIS MAY BE THE LAST TIME
WE HAVE MR KELLY HERE BEFORE US
IN HIS CURRENT CAPACITY. WE HOPE
THAT WE WILL SEE HIM ON MANY
MORE OCCASIONS FOR OTHER REASONS
, BUT IN JANUARY, HE ANNOUNCED
HE WAS LEAVING THE AUTHORITY AND
I DO WANT TO CONGRATULATE YOU ON
YOUR TIME WITH THE AUTHORITY. I
THINK WE'LL BE HAPPY TO HEAR
MUCH OF WHAT YOU HAVE TO SAY
TODAY ON THIS CURRENT UPDATE, OF
COURSE, IN A IN A POSITIVE VEIN,
AND, OF COURSE, BEST WISHES ON
ALL YOUR FUTURE ENDEAVORS. THANK
YOU, MR CHAIRMAN WITH YOU AND
LIMITED OPPORTUNITY. I'VE HAD TO
DO IT THUS FAR. THANK YOU.
WELCOME TO BOTH OF YOU. THANK
YOU VERY MUCH, MR CHAIRMAN AND
MEMBERS. AS ALLUDED TO I'M BRIAN
KELLY, THE CHIEF EXECUTIVE
OFFICER FOR THE CALIFORNIA HIGH
SPEED RAIL AUTHORITY, AND I'M
PLEASED TO BE HERE TODAY TO
PRESENT OUR 2024 BUSINESS PLAN
LOOK FORWARD TO THE DISCUSSION.
AND ANSWERING YOUR QUESTIONS.
I'M JUST GOING TO MAKE SURE THAT
WE ARE TECHNICALLY READY TO GO.
I THINK WE ARE. YES. YOU READY?
OK, WHOOPS. THAT'S RIGHT. OK?
I'M GOING TO JUMP RIGHT INTO THE
PRESENTATION. THIS IS OUR 2024
DRAFT BUSINESS PLAN. UH, JUST BY
WAY OF REMINDER. THERE'S A
PROCESS FOR THIS BUSINESS PLAN
EVERY EVEN NUMBERED YEAR. IT'S A
60 DAY PROCESS. FROM THE TIME WE
RELEASED THE PLAN HAVE PUBLIC
HEARINGS, TAKE PUBLIC COMMENT,
THEN RETURN TO OUR BOARD IN
APRIL FOR ANY REVISIONS TO THAT
PLAN BEFORE IT GOES FINAL AND
THERE WILL BE CHANGES TO THE
PLAN BETWEEN DRAFT AND FINAL AND
WE'LL TALK A LITTLE BIT ABOUT
SOME OF THOSE TODAY. JUST 11.
MONTHS AGO, WE INTRODUCED THE
2023 PROGRAM UPDATE REPORT TO
THE LEGISLATURE AND THAT REPORT
HAD EXTENSIVE CHANGES TO THE
COST ESTIMATES AND SCHEDULE FOR
COMPLETING OUR WORK IN THE
CENTRAL VALLEY, AND IT LAID OUT
A LONG TERM STRATEGY TO GO AFTER
AND RECEIVE FEDERAL FUNDS TO
ADVANCE THE PROJECT. IN THIS
THIS 2024 BUSINESS PLAN. UH,
STAYS LARGELY, UM WITHIN THE
CONSTRAINTS OF THAT. 2020 THREE
PROJECT UPDATE REPORT IN TERMS
OF THE COST AND SCHEDULE ISSUES
THAT WE HAVE NOT CHANGED THOSE
IN THE 10 OR 11 MONTHS SINCE THE
20 THREE PROJECT UPDATE REPORT,
AND INSTEAD THIS PLAN TALKS
ABOUT THE MAJOR CHANGES TO THE
PROGRAM OVER THE COURSE OF THE
LAST 11 MONTHS AND THE THINGS
THAT ARE IN FRONT OF US AND THE
VISION THAT WE LAY OUT TO GET
THE OPERATING SEGMENT DONE IN
THE VALLEY, ADVANCED THE WORK ON
THE BOOK ENDS OR THE BOOKEND
SEGMENTS. WE CALL THEM, UH, THE
STRETCHES INTO THE BAY AREA.
INTO THE SOUTHERN CALIFORNIA
BASIN. I WILL MAKE, UH ONE NOTE
ON THE 23 PROJECT UPDATE REPORT,
WHICH I SAID WAS AN EXTENSIVE
UPDATE REPORT THE INSPECTOR
GENERAL THAT WAS PUT IN PLACE BY
THE LEGISLATURE SUBJECT TO OUR
SUBJECT TO A STATUTE THAT WAS
PASSED IN THE 2021 BUDGET
PROCESS. THE FBI G ALSO HAD A
CHANCE TO REVIEW UH, THAT, UH,
PROJECT UPDATE REPORT THAT WE
LAID OUT FOUND IT CREDIBLE AND
RESPONSIVE TO THE STATUTORY
REQUIREMENTS THAT WE HAVE FOR
OUR OUR REPORTS TO THE
LEGISLATURE. THEY DID MAKE SOME
RECOMMENDATIONS. UH IN THE IN
THE LOOK OF THAT REPORT THAT WE
INCORPORATE INTO OUR BUSINESS
PLANS. AND AS THIS BUSINESS PLAN
GOES FROM DRAFT TO FINAL, WE'LL
INCORPORATE THOSE THINGS,
INCLUDING A SPECIFIC DATES WHEN
FUNDING IS NEEDED TO KEEP THE
PROJECT PROJECT ON SCHEDULE. A
BREAKOUT OF COSTS FOR CERTAIN
MERCED TO BAKERSFIELD SEGMENT.
UH, PORTIONS LIKE RIGHT OF WAY.
UH AND OTHER THINGS, UH, BOARD
POLICY ON TIME. THE TIMING OF
WHEN WE DO OUR COST UPDATES,
WHICH IS SOMETHING WE WILL
PURSUE WITH THE BOARD WHEN THIS
REPORT GETS TO THE FINAL VOTE IN
APRIL AND MORE SPECIFICITY ON
OUR MANAGEMENT OF RISK FACTORS,
WHICH WE IDENTIFY IN THE
BUSINESS PLAN, AND AGAIN, WE
WILL, UH WE WILL SPEAK MORE
SPECIFICALLY ABOUT THOSE AS WE
GET TO THE FINAL DRAFT OF THIS
THIS PLAN. AGAIN AS I MENTIONED
THIS PLAN WORKS OFF OF THE 2020
THREE PROJECT UPDATE REPORT.
THAT SET A TARGET AND SCHEDULE
FOR THE EARLY OPERATING SEGMENT
IN THE CENTRAL VALLEY FOR MERCED
TO BAKERSFIELD OF BETWEEN 2030
2030 THREE. THAT'S OUR SCHEDULE
ENVELOPE TO BE OPERATIONAL. WE
UPDATED OUR COST ESTIMATES BASED
ON ESCALATION, INFLATION, SCOPE,
INCREASES AND RISK ANALYSIS AND
WE SET A FUNDING STRATEGY
INFORMED BY THE CALIFORNIA
LEGISLATIVE BUDGET DECISIONS AND
THE ENACTMENT OF THE FEDERAL
BIPARTISAN INFRASTRUCTURE LAW.
WE ALSO ESTABLISHED NEW
RIDERSHIP AND REVENUE FORECAST
BASED ON A NEW MODEL THAT WAS
DEVELOPED BY THE AUTHORITIES.
EARLY TRAIN OPERATOR IN
COORDINATING WITH THE CALIFORNIA
STATE TRANSPORTATION AGENCY. WE
UPDATED THE PROGRAM. BASELINE
SCHEDULE. UH AND INFORM, UH,
INFORMED BY FUNDING. WE FINALIZE
SEVERAL COMMERCIAL AGREEMENTS
AND LAID DOWN THE PROCESS FOR
OUR TRACKING SYSTEMS TO MOVE
FORWARD OUR OUR CONSTRUCTION
SCHEDULE IN THAT PROJECT UPDATE
REPORT HAD THE FIRST
CONSTRUCTION PACKAGE DONE IN
2026, THE SECOND ONE ALSO IN 26,
AND WHAT WE CALL èC P FOUR, THE
SOUTHERNMOST SECTION IN 2023,
WHICH TODAY IS SUBSTANTIALLY
COMPLETE. WE ALSO SAID THE GOALS
FOR CRITICAL CRITICAL
PROCUREMENTS, SUCH AS TRACKING
SYSTEMS, TRAIN SETS AND STATION
AND ALIGNMENT EXTENSION DESIGNS.
THAT WAS ALL IN THE 23 PER AGAIN
THAT WAS REVIEWED BY THE
INSPECTOR GENERAL AND FOUND
CREDIBLE AND REASONABLE. UH, IN
THIS 24 DRAFT BUSINESS PLAN. WE
MAINTAIN THE COST AND SCHEDULE
FROM THE 2020 THREE PER RELEASE
JUST 11 MONTHS AGO. MERCED TO
BAKERSFIELD. OUR COST ESTIMATES
ARE UNCHANGED. THE CURRENT COST
OF EMITS WHILE UNCHANGED. THE
BUSINESS PLAN DOES UPDATE COST
RISK FOR CONSTRUCTION PACKAGE
WITH THE èC P TWO CARRYING THE
HIGHEST RISK DUE TO SOME IMPACTS
FROM SPRING FUNDING IN 2022 AND
23 MAJOR CHANGE ORDER THAT'S NOW
IN ARBITRATION. A MAJOR THIRD
PARTY ISSUES THAT WE ARE WORKING
TO RESOLVE AND THE EXECUTION OF
OUR FINAL REVISED BASELINE
SCHEDULE, WHICH IS STILL IN
NEGOTIATION, BUT WILL CONCLUDE
IN AUGUST OF THIS YEAR. OUR
PHASE ONE COST UPDATES ARE
PENDING COMPLETION OF TWO
ENVIRONMENTAL DOCUMENTS THAT WE
HAVE LEFT. UH, WHEN I STARTED ON
THIS PROJECT IN 2018, WE HAD
CLEARED 119 MILES OF THE
ENVIRONMENTAL WORK OF THE ENTIRE
SAN FRANCISCO TO L, A SEGMENT,
AND TODAY WE HAVE CLEARED 422
MILES OF THAT SEGMENT. UH, THE
LAST SEGMENT NEEDED TO CLEAR ALL
OF DOWNTOWN SAN FRANCISCO TO
DOWNTOWN L. A IS THE PALMDALE TO
BURBANK SEGMENT AND THAT WILL
COME TO OUR BOARD IN JUNE OF
THIS YEAR. THE FINAL SOUTHERN
CALIFORNIA SEGMENT, WHICH IS L,
A TO ANAHEIM WILL BE COMPLETED
IN 2025. THE ANALYSIS TO DATE
SUGGESTS THAT THE COST FOR THESE
TWO SECTIONS WILL BE WITHIN THE
RANGE OF THE 2020 THREE PROJECT
UPDATE REPORT, BUT TOWARD THE
HIGHER END OF THAT RANGE, AND AS
NOTED, WE UPDATE OUR COSTS AFTER
WE COMPLETE THE ENVIRONMENTAL
DOCUMENTS BECAUSE THERE'S A LOT
OF COSTS SWING DURING THAT
PROCESS. THIS IS DISCUSSED
THOROUGHLY ON PAGE 89 OF THE
2024 BUSINESS PLAN. MAJOR
ACCOMPLISHMENTS SINCE THE 23 PER
CAME OUT. AS THE CHAIRMAN
REFERENCED WE WERE AWARDED IN
THAT 11 MONTH PERIOD JUST UNDER
THREE $0.4 BILLION IN FEDERAL
FUNDS TO ADVANCE AN ELECTRIFIED
HIGH SPEED RAIL SYSTEM IN
CALIFORNIA. WE HAVE ADVANCED
SOME IMPORTANT PROCUREMENTS TO
MOVE THE PROJECT TOWARD
OPERATIONS. OUR FIRST
CONSTRUCTION PACKAGE COVERING
22.5 MILES IS SUBSTANTIALLY
COMPLETE TODAY. OUR CONSTRUCTION
JOBS EXCEEDED 12,200 FROM THE
TIME WE STARTED CONSTRUCTION IN
2020 THREE, WHICH IS A RECORD
HIGH, AND OUR DAILY WORKERS ON
THE JOB SITES IS NOW HOVERS
BETWEEN 516 100 EVERY DAY, ALSO
A RECORD NUMBER FOR THE
AUTHORITY AND IN 2020 THREE, WE
COMPLETED 17 STRUCTURES AGAIN A
RECORD FOR A CALENDAR YEAR FOR
THE AUTHORITY. FOR A LONG TIME.
RIGHT OF WAY. PROCUREMENT AND
ACQUISITION WAS A, UH, A
DIFFICULT PROCESS THAT THE
AUTHORITY WE RESHAPED THE
MANAGEMENT OF HOW WE EXECUTE
THAT. AND TODAY WE'RE COMING IN
99% OF THAT RIGHT AWAY BEING
COMPLETE AND IN 2023 THE NUMBER
OF UTILITIES WE'VE MOVED IN A
SINGLE YEAR SET A RECORD AT 254.
OUR WORK, PACE AND RHYTHM IN THE
CENTRAL VALLEY HAS REALLY COME
INTO SHAPE AND INTO FORM AND
WE'RE MOVING THAT WORK ALONG THE
SCHEDULES THAT WE IDENTIFIED IN
THE PUR. ALSO WE HAVE ENTERED
CONTRACTS TO DESIGN THE
EXTENSIONS TO MERCED AND TO
BAKERSFIELD. UH, THIS YEAR, WE
WILL GET TO 30% OF THAT DESIGN
COMPLETED AND WITH THE FEDERAL
FUNDING WE JUST RECEIVED, OUR
BOARD APPROVED US USING THAT
DESIGN MONEY TO GET TO 100%
DESIGN OF THE MERCED AND
BAKERSFIELD EXTENSIONS, AND
THAT'S AN IMPORTANT MILESTONE
BECAUSE WITH THAT WE CAN START
TO ACQUIRE RIGHT AWAY AND, UH,
IDENTIFY THE UTILITIES THAT NEED
TO BE RELOCATED. GETTING THAT
SEQUENCING OF WORK CORRECT.
GOING FORWARD, SO WE DO NOT MAKE
MISTAKES OF THE PAST. THE NEXT
SLIDE. UM CENTER AGAIN. I HAD
COVERED MOST OF THIS IN THE
PRIOR SLIDE IS JUST AN
ADDITIONAL ARTICULATION OF THE
ACHIEVEMENTS THAT WE ACHIEVED IN
2020, THREE SINCE THE PROJECT
UPDATE REPORT CAME OUT THIS
SLIDE IS JUST A SCORECARD. IF
YOU WILL OF EACH OF THE
CONSTRUCTION PACKAGES IN THE
VALLEY. AND WHERE THEY ARE IN
TERMS OF THE STATUS OF THE
CONSTRUCTION. YOU SEE THAT EACH
OF THE CONSTRUCTION PACKAGES IS
100% DESIGNED. WHEN I STARTED IN
2018, THEY WERE ABOUT 11% DESIGN
. SO AGAIN, WE'VE GOT THEM FULLY
DESIGNED NOW COMING IN AT 99% OF
THE RIGHT OF WAY DONE BETWEEN 80
100% DEPENDING ON WHICH èC P.
WE'RE IN OF THE UTILITIES MOVED.
YOU SEE THE NUMBER OF STRUCTURES
DONE GUIDEWAY COMPLETE AND THE
OVERALL CONTRACT WE WORK THROUGH
AND AGAIN, OUR SCHEDULES FOR THE
CONSTRUCTION IN THE VALLEY ARE
UNCHANGED FROM THE PROJECT.
UPDATE REPORT. THE OTHER PLACE
THAT WE ARE MOVING FORWARD ON IS
THE DESIGN OF FOUR KEY STATIONS
BETWEEN MERCED AND BAKERSFIELD.
THERE'S A STATION IN MERCED,
WHERE HIGH SPEED RAIL SERVICE
WILL MEET THE AMTRAK SERVICE ON
THE SAN JOAQUIN SYSTEM, AND THE
ACE OR ALTAMONT CORRIDOR EXPRESS
SYSTEM THAT GOES OVER THE, UM
OVER THE HILL FROM, UH, THE
VALLEY TO, UH TO OAKLAND AND SAN
JOSE. UM AND SO WE'RE ADVANCING
THAT STATION. WE'RE ADVANCING,
UH, FRESNO, KINGS, TULARE AND
BAKERSFIELD DOWNTOWN STATIONS.
THROUGH THAT DESIGN PROCESS. WE
EXECUTED THE DESIGN CONTRACT. IN
MARCH, 2023. WE COMPLETED OUR
CONCEPT DESIGNS FOR ALL FOUR
STATIONS IN NOVEMBER, AND WE ARE
CONTINUING THAT DESIGN WORK TO
THE SCHEMATIC DESIGN PHASE,
WHICH IS A GREATER ARCHITECTURAL
DETAIL AND ROUGHLY 30% OF THE
DESIGN DONE. BY NOVEMBER OF 2024
. AND WITH SOME OF THE FEDERAL
MONEY THAT WE RECEIVED. WE'RE
ADVANCING. UH THAT MUCH OF THAT
WORK TO COMPLETE DESIGN FOR
CERTAIN STATIONS AND PURSUING
FEDERAL FUNDING FOR THE REST.
NEXT SLIDE. NORTHERN CALIFORNIA.
WE'VE COMPLETED ALL THE
ENVIRONMENTAL CLEARANCE FROM
MERCED INTO SAN JOSE AND SAN
JOSE INTO DOWNTOWN SAN FRANCISCO
. WE ARE FUNDING PARTNERS WITH
CALTRAIN ON THE ELECTRIFICATION
OF THE COMMUTE RAIL CORRIDOR
BETWEEN SAN FRANCISCO IN SAN
JOSE. THAT IS A $2.9 BILLION
PROJECT THAT IS MANAGED BY
CALTRAIN. IT'S PROPOSED TO BE
COMPLETED BY FALL OF 2024 AND
THE AUTHORITY HAS INVESTED $714
MILLION IN THAT PROJECT.
ULTIMATELY THE AUTHORITY WILL
USE THAT CORRIDOR TO GAIN ACCESS
INTO DOWNTOWN SAN FRANCISCO. UH
THERE WILL BE ADDITIONAL
INFRASTRUCTURE NEEDS THROUGH
THAT CORRIDOR FOR THE HIGH SPEED
RAIL SYSTEM TO COME THROUGH
THERE, BUT AGAIN BY THE END OF
24 FOR CAL TRAIN PURPOSES IN THE
SHORT TERM, THE ELECTRIFICATION
WILL BE COMPLETE. WE ARE ALSO
PARTNERS ON HER DESIGN AND
ULTIMATELY HELPING FIND FUNDING
FOR THE COMPLETION OF WHAT IS
KNOWN AS THE PORTAL, WHICH IS A
DOWNTOWN EXTENSION PROJECT OR
THE TRANS BAY JOINT, UH, JOINT
TRANSIT CENTER IN DOWNTOWN SAN
FRANCISCO NOW NOW KNOWN AS THE
SALE FORCE TRANSIT CENTER. WE
ALSO WORK IN SAN JOSE WITH
PARTNERS IN THAT AREA ON THE
DEAN INTEGRATED CONCEPT PLAN FOR
THE DERA DON STATION THAT WILL
ALSO HOST NOT JUST HIGH SPEED
RAIL, BUT B, Tð VÆ Tð, A AMTRAK
AND CALTRAIN. WE ARE ACTIVELY
SEEKING ADDITIONAL FUNDING FOR
DESIGN WORK AND GEOTECHNICAL
STUDIES IN THE PACHECO PASS,
WHICH IS THE MOUNTAINOUS REGION
BETWEEN MERCED AND SAN JOSE THAT
ULTIMATELY WILL WILL GO THROUGH.
IN SOUTHERN CALIFORNIA. OUR
FOCUS IS ON. BOTH WORKING WITH
THE LOCAL ENTITIES ON KEY
INFRASTRUCTURE IMPROVEMENTS DOWN
THERE. UH, WE HAVE SPENT $80
MILLION ON A GRADE SEPARATION
PROJECT IN LOS ANGELES.
ROSECRANS MARQUARDT, WHICH IS A
AT ONE TIME WAS THE MOST
DANGEROUS, GREAT SEPARATION OR
GREAT CROSSING IN CALIFORNIA.
UH, THAT PROJECT IS NOW UNDERWAY
TO SEPARATE TRAINS FROM VEHICLES
AND IT WILL BE COMPLETED IN 2025
. WE ARE ALSO PARTNERS WITH L, A
METRO ON REMODELING IF YOU WILL.
THE L A UNION STATION AND MOVING
THAT INTO A TRACK RUN THROUGH.
UH UH, SYSTEM THAT WILL HELP THE
EFFICIENCY OF REGIONAL RAIL IN
THE SHORT TERM AND ULTIMATELY
ACCOMMODATE HIGH SPEED RAIL. IN
THE LONG TERM. WE ARE WORKING
THROUGH TWO DRAFT ENVIRONMENTAL
DOCUMENTS IN SOUTHERN CALIFORNIA
. ONE IS THAT PALMDALE TO
BURBANK SECTION, WHICH I
REFERENCED EARLIER. THE SECOND
IS THE L A TO ANAHEIM SECTION.
AND LASTLY, ASIDE FROM THE
FEDERAL DOLLARS THAT WE RECEIVED
IN SOUTHERN CALIFORNIA SHOULD BE
NOTED THAT BRIGHT LINE WEST WAS
THE RECIPIENT OF JUST A LITTLE
LOWER THAN US. THEY GOT 3
BILLION UH, IN FEDERAL FUNDS ON
THAT PUBLIC PRIVATE PARTNERSHIP
PROGRAM. AND SO PART OF OUR WORK
THIS YEAR WILL INVOLVE US
WORKING CLOSELY WITH BRIGHT LINE
, UH AND THROUGH THE HIGH DESERT
CORRIDOR ADJOINED POWERS
AUTHORITY TO IDENTIFY CONNECTING
POINTS BETWEEN OUR SYSTEM AND
THEIR SYSTEM AS WE GO FORWARD.
THE NEXT SLIDE. JUST UH, COVERS
OUR FUNDING FOR THE PROGRAM TO
DATE, UH, THE COLORFUL BAR CHART
ON THE RIGHT, UH, IS, UH, SHOWS
THE DIFFERENT FUNDING SEGMENTS
OF FEDERAL AND STATE DOLLARS
THAT COME TO THIS PROJECT. AND
THEN AS YOU GET TO THE TOP OF
THE CHART, THERE'S SOME CAP AND
TRADE DOLLARS, ASSUMING A
BILLION DOLLARS A YEAR WE'RE
ASSUMING A BILLION 0.25 A YEAR
FROM CAP AND TRADE. THAT IS OUR
ONLY ONGOING SOURCE OF STATE
FUNDING TODAY, AND IN THE LAST
TWO YEARS, THE CAP AND TRADE HAS
COME IN AT ABOUT A BILLION A
YEAR FOR THE PROJECT. THE LAST
THREE CYCLES. IT'S UP TO ABOUT A
BILLION 25 FOR THIS AND SO WITH
AT A BILLION WE HAVE A BUDGET OF
ABOUT 28.7 BETWEEN NOW AND 2030
AT A BILLION FIVE. OUR BUDGET IS
UP TO ABOUT JUST UNDER 31
BILLION. WE ALSO ARE CONTINUING
TO WORK ON OUR STRATEGY WITH
FEDERAL MONEY TO FIND 4.7 CENTS
BILLION MORE IN FEDERAL FUNDS.
ALONG WITH THE 3.3 THAT WAS
AWARDED TODAY. THE TOTALITY OF
THIS GIVES US A BUDGET THROUGH
2010 OF BETWEEN 27 AND $31
BILLION FOR THE PROJECT. THIS
NEXT SLIDE WHILE A LITTLE BIT
COLORFUL AND CONFUSING,
CONFUSING, UH, IS DESIGNED TO
JUST SHOW YOU THE SEGMENTS OF
THE PROJECT THAT WE ARE BUILDING
IN THE CENTRAL VALLEY. IF YOU
LOOK AT THAT RIGHT VERTICAL LINE
, IT'S THE CITIES BETWEEN MERCED
AND BAKERSFIELD ALONG THE TOP
ARE DIFFERENT. MOVING LEFT TO
RIGHT ARE DIFFERENT PHASES OF
THE PROJECT FROM ENVIRONMENTAL,
UH, TO ADVANCED DESIGN, RIGHT OF
WAY. FINAL DESIGN, CONSTRUCTION
TRACKING SYSTEM, SECOND TRACK
AND, OF COURSE TRAIN SETS. AND
IF I WAS TO SIMPLIFY THIS ON THE
LEFT IS WHERE WE WERE LAST YEAR
WHEN I WAS IN FRONT OF THE
COMMITTEE. EVERYTHING NOT GREEN
IS UNFUNDED IN THAT BOX ON THE
LEFT, AND WHEN YOU MOVE TO THE
RIGHT WITH THE AWARD OF FEDERAL
FUNDS WE GOT THIS YEAR
EVERYTHING GREEN IS FUNDED. AND
SO OBVIOUSLY THAT FEDERAL
FUNDING GOES A LONG WAY TOWARD
HELPING US ADVANCE THE PROJECT.
WE'LL PROBABLY GET INTO THIS A
LITTLE BIT MORE LATER. BUT I
WOULD JUST LIKE TO SAY THAT THE
AWARD OF FEDERAL FUNDS WAS MORE
THAN JUST AN AWARD OF THREE
POINT THREE BILLION DOLLARS. IT
WAS THE FIRST TIME THAT THE
FEDERAL GOVERNMENT GOT TO WEIGH
IN ON THE PLAN TO GET THE
CENTRAL VALLEY SEGMENT EXTENDED
FROM 100 AND 19. MILES WHICH
CONNECTED A TOWN OF MADEIRA AND
LITERALLY AN ORCHARD TO THE
CITIES OF MERCED, FRESNO AND
BAKERSFIELD. AND WHEN WE SHIFTED
TO THAT BEING THE CENTRAL VALLEY
FOCUS IN 2019, THIS IS THE FIRST
TIME THE FEDERAL GOVERNMENT HAS
HAD THE OPPORTUNITY TO ENDORSE
THAT PLAN, AND THEY DID EVERY
DOLLAR THAT WE GOT IS REALLY
ABOUT EXPANDING THAT THAT
INITIAL 100 19 MILES TO THE 171
MILE SEGMENT. SO WE'RE VERY
PLEASED WITH THAT, AND WE THINK
IT'S AN ENDORSEMENT OF WHAT
WE'RE TRYING TO DO ON THIS
PROJECT. THE FEDERAL INVESTMENT
THAT WAS THE LARGEST SINGLE
AWARD IN 2023 WAS IN DECEMBER.
AND IT WAS THE AWARD OF THE
FEDERAL STATE PROGRAM THAT WAS
PART OF THE BIPARTISAN
INFRASTRUCTURE BILL. THAT $3.1
BILLION IS FUNDS SIX ELECTRIC
TRAINS FOR TESTING AND USE FUNDS
, THE DESIGN AND CONSTRUCTION OF
TRAIN SET FACILITIES, FUNDS, THE
DESIGN AND CONSTRUCTION OF THE
DOWNTOWN FRESNO STATION, THE
FINAL DESIGN AND RIGHT AWAY
ACQUISITION FOR THE MERCED AND
BAKERSFIELD EXTENSIONS AND FUNDS
SYSTEM AND THE SYSTEMS FOR THE
BAKERSFIELD INTERIM EXTENSION,
WHICH IS 13 MILES TOWARD
DOWNTOWN BAKERSFIELD. THE NEXT
SLIDE IS THE OVERALL COST
ESTIMATES THAT WERE IN THE
PROJECT UPDATE REPORT IN 2023
FOR ALL OF THE SYSTEM FROM SAN
FRANCISCO TO ANAHEIM. AS YOU SEE
THE BASES 106 THE HIGH END IS 1
27 9 93, AND, AS I SAID EARLIER,
AS WE FINISH OUR ENVIRONMENTAL
WORK, AND WE UPDATE THOSE COST
ESTIMATES WE WILL STAY WITHIN
THIS RANGE. BUT IT WILL TAKE A
LITTLE BIT HIGHER WHEN WE
CONCLUDE THE ENVIRONMENTAL WORK
FOR BOTH THE L. A ANAHEIM
SECTION AND THE SECTION FROM
PALMDALE TO BURBANK. THANKS
SLIDE AGAIN AT $127 BILLION,
WHICH IS THE HIGH END OF OUR THE
PROJECT UPDATE REPORT. YOU SEE
THAT THE COST OF THIS IN THE
CAPACITY BENEFITS THAT YOU GAIN
FROM THE PEOPLE THAT YOU CARRY
ALONG THIS SYSTEM IN THE
TRANSPORTATION SYSTEM WITH HIGH
SPEED RAIL TO GET THESE THE
EQUIVALENT BENEFITS IN TERMS OF
CARING CAPACITY OF THE SYSTEM.
YOU WOULD HAVE TO EXPAND
HIGHWAYS AND AIRPORTS IN THE
COST OF DOING THAT IS ROUGHLY
DOUBLE THE COST OF WHAT WE'RE
SPENDING TO DO THE HIGH SPEED
RAIL SYSTEM. MHM. I SAID EARLIER
THAT ARE MAJOR SOURCE OF FUNDING
AT THE STATE LEVEL IS CAP AND
TRADE DOLLARS. THERE'S BEEN SOME
QUESTION ABOUT WHAT HIGH SPEED
RAIL BRINGS TO THE CAP AND TRADE
OBJECTIVES. THERE ARE THREE
IMPORTANT OBJECTIVES FROM CAP
AND TRADE THAT ARE ARTICULATED
IN STATUTE WITH THE GREENHOUSE
GAS REDUCTION FUND DOLLARS. ONE
OF THEM, OF COURSE, IS TO REDUCE
REDUCE GREENHOUSE GAS EMISSIONS.
THE SECOND IS TO REDUCE CRITERIA
. AIR POLLUTANT REDUCTIONS, AND
THE THIRD IS ECONOMIC
DEVELOPMENT OR JOB CREATION IN
THIS PROJECT SCORES WELL ON EACH
OF THOSE, UM TODAY JUST IN THE
CONSTRUCTION THAT WE'VE DONE
THUS FAR WE HAVE REDUCED ABOUT
500,000 METRIC TONS OF CO TWO
EMISSIONS. ONCE WE ARE IN
OPERATIONS ON AN ANNUAL BASIS
WILL BE REDUCING ABOUT 600 TONS
OF CO. TWO ANNUALLY. WITH
RESPECT TO THE CRITERIA. AIR
POLLUTANTS HAS THUS FAR WITH
CLEAN CONSTRUCTION EQUIPMENT. WE
HAVE REDUCED BETWEEN SIX HOURS
60. WE ARE 65 TO 76% CLEANER IN
TERMS OF REACTIVE ORGANIC GASSES
, PARTICULARLY MATTER OF BLACK
CARBON AND KNOCKS OR NITROGEN
OXIDE, COMPARED TO STANDARD
CONSTRUCTION PROJECTS, AND WE
HAVE AVOIDED ABOUT £500,000 OF
AIR POLLUTANTS SINCE THE START.
OF CONSTRUCTION IN FULL
OPERATION OR WHEN WE'RE DONE
WELL ON AN ANNUAL BASIS REDUCED
1400 TONS OF CRITERIA AIR
POLLUTANT ANNUALLY ECONOMICALLY.
TO DATE. WE'VE CREATED 92,000
JOBS SINCE THE START OF
CONSTRUCTION 12,200 CONSTRUCTION
JOBS IN THE CENTRAL VALLEY AND
THE 11.7 BILLION WE'VE INVESTED
TO DATE. HAS HAD AN ECONOMIC
OUTPUT IN EXCESS OF $18 BILLION.
MOST OF OUR FUNDING CONSISTENT
WITH SB 535 AND MAYBE 1550
PASSED BY THE LEGISLATURE. MUCH
OF IT HAS BEEN FOCUSED ON
DISADVANTAGED COMMUNITIES. WE
HAVE DELIVERED 220 MILLION IN
WAGES TO DISADVANTAGE WORKERS.
PROVIDED THOUSANDS OF LIVING
WAGE JOBS FOR THE MORE THAN 65%
OF OUR WORKERS WHO LIVE IN
DISADVANTAGED COMMUNITIES, AND
WE HAVE INVESTED 5.5 BILLION TO
DATE IN DISADVANTAGED
COMMUNITIES MORE THAN 50% OF OUR
TOTAL INVESTMENT AND MORE THAN
215 SMALL BUSINESSES THAT WORK
ON THE PROJECT ARE LOCATED IN
DISADVANTAGED COMMUNITIES. WE
ALTERED OUR OUR RIDERSHIP
PROJECTIONS IN THE 2023 PROJECT
UPDATE REPORT THAT'S IN THE
YELLOW BOXES ON THIS SLIDE, AND
THEN THEY'VE BEEN ADJUSTED AS
WE'VE DONE FURTHER ANALYSIS
COMING INTO THIS, UH THIS YEAR
AND THIS YEAR'S PROJECT UPDATE
REPORT. SORRY THIS YEAR'S
BUSINESS PLAN. SO THE YELLOW
REFLECTS WHERE WE WERE IN 2023
FOR THE VALLEY TO VALLEY AND THE
PHASE ONE SYSTEMS JUST TO GIVE
YOU SOME PERSPECTIVE ON THIS
VALUE TO VALLEY IS THE CENTRAL
VALLEY SYSTEM FROM BAKERSFIELD
IN THE SOUTH ALL THE WAY INTO
SAN JOSE AND SAN FRANCISCO
THAT'S EXPECTED TO CARRY BETWEEN
12.2 12.5 MILLION WRITERS
ANYWAY, TO GIVE YOU SOME
PERSPECTIVE ON THAT. LARGE THE
LARGEST WERE THE MOST THE
BUSIEST SINGLE INTERCITY RAIL
PASSENGER SEGMENT IN AMERICA IS
THE NORTHEAST CORRIDOR THAN
AMTRAK CARRIES ABOUT 12 MILLION
RIDERS A YEAR ON THAT CORRIDOR,
SO VALID VALUE WOULD BE ON PAR
WITH THE BUSIEST AMTRAK CORRIDOR
IN AMERICA. AND AS WE MOVE TO
PHASE ONE, THAT'S SAN FRANCISCO
ALL THE WAY TO THE AND ANAHEIM
WE'RE CARRYING ON THE ORDER OF
30 MILLION PASSENGERS A YEAR.
AGAIN ABOUT 2.5 TIMES WHAT THE
NORTHEAST CORRIDOR CARRIES TODAY
. THE BUSINESS PLAN DOES TALK
ABOUT OUR RISKS, INCLUDING
THINGS WE'VE DONE THROUGH ACTIVE
RISK MANAGEMENT THAT INCLUDES,
AS I MENTIONED EARLIER,
IMPROVING AND ACCELERATING THE
PARCEL ACQUISITION PROCESS IN
THE CENTRAL VALLEY. WE RESOLVE
SEVERAL COMMERCIAL ISSUES WITH
CONTRACTORS. WE SETTLE
LITIGATION WITH THE BURBANK
GLENDALE PASADENA AIRPORT. WE'VE
ENTERED STAY AGREEMENTS WITH TWO
CITIES IN THE BAY AREA WHO
CHALLENGED THE ENVIRONMENTAL
DOCUMENT AND WE ARE INACTIVE
SETTLEMENT NEGOTIATIONS WITH
THEM, AND WE COMPLETED A MAJOR
WATER STORAGE DISTRICT CANAL IN
CURRENT COUNTY TOP RISK GOING
FORWARD THE BUSINESS PLAN ON IN
CHAPTER FOUR ON PAGE 76 LISTS
ALL 13 RISKS THAT WE ARE
CURRENTLY MANAGING. NOTE HERE
THAT THE INSPECTOR GENERAL HAS
ASKED US TO SAY MORE ABOUT HOW
WE ARE MANAGING THOSE RISKS THAT
WE WILL DO THAT AS WE MOVE THIS
DRAFT PLAN TO A FINAL PLAN IN
MAY AND THE TOP RISKS THAT WE
IDENTIFIED HERE ARE FUNDING
UNCERTAINTY FOR THE PROGRAM,
WHICH HAS BEEN THE RISK SINCE
THE PROGRAM WAS STARTED. THIRD
PARTY MANAGEMENT WORKFORCE
PLANNING AND PROGRAM
INTEGRATION. MANAGEMENT. IN
TERMS OF WHAT'S NEXT FOR THE
PROJECT THAT THINGS WE ARE
FOCUSING ON. HIS FINISHING THE
CONSTRUCTION AND 119 MILES IN
THE VALLEY AND THE DESIGN WORK
FOR THE MERCED AND BAKERSFIELD
EXTENSIONS. WE ARE CONTINUING AS
I MENTIONED THE ENVIRONMENTAL
REVIEW FOR THE REMAINING PROJECT
SECTIONS AGAIN ALL OF DOWNTOWN
SAN FRANCISCO TO DOWNTOWN LOS
ANGELES WILL BE ENVIRONMENTALLY
CLEARED. COME JUNE AND WILL
FINISH THE LAST SEGMENT FROM LA
TO ANAHEIM IN 2025. WE ARE
ADVANCING COLLABORATIVE PROJECTS
IN NORTHERN AND SOUTHERN
CALIFORNIA, INCLUDING WHAT WE
CALL THE BOOKEND PROJECTS AS
WELL AS SUPPORTING FUNDING
REQUESTS FOR JOINT USE PROJECTS,
BOTH IN SOUTHERN AND NORTHERN
CALIFORNIA. WE ALSO ARE
EXECUTING PROCUREMENT TO ADVANCE
OUR RAIL STRATEGY. TRAIN SETS
TRACKING SYSTEMS OVERHEAD
CATENARY SYSTEM IN 2024. WE'RE
DOING THAT IN A METHODICAL WAY,
INCLUDING THE USE OF NOT TO
PROCEED SEGMENTS OF THE CONTRACT
SO THAT WE DO NOT GET IN FRONT
OF AVAILABLE MONEY. IN OTHER
WORDS, WE'LL ONLY DO THE WORK
SEQUENTIALLY AS WE CAN AFFORD AS
WE GO FORWARD. WE ARE CONTINUING
OUR WORK ON DESIGN STATIONS AND
WILL CONTINUE TO ADVOCATE FOR
ADDITIONAL FUTURE FEDERAL
FUNDING. OUR GOAL REMAINS
ELECTRIFIED SERVICE BETWEEN 2030
2033 IN THE CENTRAL VALLEY. AND
THEN I'LL JUST END WHERE I BEGAN
. WHICH IS THE PROCESS. WE'RE
UNDERWAY NOW ON THIS BUSINESS
PLAN. WE RELEASED THIS. ON
FEBRUARY, 9TH HAD OUR FIRST
PUBLIC HEARING WITH PUBLIC
COMMENT ON THE 29TH ASSEMBLY
TRANSPORTATION COMMITTEE
YESTERDAY WERE HERE BEFORE YOU
TODAY. I WILL GO BACK TO OUR
BOARD ON APRIL 11TH TO REVISE
THE BUSINESS PLAN TO MAKE SOME
ADJUSTMENTS FROM THE DRAFT AND
OUR FINAL 2024 BUSINESS PLAN
WILL BE SUBMITTED TO THE
LEGISLATURE AROUND IN THE
STATUTORY DEADLINE OF MAY 1ST.
OR THAT MR CHAIRMAN, HAPPY TO
ANSWER ANY QUESTIONS. THANK YOU.
THANK YOU, MR KELLY. APPRECIATE
IT VERY MUCH AND AGAIN. THANK
YOU. PANEL FOR BEING HERE IN NEW
YEAR AVAILABLE TO ANSWER
QUESTIONS, AND WE'LL GET TO THAT
NEXT, SENATOR BLAKE SPHERE I
KNOW YOU WANT TO BE RECOGNIZED
FOR BY SENATOR ARCHULETTA. YES
THANK YOU. THANK YOU, MR KELLY
FOR THE INFORMATION. YOU PACKED
A LOT OF INFORMATION INTO THAT
POWER POINT AND FLEW THROUGH IT.
SO THANK YOU FOR PROVIDING SO
MUCH DATA. UM I AM CHAIRING A
SUBCOMMITTEE ON THE LOW SAND
RAIL CORRIDOR, WHICH IS THE 350
MILES THAT RUNS FROM SAN DIEGO
TO SAN LUIS OBISPO. AND I HAD
THE OPPORTUNITY TO TOUR ELLA'S
UNION STATION. AND THE C THE
REALLY IMPORTANT BOOK AND
PROJECT. SO ONE OF THE BOOKENDS
OF YOUR PROJECT, WHICH WOULD
IMPROVE THE RUN THROUGH TRACKS
AT LA UNION STATION. AND THE
2024 DRAFT BUSINESS PLAN ALSO
HIGHLIGHTS THE IMPORTANCE OF THE
BOOK AND INVESTMENTS. AND I WAS
LISTENING CLOSELY TO WHAT YOU
JUST SAID VERBALLY ABOUT IT. AND
YOU SAID WE'RE PARTNERS WITH L.
A METRO TO HELP WITH EFFICIENCY
IN THE SHORT TERM AND HIGH SPEED
RAIL IN THE LONG TERM, BUT IT
APPEARS VERY MUCH AS IF THAT
PROJECT IS NOT MOVING FORWARD
QUICKLY. IT'S NOT GOING TO BE
MAKING IT IN TIME FOR THE
OLYMPICS IN LOS ANGELES. UM AND
THERE ARE A LOT OF SHARED
BENEFITS AND EARLY VALUE FROM
DOING THAT PROJECT. IT'S
PARTICULARLY IMPORTANT BECAUSE
AS YOU MAY KNOW, THE TRAINS THAT
COME THROUGH ON THE LAUSANNE
CORRIDOR HAVE TO GO BEYOND THE
STATION AND THEN BACK IN, UM AND
IT CREATES A TREMENDOUS DELAY
FOR ALL OF THE RAIL THAT'S GOING
THROUGH THERE. AND SO I
UNDERSTAND THAT THIS YEAR YOU'LL
BE LOOKING AT, UM HOW TO PROCEED
, GIVEN RISING COSTS AND VARIOUS
PRIORITIES, AND YOU KNOW, THIS
IS A PARTICULARLY IMPORTANT
PROJECT. THAT'S ALSO VERY MUCH
IN LINE WITH THE DRAFT BUSINESS
PLAN. SO I JUST WANTED TO ASK
YOUR PERSPECTIVE ON THAT AND
WHAT IS BEING DONE TO PRIORITIZE
THAT PROJECT OR WHAT MORE COULD
BE DONE TO PRIORITIZE THAT? YES
A LITTLE BACKGROUND ON THAT IN.
I WANT TO SAY IN 2012 THE
LEGISLATURE UNDER A BUDGET
AGREEMENT DIRECTED THAT WE HOLD
SOME OF THE BOND DOLLARS ON FROM
THE PROPER ONE. A BON NOT
SPECIFICALLY FOR HIGH SPEED RAIL
PROJECTS, BUT FOR PRIORITY
PROJECTS IN BOTH NORTHERN
CALIFORNIA AND SOUTHERN
CALIFORNIA. THAT TOTALS ABOUT
1.3 BILLION OUT OF THE BOND
DOLLARS IN NORTHERN CALIFORNIA.
THE TWO PROJECTS WERE GREAT
SEPARATION IN SAN MATEO AND THE
ELECTRIFICATION OF THE CALTRAIN
PROJECT IN SOUTHERN CALIFORNIA.
THE TWO PROJECTS ARE MAJOR GRADE
SEPARATION THAT ROSECRANS
MARQUART GREAT SEPARATION AND
BASED ON THE PRIORITY THAT THE
REGION GAVE US THE L. A UNION
STATION. THERE'S TWO PHASES TO
IMPROVING THE AH UNION STATION
AND PHASE ONE IS WHAT WE HAVE
FUNDED. WE PROVIDED 423 MILLION
TOWARD THAT PHASE ONE PROJECT AT
THE TIME THAT METRO CAME TO US
WITH THAT. THAT PROJECT THEY HAD
IDENTIFIED A TOTAL COST NEED OF
ON THE ORDER OF 1.1 BILLION. WE
PROVIDED 423 MILLION. I BELIEVE
THE CALIFORNIA STATE
TRANSPORTATION AGENCY PROVIDED
ROUGHLY THE SAME AMOUNT. SO
ABOUT 90% OF THAT PROJECT WAS
BEING FUNDED BY THE STATE. BUT
L. A METRO IN 2023 INFORMED US
THAT THEY HAD SOME COST AND
SCHEDULE ISSUES. WITH THAT
PROJECT, SO UNDER OUR FINANCING
AGREEMENT WITH THEM, THEY ARE
REQUIRED TO COME BACK TO OUR
BOARD WITH A REMEDIATION PLAN
WHERE THEY MAY ALTER SOME OF THE
SCOPE OF THE PROJECT TO REDUCE
COSTS AND TRY TO PICK UP
SCHEDULE. THAT REMEDIATION PLAN
IS WILL COME TO US. WE THINK IN
EARLY SUMMER OF THIS YEAR AND
THEN MY BOARD WILL TAKE THAT UP,
AND WE'LL DECIDE WORKING WITH
THEM THE RIGHT PATH FORWARD. IT
IS AN IMPORTANT PROJECT FOR THE
EFFICIENCY OF MOVING LOCAL AND
REGIONAL TRANSIT THROUGH THAT
STATION. THE RUN THROUGH TRACKS
MEANS ALSO THAT NOT ONLY IS IT
MORE EFFICIENT, BUT IT ALSO
MEANS THAT TRAINS ARE NOT
SITTING IN THE STATION IDLING
FOR AS MUCH TIME AS THEY HAVE TO
TODAY AND TO END ALL OF THAT IS
THE BEGINNING OF TWO PHASE
PROJECT THAT NOT JUST HELPS THE
LOCAL AND REGIONAL TRANSIT
SYSTEMS BUT ULTIMATELY HELPS
ACCOMMODATE HIGH SPEED RAIL WHEN
WE GET THERE, SO YOU'RE THE LEAD
AGENCY ON THAT PROJECT, RIGHT?
THE LEAD AGENCY ON THAT PROJECT
IS METRO. WE ARE FUNDING
PARTNERS ON IT. AND UNDER OUR
FUNDING AGREEMENT IF THERE'S
CHANGES TO COST AND SCHEDULE,
THEY HAVE TO COME BACK TO
HARDBOARD AND GIVE US A
REMEDIATION PLAN. AND SO THAT
THAT'S WHERE IT STANDS RIGHT
NOW. BUT THEY ARE THE
CONSTRUCTION LEADS ON THAT
PROJECT. OKAY THANKS VERY MUCH.
SENATOR FLOYD. THANK YOU, MR
KELLY FOR APPEARING BEFORE THE
COMMITTEE HERE. I'M EXCITED TO
HEAR THAT WE'RE TALKING ABOUT
JOBS, 12,000 JOBS, CONSTRUCTION
JOBS ABOUT 1500 PEOPLE PER DAY,
ACTUALLY ON THE JOB SITE. BUT
I'VE GOT TO TURN IT TO LOS
ANGELES COUNTY FOR JUST A MINUTE
AS MY COLLEAGUE HAS JUST
MENTIONED AND YOU HAVE MENTIONED
THE UNION STATION IN DOWNTOWN
LOS ANGELES HISTORICAL SITE
THERE. GIVE ME AN IDEA WHAT
CONSTRUCTION? YOU'RE TALKING
ABOUT EXPANDING THE TRACKS. IS
IT? ARE YOU GOING TO DO ANYTHING
TO THE BUILDING ITSELF? IT'S
BEEN THERE SINCE THE THIRTIES. I
BELIEVE TELL ME ABOUT THAT. AND
THEN IF YOU FINISH UP WITH
PURCHASING ALL THESE HIGH SPEED
TRAIN BECAUSE I'D LIKE TO SEE
GOD WILLING THAT THE
MANUFACTURING OF THESE TRAINS
WOULD BE HERE IN CALIFORNIA
AGAIN FOR CALIFORNIA JOBS IF YOU
CAN ELABORATE ON THAT. THANK YOU
. SO I'LL GIVE YOU AT LEAST A
HIGH LEVEL. OF COURSE, MY OFFICE
CAN PROVIDE YOUR OFFICE WITH
MORE DETAIL ON EACH ELEMENT. THE
VILLA UNION STATION PROJECT, BUT
HAD A HIGH LEVEL. IT'S A TWO
PHASE PROJECT. THE FIRST PHASE
OF THE PROJECT IS LESS ABOUT
BROAD STATION IMPROVEMENTS AND
MORE ABOUT IMPROVEMENTS SO THAT
YOU HAD A COUPLE MORE TRACKS
COMING IN TO THE STATION AREA,
AND, UM AND WE TAKE CARE OF THE
RUN THROUGH TRACK ISSUE TODAY,
IT'S A DEAD END GOING INTO THAT
STATION SO TRAINS AFTER GO IN
THERE THEY WAIT. THEY BOARD AND
THEN THEY GO BACK OUT ISLAND
TIMES ARE LONGER THAN THEY NEED
TO BE AS OPPOSED. IF THE TRAINS
CAN SIMPLY RUN THROUGH AND
CONTINUE THEIR SERVICE, SO THE
FIRST PART IS TO ADD RUN THROUGH
TRACKS, SO IT BECOMES A STATION.
THAT'S NOT A TERMINAL STAGE
TERMINATING STATION BUT ONE THAT
THE TRAINS CAN GO THROUGH.
THAT'S AN ELEMENT OF THE
CONSTRUCTION IN THE FIRST PHASE
OF THE PROJECT. THE SECOND PHASE
OF THE PROJECT INVOLVES
ADDITIONAL WORK, INCLUDING
STATION REDESIGN, WHERE THERE
THERE IS NOW A FULL STATION
THAT'S ACCOMMODATING, NOT JUST
THE LOCAL AND REGIONAL SERVICES
BUT IS ALSO CAPABLE OF
ACCOMMODATING FULL HIGH SPEED
RAIL SERVICE WITH TRACKS
DEDICATED, HIGH SPEED RAIL EYES
SPEED RAIL SYSTEM. AND SO THAT'S
KIND OF THE SECOND PHASE OF THE
PROJECT. INITIALLY THE FIRST
PHASE PROJECT WAS, I SAID, AS I
SAID, ESTIMATED AT ABOUT 1.1,
THE STATE OF CALIFORNIA THROUGH
OUR CONTRIBUTION IN THE STATE
AGENCY WAS COVERING ABOUT 900
MILLION OF THAT, UM AND L. A
METRO IS INDICATED THAT THEY'RE
REVISITING THE COST OF THE
SCHEDULE ON THAT PROJECT. SO
AGAIN, WE'RE WAITING ON THE
REMEDIATION PLAN. FOR THAT. WE
HAVE DETAILED DATA ON BOTH
PHASES OF THEIR PROJECT, AND I'M
HAPPY TO PROVIDE THAT TO YOUR TO
YOUR OFFICE. UM AND THEN ON THE
SECOND ISSUE IS ON THE TRAIN
SETS AND SO WE ARE CURRENTLY IN
A REQUEST FOR PROPOSALS EARLIER
IN THE YEAR IN 2023, WE WENT OUT
FOR A REQUEST FOR QUALIFICATIONS
, AND THAT WAS JUST A QUALIFIED
BIDDERS WHO COULD BUILD THE
ELECTRIFIED HIGH SPEED TRAINS
FOR US. WE GOT TWO BIDDERS. ONE
IS AUSTIN, WHICH IS A COMPANY
THAT IS BUILDING TRAINS IN
UPSTATE NEW YORK. THE OTHER
QUALIFIED IS SEAMAN'S WHO IS
BUILDING TRAINS AND BUILDING
LIGHT RAIL SYSTEMS FOR PROBABLY
EVERY DISTRICT ON THIS PANEL, UM
, HERE IN SACRAMENTO, AND SO
THOSE ARE THE TWO QUALIFIED
BIDDING TEAMS RIGHT NOW THAT RFP
PROCESS WE MOVED, SO WE
QUALIFIED, AND NOW WE ARE
WRITING THE RFP IN REAL TIME.
WILL BE GOING TO OUR BOARD TO
APPROVE THE RFP IN APRIL, AND
THEN WE'RE LOOKING TO AWARD THAT
CONTRACT TOWARD THE THIRD
QUARTER OF THIS YEAR AFTER WE GO
BACK TO THE BOARD. I WILL SAY
THIS I KNOW IT'S GOING A LOT OF
ATTENTION IN TERMS OF WHO AND
WHERE AND OBVIOUSLY OUR JOB IN A
YOU KNOW, AN RFP IS TO HAVE A
FAIR AND OPEN A COMPETITION,
WHICH WERE DEDICATED TO IN THE
IN THE BIDDING PROCESS. I JUST
SAY THAT OUR PROJECT HAS A LONG
HISTORY OF GOOD RELATIONS WITH
LABOR. WE ENTERED ONE OF THE
FIRST AND MOST COMPREHENSIVE
COMMUNITY BENEFIT AGREEMENTS OR
PLA'S ON THE CONSTRUCTION SIDE
OF THIS PROJECT, AND THAT'S BEEN
IN PLACE SINCE 2013 FOR THE
CONSTRUCTION WORK. LAST YEAR
WHEN WE SEE OPERATIONS AND
MAINTENANCE ON THE HORIZON AS WE
GET INTO THE OPERATING SPEAR
HERE, WE ENTERED A SECOND LABOR
AGREEMENT AND MOU WITH NATIONAL
LABOR GROUPS TO MAKE SURE THAT
OPERATING AND MAINTENANCE FOLKS
WE'RE GOING TO FOLLOW FEDERAL
STATUTE THAT APPLIES TO
OPERATING A MEETING MAINTAINING
RAILROAD IN AMERICA AND IN
CALIFORNIA. AND NOW I'M THIS
PROCESS. THERE'S BEEN A LOT OF
TALK AND CONVERSATION ABOUT. YOU
KNOW WHETHER A BIDDER IS A
UNIONIZED SHOP OR NOT A
UNIONIZED SHOP. WE CAN'T DO THE
RFP MAKE THAT HAPPEN ONE WAY OR
THE OTHER. BUT WE ARE DOING
THINGS IN THIS RFP THAT I THINK
ARE RELEVANT AND HELPFUL TO
UNDERSTANDING THE DIFFERENCES
BETWEEN THE SHOPS. FOR EXAMPLE,
WE ARE VOLUNTARILY AT THE
AUTHORITY. USING SOMETHING
CALLED THE U. S EMPLOYMENT PLAN
IN THIS RFP, WHERE WE ASK EACH
BIDDERS TO GIVE US A SENSE OF
WHERE THEY'RE GOING TO
MANUFACTURE HOW MANY EMPLOYEES
THEY EXPECT TO USE. WHAT'S THE
TRAINING AND WORKFORCE PLANNING
FOR THE EMPLOYEES AT THAT SITE?
ARE THEY EMPLOYING AND WHAT'S
THEIR PLAN TO EMPLOY FOLKS FROM
DISADVANTAGED COMMUNITIES?
THAT'S ALL IN THE SPIRIT OF WHAT
THE HISTORY OF THIS PROJECT HAS
BEEN ABOUT. IN THE CENTRAL
VALLEY, AND THAT WILL BE
APPLICABLE TO THE RFP FOR THE
TRAIN SETS AS WELL. SO BECAUSE
WE'RE IN THE RFP, IT'S GOT TO BE
FAIR AND OPEN. THAT'S AS BAD AS
MUCH AS I CAN SAY ABOUT IT
TODAY. BUT AGAIN, ONE MORE THING
JUST ON PROCESS. WE WILL BE
RETURNING TO OUR BOARD TO
APPROVE THE RFP IN APRIL AND A
COMPREHENSIVE SUMMARY OF WHAT'S
IN THAT RFP. INCLUDING HOW THE
U. S EMPLOYMENT PLAN INFORMATION
APPLIES THAT WILL BE MADE
AVAILABLE PUBLICLY ABOUT A WEEK
IN FRONT OF THAT HEARING, SO
THERE WILL BE A PUBLIC HEARING
IN AN OPPORTUNITY FOR PEOPLE TO
REVIEW AND COMMENT AT THE PUBLIC
HEARING ABOUT WHERE THAT IS.
GOOD THANK YOU, MR CHAIR. THANK
YOU, MR GALLAGHER. OKAY. THANK
YOU WERE GOING TO VICE CHAIR
NÚMERO, FOLLOWED BY SENATOR
NEWMAN AND SENATOR ROSEAU.
ANYONE ELSE NEEDS TO BE
RECOGNIZED FOR ADRIAN. THANK YOU
. THANK YOU, MR. CHAIR. MR
KELLY. MY HAT IS OFF TO YOU. YOU
HAVE A VERY DIFFICULT JOB, AND,
UM SO I HAVE SOME QUESTIONS
ABOUT THE VERY DIFFICULT JOB.
FIRST OF ALL, I READ THE FIFTH
CHAPTER. OF YOUR REPORT
FORECASTS AND ESTIMATES AND IT
TALKS ABOUT BASICALLY DISCUSSION
OF OPERATING PROFITS. YES AND I
DON'T NOTICE IN THERE ANY
DISCUSSION. OF FIXED COSTS. YOU
HAVE OPERATING EXPENSES AND
RIDERSHIP ESTIMATES THAT RESULT
IN IN IN IN GROSS REVENUES, AND
SO YOU HAVE AN OPERATING PROFIT,
BUT I AM I MISSING SOMETHING. I
DIDN'T SEE ANY REFERENCE IN
THEIR RELATIVE TO THE
AMORTIZATION OF FIXED COSTS. IN
LIFE CYCLE COST SECTION B. I
COULD. YES, THE WHEN WE'RE
LOOKING AT THE OPERATION AND
MAINTENANCE COST THAT'S
MAINTAINING THE TRACK AND THE
SYSTEMS MAINTAINING THE TRAIN
SETS. I THINK IN THE TRAIN SETS,
THERE'S A MAJOR REHABILITATION
POINT WITHIN THE 30 YEAR OF
MAINTENANCE PERIOD. SO THOSE
COST ARE INCORPORATED INTO THE
ANALYSIS IN TERMS OF AND IN
TERMS OF THE ONGOING COST OF
MAINTAINING THE TRACK AND THE
VEHICLES AND YOU'LL SEE WE DO
INDICATE WHAT ON PAGE 96 AND 97
PROFITABILITY, MEANING. WHERE IS
THE CASH FLOW COMING IN FROM
WRITERS BUYING TICKETS FROM ANY
ANCILLARY REVENUE, EXCEEDING THE
COST OF OPERATIONS AND
MAINTENANCE, AND THAT INDICATES
THAT THE ANALYSIS DONE FOR THE
PHASE ONE SYSTEM. THE CHANCE OF
PROFITABILITY WAS ESTIMATED AT
98.4. SO WE THINK THEY'RE REAL
WITH A HIGH CONFIDENCE LEVEL,
SAYING THAT THAT OPERATION WILL
GENERATE THE CASH FLOW NEEDED TO
PAY FOR THE OPERATION AND
MAINTENANCE COST OPERATIONALLY.
BUT NOT INCLUDING AMORTIZATION
OF THE FIXED COSTS GOING INTO
THE OPERATION THAT YOU'RE
SPEAKING OF THE CAPITAL COST TO
BUILD THE TRACK THE SYSTEMS AND
THAT'S PRETTY TYPICAL OF HIGH
SPEED RAIL MIGHT KNOW THAT
BRIGHT LINE, FOR EXAMPLE, WAS A
GRANT RECIPIENT FOR THEIR
PROJECTS SO AGAIN, OFTEN USUALLY
, I'M NOT SURE IF THERE'S ANY
EXCEPTIONS, EVEN THAT THESE HIGH
SPEED RAIL SYSTEMS DO NEED
GOVERNMENT FUNDING TO COMPLETE
THE CONSTRUCTION. BUT THEN, AS
OUR ANALYSIS INDICATES, THESE
TYPE OF SYSTEMS ARE ABLE TO FUND
THEIR OPERATION AND MAINTENANCE
COSTS GOING FORWARD. YOU HAVE A
PROBLEM, THOUGH, BECAUSE
PROPOSITION ONE A SPECIFIED.
THAT THE OPERATION THAT THE HIGH
SPEED RAIL WILL OPERATE WITHOUT
ANY SUBSIDIES. AND NOT INCLUDING
AN AMORTIZATION OF THE CAPITAL
COST TO GET THE PROJECT TO
OPERATION HAS BEEN CAUSED HERE
WOULD NOT BE AN ACCURATE
REFLECTION OF THE TOTAL COSTS.
AND IN THE COMMITTEE'S STAFF
REPORT. THE TRAIN SETS. IN THE
COMMITTEE STAFF REPORT. THEY
INDICATE THE WITH REGARD TO THE
FIRST VALLEY LINE. WAIT UNTIL
YOU HAVE YOUR CONVERSATION.
QUALITIES UM, IN THE COMMITTEE
STAFF REPORT. I IT ON PAGE SIX
POINTS OUT PROPOSITION ONE AGE
REQUIREMENT THAT IT OPERATES
WITHOUT SUBSIDY AND THAT YOUR
PLAN FOR THAT OPERATION IS TO
SIGN AN AGREEMENT WITH THE, UM
SAN JOAQUIN REGIONAL RAIL
COMMISSION AND THAT YOU FEEL
THAT SIGNING AND STRUCTURING
THAT AGREEMENT APPROPRIATELY
WOULD AVOID ANY VIOLATION.
HOWEVER THE COMMITTEE STAFF
REPORT HAS THE SENTENCE. HOWEVER
S J. R. R C MAY NEED ADDITIONAL
SUBSIDIES FROM THE STATE, WHICH
WOULD BE AT LEAST FOR THAT
SEGMENT, A CLEAR VIOLATION OF
PROPOSITION ONE. A, UM SO HOW
WOULD YOU RESPOND TO THAT NUMBER
ONE AND NUMBER TWO? WOULD YOU
INTEND TO, UM, LEAST THAT THIS
SYSTEM TO S J R R C WITHOUT THE
OBLIGATION OF PAYING THE STATE
BACK, UH AND AMORTIZATION
FASHION FOR THE CAPITAL COSTS
THAT IT TOOK TO SET THIS SYSTEM
UP IN THE FIRST PLACE. ALL OF
THAT. I WILL. UM WELL, FIRST WE
DISAGREE THAT THE, UM OPERATING
SUBSIDY WOULD APPLY TO THE
BUSINESS PLAN OR THE BUSINESS
MODEL FOR THE INITIAL SEGMENT IN
THE CENTRAL VALLEY BECAUSE WE
ARE NOT THE DIRECT OPERATOR THAT
SYSTEM AND UNDER THEIR BUSINESS
PLAN, MUCH LIKE SJP A DOES TODAY
THEY ESSENTIALLY LEAST TRACKS
BASED OPERATE PASSENGER RAIL
FROM THE FREIGHTS. IN THIS CASE,
THEY WOULD LEAST OUR EQUIPMENT
TO OPERATE AND MAINTAIN OPERATE.
THERE ARE SYSTEM OVER ASSETS
THAT WE OWN, AND THEY WOULD PAY
A RATE THAT IS INTENDED TO
COVER. CERTAINLY OPERATION
MAINTENANCE COSTS OF THAT
CAPITAL COSTS. THE CAPITAL
CONCERT AT THAT POINT OR SUNK
COSTS, AND THEY HAVE TO HAVE THE
OBLIGATION OF OPERATING AND
MAINTAINING THAT IN OTHER WORDS,
WE'RE TALKING, HOLD THEM
ACCOUNTABLE TO PAY YOU BACK ON A
AMORTIZATION BASIS FOR THE
UPFRONT CAPITAL COSTS, NOT NOT
FOR THE NOT FOR THE OPERATIONS
OF THE INITIAL SYSTEM BETWEEN UM
MERCED AND BAKERSFIELD. I WOULD
SUGGEST WE'RE GOING TO HAVE A
SERIOUS DEBATE AS TO WHETHER OR
NOT THAT'S A VIOLATION OF
PROPOSITION ONE A STATES NO
SUBSIDIES TO PROVIDE A SYSTEM
WITHOUT THE OPERATOR OF THE
SYSTEM, HAVING TO COVER THE
INITIAL CAPITAL COSTS IN ANY
FASHION. IS AN INACCURATE
PERIPHERAL PROVIDED INACCURATE
FINANCIAL STATE SENATOR SYSTEM.
I WOULD JUST SAY THAT AMTRAK
TODAY MOST OF THE CAPITAL
EXPENDITURES THAT THEY'VE THAT
THEY'VE RECEIVED TO BUILD THEIR
CAPITAL SYSTEM CAME FROM THE
STATE OF CALIFORNIA AND THE
FEDERAL GOVERNMENT, AND THEY
THEY'RE OPERATING AND
MAINTENANCE CAUSE OR WHAT IS
CONSIDERED. AGAINST AN OPERATING
SUBSIDY, NOT THE REPAYMENT OF
THAT CAPITAL. BUT THOSE SYSTEMS
WEREN'T PREDICATED UPON AN
AUTHORIZATION BY THE VOTERS SAID
THAT THERE WOULD BE NO SUBSIDIES
. OPERATING SUBSIDY TYPICALLY
DOES NOT INCLUDE THE BASED
CAPITAL COSTS. I UNDERSTAND YOUR
POINT. I RESPECTFULLY DISAGREE.
NOW WHAT YOU'RE SAYING IS WHAT'S
TYPICAL IN THE RAILROAD BUSINESS
. I SUSPECT THAT ANY OF THE
VOTERS THAT VOTED ON PROPOSITION
ONE A WE'RE NOT EXPERTS ON WHAT
THE CONVENTION IS FOR FINANCIAL
STATEMENT ACCEPTABLE FINANCIAL
STATEMENT PRACTICES IN THE
RAILROAD INDUSTRY. I CAN TELL
YOU THAT IN EVERY OTHER INDUSTRY
THAT I KNOW OF, UM, THAT WOULD
NOT BE THE WAY OF ASSESSING THE
SUCCESS OF AN OPERATION CAPITAL
COSTS WOULD BE ALLOCATED AND
AMORTIZED. IN A REGULAR
ENTERPRISE. SO WE HAVE A LITTLE
BIT OF DISAGREEMENT AS TO HOW
WE'RE GOING TO ASSESS THE
POTENTIAL OF A SUBSIDY AND I
WOULD SUGGEST WE MIGHT HAVE A
LITTLE BIT OF A DISAGREEMENT
THERE. SO WE MIGHT I AGAIN WOULD
JUST SAY THAT INDUSTRY STANDARD
FOR PUBLIC TRANSIT PASSENGER
RAIL SYSTEM ALL OVER THE
COUNTRY, AND PROBABLY AROUND THE
WORLD IS AN OPERATING SUBSIDY
DOES NOT INCLUDE THE REPAYMENT
OF THE BASE CAPITAL COSTS OF
BUILDING THE SYSTEM. IT IS AN
OPERATING O AND M COSTS VERSUS
REVENUE THAT COME INTO THE FARE
BOX AND THAT THAT'S THE
DEFINITION, THE OPERATING
SUBSIDY THAT IS ACCEPTED
INDUSTRY WIDE AND WE SHOULD NOT
BE THE EXCEPTION TO THAT. NOT TO
BELABOR THE POINT, BUT I WOULD
JUST SAY THAT I AM A CERTIFIED
PUBLIC ACCOUNTANT. I DON'T
PRACTICE ANYMORE, BUT I KNOW
ACCOUNTING. I KNOW FINANCIAL
STATEMENTS FROM AN ENTERPRISE
STANDPOINT ON ENTERPRISE
STANDPOINT, AND WHEN I READ
PROPOSITION ONE, A. I DID NOT
INTERPRET THAT IN THE FASHION
THAT YOU JUST ARTICULATED IT. SO
WE HAVE A LITTLE BIT OF A
DISAGREEMENT AS TO SPECIFIC
RAILROAD AND TRANSIT OPERATIONS,
ACCOUNTING VERSUS THE WAY THE
REST OF THE WORLD. DOES IT
QUESTION ABOUT COST UPDATES IN
THE SOUTHERN AH CALIFORNIA
SECTION. THERE HASN'T REALLY
BEEN MUCH OF A COST UPDATE FOR
THE LAST FEW YEARS, ALL OF THE
OTHER COST UPDATES THAT YOU'VE
DONE HAVE CONSISTENTLY BEEN
ABOUT ON UNSPENT. COST AND THEN
ESTIMATING WHAT YOU STILL HAVE
TO SPEND IT. THE ASSESSMENT HAS
CONTINUALLY BEEN ABOUT A 15% PER
YEAR. INCREASE IN ESTIMATED
COSTS, IF THAT HOLDS TRUE FOR AN
UPDATE OF SOUTHERN CALIFORNIA,
IT WOULD BE A VERY SIGNIFICANT
INCREASE. IN THE COST FOR THAT
PROJECTED COSTS FOR THAT SYSTEM.
CAN YOU COMMENT ON THAT? YES I
CAN. OUR PRACTICE HAS BEEN TO
UPDATE THE SEGMENT CAUSED AFTER
WE COMPLETE THE ENVIRONMENTAL
DOCUMENTS. FOR EACH SEGMENT, AND
SO YOU'VE SEEN SOME UPDATES FOR
OTHER SEGMENTS BEFORE WE'VE SOME
OF THE SOUTHERN CALIFORNIA
SEGMENTS BECAUSE THE LAST TWO
SEGMENTS TO GET DONE OR PALMDALE
PALM BAY HILL TO BURBANK AND L.
A ANAHEIM THE OTHER SEGMENTS
DOWN THERE. WE HAVE UPDATED WHEN
WE FINISHED THAT ENVIRONMENTAL
DOCUMENT. THE REASON WE WAIT
UNTIL THE ENVIRONMENTAL DOCUMENT
IS DONE IS YOU CAN HAVE LARGE
COST SHIFTS DURING THE
ENVIRONMENTAL PROCESS. I'LL GIVE
YOU A COUPLE OF EXAMPLES.
ALREADY ON PALMDALE TO BURBANK.
DURING THE ENVIRONMENTAL PROCESS
. THERE IS A SPACE WHERE THE
ARMY CORPS OF ENGINEERS ASKED US
TO MAKE SURE WE'RE GOING AROUND
A LAKE AND NOT ALONG THE EDGE OF
THE LAKE. AND SO WHEN YOU MAKE
THAT ADJUSTMENT THAT COMES WITH
IT ABOUT A FOUR OR $500 MILLION
SHIFT IN THE COST OF THE PROJECT
AS WE WORKED ON THE
ENVIRONMENTAL DOCUMENT WE WILL
CLOSELY WITH COMMUNITIES ON WHAT
THE IMPACTS OF THE PROJECT WOULD
BE TO THE COMMUNITY. AND WE MAKE
ADJUSTMENTS TO DEAL WITH THOSE
IMPACTS. ALL OF THEM COME WITH
CLAWS SIMILARLY SWINGING THE
OTHER WAY. NOW WE WERE LOOKING
AT AN ENVIRONMENTAL DOCUMENT TO
CLEAR BETWEEN AS LOS ANGELES AND
ANAHEIM. YEAR AND A HALF AGO
THAT INVOLVED US HAVING TO BUILD
ADDITIONAL STRUCTURES IN THE
INLAND EMPIRE TO RELIEVE THE
FREIGHTS. THE FREIGHT RAILS OF
SOME LOST CAPACITY WHERE WE WERE
GOING TO BRING IN MORE PASSENGER
RAIL ON THE COAST SIDE AS WE'VE
GONE THROUGH THAT ENVIRONMENTAL
PROCESS AND REFINED REFINED THAT
FURTHER, WE'RE NOW MOVING TO A
SEPARATE ANALYSIS WHERE WE DO
NOT HAVE TO BUILD THOSE INLAND
EMPIRE STRUCTURES VERSUS THAT
CAUSES OF IT. IT'S SAVING ABOUT
2.5 BILLION. SO AGAIN, YOU GET
BIG SWINGS IN THE ENVIRONMENTAL
PROCESS. WE WAIT UNTIL WE'RE
DONE BEFORE WE UPDATE THOSE
SEGMENTS. BECAUSE OF THAT REASON
, I WILL TELL YOU NOW THAT AS WE
LOOK AT THE TWO SOUTHERN
CALIFORNIA SEGMENTS, AND I
MENTIONED THIS IN MY
PRESENTATION. WE HAVE A COST
RANGE IN THE POOR OF A HIGH OF
ABOUT 100 AND 28 BILLION FOR ALL
OF PHASE ONE AND A BASE OF ABOUT
106 AND A LOW OF ABOUT 88 WHEN
WE FINISH THE ENVIRONMENTAL
DOCUMENT, WE WILL STAY WITHIN
THAT RANGE, BUT IT WILL MOVE
CLOSER TO THE HIGH BECAUSE
BURBANK TO PALMDALE WILL BE
HIGHER THAN IT WAS THAN IT WAS
BEFORE WE UPDATED, WHICH WAS NOW
YEARS AGO. AND L A. AND I'M ALSO
BUMP A LITTLE BIT HIGHER. SO AS
WE COME BACK WITH THE 25 PROJECT
UPDATE REPORT WILL HAVE
COMPLETED ALL OF THE
ENVIRONMENTAL WORK FOR A BIT
BURBANK TO, UM, BURBANK TO
PALMDALE, AND WE'LL UPDATE THAT
SEGMENT AS WELL BUT ARE CAUGHT
ASSESSMENTS WILL STAY WITHIN THE
OVERALL RANGE THAT WE
ARTICULATED IN THE 23 PROJECT.
UPDATE REPORT. OKAY THANK YOU.
ONE LAST QUESTION ON PAGE 64 OF
YEAR UPDATED TALKS ABOUT PRIVATE
SECTOR FINANCING AND STATES. IT
IS THE AUTHORITIES INTENT AND
OBJECTIVE TO SECURE PRIVATE
INVESTMENT IN THE PROGRAM IN THE
FUTURE. CAN YOU ELABORATE ON
THAT A BIT. YEAH SO I KNOW YOU
KNOW, FROM THE BEGINNING OF THIS
THIS PROJECT WAY BACK IN 2008.
THE IDEA WAS TO YOU KNOW THE
STATE WAS PUTTING OUT A $9
BILLION AND BUYING MONEY, AND
THEN THE REQUIREMENT WAS TO GO
FIND OTHER FUNDS. AND IN THAT
TIME WE'VE NOW FOUND 7 BILLION
IN FEDERAL FUNDS. WE'VE GOTTEN
SOME CAP AND TRADE DOLLARS TO
MATCH THE ORIGINAL BOND DOLLARS.
MY VIEW ON THE PRIVATE SECTOR
SIDE IS WE NEED TO MODEL IT MORE
LIKE WHAT? HI. SPEED RAIL IS
DONE IN EUROPE CAPITAL COSTS FOR
A PROJECT OF THIS MAGNITUDE OR
GENERALLY ALWAYS COVERED BY THE
STATE. THE GOVERNMENT YOU KNOW
THE GOVERNMENT'S SIDE OF THE
EQUATION. HOWEVER YOU CAN USE
PRIVATE SECTOR PARTNERS WHERE
YOU ARE IN A SEGMENT THAT IS
THAT IS LIKELY GOING TO BE
PROFITABLE. TO DO A
CONCESSIONARY AGREEMENT, FOR
EXAMPLE, AND YOU CAN REDUCE THE
PUBLIC COST OF THAT SEGMENT
BECAUSE YOU BRING IN SOME
DOLLARS FROM THAT CONCESSIONAIRE
AGREEMENT. I THINK THAT'S HARD
TO DO IN THE CENTRAL VALLEY, BUT
I THINK IT'S MUCH MORE LIKELY TO
DO AS YOU GET TO THE BAY AREA
AND YOU GET TO THE SOUTHERN
CALIFORNIA REGIONS, AND SO OUR
APPROACH WOULD BE TO WORK WITH
PRIVATE SECTOR PARTNERS ON SOME
OF THOSE SEGMENTS TO SEE WHERE
CONCESSIONAIRE MAY MAKE SENSE
AND OFFSET SOME OF THE PUBLIC
COST. THAT'S THE SAME MODEL THEY
USED ON HIGH SPEED RAIL FOR
EXTENSIONS AROUND EUROPE. AND
OTHER COUNTRIES AROUND THE
WORLD, AND THAT'S HOW WE ARE
LOOKING AT THIS. I HAVE NOT FELT
SINCE I'VE BEEN HERE MY SIX
YEARS HERE. THAT YOU CAN REALLY
GET INTO THE PRIVATE SECTOR
CONVERSATION UNTIL MORE OF THE
RISK OF THE PROJECT GETS BEHIND
YOU. AND FOR WHEN SO MUCH OF
THIS WAS NOT ENVIRONMENTAL,
ENVIRONMENTALLY CLEARED WHEN I
STARTED, I THINK IT'S VERY
DIFFICULT TO BRING THAT PRIVATE
SECTOR PARTNER ALONG SO THIS
YEAR WE ARE COMPLETING ALL THE
ENVIRONMENTAL WORK FROM SAN
FRANCISCO TO L. A I NOTED IN THE
BUSINESS PLAN, THERE'S A CEO
LETTER AT THE FRONT OF THE
BUSINESS PLAN, AND THERE ARE
FOUR THINGS THAT I TALKED ABOUT.
WE WANT TO PURSUE IN 2024 1 OF
THEM IS WITH THE COMPLETION OF
THAT ENVIRONMENTAL WORK IS TO DO
WITH THE AUTHORITY DID MANY
YEARS AGO. BUT NOW DO IT BECAUSE
I THINK IT'S MORE RELEVANT. IS
TO DO A PUBLIC WHAT THEY CALL A
REQUEST FOR EXPRESSION OF
INTEREST, WHICH IS TO ENGAGE
WITH PRIVATE SECTOR PARTNERS.
NOW ON WHAT SEGMENT ELEMENTS ARE
MOST LIKELY FOR PARTNERSHIP WITH
THE FEDERAL SORRY WITH PRIVATE
SECTOR PARTNERS AND WHAT THEY
LOOK FOR FROM THE PUBLIC SIDE TO
MAKE THAT MORE APPEALING, AND SO
WE WANT TO GET A BETTER SENSE OF
THAT THIS YEAR, WITH THE
ENVIRONMENTAL WORK HAVING BEEN
COMPLETED AND THEN FIGURE OUT
HOW BEST TO DEPLOY THAT GOING
FORWARD. THANK YOU. ALL RIGHT.
WE WILL MOVE ON TO SENATOR
NEWMAN FOLLOWED BY SENATOR DRAWS
. WELL, THANK YOU, MR CHAIR.
FIRST I AM ONE OF THOSE WHO HAVE
SOME CONCERNS ABOUT THE
PROCUREMENT BUT APPRECIATE YOUR
ANSWER THERE, AND I KNOW SENATOR
ROGER PLAYED, SPEAK A LITTLE
MORE TO IT TO YOUR CONVERSATION
WITH SENATOR NILO JUST TO GIVE
IT CONTEXT. AND NOW WE'RE
STANDING THE DISAGREEMENT ABOUT
COUNTY YOU KNOW, WHAT'S THE
CURRENT? PROJECTION FOR THE COST
OF A TICKET ON THE CENTRAL
VALLEY SEGMENT WHEN IT OPENED.
YOU KNOW WE'RE NOT. WE'RE NOT
CLOSE ENOUGH TO OPERATIONS FOR
SPECIFIED FARES YET, BUT I WILL
TELL YOU THAT FOR MODELING
PURPOSES. WE'RE USING ROUGHLY
THE AMTRAK TICKETING PRICE THAT
IS NOW IN THE CENTRAL VALLEY OR
THE SAN JOAQUIN'S SYSTEM FOR
THAT PART OF THE SEGMENT. WHEN
YOU TALK ABOUT PHASE ONE, WE
HAVE GENERALLY HAD THE AFFAIRS
B. CLOSE TO AIRLINE TICKETS THAT
BETWEEN NORTHERN CALIFORNIA AND
SOUTHERN CALIFORNIA ALONG THAT
LINE, AND THE RISK OF REOPENING
THIS DEBATE IS THAT ARE THERE
ANY ISSUES AROUND THAT THAT PROP
ONE A PROHIBITION ON SUBSIDIES
THERE ON THE COST PER TICKET?
WILL THAT BE SUBSIDIZING OR IS
THAT SIMPLY? YOU KNOW WHAT? WHAT
THE MARKET WILL BEAR. WELL, I
MEAN AGAIN, THE YOU KNOW, WILL
IT BE SUBSIDIZED FOR THE CENTRAL
VALLEY? PART OF THIS, WHICH IS
SUBSIDIZED TODAY ON THE SAN
JOAQUIN SYSTEM WERE VERY CLEAR
THAT THE MERCEDES BAKERSFIELD
LINE WILL ALSO TAKE AN OPERATING
SUBSIDY. THE DIFFERENCE BETWEEN
WHAT YOU GET IN THE CENTRAL
VALLEY IF YOU DON'T BUILD WHAT
WE'RE PROPOSING, VERSUS WHAT YOU
DO. IS OUR EXPECTATIONS OF THE
BUILD VERSUS NO BUILD RIDERSHIP
IN THE CENTRAL VALLEY FOR ALL
THE REGIONAL RAIL THERE NOW WILL
ROUGHLY DOUBLE WITH THE BUILD
THE PER THE PERK. THE COST PER
MILE PER PASSENGER WILL BE CUT
IN HALF AND THE REVENUE AND THE
FARE BOX WILL CHANGE
DRAMATICALLY IN THE UPWARDS
UPWARDS WAY. AND SO THAT'S WHAT
WE ARE PROJECTING, WORKING WITH
AGENCY AND SAN JOAQUIN'S ON THE
FULL PACKAGE. WE DID SAY IN THIS
BUSINESS PLAN THAT THE RIDERSHIP
MODEL BECAUSE WE'RE DEALING WITH
NOT JUST US, BUT ALSO A AMTRAK
SOME BUS SYSTEMS IN SOME OTHER
THINGS. THE ANALYSIS ON THE FULL
RIDERSHIP AND MODEL FOR THE
CENTRAL VALLEY SEGMENT. IN THIS
DOCUMENT. WE STAYED WITH THE PER
REFERENCE, BUT IT WILL SHIFT AS
WE GO FORWARD BECAUSE EACH
ENTITY IS GOING THROUGH THAT
MODEL AND ADJUSTING THEIR
SERVICES SO THAT WE CAN
ARTICULATE THE REGIONAL BENEFIT
WHEN EVERYBODY IS, UH, HAS THE
SAME UNDERSTANDING OF HOW WELL
HOW CURRENT DEMOGRAPHICS WILL
AFFECT THEIR SYSTEMS AND WHAT I
MEAN BY CURRENT DEMOGRAPHICS.
THERE ARE TWO TRENDS IN
CALIFORNIA THAT HAVE AFFECTED
PUBLIC TRANSIT AND RAIL
RIDERSHIP. THE FIRST REALLY ON
PUBLIC TRANSIT IS COVID THE FACT
OF THE MATTER THAT DURING COVID,
YOU HAD MASS NUMBERS OF PEOPLE
NOT COMMUTING TO WORK AND EVEN
POST COVID. IT'S NOT NEAR THE
NUMBER THAT IT USED TO BE. AND
SO RIDERSHIP ON COMMUTER TRANSIT
SERVICES HAS REMAINED RELATIVELY
FLAT. IT'S COME BACK A BIT, BUT
IT'S FLAT. INTERCITY PASSENGER
RAIL SERVICE HAS BEEN A LITTLE
BIT BETTER IN TERMS OF IT COMING
BACK, AND AIRLINES HAVE DONE
VERY WELL IN TERMS OF THEM
COMING BACK. BUT SO THAT'S ONE
THING THAT YOU SEE IS THE COVID
RELATED COMMUTE PATTERNS ARE
HAVING A DOWNWARD IMPACT ON
RIDERSHIP. AND THAT'S NOT JUST
US THAT'S ACROSS THE BOARD IN
CALIFORNIA IN AMERICA. THE OTHER
THING THAT IS SPECIFIC TO
CALIFORNIA THAT IS HAVING SOME
SUPPRESSION ON RIDERSHIP THAT
HAS AFFECTED OUR NUMBERS AND
AGAIN IS AFFECTING PUBLIC
TRANSIT RIDERSHIP UP AND DOWN
THE STATE. IT WAS. CALIFORNIA'S
POPULATION IS VERY STAGNANT NOW
AND FOR THE FIRST TIME IN MY
PUBLIC CAREER. IT'S EVEN
PROJECTED TO START TIPPING
DOWNWARD THAT HAS AN IMPACT ON
THE ESTIMATES FOR PUBLIC TRANSIT
RIDERSHIP FOR JOB CREATION AND
FOR COMMUTE. AND SO WE REFLECT
THAT IN OUR RIDERSHIP NUMBERS,
SO THE BUSINESS PLAN DOES
REFLECT THE PLATOON DOES
APPRECIATE THAT LAST QUESTION.
KIND OF MACRO QUESTION. I THINK
IF YOU RECALL IT, WE HAD
OVERSIGHT HEARING ABOUT THIS
TIME LAST YEAR, AND I TRIED THEM
TO SECURE YOUR COMMITMENT TO
HOLD OFF ON SHOWER UNTIL THE
PROJECT WAS COMPLETED. AND YOU
WERE VERY SMART NOT TO ANSWER
THAT QUESTION. BUT YOU KNOW IF
YOU WOULD YOU KNOW, AS YOU LOOK
BACK, MR KELLY AND LOOKING
FORWARD WHAT RECOMMENDATIONS FOR
LEARNINGS, WOULD YOU LEAVE WITH
US? UH, AS YOU SORT OF
CONTEMPLATE YOUR YOUR DEPARTURE
AND HOW BEST TO BRING THIS VERY
IMPORTANT PROJECT TO COMPLETION
AS SMOOTHLY AS POSSIBLE. WELL, I
APPRECIATE THE QUESTION I THINK
I WANT TO. I THINK I WANT TO
ANSWER THAT BY SAYING SOMETHING.
I HOPE YOU ALL UNDERSTAND THAT
I'VE LEARNED AND THAT WE'VE HAD
TO LEARN THE HARD WAY ON THIS
PROJECT. AND THAT IS SPENT FIVE
YEARS NOW. SIX YEARS, BUT REALLY
THE FIRST FIVE YEARS OF THIS
CLEANING UP A VERY DIFFICULT
BEGINNING ON THE PROJECT AND
WHAT I MEAN BY THAT REALLY IS
AND THIS IS WITHOUT CRITICISM OF
ANYBODY WHO CAME BEFORE ME. BUT
AT THE TIME THE AUTHORITY GOT
FEDERAL MONEY. IT CAME WITH A
VERY TIGHT DEADLINE TO SPEND
THAT MONEY. AND SO THE AUTHORITY
GOT INTO CONSTRUCTION
IMMEDIATELY TO TRY TO GET THE
MONEY SPENT AND KEEP THE FEDERAL
MONEY PRODUCING ECONOMIC
BENEFITS IN CALIFORNIA. THE
PROBLEM WAS, IT WENT INTO
CONSTRUCTION AND WHAT WE CALL AT
RISK IT GOT INTO CONSTRUCTION
WITHOUT ALL THE RIGHT AWAY IN
HAND, AND WITHOUT ALL THE
UTILITIES MOVED, UM AND THEN
WHEN YOU RAN INTO YOU RIGHT AWAY
PROBLEMS AND YOU COULDN'T GET
THE UTILITIES MOVE AND DESIGNS
WEREN'T ADVANCED ENOUGH. HE RAN
INTO DELAYS AND DELAYS BRING
COST AND THAT IS THE HISTORY OF
HOW THIS PROJECT GOT STARTED.
WHAT I WANT YOU ALL TO KNOW
WHETHER I'M HERE OR SOMEBODY
ELSE'S HERE RUNNING THE
AUTHORITY GOING FORWARD, THAT'S
CHANGED THE AUTHORITY NOW I
TALKED TO YOU ABOUT DESIGNING
TODAY ARE EXTENSIONS TO MERCED
AND THE BAKERSFIELD WHEN I
STARTED HERE LESS THAN 15. OF
THE IRISH. SORRY WHEN WE GOT
INTO CONSTRUCTION LESS THAN 15%
OF THIS STUFF WAS EVEN DESIGNED.
BUT YOU STARTED CONSTRUCTION.
WE'RE NOT DOING THAT ANYMORE.
WE'RE GETTING TO 100% DESIGN ON
THESE EXTENSIONS. WHEN YOU DO
THAT, YOU CAN IDENTIFY ALL THE
RIGHT AWAY. YOU NEED ALL THE
UTILITIES THAT NEED TO BE MOVED
TO DO IT IN THE RIGHT SEQUENCE
AND LARGELY I'M NOT GOING TO SAY
YOU ELIMINATE, BUT YOU LARGELY
AVOID MANY OF THE RISKS OF COST
AND DELAY THAT THIS PROJECT WAS
DEALT WITH IN THE INITIAL PART.
SO ONE THING IS UNDERSTANDING
WHAT HAPPENED ON THIS THAT WE'VE
INCORPORATED AND WE HAVE LEARNED
THAT THE HARD WAY AND THEY WERE
DOING IT THE RIGHT WAY GOING
FORWARD. I THINK THAT'S ONE
IMPORTANT LESSON LEARNED THE
OTHER ONE, WHICH I KNOW YOU'RE
GOING TO HEAR LOU THOMPSON FROM
THE PEER REVIEW GROUP. SAY TO
YOU, WHICH LEWIS SAID
CONSISTENTLY FOR 10 YEARS AND
HE'S RIGHT ABOUT THIS. AND LOOK,
LOU AND I OVER THE LAST SIX
YEARS OF BUMPED HEADS ON, YOU
KNOW, AND UNCERTAIN ELEMENTS OF
WHERE WE ARE IN THE PROJECT AND
WHERE WE'RE GOING, BUT ONE THING
WE DO AGREE ON, IT IS EXTREMELY
DIFFICULT TO MANAGE A PROJECT
WHERE THERE'S EXPECTATIONS FOR A
DELIVERY UNDER A TIMELINE, AND
IT IS NOT FUNDED. IT IS
IMPOSSIBLE TO MANAGE A PROJECT
THAT WAY. AND SO WHAT I WOULD
SAY TO THE MEMBERS IS UM, IF THE
POLICY OF THE STATE OF
CALIFORNIA IS TO ADVANCE
PASSENGER RAIL BEYOND YOU KNOW,
DIESEL ADMITTING SLOW RAIL INTO
SOMETHING THAT IS CLEAN, FAST,
YOU KNOW, HAS GREAT MOBILITY
BENEFITS, AND IT'S BETTER FOR
THE FUTURE OF THE STATE OF
CALIFORNIA, PARTICULARLY IN THE
AREA OF CLIMATE CHANGE. WE
REALLY DO HAVE TO ADDRESS THE
INSTABILITY OF FUNDING. I AM
BUILDING A MULTIYEAR MEGA
PROJECT AND I'VE GOT A FUNDING
SOURCE THAT EXPIRES IN A FEW
YEARS. AND THAT IS NOT
SUSTAINABLE. WE CANNOT DELIVER
THIS PROJECT IF THAT STAYS THAT
WAY, AND WE ARE DOING OUR BEST
TO GO GET FEDERAL MONEY, WHICH
WE'VE BEEN SUCCESSFUL AT.
FINALLY THIS YEAR IN DOING I
BELIEVE WE HAVE A STRONG FEDERAL
PARTNER NOW. WHO WILL BE WITH US
FOR A WHILE ON THIS ASSUMING
CERTAIN THINGS GOING FORWARD.
BUT, UM BUT I THINK THAT'S THE
OTHER IMPORTANT LESSON. IF YOU
WANT A DELIVERABLE BY A DATE,
WE'VE GOT TO MAKE SURE THE
FUNDING IS STABLE, AND WE'LL
PUT. THANK YOU APPRECIATE THAT.
THANK YOU. MR CHAIR. SENATOR
NEWMAN, SENATOR ROSES NEXT FOUR
BY SENATOR BECKER IF HE'S IN THE
ROOM, FOLLOWED BY SENATOR
SUHARTO. THANK YOU. UM AND I
WANT TO CONGRATULATE YOU ON
THOSE $3.1 BILLION. THE FEDERAL
I J. A UM, FOR THIS HIGH SPEED
RAIL. I THINK OBVIOUSLY, THAT'S
A REFLECTION OF HOW THINGS ARE
CHANGED AND THINGS ARE IN THE
BEST POSITION TO BE ABLE TO WIN
THAT KIND OF SUPPORT. SO HAVING
THAT PARTNERSHIP WITH THE
FEDERAL GOVERNMENT, I THINK IS
REALLY IMPORTANT. AND THANK YOU.
THANK YOU TAKING US THERE. WITH
REGARDS TO THE COMMITMENT. I'M
VERY CONFIDENT THAT THE VOTERS
ONE VOTED FOR THIS BECAUSE
MOBILITY WITHOUT A DOUBT, BUT
IT'S ALSO A CLIMATE ISSUE, AND
IT'S ALSO CREATING GOOD JOBS.
ANYBODY UNDERSTANDS THAT
QUESTIONS COME UP FOR US IS HOW
DO WE LIVE UP TO THAT
COMMITMENT? UM YOU KNOW IN L. A.
WE PASSED THE SALES TAX INCREASE
IN 2008 IN THE MIDDLE OF THE
MOST THE WORST RECESSION WE HAVE
HAD, AND THAT WAS BECAUSE OF
THAT COMMITMENT AND WE LIVED UP
TO IT, BUT TO REALLY FINISH WE
NEED TO DO A WHOLE LOT MORE. UM
SO AH. A FEW QUESTIONS ALL
RELATED TO EACH OTHER WITH
REGARDS TO THE QUALITY OF THE
JOBS AND THE INCLUSION OF
COMMUNITIES THAT HISTORICALLY
HAVE BEEN EXCLUDED FROM THE
PROSPERITY OF OUR GOVERNMENT'S
INVESTMENTS ARE AH, WHETHER IT'S
A STATE OR OR THE FEDERAL, BUT
IF YOU COULD GO A LITTLE BIT
MORE, I KNOW YOU STARTED TO TALK
ABOUT THE TRAIN SETS AND THE
PROCUREMENT, BUT WE COULD USE
THE PROCUREMENT PROCESS. UM
LESSONS AND, UH, ABOUT THAT,
BECAUSE THE PROCUREMENT PROCESS
IS, FOR THE MOST PART WORKING IN
L, A METRO. AND BY THE WAY AGAIN
, THANK YOU. ALSO FOR WORKING
WITH ALI METRO ON THESE, AND I
APPRECIATE MY COLLEAGUES WHO
RAISED THE ISSUE OF THE UNION
STATION. BUT THAT, UM, SINCE
IDENTIFIED THAT AS ONE OF THEIR
AH, TWO PRIORITIES. APPRECIATE
THAT WE'RE WORKING ON THAT, BUT
WITH REGARDS TO THE QUALITY OF
THE JOBS UM THERE IS, UH WHAT
ARE WHAT DO YOU THINK? HOW WILL
YOU IMPLEMENT? AH THE
INITIATIVES TO MAXIMIZE THE
BENEFITS FOR CALIFORNIA TO
CALIFORNIA COMMUNITIES, MAYBE
EXAMPLES OF THE AGREEMENTS
REQUIRED BY THE HIGH ROAD
TRAINING AH HIGH ROAD TRAINING
PARTNERSHIPS. UM AS FAR AS
DOLLARS THAT COULD BE USED IJ
DOLLARS THAT CAN BE USED UM ARE
YOU CURRENTLY OPERATING ANY
TARGETED OR LOCAL? HIGHER UM,
INITIATIVES? AH USING TOOLS. I
THINK YOU DID MENTION USING
TOOLS LIKE COMMUNITY BENEFITS
AGREEMENT PROJECT LABOR
AGREEMENTS OF OTHER WORKFORCE
AGREEMENTS. UM AND I'M
PARTICULARLY FOCUSED ON NON
CONSTRUCTION. WE HAVE A LOT MORE
TOOLS AND PRACTICE AND
FAMILIARITY WITH CONSTRUCTION
JOBS. THANK GOD. UM WE'RE NOT SO
GOOD AT NON CONSTRUCTION JOBS
AND THE OPPORTUNITIES THAT THE
FEDERAL DOLLARS ARE GIVING TO
US. THE OTHER DAY WHEN OUR
PRESIDENT OUTLINED, UM THE
FUNDING THE COMMITMENT OF THE
FEDERAL GOVERNMENT TO AH,
INFRASTRUCTURE. HE WAS VERY
CLEAR ABOUT MAKING SURE THAT
THAT THOSE DOLLARS WENT TO
IMPROVE ALL OF OUR COMMUNITIES
THROUGH GOOD JOBS. SO WHAT,
HOWEVER, YOU CAN SORT OF BUNDLED
THEM ALL YOU KNOW WHERE I WANT
TO GO. LET ME TRY IT THIS WAY
AND HAPPY TO FOLLOW UP IN ANY
WAY YOU WANT ME TO DO SO I THINK
THE FIRST THING IS THAT IT'S
BEEN A CLEAR SORT OF EMBEDDED IN
THE IN THE DNA OF THE AUTHORITY.
IF YOU WILL, THAT IT IS
IMPORTANT TO GET THE RIGHT
ECONOMIC BENEFIT FROM THESE
INVESTMENTS. AND FOR ALL THE
CHALLENGES OF WHERE THE PROJECT
STARTED, OR ALL THE QUESTIONING
ABOUT WHERE IT STARTED, ARE ALL
CLOSE TO 60% OF THE DOLLARS THAT
WE ARE SPENDING MUCH MORE BEING
ARE SPENT IN WATER DEFINED AS
DISADVANTAGED COMMUNITIES. UM
AND SO ON THE CONSTRUCTION SITE
AGAIN, MANY OF THE JOBS THAT WE
CREATED THE 12,200 PLUS JOBS IN
THE VALLEY ARE PEOPLE WHO RESIDE
IN THE VALLEY, AND WE'RE
BENEFITS OF THAT JOB OF THAT
PROCESS, AND THAT WAS NOT BY
MISTAKE. THE AUTHORITY ENTERED A
COMMUNITY BENEFITS AGREEMENT ON
THE CONSTRUCTION SIDE WITH 13
LABOR ORGANIZATIONS. TO MAKE
SURE THAT THE BEST TRAINED AND
FOLKS WHO CAME THROUGH THE
APPRENTICESHIP PROCESS WE'RE
DOING THE WORK ON THE
CONSTRUCTION SIDE, AND SO WE'RE
VERY, VERY PROUD OF THAT. THIS
PROJECT NOW AS WE GO FORWARD,
AND ONE OF THE REASONS YOU KNOW
CANDIDLY, I THINK IT'S A GOOD
TIME FOR ME TO TRANSITION TO THE
NEXT LEADER. HERE IS THIS
PROJECT IS NOW IN STARTING TO
ENTER THE OPERATIONS AND
MAINTENANCE PHASE OF THE
PROJECT. AS WE TALK ABOUT TRAINS
AND TRACKING SYSTEMS AND
SCHEDULES AND FARES AND STATIONS
, IT GETS MORE TO THE OPERATING
DIALOGUE. AND SO IN 2023, WE
ENTERED A AN AGREEMENT WITH I
DON'T HAVE THE NUMBER IN FRONT
OF ME RIGHT NOW. I WANT TO SAY
NINE ORGANIZATIONS THAT ARE
TRADITIONAL LABOR REPRESENTATIVE
ORGANIZATIONS FOR OPERATING AND
MAINTENANCE, INTERSTATE AND
PASSENGER RAILROAD THROUGHOUT
AMERICA THAT THINGS LIKE THE
RAILROAD LABOR ACT, THE RAILROAD
RETIREMENT ACT APPLIED TO THE
OPERATION AND MAINTENANCE WORK
THAT WE HAVE COMING UP COMING
FORWARD. AND THAT MEANS THINGS
LIKE HOW A CONTRACTOR DEALS WITH
FOLKS WHO WANT TO MAKE A
FACILITY. MAKE SURE THAT THEY
ARE REPRESENTED. THERE'S
PROCESSES INTO THE LABOR ACT FOR
THAT TO OCCUR, AND OUR AGREEMENT
SAYS THAT OUR CONTRACTORS HAVE
TO ABIDE BY THOSE THE THING
THAT'S A LITTLE BIT. YOU'RE
RIGHT. MAINTENANCE IS A LITTLE
BIT OUTSIDE OF THAT. I'M SORRY.
MANUFACTURING THE TRAINS IS A
LITTLE BIT OUTSIDE OF THE SCOPE
OF THOSE TWO AREAS. WHAT WE'RE
DOING IS WE ARE PICKING UP THE
UH, SOMETHING THAT L A METRO HAS
DONE THAT NEW YORK METRO IS DONE
IN CHICAGO TRANSIT AUTHORITY HAS
DONE AND THAT IS, AS WE LOOK AT
THIS WHO ARE MANUFACTURING THE
TRAINS WERE IMPLEMENTING PART OF
A VOLUNTARY PROGRAM OF THE U. S
EMPLOYMENT PLAN, WHICH IS ALSO
DESIGNED TO HAVE THE BIDDERS
TELL YOU MORE ABOUT THE LABOR
MARKETS THAT THEY INTEND TO
AFFECT. SO THERE WILL BE A
SERIES OF QUESTIONS IN OUR RFP
THAT WILL BE SCORED IN THE RFP
PROCESS AND WILL BE MAKING SURE
THAT WE HAVE AN UNDERSTANDING OF
THE JOB MARKET. THEY'LL BE UNDER
ENTERING THE LOCATION OF THEIR
PRODUCTION SITES. THE STRATEGIES
TO ESTABLISH AND SUPPLY AS
ESTABLISHED SUPPLY CHAINS,
DESCRIPTION OF THE JOBS, THE
TYPES OF JOBS THAT WILL BE
CREATED AND THE INVESTMENT. THE
PROPOSAL INTENDS TO COMMIT TO
WORKFORCE DEVELOPMENT AND
TRAINING PROGRAMS. THOSE ARE ALL
THE THINGS THAT WILL BE ASKING
ABOUT IN THE RFP. OF THE TWO
QUALIFIED BIDDERS. IT WILL BE
SCORING THOSE ANSWERS. AND SO
THAT'S PART OF WHAT WE'LL DO IN
THE RFP PROCESS FOR
MANUFACTURING. THE OTHER THING I
WOULD SAY IS IN MAKING SURE YOUR
YOUR DEVELOPING A QUALIFIED
WORKFORCE PART OF THAT THAT
LIVED THE COMMUNITY BENEFIT
AGREEMENT THAT WE ENTERED INTO
BACK IN. 2013 INCLUDED WORK WITH
THE ECONOMIC DEVELOPMENT
COMMISSION OR COUNCIL IF FRESNO
COUNTY AND THE LABOR GROUPS DOWN
THERE TO MAKE SURE THAT WE WERE
GETTING MORE AND MORE PEOPLE
INTO A TRAINING PROGRAM, RUN BY
THE TRADES THAT ALSO HAD FED THE
LABOR NEED FOR OUR PROJECT. IN
MORE RECENT YEARS, WE OPENED A
SIMILAR FACILITY WORKING WITH
THE LABORERS IN SELMA,
CALIFORNIA WE SPEND WE HELPED
FUND THAT WITH THE IN FRESNO,
AND SO EVERY QUARTER OR SO WE
GRADUATE ON THE ORDER OF 25 TO
50 STUDENTS WHO GO THROUGH THAT,
AND MANY OF THEM ARE PEOPLE WHO
ARE AT RISK IN TERMS OF
ECONOMICALLY AT RISK, FOLKS. SO
THOSE ARE THINGS THAT ARE PART
OF OUR OPERATION AND PART OF OUR
ENTERPRISE, AND THAT'S HOW WE'RE
LOOKING AT THIS AS WE GO FORWARD
WITH THE RFP AGAIN, THE RFP ON
THE MANUFACTURING SIDE WILL BE
PART OF A VERY PUBLIC PROCESS
THAT OUR BOARD OUR OUR BOARD HAS
. THE R P HAS TO BE APPROVED BY
THE BOARD OF TO FOR US TO PUT IT
OUT AND THEN LATER TO AWARD. THE
WINNER WILL ALSO GO THROUGH A
PUBLIC PROCESS THAT OUR
COMMISSION CAN YOU ADD A LITTLE
BIT IN TERMS OF LOCAL HIGHER?
YEAH UM, WELL AGAIN, UH, IN THE
WITH RESPECT TO THE
MANUFACTURING AGAIN, WE WILL ASK
THE WILL ASK BOTH OF THE BIDDERS
TO DESCRIBE WHERE THEIR
PRODUCTION FACILITIES WILL BE
AND WHAT THEIR PROCESS WILL BE,
TO, UH, TO UTILIZE DISADVANTAGE.
COMMUNITY WORKERS IN THAT IN
THAT WORK, SO IT'LL THAT
INFORMATION ALWAYS COME IN THE
DOOR THROUGH THE RFP PROCESS.
BUT THE U. S EMPLOYMENT PLAN
ALLOWS FOR US TO ASK THOSE TYPES
OF QUESTIONS ON THE RFP. THERE
WAS ALWAYS AN ISSUE ABOUT
FEDERAL DOLLARS. UM YEAH, I MEAN
, WHAT I AM WHAT? I KNOW THAT
OUR COMMUNITY BENEFITS AGREEMENT
. WE HAD A TARGETED GOAL ON THE
CONSTRUCTION SIDE FOR HIRING
LOCALLY AND WHAT I THINK I SAID
EARLIER IS THAT FOR THE
CONSTRUCTION OF THE VALLEY ABOUT
ON THE ORDER OF 70% OF THE
WORKERS WHO WERE WORKING ON THAT
LIVE IN THE COME FROM THE
COUNTIES IN WHICH THE PROJECT IS
BEING BUILT. GREAT OKAY, WELL,
JUST A FURTHER EMPHASIS ON UM,
WHO? HOPEFULLY WE DON'T HAVE TO
GO THROUGH ANOTHER TRAINING
PROCESS. ON THE ISSUE OF THE
QUALITY OF THE JOBS AND THE
TRAINING AND COMPLIANCE WITH THE
COMMITMENTS THAT ARE MADE BY THE
COMPANIES THAT ARE AWARDED THE
CONTRACTS. HOPEFULLY WE DON'T
HAVE TO GO THROUGH THAT WHOLE
PROCESS AGAIN WITH YOUR UM OH,
YOUR SUCCESSOR BECAUSE THAT'S
NOT AN EASY THING, AND IT'S
SOMEWHAT NEW IN IN THE AREA. WE
JUST HAVE TO APPLY IT. YEAH AND
FEEL THAT, YOU KNOW, BE
CONFIDENT THAT WE COULD ACTUALLY
EXPECT GOOD HIGH PAYING JOBS
LOCAL HIGHER AND ALL THE OTHER
PIECES TO IT. UM FROM THE
DOLLARS. THESE ARE TAX DOLLARS.
YES, WE SHOULD BE ABLE TO EXPECT
THAT SO APPRECIATE. AND I WOULD
JUST SAY THAT, YOU KNOW,
OBVIOUSLY, THESE THINGS ARE VERY
IMPORTANT TO MY BOARD AS WELL.
SO WHOEVER THE SUCCESSOR HAS TO
ANSWER TO THAT BOARD, SO AND US?
YES, ABSOLUTELY. THANK YOU.
SENATOR ROBERTSON, SENATOR
BECKER'S NEXT FOLLOWED BY
SENATOR SEYARTO. THANK YOU. AND
THANK YOU FOR YOUR DEDICATION
AND WORK TO THIS PROJECT. YEAH.
MY COLLEAGUES HIT A LOT OF
ISSUES. THANK YOU ALSO FOR YOU
SAID ABOUT LOCAL HIGHER AND
COMMUNITY BENEFIT PROGRAM THAT
REALLY CRITICAL FOR US TO SEE.
UM I HAD A COUPLE OF QUESTIONS,
UM, RELATIVE TO MY DISTRICT. YES
THINK AS YOU KNOW, SO I'VE GOT
THERE'S 2500 UNITS OF MUCH
NEEDED HOUSING THAT ARE BEING
HELD UP RIGHT NOW AND AS PART OF
TWO LAWSUITS WITH HIGH SPEED
RAIL I HEARD THAT THE ASSEMBLY
YOU SAID THOSE WOULD BE RESOLVED
THIS YEAR. IS THAT YES, BOTH THE
MILLBRAE AND BRISBANE LITIGATION
OR EVEN STAYED, AND DURING THAT
STAY, WE'RE IN SETTLEMENT.
DISCUSSIONS ARE CERTAINLY OUR
INTENT IS TO SETTLE THOSE IN
2024. YEAH OKAY. THAT'S GREAT TO
HEAR. I MEAN, CERTAINLY VERY
IMPORTANT THAT THEY DO SO THAT
HOUSING CAN MOVE FORWARD. I
APPRECIATE THAT. UM, INTEREST
NOTE THAT AND ALSO THANK YOU FOR
YOUR SUPPORT OF ELECTRIFIED
CALTRAIN THAT IS GOING TO LAUNCH
ON SCHEDULE THIS FALL, SO IT'S A
MASSIVE ACHIEVEMENT AND THANK
YOU FOR CONTRIBUTING
CONTRIBUTIONS TO THAT. I JUST
KNOW THAT YOU DID YOU MENTIONED
AND SOME OF THE MONEY HAD GONE
TO ONE GRADE SEPARATION, WHICH
WAS AN IMPORTANT ONE. WE HAVE
PROBABLY ANOTHER 30 GRADE
SEPARATIONS OF WHICH BY 15 ARE
CRITICAL AND 3 TO 5 ARE ARE ON
THE LIST OF THE HIGHEST, MOST
DANGEROUS ONES IN THE STATE. SO
UM, YOU KNOW, THAT'S NOT, YOU
KNOW, SORT OF YOUR
RESPONSIBILITY, BUT IT'S
SOMETHING THAT WE'RE GOING TO
HAVE TO TRUST. LOOK I THINK
THERE ARE KEY CORRIDORS. THE
PENINSULA IS ONE OF THEM.
THERE'S SOME KEY QUARTERS IN
SOUTHERN CALIFORNIA IN THE L. A
AREA. BEYOND THE GREAT
SEPARATIONS WE'VE ALREADY FUNDED
THAT I THINK ARE RIGHT FOR
CORRIDOR WIDE GRADE SEPARATION
APPROACH IS GOING TO TAKE A SORT
OF A PLAN AND A FUNDING PROGRAM
AIMED AT THAT, BUT I THINK I
THINK THAT CORRIDOR IN THE CAL
TRAINED IS IMPORTANT FOR THEM
AND FOR US, ULTIMATELY, FOR MORE
OF THAT. WELL, THANK YOU. I
MEAN, THAT'S ONE OF THE FEW
ISSUES ON THE PENINSULA ONE GETS
ALL TODAY, BUT CERTAINLY
LECTURED CALTRAIN IN THE
MEANTIME, WILL BE, UM, AND MAYBE
ULTIMATELY WILL BE A GREAT
SOLUTIONS. THANK YOU. THANK YOU.
SENATOR SARAH TO THANK YOU SO
MUCH. AND I'M HOPING WE GOT MOST
OF OUR QUESTIONS OUT OF HER
SYSTEM. THIS FIRST ROUND. WE
HAVEN'T GOT TO THE SECOND PANEL
YET. AH ONE OF THE QUESTIONS I
HAVE IS THE FUTURE. THIS
SEGMENT. WAS ON PROBABLY THE
FLAT IST AREA WITH THE LEAST
GEOGRAPHICAL HURDLES. UM AND IT
HAS TAKEN US THIS LONG TO GET
HERE, AND IT'S KIND OF TIES INTO
YOUR QUESTION OF ARE YOUR ANSWER
ABOUT FUNDING. HOW ARE WE GONNA
GET THE FUNDING? WE NEED TO MAKE
SURE WE'RE FUNDING THIS, UM THIS
PROJECT. THE WHOLE THING WAS
SUPPOSED TO BE DONE IN 2022, AND
I WAS SUPPOSED TO BE $38 BILLION
, SO THE PEOPLE OF CALIFORNIA
THOUGHT THEY DID FUND THIS
THROUGH CAP AND TRADE. THAT WAS
THE WHOLE IDEA WITH SOME OF THE
IDEA WAS CAP AND TRADE WOULD
HELP FILL THE GAPS AND WE HAD
OUR BOND THAT WE'RE NOW USING.
WE'LL USE THE LAST PART OF THAT
2022 23 BUDGET. I BELIEVE AND SO
BUT WE'VE ONLY DONE THE EASIEST
SECTION OF THIS. WHAT ARE WE
LOOKING AT FOR A FUNDING GAP FOR
THE REST OF THIS? WELL THE
ENTIRETY THIS SYSTEM IS I THINK
I ESTIMATED IN THIS THIS
COMMITTEE LAST YEAR FROM SAN
FRANCISCO, ALL THE WAY TO
ANAHEIM WILL COST ON THE ORDER
OF $125 BILLION TO GET IT ALL
DONE. TODAY ARE BUT WE HAVE 28
BILLION IS WHAT WE HAVE IN HAND.
THE GOOD NEWS IS YOU DON'T YOU
KNOW I DON'T I WOULDN'T
RECOMMEND AND I WOULD ADVISE
THAT. I MEAN, IT WOULD BE GREAT
IF YOU COULD FIND IT ALL RIGHT
NOW AND ONE FOUL SWOOP, BUT I
DON'T. I DON'T THINK THAT'S
REALISTIC. WHAT WHAT WE'VE BEEN
TRYING TO DO SINCE I'VE BEEN
HERE, AND WHAT I'VE BEEN TRYING
TO ARTICULATE IS, YOU KNOW ONE.
WE GOT TO GET VALUE OUT OF WHERE
WE'VE STARTED CONSTRUCTION. AND
SO IN THE CENTRAL VALLEY. AT
LEAST IT WAS. I THINK YOU KNOW
THE GOVERNOR'S VIEW AND
CERTAINLY HAVE YOU THAT I
CONCURRED WITH WHICH IS THAT?
YOU KNOW, THE 119 MILES
STRETCHED BY ITSELF DOESN'T GIVE
YOU ENOUGH AND SO GETTING INTO
THE CITIES OF THE CENTRAL VALLEY
WAS KI¾M, AND WE'VE LAID OUT A
STRATEGY TO DO THAT. WE'VE LAID
OUT WHAT WE NEED FROM OUR
FEDERAL PARTNERS TO DO THAT, AND
WE'VE HAD SOME SUCCESS THIS YEAR
IN GETTING THERE, UM, TO DO ALL
OF WHAT WE WANT TO DO, AND I DO
THINK THERE IS A ONCE, CERTAINLY
IN THE CURRENT FEDERAL
ADMINISTRATION. THERE IS A WANT
TO ADVANCE PASSENGER RAIL FROM
WHERE IT WAS YESTERDAY TO WHERE
IT SHOULD BE TOMORROW, AND THAT
MEANS MOVING FROM THINGS LIKE
DIESEL GENERATED, YOU KNOW, SLOW
TRAINS TO ELECTRIFIED SYSTEMS
THAT ARE FAST. TO BE CANDID.
THAT'S GOING TO TAKE A FEDERAL
PARTNER THAT IS WITH YOU OVER
DECADES. UM, YOU ARE GOING TO
HAVE TO BE, AND THAT'S NOT JUST
FOR CALIFORNIA. IT'S NATIONALLY,
WE BUILT THE INTERSTATE HIGHWAY
SYSTEM WITH A TRUST FUND
COMMITMENT. TO BUILDING HIGHWAYS
, AND THEY GOT DONE. UH AND IT'S
GOING TO TAKE SOMETHING OF THAT
MAGNITUDE GOING FORWARD. I DO
THINK THAT THE BIDEN
MINISTRATIONS TALKED ABOUT WHAT
THEY ACHIEVED IN THE BIPARTISAN
INFRASTRUCTURE LAW, AND I THINK
THEY'RE INTERESTED IN A RAILROAD
TRUST FUND GOING FORWARD SO THAT
THAT IS A KEY CONVERSATION TO
ULTIMATELY HOW ANY STATE
INCLUDING THIS STATE GETS ALL
THE WORK DONE. I DO THINK WHAT
WE NEED TO DO IN THE STATES SIDE
THAT IS PREPARED FOR THAT. AND I
THINK I THINK I GUESS WHAT I'M
CAUTIONING AGAINST AND JUST
THINKING GOING FORWARD. IT'S
BEEN TOUGH TO FUND A PROJECT
WITH THE ONLY SOURCE OF FUNDING
BEING SOMETHING THAT HAS AN
EXPIRATION DATE. BECAUSE YOU
HAVE YOUR PLANNING BEYOND THAT,
AND I'VE GOT A STATUTE THAT
TELLS ME TO BUILD THIS. AND I'VE
GOT FUNDING THAT ALLOWS ME TO
BUILD THIS. AND SO WHAT? I'M
DOING THE WAY WE ARE PROCEEDING
THAT ENVIRONMENT BECAUSE WE'RE
DOING IT IN BUILDING BLOCKS.
WE'RE GIVING YOU THE PORTIONS.
WE THINK WE CAN GET DONE WITH
THE FUNDING WE HAVE WE HAVE, AND
WE'RE TRYING TO GET TO A SYSTEM
THAT ULTIMATELY CAN GET GET
DONE. AND SO I THINK IT'S GOING
TO TAKE TWO THINGS. IT'S GOING
TO TAKE A FEDERAL PARTNER THAT
IS IN IN THAT FOR THE LONG TERM.
I THINK FOR US. WE'RE TRYING TO
GET THE VALLEY OPERATIONAL.
WE'RE TRYING TO GET MORE OF THE
PRE CONSTRUCTION WORK DONE ON
THE ENDS SO THAT WE CAN REFINE
EXACTLY WHAT THOSE COSTS LOOK
LIKE AND THEN HAVE CONVERSATIONS
OVER HOW WE HOW WE DO THAT GOING
FORWARD. SO IN THIS PARTICULAR
SEGMENT, WHERE, LIKE $28 BILLION
IN DEPENDING ON OUR CATCH,
DEPENDING ON OUR CAP AND TRADE
DOES WE HAVE BETWEEN 28 AND 31
BILLION AND THE COST IS BETWEEN
32 AND 35. AND WE'RE OPEN TO
CLOSE THAT GAP WITH FEDERAL MORE
FEDERAL FUNDS, EVEN IF WE EXTEND
THE CAP AND TRADE TO 2050. MOST
OF THE THINGS THAT WE'RE WORKING
ON RIGHT NOW ARE GOING TO
DIMINISH THAT PART OF MONEY. SO
IF WE DID HAVE THE WHEREWITHAL
TO DO IT PAST 2050. IT'S STILL
GOING TO GO DOWN, SO YOU'RE
STILL NOT GOING TO GET THAT POT
OF MONEY. WELL MOST WHEN I'M
GETTING AT HERE IS THIS ONE
PROJECT? YES SUCKING ALL OF MOST
OF THE TRANSPORTATION DOLLAR
OPPORTUNITIES. FOR EVERYTHING
ELSE. IN OUR ROAD SYSTEM AND OUR
TRANSPORTATION SYSTEM IN
CALIFORNIA. I COME FROM A
DISTRICT THAT WILL NOT BENEFIT
FROM THIS WHATSOEVER. AND BUT
WHAT WE ARE NOT BENEFITING RIGHT
NOW FROM IS NOT HAVING
TRANSPORTATION DOLLARS TO FINISH
THE STINKING ROADS OUT THERE OR
PUT IN MASSIVE AMOUNTS OF OTHER
INFRASTRUCTURE TO ACCOMMODATE
THE GROWTH IS BEING TOLD. WE
HAVE TO BE OUT THERE AND SO IT'S
HARD FOR THE PUBLIC AFTER THEY
WERE TOLD THE WHOLE THING WAS
GOING TO COST $30 BILLION IF YOU
TOLD HIM IT'S GOING TO $127
BILLION, ACTUALLY, PROBABLY. BY
THE TIME WE GET THERE, IT'S
GOING TO BE MORE LIKE 200. THAT
THIS THING WOULD HAVE NEVER BEEN
STARTED BECAUSE WE WILL NEVER
PASS THE BOND. AND THAT'S WHERE
YOU KNOW YOU TALKED ABOUT THE
OTHER TWO LEGS, THE FEDERAL AND
STATE. THERE'S ANOTHER PART OF
THAT, AND THAT'S THE PUBLIC.
THERE IS NOT A PERSON IN THE
PUBLIC DOMAIN. THAT I TALKED TO
THINK THAT THIS IS AWESOME.
THEY'RE THEY'RE DONE WITH THE
BULLET TRAIN. WHAT THEY WANT IS
THE REST OF THEIR INFRASTRUCTURE
PUT IN SO THEIR HOMES DON'T GET
WASHED AWAY SO THEY CAN DRIVE
FROM ONE CITY TO ANOTHER. AFTER
A STORM ALL OF THOSE THINGS OR
WHAT THEY'RE WORRIED ABOUT RIGHT
NOW. AND I'M CONCERNED THAT THIS
WE'RE CONTINUING TO DO THIS. I
WANT THIS RUN SEGMENT TO GET
DONE WOULD LIKE US TO TAKE A
BREAK. SO THAT WE CAN GET THE
REST OF THE STUFF DONE. UM AND
SO THAT YOU KNOW, THERE'S SOME
MORE HURDLES FOR YOU, AND THAT'S
THE PUBLIC AND YOU KNOW, IT'S
JUST DOING DOING PROJECTS IN
CALIFORNIA. IT'S NOT NECESSARILY
THE EFFORTS THAT YOU ARE OTHER
FOLKS HAVE PUT IN. BUT ALL THOSE
WORK ALL THOSE JOBS THAT WE'RE
TALKING ABOUT. THEY CAN BE PUT
TO PUT THEY CAN ALL BE PUT TO
WORK DOING ALL THE OTHER STUFF.
BUT RIGHT NOW THE AIR IS BEING
SUCKED OUT OF THE ROOM. FUNDING
WISE. BY THIS ONE PROJECT. HOW
DO WE GET THE PUBLIC ON BOARD
WITH SOMETHING THAT HAS THIS
MUCH OF A DOWNSIDE TO IT?
FUNDING RISE. WELL,
RESPECTFULLY, SENATOR, I'D SAY A
COUPLE OF THINGS ONE UM, I THINK
THE ONLY WAY YOU GET THE PUBLIC
IS BY PERFORMING BETTER, AND I
THINK THE AUTHORITIES PERFORMING
BETTER TODAY THAN IT WAS, AND I
THINK IT WILL GOING FORWARD
BECAUSE WE'RE LAYING OUT THE
PATH OF HOW TO DELIVER THIS
PROJECT GOING FORWARD. I THINK
THERE WILL BE A LOT LESS CHANCE
OF THE LARGE COSTS AND DELAYS
THAT YOU SAW BECAUSE THE
CHRONOLOGY AND THE SEQUENCING OF
THE WORK GOING FORWARD IS RIGHT.
SECONDLY, ON THE SUCKING UP OF
ALL TRANSPORTATION DOLLARS. I
WAS THE SECRETARY OF
TRANSPORTATION FOR THE STATE OF
CALIFORNIA WHEN WE PASSED THE
LARGEST SINGLE TRANSPORTATION
INVESTMENT PACKAGE IN THE
HISTORY OF THE STATE S B ONE,
AND THIS PROJECT DID NOT GET A
PENNY OF THOSE DOLLARS. NOT ONE
PENNY. OKAY SO I, YOU KNOW $5
BILLION A YEAR 50 BILLION OVER
10 YEARS, HUNDREDS OF BILLIONS
OVER THE DECADES THAT SB ONE
WOULD BE IN PLACE IN THIS
PROJECT DOESN'T SEE A DIME OF
THAT. AND SO WE HAVE. WE GOT CAP
AND TRADE DOLLARS, WHICH ARE
WE'RE THRILLED TO HAVE WITHOUT
HIM. WE WOULD BE DONE. BUT I DO
THINK THERE'S ANOTHER
CONSIDERATION HERE. I DON'T
THINK IT'S SUSTAINABLE GOING
FORWARD IN THE AREA OF CLIMATE
CHANGE TO JUST BUILD ROADS. I
THINK WE HAVE TO BUILD
TRANSPORTATION SYSTEMS THAT MEET
THREE OR FOUR KEY OBJECTIVES.
THEY'VE GOT TO IMPROVE MOBILITY
IN A WAY THAT ROAD EXPANSION
DOES NOT. THEY HAVE TO GET
PEOPLE FROM POINT A TO POINT B
IN A QUICK AMOUNT OF TIME. IT
HAS TO BE CLEAN. IT HAS TO NOT
PRODUCE THE EMISSIONS THAT
TRADITIONAL AND TECHNOLOGIES OF
THE PAST DID IT HAS TO BE
ACCESSIBLE TO CALIFORNIANS,
SOMETHING THAT THEY CAN USE AND
IT HAS TO CREATE GREAT ECONOMIC
BENEFIT. AND I'M JUST SAYING IN
MY 30 YEARS OF PUBLIC SERVICE,
WORKING ALMOST ENTIRELY IN THE
TRANSPORTATION SPACE, I HAVE
NEVER SEEN ONE PROJECT THAT
TOUCHES ALL OF THOSE BUTTONS AS
MUCH AS THIS ONE DOES. AND I'VE
BEEN HERE IN THIS COMMITTEE IN
ANOTHER COMMITTEES ADVOCATING
FOR IT AND DOING THE WORK FOR
IT, BECAUSE I THINK IT'S THE
RIGHT THING TO DO FOR THE FUTURE
OF THE STATE IN THE COUNTRY. AND
YES, IT'S A CHALLENGE. AND JUST
LIKE WHEN I WORKED ON THE BAY
BRIDGE YEARS AGO, AND YOU'RE
STUCK IN THE MIDDLE OF A VERY
TOUGH PROJECT, IT FEELS
IMPOSSIBLE UNTIL IT'S NOT. AND
THEN YOU JUST GRIND. YOU DO THE
WORK. YOU PERFORM BETTER YOU
DELIVER. AND YOU'RE RIGHT. WE
GOT TO GET THIS MIDDLE SECTION
DONE. WE'VE GOT TO GET THIS
MIDDLE SECTION DONE. WE ARE IN A
BETTER PATH TODAY ON IT THEN
WHEN I STARTED AND I BELIEVE IT
WILL GET DONE, AND THEN I HOPE
WE HAVE THE WHEREWITHAL TO DO
SAN FRANCISCO TO L A AND THREE
HOURS BECAUSE THAT'S WHAT THIS
PROJECT CAN DO, AND I THINK
THAT'S REALLY IMPORTANT. LAST
QUESTION. WHAT METHODOLOGY DID
YOU DO TO ARRIVE AT THE
RIDERSHIP NUMBERS THAT MAKE THIS
POPULATION. UM OPERATIONALLY
SOUND AS FAR AS FUNDING IS
CONCERNED WHEN THIS ONE SEGMENT
IS DONE BECAUSE IT SEEMS TO LACK
THE ELEMENTS, AND I TALKED ABOUT
THIS LAST YEAR OF WHAT PEOPLE
JUMP ON A RAIL. FOUR WELL, WHEN
YOU MODEL THE PROJECTIONS FOR
RIDERSHIP, YOU USE THINGS LIKE
DEMOGRAPHICS YOU WHICH INCLUDE
POPULATION OF CONNECTING
SERVICES, ALL KINDS OF THINGS
THAT GO INTO THE RIDERSHIP MODEL
. I AM HAPPY TO DID YOU ANY
SURVEYS? YES THEY DID DO SURVEYS
WITH THE PUBLIC ON THIS, AND SO
THAT'S THAT'S ALL OF WHAT GOES
INTO THIS. THERE'S A MODEL THAT
WE ARE YOU WE ARE PIVOTING TO IN
THE PROJECT UPDATE REPORTING
HERE THAT CAPTURES NOT JUST WHAT
WE ARE ANTICIPATING TO DO, BUT
ALSO ALL OF THE SERVICES AND
WHERE THEY WILL BE IN THE 2030
TO 2040 TIMELINE. UNDER THE
STATE RAIL PLAN, AND SO WE WERE
MODELING OUR WORK WITH EVERYBODY
ELSE AND TRYING TO ARTICULATE
WHAT, UH, SYSTEM IN A RIDERSHIP
WILL BE ON CONNECTED SERVICES
BECAUSE OUR INITIAL SYSTEM IS
CONNECTED. IT'S NOT ALL JUST US.
SO WHEN WE TALK VALLEY TO VALLEY
THAT'S A TRIP THAT EVERYBODY'S
JUST ON US. IN THE CENTRAL
VALLEY. THERE'S TRANSFER POINTS
WITH A SPACE IN SAN JOAQUIN'S
THAT ARE MORE RELEVANT, AND SO
WE TALKED ABOUT IT FOR ALL OF
THOSE SYSTEM ELEMENTS CAN
CERTAINLY HAVE OUR RIDERSHIP.
GUYS MEET WITH YOU AND GO
THROUGH THIS AND OUR RIDERSHIP.
NUMBERS HAVE BEEN PEER REVIEWED
IN THE PAST, AND THEY WILL BE
PEER REVIEWED GOING FORWARD AND
SO AGAIN, WE'RE HAPPY TO SUBJECT
THOSE TO ANY REVIEW THAT ANYBODY
WOULD LIKE, AND I LIED. I DO
HAVE ONE MORE QUESTION. THE
LOGISTICS OF GOING THROUGH THE
BOTH THE SOUTHERN SECTION AND
THE MOUNTAINS, ETCETERA. YES.
$100 MILLION FUNDING GAP DOES
THAT INCLUDE THE POTENTIAL FOR
HAVING TO TUNNEL THROUGH? IT
REQUIRES THAT WE TUNNEL THROUGH,
BUT THE FUNDING GAP NUMBER
INCLUDED IN THAT FUNDING. IT IS
THAT'S WHY I SURVIVED. OKAY?
YES. MAYBE WE JUST WE JUST GOT
$38 BILLION. WE'RE NOT GOING TO
DEBATE ON THE DIOCESE DO THAT.
THANK YOU, SIR DOT YES. I
APPRECIATE MR KELLY, THE GREAT
WORK THAT YOU AND YOUR TEAM HAVE
DONE SINCE YOU HAVE COME ABOARD.
WE'VE HEARD THE ARGUMENTS IN THE
PAST OF WHERE WE'VE BEEN. WE'VE
HAD THE SAME KIND OF
CONVERSATIONS EVERY SINGLE TIME
WE HAVE A HEARING. YOU KNOW,
WITH WITH YOU COMING HERE AND
ANSWERING THOSE QUESTIONS. I
LOVE THE BAY BRIDGE ANALOGY. AS
YOU WELL KNOW, I WAS CHAIRMAN OF
THE MTC AT THE TIME AND WE TOOK
A LOT OF STATIC. THAT THING WAS
GOING TO BE A BILLION DOLLAR
PROJECT AND ENDED UP BEING 7
BILLION. LOOK AT THE BIG DIG IN
MASSACHUSETTS. THESE ARE NOT
GREAT EXAMPLES, BUT IT'S
SOMETIMES JUST STUFF HAPPENS. I
STILL FEEL LIKE I DID. YOU KNOW,
BACK WHEN? WHEN I SUPPORTED THE
PROJECT. I WISH WE HAD DONE A
LOT OF THINGS DIFFERENT. DON'T
GET ME WRONG. I KNOW YOU DO AS
WELL. BUT THE BOTTOM LINE IS MY
GENERATION. SOME OF YOU ARE. MY
GENERATION HAS NOT LEFT ANYTHING
FOR FUTURE GENERATIONS. IN THE
STATE, PARTICULARLY WITH CLIMATE
CHANGE, YOU KNOW, STARING US
DOWN. I STILL BELIEVE THIS IS A
PROJECT THAT NEEDS TO GET DONE.
IT'S GOING TO COST A LOT OF
MONEY. WE KNOW THAT BUT LATER ON
, WE WILL HAVE PEOPLE LOOKING
BACK. EVEN THE PEOPLE WILL BE
SURVEYED IN YOUR DISTRICT. I'LL
BET WE'LL COME BACK AND SAY, HEY
, THESE GUYS HAD A LOT OF
FORESIGHT. SURE COST A HELL OF A
LOT OF MONEY, BUT THEY HAD A LOT
OF FORESIGHT TO GET THIS DONE.
WE ARE STILL NEVER GOING TO CITE
WITH SEQUA. REQUIREMENTS AND
EVERYTHING. ANOTHER MAJOR
AIRPORT. IN THIS STATE YET EVERY
SINGLE FLIGHT I TAKE COMING OUT
OF THE STATE GOING ANYWHERE IS
FULL ALL THE TIME, UM CAP AND
TRADE FUNDS THOSE WE'RE NOT
GONNA GO FOR ROADS AND STREETS
AND BRIDGES. LET'S JUST FACE IT.
IF THE CAP AND TRADE WITH JERRY
BROWN HEAD AND DONE WHAT HE'D
DONE WITH CAP AND TRADE, IT
WOULD BE GOING TO OTHER THINGS,
BUT IT CERTAINLY WOULDN'T BE
GOING TO OTHER INFRASTRUCTURE
PROJECTS, NOT NECESSARILY THE
SAME THING WITH THE FEDERAL
FUNDS THAT WERE ASKING FOR RIGHT
NOW. THESE ARE SILOED FEDERAL
FUNDS THAT ARE GOING FOR HIGH
SPEED RAIL IN OUR COUNTRY TO
SUPPORT THE MISSION THAT THIS
PRESIDENT HAS BROUGHT FORWARD ON
WANTING TO HAVE MORE HIGH SPEED
RAIL. AS FOR CAPITAL VERSUS
OPERATING, I THINK, WITH ALL DUE
RESPECT, SENATOR NEAL OH, I
APPRECIATE AS A BUSINESS GUY I
APPRECIATE YOU KNOW THE FACT
THAT BUSINESSES LOOK AT WE CAN'T
LOOK AT THOSE TYPE OF THINGS
WITHOUT LOOKING AT AMORTIZED
CAPITAL COSTS, BUT THIS IS
TRADITIONAL IN GOVERNMENT
FUNDING FOR TRANSPORTATION
PROJECTS. IF YOU CAN IMAGINE
TRANSIT OPERATORS THAT ARE
BUYING ALL THESE BRAND NEW
HYDROGEN BUSSES ALL THESE
DIFFERENT NEW TECHNOLOGIES, WE
ARE THAT THEY WOULD HAVE TO PAY
BACK AT A FAIR BOX RECOVERY IN
ORDER TO GET ANY TYPE OF FEDERAL
OR STATE MONIES. IT JUST DOESN'T
PENCIL. THAT'S WHY I THINK THOSE
ARE APPLES IN IN IN ORANGES. I
THINK THAT WHAT WE KNOW FOR SURE
IS THAT WE'VE GOT THE PROPER ONE
THING IS AN ISSUE FOR ME. WE'VE
GOT A FEDERAL PARTNER THAT SEEMS
TO WANT TO INVEST IN THIS. WE'VE
GOT TO TAKE HIM DOWN THE ROAD
ALL THE WAY AND I JUST I JUST
THINK WE NEED TO MOVE FOUR SPEED
AHEAD WITH OUR EYES WIDE OPEN.
UH AND I HOPE YOU GUYS HIRE
SOMEBODY WITH THE SAME SKILL SET
IS INDUSTRY. KELLY THANK YOU.
THANK YOU. THANK YOU, SENATOR.
SENATOR ALLEN'S NEXT. WELL UM, I
MEAN, IT'S FUNNY PLACE WHERE I'M
KIND OF AGREEING A LOT WITH SOME
THINGS THAT BOTH SENATOR DODD
AND CENTER CR TO HAVE HAD TO
SAY. FIRST OF ALL, LET ME START
BY JUST SAYING, UM HOW GRATEFUL
I THINK WE ALL HAVE TO BEAT IT.
UM DIRECTOR KELLY FOR COMING IN
WITH THE COMPETENCE AND RIGHTING
THE SHIP. UM YOU KNOW, THEY ARE
IMMENSELY IMPORTANT AND, YOU
KNOW, IT'S ALSO NICE TO HAVE
SOMEONE STICK AROUND AND
ACTUALLY SEE THINGS THROUGH. WE
HAD SUCH INCREDIBLE TURNOVER AND
I REALLY DO HOPE THAT WHATEVER
PLANS THAT YOU HAVE INVOLVED YOU
DELAYING THOSE NEW PLANS AS LONG
AS YOU CAN, BECAUSE WE REALLY DO
NEED CONTINUITY AT THIS
ORGANIZATION. AND I THINK THE
TRACK RECORD FROM THE PAST SHOWS
THAT DESPERATELY OF COURSE, I
WANT TO SEE THIS THING BUILT AND
DOWN HIM. THE QUESTION IS THAT
THE COSTS ARE SO MASSIVE AND
THEY REALLY DO ULTIMATELY RELY A
LOT ON SOME BIG INFUSION OF
FEDERAL MONIES. WE KNOW HOW
COMPLICATED THE SITUATION IS IN
WASHINGTON, IT COULD GET MORE
COMPLICATED. SO OBVIOUSLY YOU
CAN'T PROGNOSTICATE ABOUT THE
FUTURE OF RAIL FUNDING FOR THE
UNITED STATES OF AMERICA. BUT I
WILL SAY I COULDN'T HELP BUT BUT
KIND OF TWITCH A LITTLE BIT WHEN
THE BRIGHT LINE FOLKS CAME OVER
AND DECLARED THAT THEY'RE GOING
TO BUILD HIGH SPEED RAIL LINE
FROM YOU KNOW CORRENTE,
CUCAMONGA LAST VEGAS BY 2028.
WHEN WE'RE LOOKING AT MERCED TO
BAKERSFIELD BY 2033, AND THIS
THING STARTED IN A WAY THAT, UM
HE, YOU KNOW, AND THE SO I JUST
I GUESS I'D LOVE SOME
REFLECTIONS ON. I SUPPOSE YOU
HAVE GIVEN US SOME INFORMATION
ABOUT ABOUT WHY WHY THAT MASSIVE
DELTA BETWEEN THOSE TWO PROJECTS
, BUT I WILL. I WILL. I DO WANT
TO ASK. WHAT ARE SOME THINGS WE
CAN DO TO GET SOME OF THESE
COSTS UNDER CONTROL. TO REALLY
GIVE US A FIGHTING CHANCE OF
GETTING THIS THING DONE. I'D
LOVE TO SEE IT GET DONE, OF
COURSE, BUT THESE CLASSES ARE
JUST ARE REALLY, REALLY HARMING
OUR ABILITY TO THINK ABOUT THAT
CREDIBLY. AND WHILE IT MAY NOT
BE SUCKING UP A LOT OF SB FUNDS,
SB ONE FUNDS, IT ISN'T AT ALL IT
IS SUCKING UP A MASSIVE AMOUNT
OF GROF FUNDS AND, QUITE
FRANKLY, THE VALUE PER TON OF
CARBON, UM, IS FAR LESS FOR THIS
PROJECT, EVEN WITH YOUR
RIDERSHIP NUMBERS. THEN FOR A
LOT OF THE OTHER KINDS OF
PROJECTS THAT ARE FINANCE CENTER
ADDED THE G R F, SO THAT'S A
FINITE CARE A GREAT DEAL ABOUT
AND I WANT TO MAKE SURE WE'RE
DOING OUR BEST TO PROVIDE REAL
REAL TANGIBLE. CLIMATE BENEFITS
TO CALIFORNIANS. EVERYTHING FROM
WEATHERING Tð. ENERGY EFFICIENCY
, ETCETERA, SO THOSE KINDS OF
PROJECTS ARE GETTING UNDERFUNDED
AND PARTLY BECAUSE WE'VE GOT SO
MUCH MONEY, YOU KNOW, WRAPPED UP
IN THE CONTINUOUS APPROPRIATION.
SO, UM, I WOULD LOVE SOME
THOUGHTS ON HOW TO HOW DO WE
MOVE FORWARD WITH THIS PROJECT
WITH GETTING SOME OF THESE COSTS
BETTER UNDER CONTROL. WELL, I
GUESS I WOULD SAY, I THINK, UM I
THINK, AS I SAID EARLIER, ONE OF
THINGS WE LEARNED IS JUST, UM I
WOULD NOT. I WILL NOT REPEAT THE
EXERCISE OF GOING TO THE PUBLIC
FOR PARTIAL FUNDING OF THE
PROJECT. I THINK I THINK $9
BILLION EXERCISE FOR SOMETHING
AT THE TIME IN THE SAME GENERAL
ELECTION PAMPHLET ESTIMATED THE
COST OF THE SYSTEM AT 45 BILLION
, YOU KNOW, AND THEN EXPECTING
SPECIFIC DELIVERY DATES IS
UNREALISTIC. AND I THINK WE
SHOULD ALL LEARN FROM WHAT WAS
ALL THAT WAS JUST AVAILABILITY
AT ALL COMING. IF WE START THE
IDEA WAS TO GET STARTED WITH 9
BILLION LET'S GO FIND FEDERAL
AND PRIVATE AND LOCAL MONEY TO
COME AND HELP MATCH THIS. AND I
THINK A COUPLE OF CHALLENGES
THAT I'VE LEARNED OVER THAT IS
ONE FROM A LOCAL. THIS IS A
PROJECT LIKE THIS. THAT IS
STATEWIDE IN NATURE. SAN
FRANCISCO ALL THE WAY TO L. A IS
ALWAYS BY ITS NATURE GOING TO BE
A STATE PRIORITY. AND SO I THINK
, LOOKING FOR A TON OF LOCAL
MONEY TO HELP BUILD THIS IS
CHALLENGING. AT LEAST AT THIS
STAGE. I THINK IT WILL GET
BETTER AS YOU GO FORWARD BECAUSE
THE LOCAL BENEFITS WILL BECOME
CLEARER. BUT I THINK INITIALLY
SEEKING, YOU KNOW, SUGGESTING
LOCAL FUNDS WOULD COME FOR A
STATEWIDE PROJECT IS WAS NOT THE
MOST REALISTIC THING I THINK
PROVIDING 1/5 OF THE PROJECT
COST AND AGAIN EXPECTING STRICT
DELIVERY DATES WAS UNREALISTIC,
AND IT'S NOT ME OR ANYBODY ELSE
OR YOU OR ANYBODY ELSE. NOBODY
CAN DO PROMISE A DELIVERY DATE
WHEN ITS UNFUNDED I THINK THE
THINGS THAT WE OWN AT THE
AUTHORITY THAT YOU KNOW STARTED
BEFORE I GOT HERE AND THINGS I
LEARNED ON THE JOB. ARE YOU KNOW
, WE OWE AN OBLIGATION TO
PERFORM WELL, TO PERFORM BETTER
TO A LOT TO ANNOUNCE MILESTONES
THAT WE CAN ACHIEVE, AND THEN HE
AND THEN ACHIEVE THEM, AND I
THINK FOR A LONG TIME, THERE WAS
A MORE HOPE IN SOME OF THE
MILESTONES AND THERE WERE
REALISTIC EXPECTATIONS. AND SO
YOU HAVE TO ADJUST THAT. I HAVE
LEARNED A LOT ABOUT THE SECRET
PROCESS AND I'M OF A SPLIT MIND
ON IT TO BE CANDID WITH YOU. I
THINK ON THE ONE END, THE SECRET
PROCESS IS EXTREMELY VALUABLE
AND HAVING THE RIGHT
CONVERSATION WITH THE
COMMUNITIES THAT YOU'RE BUILDING
IN ON HOW THE PROJECT WILL WORK
IN THE COMMUNITY AND WHAT YOU
HAVE TO DO FOR IT. I THINK THE
LITIGIOUS NATURE OF THAT PROCESS
IS HARMFUL, AND I THINK IT'S
AWFULLY THERE'S OFTEN LITIGATION
FILED OVER THINGS THAT HAVE
NOTHING TO DO WITH THE
ENVIRONMENTAL PROCESS OR IN THE
ENVIRONMENT. AND WHEN I STARTED
HERE I THINK WE HAD SEVEN
OUTSTANDING LAWSUITS. WHEN I
STARTED ON 119 MILES OF CLEARED
PROPERTY, AND AT ONE TIME IT WAS
12. WHEN I GOT HERE, THERE WERE
SEVEN WE TOOK AN EFFORT TO
SETTLE ALL OF THEM. TODAY WE'VE
CLEARED 422 MILES, AND WE'VE
ONLY GOT THREE LAWSUITS. WE
SETTLED THE BURBANK ONE AND WE
HAVE TWO LEFT THAT ARE IN
NEGOTIATIONS NOW. SO IT'S GOTTEN
BETTER, BUT THAT TAKES A LONG
TIME. AND SO THERE'S SOME THINGS
THERE THAT I THINK ARE TRICKY,
AND I THINK THERE'S ALWAYS MORE
WE CAN DO TO WORK MORE
EFFICIENTLY. WITH THE DIFFERENT
AGENCIES, BOTH FEDERAL AND STATE
ON MOVING FASTER ON PERMITTING
REQUIREMENTS. AS YOU GO THROUGH
CONSTRUCTION. THERE'S A LOT YOU
CAN DO TO STREAMLINE SOME OF
THOSE PROCESSES. SO THOSE ARE
THINGS THAT I THINK ARE
IMPORTANT TO SOME OF WHAT
AFFECTED THE PROJECT AGAIN. WHAT
HAPPENS WHEN YOU DON'T HAVE FULL
FUNDING IS YOU LOSE TIME. WHEN
YOU LOSE TIME ON A PROJECT OF
THIS MAGNITUDE, THE DOLLAR SIGNS
ARE HUGE. AND SO IF I DON'T HAVE
FULL FUNDING, YOU CAN'T DELIVER
SOMETHING BY A DATE CERTAIN
BECAUSE I DON'T HAVE FULL
FUNDING AND THEN YOU PUSH OUT
THOSE DATES. IT'S BILLIONS OF
DOLLARS EVERY TIME YOU PUSH OUT
THE DATES. AND THAT'S THE
REALITY OF WHEN YOU DON'T HAVE
FULL FUNDING. IT'S IMPOSSIBLE TO
MEET A SPECIFIC DATE. SO YOU
KNOW I HEAR AND HAVE HEARD A LOT
ABOUT WHAT WAS SAID 15 YEARS AGO
IN THE BOND BILL AND WHAT THE
COST WOULD BE, AND THAT IT WOULD
BE DONE BY 2020. BUT IF YOU'RE
REALLY CANDID ABOUT THAT THE
BOND BILL PROVIDED 1/5 OF THE
FUNDING AND SAID, WE GET DONE BY
A DATE CERTAIN AND THE REST OF
IT HASN'T COME. AND OVER TIME,
THOSE COSTS GET MORE EXPENSIVE.
BECAUSE ON A PROJECT OF THIS
MAGNITUDE A YEAR'S DELAY IN A
PERCENT OF INFLATION THAT
APPLIES TO THAT IS MAMMOTH IN
THE BILLIONS OF DOLLARS. I THINK
IF I IF I REALLY BREAK DOWN OUR
COST ESTIMATES FOR THE FUTURE,
UM MOST OF IT IS TIED TO TIME.
AND INFLATION AND ESCALATION
TIED TO TIME. NOT ANYTHING THE
AUTHORITIES DOING POORLY OR
RIGHT FROM THE MANAGEMENT
PERSPECTIVE, IT'S TIME AND AN
UNFUNDED PROJECT. AND THAT WILL
BE THE COST DRIVER GOING
FORWARD. YES THE THOUGH. WELL,
IT SOUNDS AS THOUGH THERE WAS A
LOT OF PROBLEMS ASSOCIATED WITH
WERE IN THE BEGINNING. THIS
INTERACTION BETWEEN THE SPEED
WITH WHICH WE WERE BEING ASKED
TO START SPENDING DOLLARS, YES.
THAT DID LEAD TO MISTAKES. I
MEAN, I GUESS THE OTHER LESSON I
WOULD SAY, I THINK THIS IS AN
IMPORTANT ONE. I SHOULD I WANT
TO RECOGNIZE MY FEDERAL PARTNERS
HERE. THEY DID LEARN AN
IMPORTANT LESSON WHEN THEY
FUNDED THIS PROJECT BACK IN 2009
. THEY HAD VERY STRICT SPENDING
REQUIREMENTS. THAT MONEY HAS TO
BE SPENT BY A DATE CERTAIN THAT
ENDED UP BEING A PERVERSE
INCENTIVE FOR A LOT OF THINGS
AND AROUND THE COUNTRY. MANY
PROJECT SPONSORS DID NOT MEET
THOSE DEADLINES. WE WERE THE
BENEFIT OF SOME OF THAT, BECAUSE
SOME OF THOSE DOLLARS THAT
DIDN'T GET SPENT ELSEWHERE. WE
ABSORBED EITHER HERE ON THIS
PROJECT OR ANOTHER PROJECTS AND
IN CALIFORNIA. BUT IT ALSO
AFFECTED US IN A BAD WAY AND
THAT THE AUTHORITY WORKED HARD
TO SPEND MONEY WHICH MEANT GOING
INTO CONSTRUCTION AT RISK AND
WITHOUT HAVING THE CHRONOLOGY
AND THE SEQUENCING OF THE WORK
AND THE RIGHT ORDER THAT CAME
WITH DELAYS AND COSTS LATER, SO
MAKING SURE THAT THE RIGHT
INCENTIVES ARE TIED $2 FOR
PROJECTS LIKE THIS IS ALSO
IMPORTANT WHEN YOU MENTIONED THE
CONCESSIONAIRES DOWN IN SOUTHERN
NORTHERN CALIFORNIA, IS THAT
COULD HELP TO FIND THIS. ARE YOU
REFERRING TO THE MODEL THAT
WE'VE SEEN IN PLACES LIKE
TAIWAN? UH, ONE AND CHINA AND
FRANCE, WHERE THEY WHERE WE THE
RAIL AUTHORITY HAS A CERTAIN
AMOUNT OF LAND AROUND THE
STATIONS. THEY KNOW THAT AS A
RESULT OF THE CONSTRUCTION OF
THE TRAIN, THEY'RE GOING TO
BRING ALL THIS EXTRA VALUE TO
THAT LAND. AND SO YOU CAN GET
SOME MONEY ASSOCIATED WITH THE
DEVELOPMENT OF THAT LAND TO HELP
FINANCE THE PROJECT, OR IS THIS
MORE? SOME OF THAT? SOME OF THAT
IS TIED TO LIKE, TURNS AROUND
DEVELOPMENT AROUND THE STATION
WITH WHAT WE CALL LIKE. YEAH I
WAN. I MEAN, WELL, WHAT WE'RE
DOING TO FINANCE THE PROJECT
THERE WHERE WE ARE BUILDING
STATIONS IN THE CENTRAL VALLEY.
WE'RE LOOKING FOR OPPORTUNITY.
FOR VALUE CAPTURE. THOSE COULD
BE UM, LEASES AT STATIONS FOR
REVENUE, GENERATING THINGS LIKE
CONCESSIONS LIKE FOOD OR THAT'S
WHAT YOU'RE TALKING ABOUT.
THERE'S SOME OF THAT. THERE'S
ALSO OTHER PLACES WHERE WE MAY
OWN SOME PARCELS WHERE THERE
MIGHT BE OPPORTUNITIES FOR A
JOINT DEVELOPMENT THING WITH THE
LOCAL GOVERNMENT, WHERE OR WITH
A PRIVATE SECTOR PARTNER WHERE
YOU CAN HAVE SOME REVENUE
SHARING OFF OF THAT, THAT YOU
KNOW WE'RE NOT QUITE THERE ON
ALL OF THE SPECIFICS ON THAT YET
, BUT THOSE ARE SOME ISSUES
AROUND STATIONS THAT ARE
RELEVANT TO US. THAT WE WANT TO
LOOK AT, AND THAT'S WHAT SOME
OTHER COUNTRIES DO THE
CONCESSIONAIRE THAT I WAS REALLY
REFERRING TO ON THE P THREE SIDE
HAD TO DO WITH WHERE YOU HAVE A
SEGMENT AND I EXPERIENCED SOME
OF THIS ON A RECENT TRIP LAST
YEAR IN ENGLAND AND IN FRANCE,
WHERE THEY BUILT CERTAIN
SECTIONS WITH HIGH SPEED RAIL
FOR EITHER HIGH SPEED, RAIL OR
IMPROVE PUBLIC TRANSIT IN
ENGLAND. THEY'LL BURN. THEY'LL
OFFER A PRIVATE OPERATOR TO
OPERATE THAT SYSTEM, AND THAT
OPERATOR PAYS THE FEE TO DO IT.
YOU CAN USE SOME OF THOSE
DOLLARS THEY PAY TO DO IT TO DO
CAPITAL EXPENDITURES SOMEWHERE
ELSE OR EXPAND THE PROJECT, AND
THEN THEY GET THE REVENUES THAT
COME FROM THE OPERATIONS. AND SO
FOR THEM. IT'S A SYSTEM THAT
WORKS THAT WORKS IN TERMS OF
MONEY MAKING SYSTEM FOR THEM.
AND FOR THE STATE. YOU'VE
CONCESSION THAT THEY PAID TO
OPERATE THAT YOU CAN USE FOR
OTHER PURPOSES, AND WE COULD DO
SOMETHING SIMILAR THAT AND STILL
BE IN COMPLIANCE WITH THE LETTER
OF YOU CAN AND WHERE IT'S A
REVENUE GENERATING SEGMENT, AND
THAT'S WHY I'M SAYING IT'S MORE
RELEVANT IN THE BAY AREA AND,
AH, WHAT WE WANT TO DO. AND WHAT
I'M PROPOSING THAT THE AUTHORITY
DOES. THIS YEAR IS GO OUT FOR
WHAT WE CALL A, UH ON MAFIA AND
REQUEST FOR EXPRESSION OF
INTEREST. WHICH IS ENGAGING THE
PRIVATE SECTOR IN THIS DIALOGUE
NOW, BECAUSE AS WE TALK ABOUT
THESE THINGS LATER AND WHERE YOU
MIGHT HAVE THESE OPPORTUNITIES
ON A STATEWIDE SYSTEM, THERE
MIGHT BE OPPORTUNITY TO BRING IN
THAT KIND OF PRIVATE CAPITAL
UNTIL WE WANT TO TALK ABOUT THAT
. THE OTHER PLACE IS ON THE
STATION DEVELOPMENT SIDE, THOUGH
, AND THOSE ARE CONVERSATIONS
THAT AS WE GET CLOSER,
DEVELOPING THOSE STATIONS AND
WORKING WITH LOCAL PARTNERS. YOU
CAN WORK THROUGH SOME OF THOSE
ISSUES AS WELL FOR REVENUE. NOW
THIS $100 BILLION DELTA THAT YOU
WERE DIALOGUING ABOUT IS THAT I
MEAN, THAT'S OUR SO ALL THE
ENVIRONMENTAL REVIEWS WILL BE
DONE THAT THAT THAT MONEY IS
LITERALLY JUST FOR THE
CONSTRUCTION, SO THAT'S
TUNNELING AND LABOR AND ITS
TUNNELING INTO CAPITAL. IT'S
ALSO TRAIN SETS. YOU KNOW, WE
GOTTA BUY AT THE END OF THE DAY.
I THINK WE HAVE 66 TRAIN SETS
FOR THE WHOLE STATE OF
CALIFORNIA. IN THE CENTRAL
VALLEY. WE'RE STARTING WITH JUST
SIX. SO THERE'S A LOT MORE KIND
OF NEW I AM THE SORT OF PROBLEMS
THAT YOU'VE BEEN TALKING ABOUT
PERMIT. IT IS FOR ALL THE
PRECONSTRUCTION STAFF. IT IS FOR
RIGHT OF WAY. ACQUISITION
UTILITY MOVING CONSTRUCTION
ELEMENTS BUYING TRAINS. ALL OF
THAT IS IN THE IN THE COST
ESTIMATES THINGS. THE
LEGISLATURE. UM YOU KNOW, I CAN
DO THAT. WOULD THAT COULD HELP
YOU DRIVE DOWN THAT COST? I WANT
TO GIVE SOME THOUGHT AS TO WHAT
IT IS THAT THE LEGISLATURE CAN
DO. I THINK THERE ARE THINGS
ALONG THE WAY. AS I SAID. SOME
OF THE LITIGATION CHALLENGES IN
THE PROCESS HAD BEEN DIFFICULT.
I WISH THAT THE SECRET PROCESS
WASN'T QUITE AS LITIGIOUS AS IT
IS, I DON'T KNOW, AND WE
PROVIDED EXPEDITED REVIEW FOR
ALL SORTS OF THINGS. WE'VE DONE
IT FOR STADIUMS. WE HAVEN'T DONE
IT FOR THIS MASSIVE COST OF THE
PUBLIC, YOU KNOW, SO THAT'S AN
EXAMPLE. RIGHT I MEAN IT IS,
ALTHOUGH, BUT I'M COMING TO THE
END OF MY ENVIRONMENT. SO IN
TERMS OF HELPING THIS PARTICULAR
PROJECT I MEAN, I'LL BE DONE
WITH THESE IN 2025. I LOVE I
LOVE IF YOU HAVE INSIGHTS ON
WANT TO COME BACK TO YOU BECAUSE
I DO THINK SOME OF IT IS ON THE
EVEN SOME OF THAT POST PROCESS
IN SOME OF THE PERMITTING STUFF
THAT WE GO THROUGH GOING
FORWARD. THAT MATTERS. UM YOU
KNOW SOME OF THE COSTS THAT
WE'RE SEEING LIKE AGAIN.
INFLATION SPIKED DRAMATICALLY
DURING COVID, AND WE'RE
REFLECTING THAT SURE, BUT THOSE
ARE THINGS THAT YOU ALL CAN'T
CONTROL. SO I THINK THERE MAY BE
OTHER THINGS WHEN WE GET TO SOME
OF THE ELEMENTS THAT YOU'RE
TALKING ABOUT ON STATION
DEVELOPMENT AND THINGS WE CAN DO
TO ENCOURAGE THE RIGHT KIND OF
DEVELOPMENT AROUND STATIONS THAT
CAN ALSO BENEFIT THE AUTHORITY.
I THINK THAT'S AN AREA THAT WE
WANT TO COME BACK ON. YEAH I
LOVE TO HAVE A DIALOGUE èC ON
THAT, BECAUSE YOU KNOW, THE END
OF THE DAY IS SUCH AMAZING. YOU
KNOW, I MEAN, YEAH, SENATOR
CGRTS POINT IS CORRECT. IT'S
SUCH A MASSIVE DELTA AND IT
REALLY, YOU KNOW, WE JUST DON'T
WHERE DOES THAT MONEY COME FROM,
RIGHT AND? AND SO IF THERE ARE
THINGS THAT WE CAN DO TO CHIP
AWAY AT THAT NUMBER THAT GIVES
US A FIGHTING CHANCE OF ACTUALLY
REALIZING THE VISION THAT
SENATOR DIED ARTICULATED OF
ACTUALLY LEAVING SOMETHING
THAT'S TANGIBLE FOR SECOND NEXT
GENERATION. APPRECIATE THAT.
THANK YOU. LET ME JUST MAKE UP A
COUPLE OF POINTS. FIRST OF ALL,
THANK YOU VERY MUCH, AND ON ON
THE QUESTIONING THE INQUIRIES
THAT SENATOR ROSCOE AND I THINK
SOME OTHERS MADE, UM WE ARE JUST
TALK BEFORE THE HEARING WITH
REGARD TO EQUITY COMMUNITY
BENEFITS AND HOW THAT APPLIES
ONGOING. YOU KNOW, ASIDE FROM
JUST THE CONSTRUCTION WORK
ITSELF AND THANK YOU VERY MUCH
FOR ALL THE WORK THAT'S BEEN
DONE TO CREATE EQUITY IN THE
CONSTRUCTION WORK, INCLUDING
WHAT'S GOING ON RIGHT NOW, WHILE
WE'RE HOLDING THIS HEARING, AND
WE COULD SEE THAT ON THE SCREENS
, WE COULD SEE THE WORKERS OUT
THERE WORKING AT HIGH PAYING
JOBS. BUT IF YOU KEEP THIS
COMMITTEE APPRISED OF SOME OF
THOSE UNKNOWNS THAT YOU'RE STILL
WORKING ON HOW EXACTLY YOU WILL
BE ABLE TO WAIT. UM THE RFP
PROCESS, FOR EXAMPLE, ON THE
ROLLING STOCK, YOU KNOW, THERE'S
IT SOUNDS LIKE YOU'RE NOT QUITE
THERE YET, IN TERMS OF KNOWING
EXACTLY, UM, HOW MUCH YOU'LL BE
ABLE TO LEAN IN ON THAT AND WE
DON'T GET THE UPDATES EARLY
ENOUGH. I UNDERSTAND YOU'RE
LEAVING. BUT IF YOU CAN LEAVE
THAT, AS PART OF A SMALL PART OF
YOUR ONGOING LEGACY TO MAKE SURE
THAT WE GET REPORTS ON HOW
AGGRESSIVELY. THOSE STANDARDS
CAN BE APPLIED GIVEN GIVEN THE
RESTRICTIONS THAT YOU'RE GOING
TO BE DEALING WITH, INCLUDING
ANY FEDERAL LIMITATIONS. IT'S
JUST A REQUEST FOR CAN. I JUST
SAID A LITTLE EXPECTATION ON
THAT SHIRT AND THEN YOU KNOW
WE'LL DO WHATEVER WE CAN DO, BUT
I INTEREST OF TIME. YEAH. I JUST
WANT TO SAY THAT I WANT TO TRY
TO DO BULLET POINTS HERE AT THE
END OF A HEAD. OKAY? I JUST I
THE BOARD. MY BOARD IS SCHEDULED
TO HAVE A PUBLIC HEARING ON
APRIL 11TH. WE'RE INTENDING TO
BRING THE RFP TO THE BOARD IN
APRIL, 11TH ABOUT A WEEK IN
FRONT OF THAT WE PUT OUT ALL THE
BOARD MATERIALS PUBLICLY THAT
THE BOARD WILL WILL CONTEMPLATE
THAT WILL INCLUDE VERY
COMPREHENSIVE SUMMARY OF THE RFP
, INCLUDING HOW WE WILL BE
APPLYING THE USDP THE EMPLOYMENT
PLAN. IN THE CONTEXT OF THAT
THAT SUMMARY, AND THEN WE WILL
HAVE A PUBLIC HEARING TO TAKE
PUBLIC COMMENT ON THAT ON APRIL
11TH SO THAT THAT'S WHAT WE'RE
LOOKING AT GOING FORWARD. GREAT
THAT'S EXCELLENT. UM, JUST A
GENERAL COMMENT. I DON'T EXPECT
RESPONSIBLE. YOU'RE WELCOME TO
MAKE ONE UM YOUR PRESENTATION
HAS BEEN EXCELLENT. I HAVE NO
CRITIQUE OF THE PRESENTATION
WHATSOEVER. WHAT WHAT'S
DIFFERENT ABOUT IT, ESPECIALLY
RELATIVE TO SOME OF THE
PRESENTATIONS I HEARD OVER THE
YEARS PRIOR TO YOUR INVOLVEMENT.
UM IN MY OWN COUNTY. A LOT OF
THE HIGH SPEED RAIL. UM
OVERSIGHT MEETINGS WERE HELD
RIGHT IN OUR BOARD OF
SUPERVISORS CHAMBERS OVER THE
YEARS WAS THE COST THE COST OF
DELAY AND I KNOW YOU HAVE RANGES
IN HERE AND I KNOW YOU'VE SAID
CLEARLY, WE FACTORED IN
INFLATION AND COST TO THESE
RANGES. BUT YOU'RE ALSO CLEARLY
AND CANDIDLY INDICATING THAT WE
WE'RE MANAGING A PROJECT
MANAGING A PROJECT WITHOUT EVEN
KNOWING IF YOU'RE GOING TO BE
ABLE TO HIT BENCHMARKS AND
TIMELINES WERE STILL IN THAT
POSITION BECAUSE OF THE $100
BILLION DELTA. IT SEEMS TO ME
THAT IT'S WORTH THE RISK OF
BACKLASH, THE SENSE OF URGENCY
THAT YOU GET BY REALLY DEFINING
WHAT THE $128 BILLION IS GOING
TO COST FOR EVERY DAY AND EVERY
WEEK IN EVERY YEAR OF DELAY ON
FINDING THE RESOURCES THAT
SENATOR ALLEN AND OTHERS HAVE
BEEN QUESTIONED YOU ABOUT, UM, I
THINK IT'S WORTH, YOU KNOW.
SPEAKING VERY, VERY CANDIDLY
ABOUT THOSE COSTS. I TALKED
ABOUT THEM BEING ENORMOUS OR
SOME BETTER WORD THAN THAT
BETTER DESCRIPTOR. I'VE HEARD
OVER THE YEARS, YOU KNOW.
SPEECHES LENGTHY ARTICULATION
ROD DURING DÂN IN AN ADVOCATE IN
OUR OWN AREA, JUST PUTTING IT
OUT THERE AND SEEING IF THERE IS
AN ARGUMENT FOR GOING NOW AND
GOING FAST, IT'S WE'RE HERE.
WE'RE PRETTY DEEP IN THE WATER
NOW AND NOW THE COST. CAN ONLY
BE CONTROLLED BY FINDING THE
MONEY AND DOING THE
IMPLEMENTATION, ESPECIALLY SINCE
YOU'VE GOT THE DESIGN. READY TO
GO READY TO BID. YOU WELCOME TO
COMMENT ON THAT. AND THEN I JUST
HAVE ONE MORE POINT AFTER THAT,
AND I WANT TO GET TO THE NEXT
PANEL. IF I HEAR YOU, RIGHT? I
THINK YOU'RE SAYING, YOU KNOW,
EXPRESSING THIS CLEARLY THE COST
OF DELAY AND I THINK WE WANT TO
TAKE THAT BACK AND FIGURE OUT
HOW TO DO THAT. IT'S A IT'S A
RISKY EVERY TIME YOU SAY IT. I
MEAN, WE'RE GOING TO GET FOLKS
THAT ARE CONCERNED WITH JUST PUT
ANOTHER BIG NUMBER OUT THERE.
BUT THE RISK OF NOT DOING THAT
IS I THINK SOME COMPLACENCY, YOU
KNOW, IN TERMS OF THE URGENCY
AND I THINK THERE ARE PEOPLE
HERE WHO DO WANT SWEET. WE'VE
HEARD IT WANT TO HELP FIND THE
MONEY? LASTLY THAT KIND OF A
SELF SEGWAY. IF YOU TAKE THE
TOTAL MILES OF THIS PROJECT IN
YOU DIVIDED, YOU KNOW, MILES
INTO THE $100 BILLION. IT'S NOT
SO HARD TO SCALE COMMUNITY
FACILITIES, DISTRICTS UP AND
DOWN THE LINE. THEY'RE NOT GOING
TO BE TRANSIT ORIENTED
DEVELOPMENT IN THE TRADITIONAL
SENSE BECAUSE YOU DON'T HAVE
STATIONS UP AND DOWN THE LINE
THIS NATURE OF HIGH SPEED RAIL,
BUT YOU DO WE CAN. THE
LEGISLATURE CAN CREATE
STREAMLINING FOR PERMITTING FOR
PROVIDE DENSITY, HOUSING AND
OTHER OPPORTUNITIES ALONG ALONG
THE CORRIDOR. I HOPE THIS
REQUEST FOR EXPRESSIONS OF
INTEREST REALLY CALLS FOR THAT.
ASKED FOR THAT WE WERE HAVING
CONVERSATIONS. I WAS WITH PEOPLE
LIKE FORMER EMPTY C CHAIR JOHN
REUBEN, SUPERVISOR AND PESKIN,
SAN FRANCISCO ABOUT JUST TAKING
THE PENINSULA SECTION AND TRYING
TO FIGURE OUT HOW TO DO SOME
KIND OF AGGREGATED RFP, WHERE
THERE'S AN OPPORTUNITY A CALL
FOR PROPOSALS TO REALLY KIND OF
SOLVE TWO PROBLEMS AT ONCE
STARTED DRESSING ARE HIGH
DENSITY HOUSING NEEDS ARE
AFFORDABLE HOUSING NEEDS BY
STREAMLINING DENSE DEVELOPMENT
ALONG THE CORRIDOR, NOT BECAUSE
YOU'RE CLOSE TO A STATION, BUT
JUST BECAUSE WE NEED THE MONEY,
YOU GET THE EXACT SHINS THAT
$100 BILLION SKILLS PRETTY WELL
OVER SEVERAL 100 MILES. YOU
KNOW, IT STARTS TO DIVIDE STARTS
TO LOOK VERY, VERY DOABLE. IN
TERMS OF THE KIND OF DEVELOPMENT
EXACT SHINS YOU COULD GET OUT OF
PROJECT AFTER PROJECT AFTER
PROJECT THROUGH KOREA'S
FACILITIES DISTRICTS, PROBABLY
BELARUS DISTRICTS. WHATEVER WE
HAVE THOSE TOOLS, I DON'T THINK
SENATOR ALLEN'S POINT OF
SALUTING TO. I DON'T THINK THE
LEGISLATURE HAS COME IN WITH SB
35 TYPE OF APPROACH OR SB. 420 0
DESERVES TO COME IN AND SAY IF
YOU ARE GOING TO IF YOU'RE GOING
TO BUILD ALONG THE CORRIDOR AND
CREATE UM, CONTRIBUTIONS TO THIS
LINE. I WOULD CALL HIM EXACT
SHINS. THEN YOU'RE ENTITLED, UM,
TO DECLARE THOSE ENVIRONMENTAL
CONCERNS OVERNIGHT. WE CAN
STREAMLINE THAT PROCESS, AND I
THINK THAT'S SOMETHING WE CAN
REALLY DO IS TO YOUR POINT.
THERE IS NO POINT IN TRYING TO
STREAMLINE YOUR ENVIRONMENTAL
REVIEW ANYMORE. IT'S ALREADY
DONE BUT IF WE COULD DO THAT
ALONG THE CORRIDOR. I THINK ALL
OF A SUDDEN YOU'VE GOT SCALE
$100 BILLION STARTS TO LOOK LIKE
A ACTUALLY A PRETTY DOABLE
NUMBER RELATIVE TO THE KIND OF
DEVELOPMENT THAT SHE COULD GET
IT TALKING ABOUT LESS THAN A
MILLION DOLLARS PER MILE ON THE
LINE IF I'VE DONE MY MOUTH,
RIGHT, SO MY BEST BUCKS ON IT,
AND I AM NOT IN A DEBATE ABOUT
HOW HARD IT IS HERE. I'M JUST
SAYING, I THINK I THINK IT'S
HARD UNTIL IT ISN'T IT ISN'T AS
SOON AS WE CREATE MORE SKILLED
AND MORE PRIVATE SECTOR
OPPORTUNITY ALONG, YOU KNOW,
ALONG THE WAY, I WOULD LIKE TO
BE PART OF THAT ONGOING
DISCUSSIONS. SO I HOPE WITH
THAT, TOO. YOU CAN REPORT BACK
TO US AS A COMMITTEE. I DON'T
KNOW WHAT THE ASSEMBLY COMMITTEE
HAS REQUESTED, BUT REPORT BACK
TO US WE HAVE TO WAIT UNTIL NEXT
TIME AROUND, YOU KNOW, FOR AN
UPDATE FROM YOUR SUCCESSOR TO
UNDERSTAND EXACTLY WHAT KIND OF
INTEREST WE GOT FROM THIS
EXPRESSION OF INTEREST IN
WHETHER OR NOT YOU NEED TO GO
OUT WITH ANOTHER ONE. BASED ON
WHAT YOU LEARNED FROM THE FIRST
ONE. I THINK ONE THING THAT WE
CAN DO WITH YOUR OFFICES
DEVELOPED THAT THAT EXPRESSION
OF INTEREST. I MEAN, IT WOULD BE
GOOD TO GET THAT KIND OF INPUT
ON WHAT SHOULD BE IN THAT BEFORE
WE GO OUT WITH IT. SO I LIKE TO
WORK WITH YOUR OFFICE ON THAT,
AND I THINK I THINK PRIVATE
SECTOR AND LOCAL GOVERNMENT
INTERESTS NEED TO BE INVOLVED IN
THAT. UM, THANK YOU VERY MUCH.
AND IF THERE'S NOTHING ELSE WILL
GO ON TO THE NEXT PANEL,
APPRECIATE YOU BEING HERE. THANK
YOU MEMBERS.
OKAY? WONDERFUL DAY. OKAY SO
WE'RE GOING TO HEAR FROM HELEN
KERSTEIN FROM THE LEGISLATIVE
ANALYST'S OFFICE. LOU THOMPSON,
CHAIR OF THE INDEPENDENT, HIGH
SPEED RAIL PERIOD VIEW GROUP,
AND BENJAMIN BUILDING, HIGH
SPEED RAIL INSPECTOR GENERAL.
WELCOME TO ALL OF YOU. I
UNDERSTAND WE'RE GOING TO TALK
TO START WITH THE OFFICE. IS
THAT CORRECT? THAT'S CORRECT.
THANK YOU SO MUCH, MR CHAIR AND
SENATORS REALLY APPRECIATE YOU
INVITING ME TO PARTICIPATE IN
YOUR HEARING TODAY TO GUIDE MY
COMMENTS. WE PREPARED TO HAND
OUT I THINK THE SERGEANT SHOULD
BE PASSING OUT THOSE HANDOUTS.
THEY'RE AVAILABLE ON OUR
OFFICE'S WEBSITE AS WELL AS ON
YOUR COMMITTEE'S WEBSITE. FOR
THOSE WHO MAY STILL BE WATCHING
FROM HOME. IT'S A RELATIVELY
LONG HAND OUT. A LOT OF THIS IS
BACKGROUND BOTH ON THE PROJECT
AND ON THE BUSINESS PLAN. I KNOW
YOU'VE GONE OVER THIS IN GREAT
DETAIL. YOU'VE HAD A VERY ROBUST
DISCUSSION THIS AFTERNOON. I'M
GOING TO TRY TO GO RELATIVELY
QUICKLY, AND I'M GOING TO START
KIND OF MIDWAY THROUGH THE
DOCUMENT YOU HAVE BEFORE YOU ON
PAGE 16. AGAIN I'M GOING TO TRY
TO GO QUICKLY BECAUSE YOU'VE
COVERED SO MUCH CROWNED ALREADY
IN THIS DISCUSSION. YOU'VE
REALLY YOU'VE STOLEN MY THUNDER
A LITTLE BIT, WHICH IS WONDERFUL
. THAT'S THAT'S EXACTLY HOW I
LIKE IT. WE APPRECIATE IT. THANK
YOU. SO FIRST, I'M GOING TO
HIGHLIGHT SOME KEY ISSUES FOR
LEGISLATIVE CONSIDERATION THAT
WILL GO QUICKLY INTO SOME
RECOMMENDATIONS THAT FLOW FROM
THOSE KEY ISSUES. THE FIRST ONE
IS DESPITE THE LARGE FEDERAL
INFUSION OF FANS, AND YOU HEARD
ABOUT THAT THE $3.3 BILLION THAT
THE PROJECT RECEIVED OVER THE
LAST COUPLE OF YEARS. THERE'S
STILL A SIGNIFICANT FUNDING GAP.
YOU HEARD THAT PROBABLY AROUND
$7 BILLION, DEPENDING ON EXACTLY
WHAT PART OF THE RANGE YOU LOOK
AT. UM AND WHILE THE AUTHORITY
HAS A TARGET OF THE $4.7 BILLION
OF ADDITIONAL FEDERAL FUNDS YOU
HEARD ABOUT WE THINK THERE'S A
LOT OF UNCERTAINTY REGARDING
WHETHER OR NOT THE STATE WILL BE
SUCCESSFUL IN SECURING THOSE
FUNDS AND TWO AT THIS POINT, THE
AUTHORITY HASN'T PUT FORWARD ANY
KIND OF DETAILED PLAN THAT WOULD
ALLOW US TO ASSESS THE
CREDIBILITY OF THAT TARGET, SO
WE THINK THAT'S A CHALLENGE. WE
ALSO WOULD KNOW THAT THERE IS NO
CLEAR PLAN FOR ADDRESSING THE
REMAINING PORTION OF THAT
FUNDING GAP, WHICH IS ALSO A
CHALLENGE FACING THE PROJECT.
THE LACK OF THIS DETAILED
FUNDING PLAN IS A PROBLEM
BECAUSE IT'S HARD FOR THIS
PROJECT AS YOU HEARD IN DETAIL
AND TO MOVE FORWARD WHEN THERE
ISN'T A LOT OF CERTAINTY, AND IT
DOES RAISE THE RISK THAT THE
AUTHORITY COULD MOVE FORWARD
WITH SOME WORK THAT ULTIMATELY
CAN'T BE FULLY COMPLETED. YOU
KNOW, YOU MOVE FORWARD WITH
ELECTRIFICATION, FOR EXAMPLE.
BUT THEN YOU'RE NOT ABLE TO
COMPLETE MORE THAN THE ONE NIGHT
THAT 1ST 119 MILES. THAT
PROBABLY WOULDN'T MAKE A LOT OF
SENSE. SO IT'S A CHALLENGE. IF
THE PROJECT DOESN'T HAVE THE
MONEY IT NEEDS ULTIMATELY TO
FINISH WHATEVER WORK IT STARTS
UNDERTAKING. IF YOU TURN TO PAGE
17. WE ALSO HIGHLIGHT THAT WE
THINK THERE IS SIGNIFICANT RISK
THAT THE FUNDING GAP COULD GROW.
AS YOU KNOW, THIS PROJECT HAS A
HISTORY OF PAST COST INCREASES,
AND WE THINK THOSE CERTAINLY
COULD CONTINUE IN THE FUTURE.
ALSO G R F WHAT? WE'VE HAD SOME
REALLY ROBUST AUCTIONS RECENTLY
AND THAT'S GOOD. THERE'S A
SIGNIFICANT UNCERTAINTY
REGARDING THAT FUNDING SOURCE,
PARTICULARLY AS WE GET TO THAT
2030 EXPIRATION, SO WE THINK
THAT THERE'S SOME UNCERTAINTY.
WHETHER THE AUTHORITIES
ESTIMATES WILL BE THE ACCURATE
OR NOT. WE ALSO NOTE THAT THE
DRAFT PLAN DOESN'T INCLUDE
DETAILS ON THE TIMING OF WHEN
ADDITIONAL FUNDS WILL BE NEEDED.
WE UNDERSTAND THEY'RE PLANNING
TO PUT THAT IN THE FINAL PLAN,
WHICH WILL BE HELPFUL, AND WE
THINK THAT WILL BE IMPORTANT
INFORMATION FOR THE LEGISLATURE
TO HAVE IF YOU TURN TO PAGE 18
AGAIN, I KNOW THAT THE COMMITTEE
DISCUSSED THIS INTO IN GREAT
DETAIL, BUT THERE'S NO FUNDING
PLAN FOR BEYOND WERE SAID TO
BAKERSFIELD. SO REALLY,
ULTIMATELY, UM A LOT OF THE
VALUE OF THIS PROJECT WILL BE IF
IT IF AND WHEN IT CAN MOVE
BEYOND THE VALLEY. UM AND
UNFORTUNATELY, THERE IS NO
FUNDING PLAN FOR THAT, DEPENDING
ON WHAT PART OF THE RANGE YOU
LOOK AT THE EXACT DOLLAR AMOUNT
OF THAT GAP VARIES, BUT IT'S
LIKELY AT LEAST 80 BILLION. WE
HEARD PROBABLY ABOUT 100 BILLION
AND CERTAINLY THERE'S A LOT OF
UNCERTAINTY IN THAT NUMBER. SO
WE THINK THAT'S A CHALLENGE
BECAUSE IT'S HARD TO KNOW WHAT
THE PATH FORWARD IS. IF THERE'S
NO CLEAR PLAN FOR HOW TO FUND
IT. TURNING TO PAGE 19. WE
HIGHLIGHT ANOTHER ISSUE THAT WE
THINK IS REALLY CRITICAL FOR
THIS PROJECT, WHICH IS PROJECT
OVERSIGHT. THIS IS A BIG PROJECT
. IT'S SO BIG AND IT HAS HAD SO
MANY CHALLENGES, AND WE THINK
IT'S THERE ARE NUMBER OF THINGS
THAT HAVE BEEN IMPROVED, BUT
THERE'S STILL A LOT OF RISK
ASSOCIATED WITH A PROJECT OF
THIS MAGNITUDE, AND SO WE THINK
IT'S IMPORTANT TO HAVE STRONG
OVERSIGHT. THE LEGISLATURE MADE
SOME REALLY IMPORTANT STEPS IN
THIS AREA. UM COUPLE OF YEARS
AGO, THE LEGISLATURE CREATED THE
OFFICE OF THE INSPECTOR,
GENERALLY NO. YOU'LL HEAR FROM
THE FIRST I G SHORTLY. THAT WAS
A REALLY IMPORTANT STEP TO
REALLY STRENGTHENING THIS
OVERSIGHT AND WE HAVE A FEW
AREAS WE THINK COULD BE
PARTICULARLY VALUABLE FOR
ADDITIONAL OVERSIGHT IN THE NEAR
TERM, ESPECIALLY ONE IS THE
FEDERAL GRANT AGREEMENTS. $3.3
BILLION FANTASTIC. IT'S
WONDERFUL. WE'RE ALL EXCITED.
BUT AS YOU HEARD FROM MR KELLY,
SOME OF THE HISTORY OF THIS
PROJECT IS THAT WE ENTERED INTO
FEDERAL GRANT AGREEMENTS. THEY
HAD PROVISIONS THAT MADE IT
ACTUALLY HARD FOR THE PROJECT TO
MOVE FORWARD IN A WAY THAT MADE
SENSE. SO WE THINK IT'S GOING TO
BE REALLY IMPORTANT TO LOOK AT
THE DETAILS OF THOSE FUNDING
AGREEMENTS AND MAKE SURE THEY'RE
NOT CONSTRAINING THE STATE IN
WAYS THAT DON'T MAKE SENSE AND
TO MAKE SURE THAT THEY'RE REALLY
CONSISTENT WITH LEGISLATIVE
INTENT. AND THEN THE SECOND AREA
WE THINK IS REALLY CRUCIAL FOR
THAT OVERSIGHT, ESPECIALLY IN
THE NEAR TERM. BUT BOTH OF THESE
ON AN ONGOING BASIS AS WELL IS
VERY, VERY LARGE CONTRACTS THAT
THE AUTHORITIES PLANNING TO
ENTER INTO AND THE NEXT YEAR OR
SO. SO YOU HEARD ABOUT THE TRAIN
SET PROCUREMENT. THAT'S ONE OF
THEM. THAT'S BIG AND IMPORTANT,
AND I KNOW THERE'S A LOT OF
LEGISLATIVE INTEREST. THEIR
TRACKING SYSTEMS IS ALSO SO
IMPORTANT. IT'S A VERY LARGE
SERIES OF CONTRACTS. UM THERE'S
GONNA BE A LOT OF INTEGRATION
RISK A LOT. IT'S GOING TO BE
CRUCIAL FOR HAVING THIS PROJECT
WORK WELL, AND SO WE THINK IT
WILL BE REALLY IMPORTANT FOR THE
LEGISLATURE TO MAKE SURE THAT
AGAIN, THOSE CONTRACTS ARE
REALLY STRUCTURED IN WAYS THAT
ARE CONSISTENT WITH YOUR VISION
AS THE LEGISLATURE AND DON'T
EXPOSE THE STATE TO UNNECESSARY
RISK. IF YOU TURN TO PAGE 20
AGAIN, I'LL TRY TO JUST BRIEFLY
GO OVER THESE RECOMMENDATIONS
BECAUSE THEY REALLY FLOW FROM
THOSE KEY ISSUES. THE FIRST
RECOMMENDATION IS THAT WE
RECOMMEND THE LEGISLATURE
CONSIDER DEVELOPING A FUNDING
PLAN FOR MERCED TO BAKERSFIELD.
UM WE HEARD ABOUT THE CHALLENGES
OF HAVING, YOU KNOW, NOT HAVING
IDENTIFIED FUNDING. WE THINK
THERE'S LIKELY BILLIONS OF
DOLLARS OF ADDITIONAL FUNDING
THAT WILL PROBABLY HAVE TO COME
FROM THE STATE. SO THE SOONER
YOU THINK ABOUT WHAT, HOW YOU
WANT TO ADDRESS THAT, UM, THE
MORE TIME YOU'LL HAVE TO WEIGH
THAT REALLY TOUGH CHOICES YOU
PROBABLY WILL HAVE BEFORE YOU
ABOUT HOW YOU'RE GOING TO WANT
TO ACHIEVE THAT FUNDING GAP.
SHOULD YOU CONTINUE TO WANT TO
MOVE FORWARD WITH MR MERCED TO
BAKERSFIELD? IF YOU TURN TO PAGE
21, WE ALSO RECOMMEND THAT THE
LEGISLATURE SEEK ADDITIONAL
INFORMATION FROM THE AUTHORITIES
. SO AS YOU'RE CRAFTING THIS
FUNDING PLAN, YOU MAY NEED
ADDITIONAL INFORMATION TO HELP
YOU DO THAT. ONE THING WE THINK
IS GOING TO BE IMPORTANT IS
UNDERSTANDING THE CREDIBILITY OF
THAT $4.7 BILLION TARGET. HOW
REAL IS THAT? HOW LIKELY IS IT
THAT THE STATE WILL RECEIVE
THOSE FUNDS SO YOU CAN FIGURE
OUT WHAT THE DELTA IS RIGHT? AND
THEN THE OTHER PIECE THAT WE
THINK IS REALLY CRITICAL IS
UNDERSTANDING THE TIMING OF
WINDOWS. FRIENDS ARE GOING TO
NEED TO COME BECAUSE THAT'S
GOING TO BE IMPORTANT AS YOU
MAKE YOUR DECISIONS ABOUT WHICH
FUNDING APPROACH TO USE AND WHEN
YOU'RE GOING TO NEED TO ACTUALLY
APPROVE THAT ADDITIONAL FUNDING
WITHOUT AFFECTING THE TIMELINE
OF THE PROJECT BECAUSE WE HEARD
RIGHT THAT EVERY TIME WE DELAY
THIS PROJECT, THERE'S A COST.
THERE'S A DOLLAR VALUE. REALLY
MAKING SURE THAT THE LEGISLATURE
HAS TIME TO PLAN OUT WHEN
THERE'S ADDITIONAL FUNDS WOULD
BE NECESSARY IS CRITICAL. UM
THEN, FINALLY, THE LAST
RECOMMENDATIONS WE HAVE RELATED
TO OVERSIGHT. WE THINK IT'S
IMPORTANT TO SUPPORT A STRONG
AND INDEPENDENT HØI G. WE HAVE A
PUBLICATION SEPARATELY THAT I
WON'T GO INTO IN THE INTEREST OF
TIME THAT PROVIDES SOME SPECIFIC
RECOMMENDATIONS RELATED TO THE
AG'S OFFICE TO MAKE SURE IT HAS
STRONG BUDGETARY INDEPENDENCE
AND ADEQUATE STAFFING AND IT CAN
ATTRACT AND RETAIN QUALIFIED
STAFF. AND THEN AGAIN, WE
RECOMMEND FOCUSING ON THOSE KEY
OVERSIGHT ISSUES, ESPECIALLY IN
THE NEAR TERM RELATED TO THOSE
CONTRACTS AND THOSE UPCOMING
GRANT AGREEMENTS, AND WE THINK
THAT WIG COULD POTENTIALLY BE
REALLY WELL POSITIONED TO HELP
YOU WITH THAT. SO YOU'VE MADE AN
IMPORTANT ACTION IN CREATING THE
OFFICE AND NOW YOU CAN TAKE
ADVANTAGE OF THAT, POTENTIALLY
BY DIRECTING THE OFFICE TO
PROVIDE THAT OVERSIGHT ON YOUR
BEHALF. HAPPY TO TAKE QUESTIONS
AT THE CONCLUSION OF THE PANEL.
THANK YOU GUESS SO. WELL THANK
YOU. CHAIR COURT. EASY. VICE
CHAIR, NILO, UH, MEMBERS OF THE
COMMITTEE. UH I'M APPRECIATE THE
OPPORTUNITY TO SPEAK TO YOU
TODAY. AS YOU KNOW, THE PEER
REVIEW GROUP OF WHICH I AM THE
CHAIRMAN WAS CREATED BY
PROPOSITION ONE. A IN CHARGE TO
REPORT TO YOU ON MATTERS OF
INTEREST. THAT IS, WE WORK FOR
YOU TODAY WILL BE TALKING ABOUT
THE 2024 DRAFT BUSINESS PLAN.
HELEN KIRSTEN'S ANALYSIS IS AS
ALWAYS, COMPREHENSIVE AND
ACCURATE. WE IN THE LAO OR IN
CLOSE AGREEMENT. I CAN SAY THE
SAME ABOUT THE WORK THAT YOUR
STAFF HAS DONE FOR THIS HEARING
AND WE FULLY SHARE THE CONCERNS
STATED BY BEN BELKNAP AND HIS
STATEMENT. THESE PAPERS PARALLEL
MANY OF THE COMMENTS AND OUR
LETTER OF MARCH THE 8TH 2024.
THE AUTHORITY CONTINUES TO LEARN
FROM ITS EXPERIENCE, BUT PROJECT
COSTS CONTINUE TO RISE IN HER
SUBJECT TO CONSIDERABLE RISK ON
THE UPSIDE BECAUSE MOST OF THE
PROJECT REMAINS IN AN EARLY
DESIGN STAGE OR LESS, AND THERE
IS NO EXPERIENCE TO DATE WITH
MAJOR ELEMENTS OF THE PROJECT
SCHEDULES OF STRETCHING OUT
DEMAND. ESTIMATES HAVE FALLEN IN
FINANCING IS INADEQUATE AND
UNSTABLE. BUT I DON'T WANT TO
BELABOR THIS BECAUSE YOU ALREADY
KNOW IT. THE DETAILS ARE IN OUR
LETTER. INSTEAD I WOULD LIKE TO
FOCUS ON SOMETHING WE TALKED
ABOUT LAST YEAR, WHICH IS THE
DILEMMA THAT EMERGES FROM THESE
FACTS. IT'S A SIMPLE DILEMMA.
THE PROPOSAL TO BUILD OF HIGH
SPEED, FULLY ELECTRIFIED SEGMENT
FROM MERCED TO BAKERSFIELD MAKES
NO SENSE WITHOUT A COMMITMENT TO
BUILD THE ENTIRE PHASE ONE
SYSTEM THERE WOULD BE A MUCH
BETTER AND MORE EFFICIENT WAY TO
DEAL WITH JUST VERSUS THE
BAKERSFIELD. BUT BUILDING THE
PHASE ONE SYSTEM WOULD HAVE TO
BE BASED ON A COMMITMENT TO
SECURE FUNDING FAR BEYOND THE
FUNDING AVAILABLE FROM EXISTING
OR REASONABLY PREDICTABLE
SOURCES. THIS IS NOT CRITICAL OF
THE IRA STEP I COMPLETELY AGREE
WITH. THIS IS ONE THING I AGREE
WITH BRIAN I PROJECT HAS ALWAYS
BEEN OVER PROMISED AND UNDER
FUNDED, IT GOT OFF TO A TOUGH
START, PARTLY DUE TO
INEXPERIENCE AND PARTLY BECAUSE
THE FREE FEDERAL MONEY CAUSED
THEM TO AWARD CONTRACTS BEFORE
THEY WERE PROPERLY PREPARED.
THIS IS CLEAR. MANAGERS HAVE
LEARNED SOME HARD LESSONS IN THE
PROCUREMENT STRATEGIES ARE
CHANGING ACCORDINGLY, AND THAT'S
GOOD. BUT FROM THE 2024 DRAFT
BUSINESS PLAN, WE NOW KNOW THAT
PHASE ONE WILL COST THREE TIMES
WHAT WAS PROMISED WHEN
PROPOSITION ONE A WAS PASSED AND
AN UNCERTAINTY ARISES BECAUSE
COSTS ESTIMATED FOR MAJOR
ELEMENTS OF THE PROJECTS. 50
MILES OF TUNNELS, TRACK WORK,
ELECTRIFICATION, SIGNALING AND
ROLLING STOCK. ARE NOT YET BASED
ON ACTUAL BIDS, BUT ONLY ON
ENGINEERING ESTIMATES. PHASE ONE
WILL ALSO TAKE 15 TO 20 YEARS
LONGER WILL NOT REALISTICALLY
MEET THE TRIP TIMES SPECIFIED IN
PROPOSITION ONE A AND IS NOW
PREDICTED TO CARRY ONLY ABOUT
70% OF THE PASSENGERS. THE
RESULTS RAISED QUESTIONS ABOUT
THE VIABILITY AND THE PRIORITY
OF THE PROJECT, GIVEN THE OTHER
FINANCING NEEDS OF THE STATE. IN
LIGHT OF THESE CHALLENGES, WE
MADE A SERIES OF SUGGESTIONS
LAST YEAR AND MAKING SOME THIS
YEAR ONE IS THE LEGISLATURE
COULD COMMISSION AN INDEPENDENT
REVIEW OF THE ECONOMIC AND
FINANCIAL JUSTIFICATION FOR THE
PROJECT? INCLUDING THE ABILITY
TO OPERATE WELL WITHOUT SUBSIDY
IS REQUIRED BY PROPOSITION ONE.
A BEFORE RICK RE COMMITTING TO
THE FULL PHASE ONE. WE CONTINUE
TO URGE THIS THAT THIS BE DONE
BECAUSE THERE ARE AND WILL BE
MANY OTHER CLAIMS ON THE STATE'S
SCARCE RESOURCES, SO YOU NEED TO
KNOW WHAT IS THIS PRIORITY.
NOTIFY THE LEGISLATURE AND THE
INSPECTOR GENERAL OF THE RESULTS
OF THE UPCOMING TRACK SYSTEMS IN
ROLLING STOCK STATIONS AND
MERCED AND BAKERSFIELD
CONTRACTS. SHOWING THE CONTRACT
VALUE AND EXPECTED COMPLETION
TIME BECAUSE THIS THESE
CONTRACTS WILL BE IMPORTANT
PRECURSORS OF THE NEXT PHASE AND
EXPERIENCE IN THE PROJECT. WE
BELIEVE THAT THE MEMORANDUM OF
UNDERSTANDING THAT'S BEING
NEGOTIATED AMONG THE PROJECT AND
THE STATE AND THEY SAND JOAQUIN
JOINT POWERS AUTHORITY NEEDS A
LOT MORE ATTENTION AND SOON
BECAUSE MANY OF THOSE ISSUES
WILL NEED TO BE RESOLVED AND
THEY ARE NOT YET IN THE TABLE
FOR SIGNATURE AND THEY COULD
AFFECT THE OUTCOME OF THE
PROJECT. WE REQUEST DEVELOPMENT,
YOU COULD REQUEST DEVELOPMENT BY
THE LAO OR ANOTHER AGENCY OF AN
ANALYSIS WITH THE OPTIONS AND
TRADE OFFS AVAILABLE TO THE
LEGISLATURE FOR HOW TO FUND THE
POTENTIAL $7 BILLION GAP FOR
COMPLETION MERCED TO BAKERSFIELD
AND THE POTENTIAL 93 TO $99
BILLION GAP BETWEEN THIS SECTION
AND THE REMAINDER OF PHASE ONE
SYSTEM. IT IS CRITICAL THAT ANY
FUNDING APPROACH BE FULLY FUNDED
AND STABLE AND PREDICTABLE. FROM
YEAR TO YEAR. THIS HAS NOT BEEN
DONE EVER MORE IMPORTANT. WE
CAN'T EMPHASIZE TOO STRONGLY
THAT INACTION BY THE LEGISLATURE
AND GOVERNOR TO IDENTIFY AN
ADEQUATE AND STABLE SOURCE OF
FUNDING FOR THE PROJECT IS
INCREASING COSTS AND HINDERING
MANAGEMENT'S CONTROL OF THE
PROJECT. BRIAN AND I OR IN EXACT
AGREEMENT ON THIS POINT. YOU
COULD ALSO COMMISSION AND
INDEPENDENT STUDY OF THE
EXPERIENCE OF THE PROJECT AND
THE LESSONS THE STATE SHOULD
LEARN FROM THIS BECAUSE WE ARE
GOING TO BE DOING THIS AGAIN AND
WE SHOULD NOT MAKE THE SAME
MISTAKES. IT'S NOT THAT HARD TO
DO THIS AND TO PUT TOGETHER A
KIND OF A MANUAL OF WHAT WE
SHOULD AND SHOULDN'T DO IS WE
UNDERTAKE PROJECTS LIKE THIS? WE
HAVE AN ADDITIONAL REQUEST OVER
THE PAST FIVE BUSINESS PLANS.
THE ROLES OF THE LAO IN THE PEER
REVIEW GROUP HAVE CONVERGED L A
S WORK HAS BEEN EXCELLENT AND
THEIR CONCLUSIONS CLOSELY.
PARALLEL HOURS. THE SENATE AND
ASSEMBLY TRANSPORTATION STAFF
RUN USUALLY EXPERIENCED AND
COMPETENT. THE CREATION OF THE I
G. ADDS ANOTHER MOSTLY
CONCURRING VOICE TO THE
DISCUSSION. THE PEER REVIEW
GROUP HAS ATTEMPTED TO COOPERATE
CLOSELY WITH ALL OF THESE, AND
WE BELIEVE THEIR WORK IS OF
GREAT VALUE. THE QUESTION IS
WHAT IF ANY VALUE THE GROUP CAN
CONTINUE TO ADD TO THE WORK OF
THESE WELL STEP AND PROFESSIONAL
AGENCIES. WE WOULD APPRECIATE
ANY GUIDANCE A LEGISLATURE YOU
HAVE ON WHAT WE MIGHT DO IN THE
FUTURE. THIS WAS NOT A WELCOME
MESSAGE LAST YEAR, AND I'M SURE
IT'S NOT WELCOME THIS YEAR,
EITHER. BUT THE RESULTS OF THE
2024 DRAFT BUSINESS PLAN AND THE
FINANCIAL IMPLICATIONS THAT HAVE
MAKE IT EVER MORE URGENT THAT
THE STATE REVIEW ITS COMMITMENT
TO THE FULL PHASE ONE IF IT CAN
FIND A WAY TO PAY FOR IT, OR
START THE PROCESS OF DEFINING
AND CONSIDERING THE
ALTERNATIVES. THANK YOU. I WILL
HAPPY ANSWER ANY QUESTIONS YOU
HAVE. THANK YOU, MR THOMPSON.
THANK YOU FOR YOUR SERVICE. YOU
BEEN STEADFAST. AND MR BUILDING
YOUR NEST. THANK YOU. GOOD
AFTERNOON, MR CHAIR, MR VICE
CHAIR AND MEMBERS. HI MY NAME IS
BEN BELKNAP, THE INSPECTOR
GENERAL FOR THE NEWLY FORMED
OFFICE OF INSPECTOR GENERAL. THE
HIGH SPEED RAIL. MY BACKGROUND
IS AUDITING COME BY WAY OF THE
CALIFORNIA STATE AUDITOR'S
OFFICE. I SERVED THERE FOR OVER
TWO DECADES. MY TEAM AND I HAVE
REVIEWED THE AUTHORITIES DRAFT
BUSINESS PLAN AND ALTHOUGH OUR
VIEW IS ONGOING, I WILL SHARE
SOME INITIAL OBSERVATIONS. YOU
WILL FIND THESE OBSERVATIONS IN
GREATER DETAIL IN THE TESTIMONY
BRIEF THAT IT WAS JUST PROVIDED
TO YOU BECAUSE YOU HAVE THAT IN
FRONT OF YOU. AND CONSIDERING
THE LATE HOUR I'M GOING TO
TRUNCATE MY TESTIMONY. 2 TO 4
OBSERVATIONS FIRST. THE PLAN
NEEDS TO BE IMPROVED IN THE
FUNDING PLAN. FIRST THERE NEEDS
TO BE A DETAILED DEVELOPMENT OF
A MORE DETAILED FUNDING PLAN
FROM A CENTRAL BAKERSFIELD
SEGMENT. UM SECOND, THE
AUTHORITY NEEDS TO FORMALLY
ESTABLISH A POLICY ON WHICH IT
WILL UPDATE PROJECT COSTS. THIRD
AND HE'S MORE CLEARLY CLEARLY
ADDRESS EACH STATUTORILY
REQUIRED REPORTING ELEMENT AND
THEN FOURTH NEEDS TO INCREASE
TRANSPARENCY IN CERTAIN PARTS OF
THE PLAN. ON THOSE FIRST TWO
POINTS, THE MORE DETAILED
FUNDING PLAN THE ADOPTION OF A
COST UPDATE POLICY THAT STEMS
FROM A REVIEW THAT MY OFFICE
CONDUCTED ON THE 2023 PROJECT UP
THE REPORT AND THE HIGH SPEED
RAIL AUTHORITY HAS INDICATED
THAT THEY WILL IMPLEMENT THOSE
RECOMMENDATIONS CONCURRENT WITH
THEIR ADOPTION OF THE FINAL
BUSINESS PLAN. THE OTHER POINT
OF MORE CLEARLY ADDRESSING EACH
TESTER REQUIRED ELEMENT. WE
FOUND THAT MANY OF THE REQUIRED
ELEMENTS THAT PREDATE SB 198 ARE
NOT CLEARLY ADDRESSED IN THE IN
THE PLAN, AND WE'RE WORKING WITH
THE AUTHORITY ON MAKING SURE IT
DOES SO BEFORE IT REACHES ITS
FINAL STATUS EXAMPLE OF JUST YOU
DON'T HAVE TO GO VERMONT WE HAVE
THE REPORT HERE YET SO 11 REALLY
GOOD EXAMPLE IS THAT THERE IS A
REQUIREMENT THAT REQUIRES LEVEL
OF CONFIDENCE. IN THE FUNDING
THAT IS IN THE FUNDING PLAN, AND
THAT IS THAT IS ABSENT AND HAS
BEEN ABSENT FOR MULTIPLE FUNDING
MULTIPLE BUSINESS PLANS WITH THE
IMPLEMENTATION OF OUR
RECOMMENDATION. WE BELIEVE THAT
THAT WILL BE RESOLVED. ANOTHER
EXAMPLE. UM IN THE BACK OF THE
REPORT, THERE IS TO BE A
DISCUSSION OF ALL FOR REASONABLY
FORESEEABLE RISKS. HOWEVER
WHAT'S IN THERE NOW NARROWLY
FOCUSES ON TENSE SELECTED RISKS.
THE NARRATIVE THAT DESCRIBES
THOSE MANAGEMENT CONTROLS IS
TAILORED TO FIVE SELECTED RISK
INSTEAD OF THE TOP FIVE REST
THAT THE ENTERPRISE GROUP
SELECTED. ONE EXAMPLE THAT
YOU'RE MISSING IS A NARRATIVE
DESCRIBING THE STRATEGIES THE
AUTHORITY INTENDS TO UTILIZE TO
MANAGE THREATS TO ITS SCHEDULE
MONITORING AND MANAGEMENT. WHICH
IT'S SECOND HIGHEST RISK. SO
THAT'S THAT NEEDS TO BE DETAILED
. AND I THINK MR KELLY MENTIONED
THAT. THAT'S AN EXAMPLE. THERE.
THANK YOU. ANOTHER AREA THAT
GOES BEYOND WITH THE STATUTE
REQUIRES WHAT REALLY GOES INTO
THE TRANSPARENCY AND THE LEVEL
OF PROGRESS THAT I THINK
STAKEHOLDERS NEED TO SEE IS IN
THE AREA OF THE OPERATING
AGREEMENTS. AND MR THOMPSON JUST
MENTIONED THAT, UM THE CURRENT
NARRATIVE THERE DOES NOT
DESCRIBE WHAT HAPPENED IN 2023
IN TERMS OF PROGRESS. IT MAKES
IT LOOK LIKE THERE WASN'T
PROGRESS ON THOSE AGREEMENTS,
EVEN THOUGH THE PROJECT REPORT
INDICATED THAT WAS PART OF THE
TIMELINE THAT 2023 CALENDAR YEAR
2023. THERE WOULD HAVE BEEN
PROGRESS. WE THINK THAT THE
NARRATIVE SHOULD DESCRIBE WHY
THAT PROGRESS DIDN'T OCCUR. AND
WHY STAKEHOLDERS SHOULD NOT BE
CONCERNED BY THAT. UM SO THOSE
ARE SOME OF THE OBSERVATIONS
THAT WE'VE ALREADY SHARED WITH.
THE AUTHORITY WILL CONTINUE TO
SHARE UP UNTIL THE PUBLICATION
OF THE FINAL BUSINESS PLAN WITH
THAT I'LL CLOSE MY TESTIMONY
WOULD OPEN THE QUESTIONS. OKAY
QUESTIONS. COMMENTS FROM MEMBERS
OF THE COMMITTEE, MR VICE CHAIR.
THANK YOU, MR CHAIR. AH!
QUESTION I GUESS OF ALL THREE. I
RAISED THE QUESTION OF COST
UPDATES OR THE FULL SYSTEM,
INCLUDING SOUTHERN CALIFORNIA
COST AND GIVEN THE UPDATES THAT
HAVE OCCURRED SO FAR, AND I
THINK, MR THOMPSON, YOUR REPORT
SAID THIS WHICH WAS MY
CALCULATION AT EVERY TIME COSTS
ARE UPDATED. IT'S ABOUT A 15%
PER YEAR FROM THE PREVIOUS
UPDATE INCREASE IN COSTS. AND SO
FAR THE PROJECTED COSTS IN THE
SOUTHERN SECTION HAVE BEEN
UPDATED, BUT WITH VERY LITTLE
CHANGES. MR KELLY EXPRESSED
CONFIDENCE IN THE UPPER END
NUMBER OF 128 BILLION. I THINK
FOR THE EVENTUAL COST. HOW MUCH
CONFIDENCE TO THE THREE OF YOU
HAVING THAT NUMBER? I THINK
THERE'S A LOT OF UNCERTAINTY. I
THINK, UH, THIS IS IT'S A BIG
PROJECT. RIGHT AND BIG PROJECTS
HAVE UNCERTAINTY IN THIS
PARTICULAR PROJECT IS PROBABLY
SUBJECT TO EVEN MORE UNCERTAINTY
. AND AS I THINK MR THOMPSON
REFERENCED THERE ARE PIECES OF
THIS PROJECT THAT THERE IS NO
HISTORY ON WE. WE WERE VERY
SOPHISTICATED, VERY EARLY
STAGES. UM YES, WE'RE COMPLETING
ENVIRONMENTAL, BUT WE HAVEN'T
DONE YOUR TECHNICAL WORK. WE
HAVEN'T DONE ADVANCED DESIGN.
THERE'S A LOT WE MAY FIND OUT
ABOUT WHAT'S NEEDED FOR
TUNNELING THAT WE DON'T KNOW
RIGHT NOW. UM WE DON'T KNOW WE
DON'T HAVE EXPERIENCES. I THINK
MR THOMPSON HAS POINTED OUT AS
WELL ON A VARIETY OF ELEMENTS,
THEIR COMPONENTS OF THIS TRACK
SYSTEMS. RIGHT NOW WE'VE
BASICALLY BEEN DOING CIVIL WORKS
, WHICH IS KIND OF TRADITIONAL
CONSTRUCTION THAT WE DO FOR ALL
SORTS OF ROADS, BRIDGES. NOT
REALLY THAT SPECIFIC TO HIGH
SPEED RAIL. BUT WE'RE GOING TO
BE STARTING TO GET INTO THE
PIECES THAT ARE SPECIFIC THAT
ARE MORE COMPLEX AND WHERE I
THINK THERE IS SIGNIFICANT RISK,
SO I THINK IT'S VERY HARD TO
PREDICT ESPECIALLY BECAUSE SOME
OF THEM AND I THINK YOU KNOW.
ONE OTHER POINT IS THAT SOME OF
THOSE PROJECTS SEGMENTS HAVEN'T
BEEN UPDATED IN A NUMBER OF
YEARS, AND AS THE AUTHORITY
MENTIONED THAT IN PART BECAUSE
THAT'S IN LARGE PART BECAUSE
THEY'RE STILL UNDERTAKING THEIR
ENVIRONMENTAL REVIEW, BUT ONE
CHALLENGE TO THAT IS WE HEARD
COSTS ESCALATE OVER TIME. WE'VE
SEEN ACTUALLY SIGNIFICANT
CONSTRUCTION COST ESCALATION,
PARTICULARLY DURING THE PANDEMIC
YEARS. SO YOU KNOW HOW CREDIBLE
ARE THOSE? I THINK THERE'S A LOT
OF UNCERTAINTY. MAYBE WE'LL BE
WITHIN THAT RANGE. UM BUT IT'S
CERTAINLY WOULD NOT SURPRISE ME
IF WE END UP ABOVE THAT RANGE
SIGNIFICANTLY. THROUGHOUT THE
NEXT THANK YOU FOR THAT
QUESTION. I AGREE. MAKING MISS
KIRSTEN THAT THERE IS
UNCERTAINTY, BUT ONE THING TO
NOTE IS THAT UNCERTAINTY IS
TAKEN INTO ACCOUNT WHEN YOU
CALCULATE CONTINGENCY ON A
PROJECT, UM SO ONE THING THAT I
THINK OFFICE OF INSPECTOR
GENERAL NEEDS TO DO IS A DEEP
DIVE INTO THOSE PARTICULAR
CALCULATIONS. BEFORE. I SAY THAT
I'M NOT COMFORTABLE WITH HIM.
UM, A DEEP DIVE INTO UM, HOW DID
CONSULTANTS IN THIS CASE? UM
CALCULATE THOSE CONTINGENCY
LEVELS. WHAT UNCERTAINTY THEY
BRING IN ACCOUNT? I THINK IF
WE'RE IF WE ULTIMATELY ARE GOING
TO, AND I AND I AGREE WITH MS
KIRSTEN BECAUSE SHE HAS A PUBLIC
POLICY PERSPECTIVE, I COME FROM
AN AUDITING THAT WE WERE. WE
HAVE TWO DIFFERENT DISCIPLINES
HERE THAT THAT THAT THAT WORKED
TOGETHER, BUT I THINK MY
CRITICISM WOULD NEED TO BE IN
THE CALCULATIONS. AND NOT
NECESSARILY THE BROADER CONTEXT
AND THAT THAT'S A REVIEW. WE
HAVE NOT HAD TIME TO DO.
UNDERSTAND. I GUESS I COME FROM
THE GRAY HAIR PERSPECTIVE AND
HAVING DONE THIS, UH AND SEEING
WHAT HAPPENS WHEN YOU HAVE HAIR
DO SADLY. AH AND SEEING WHAT
HAPPENS WHEN YOU TAKE ON AND
MAKE ESTIMATES OF STUFF YOU
HAVEN'T DONE BEFORE, EITHER,
BECAUSE THE TECHNOLOGY IS NEW.
OR BECAUSE YOU'RE GOING INTO
AREAS IN WHICH YOU HAVEN'T
WORKED BEFORE, AND I THEREFORE
THINK THAT THERE IS A LOT OF
UNCERTAINTY HERE, AND I DON'T
KNOW. I DON'T KNOW HOW BIG IT
IS. I WISH I DID, BUT I, BUT I
CAN'T TELL YOU THAT IT'S SMALL.
THE SECOND THING, THOUGH, I DO
WANT TO SAY IS THAT A PRIMARY
IMPACT ON THE UNCERTAINTY IS THE
CHASING YOUR TAIL ASPECT OF THE
FUNDING. THERE IS NO ABILITY TO
PLAN THERE IS NO ABILITY TO NO
ABILITY TO SCHEDULE. THERE'S NO
ABILITY TO LAY OUT EXACTLY WHEN
YOU'RE GOING TO DO IT. AND HOW
ARE YOU GOING TO GET IT DONE AND
INSTABILITY LIKE THAT? EVEN IF,
IN TOTAL, THE FUNDING IS MORE OR
LESS OKAY, INSTABILITY LIKE THAT
MAKES COSTING AND MANAGEMENT
REALLY, REALLY DIFFICULT. SO IF
WE'RE SERIOUS ABOUT THIS, IF WE
REALLY WANT TO DO IT, WE HAVE
TO. WE HAVE TO JUDGE HOW WE HAVE
WHAT ARE ALTERNATIVES ARE AND
HOW WE'RE GOING TO DO IT, AND
THAT'S WHY I HAVE SO STRONGLY
RECOMMENDED THAT ONE WAY OR THE
OTHER US THE LAO OR ANOTHER
AGENCY DELAY OUT FOR YOU. WHAT
ARE OUR OPTIONS IF WE WANT TO DO
THIS 93 BILLION OR $99 BILLION?
WHERE DOES IT COME FROM? AND HOW
CAN WE ACHIEVE IT IN A WAY THAT
DOESN'T DOESN'T CAUSE THE
AUTHORITY TO BE UNSURE, YEAR TO
YEAR. WHAT KIND OF FUNDING
THEY'RE GOING TO HAVE, BUT YET
GIVES THEM A RESPONSIBLE FUNDING
PLAN SO THAT THEY CAN MANAGE. SO
I AGREE WITH MR KELLY'S
ASSESSMENT OF THE ORIGINAL
AUTHORIZING PROPOSITION, AND
MUCH OF WHAT WE'RE DEALING WITH
STEMS FROM THAT THE IMPRECISION
OF THAT UM IF YOU GO BACK AND
REREAD THE TITLE IN SUMMARY, NOT
THE DETAILED ANALYSIS, BUT THE
TITLE AND SUMMARY OF THAT
PROPOSITION. IT BASICALLY SAID
WE WERE GOING TO GET A COMPLETE
HIGH SPEED RAIL SYSTEM FOR $10
BILLION. I THINK THAT WAS
INTENTIONAL. UM, NOW IN THE
ANALYSIS. IT SAID, WHICH I HAD A
DISCUSSION WITH MR KELLY. AND
HIS CFO ABOUT THIS, THAT THERE
WOULD BE NO SUBSIDIES THAT THE
OPERATION WOULD COVER ALL COSTS.
AND I UNDERSTAND WHAT THEY'RE
SAYING THAT IN THE CONTEXT OF
THE RAILROAD INDUSTRY WHEN A
PUBLIC ENTITY BUILDS A SYSTEM
AND THEN PASSES IT ON TO AN
OPERATOR. THEY'RE NOT HELD
ACCOUNTED FOR THEIR CAPITAL
COSTS. UM I DON'T KNOW THAT IN
PRACTICAL SENSE THAT ALWAYS
TURNS OUT BECAUSE SOMETIMES THE
ENTITY THAT BUILDS IT ALSO
OPERATES LIKE RT LOCALLY HERE,
IN WHICH CASE THEY PROBABLY HAVE
TO COVER THEIR CAPITAL COSTS,
WHICH IS WHY THEY USUALLY END UP
WITH AN OPERATING LOSS. SO GIVEN
MY CONTENTION THAT WHEN VOTERS
APPROVED THIS, THOSE THAT WENT
TO THE LAOS DETAILED ANALYSIS,
UM AND SAW OH, WE'LL NEVER HAVE
A SUBSIDY. WE GET THE WHOLE
THING FOR $10 BILLION WORTH.
THEY READ THE WHOLE ANALYSIS.
THEY MIGHT NOT BE MISLED BY
THAT, BUT NO SUBSIDY. UM HOW HOW
ARE WE GOING TO BE ABLE TO
RECONCILE WHAT I THINK IS THE
REGIONAL REASONABLE PERCEPTION
THAT THE OPERATION OF THE SYSTEM
HAS TO COVER ALL COSTS,
INCLUDING AN APPROPRIATE
AMORTIZATION OF THE CAPITAL
COSTS. VERSUS THE FACT THAT
THAT'S NOT WHAT WE'RE GOING TO
DO. HOW DO WE? HOW DO YOU
SUGGEST WE RECONCILE THAT TO
ONCE? VOTERS UNDERSTAND WHAT'S
REALLY GOING ON. AH FIRST PART
OF THE ANSWER IS THAT WE RAISED
THIS ISSUE A NUMBER OF YEARS AGO
AND ASK THAT YOU DEFINE WHAT
THOSE TERMS MEANT BECAUSE THE
LAW IS NOT CLEAR. AH THE SECOND
POINT IS THAT I LISTENED TO THE
EARLIER DISCUSSION. THERE ARE IN
FACT, A FEW PASSENGER RAILWAYS
THAT DO PAY BACK THEIR CAPITAL,
THE JAPANESE SYSTEM AND SOME
REGARDS PAYS BACK ITS CAPITAL. A
COUPLE OF THE LINES IN FRANCE
THAT PERFORMED THE BEST ALSO
ACTUALLY OR FINANCIALLY
PROFITABLE IN THAT SENSE. THAT'S
THE LIMIT. EVERY OTHER SYSTEM.
THERE IS NOT CLEAR WHETHER
THAT'S WHAT THE CHINESE SYSTEM
IS DOING, ALTHOUGH I WOULD ADD
THAT THEY BUILT 20,000 MILES OF
LINE IN THE TIME THAT WE STARTED
THIS PROJECT, SO THERE'S A FEW
WANT TO KNOW HOW YOU SPEED IT
UP. THERE IS PART OF YOUR
ANSWER. THEY PROBABLY DON'T HAVE
SEQUEL THAT I WOULD THAT WE
WOULD NOT WANT TO DUPLICATE THAT
EXPERIENCE. I'M SURE. UH, I
THINK IT'S UNREALISTIC TO THINK
THAT THE CAPITAL COSTS CAN BE
RECOVERED. THAT IS NOT THAT IS
NOT WHAT EXPERIENCE ELSEWHERE
SUGGESTS. I DO THINK IT'S
REALISTIC TO DEMAND THAT THE
OPERATING COSTS BE COVERED. AND
I BELIEVE MY PERSONAL BELIEF IS
THAT THERE IS A SHOT AT DOING
THAT WHEN THE FULL SYSTEM IS
BUILT. THERE IS NO PRETENSE OF
DOING THAT. MERCED TO
BAKERSFIELD. THE ARGUMENT IS
THAT IT WILL IN TOTAL, LOWER THE
SUBSIDY THAT THE STATE IS PAYING
TO ACE IN SAN JOAQUIN POWER
AUTHORITY AND THAT THE AUTHORITY
ITSELF WILL BE FULLY COMPENSATED
FOR ITS COSTS OF THE EQUIPMENT
AND THE TRACK SO THAT THE
AUTHORITY ITSELF WILL NOT BE
RECEIVING A SUBSIDY AS YOU WOULD
DEFINE THEIR COSTS ARE BEING
COVERED. THAT DEPENDS VERY
HEAVILY ON TWO THINGS ONE. IT
DEPENDS ON THE DEMAND FORECAST
FOR THAT FOR THAT PART OF THE
SYSTEM. BEING REACHED. AND IT
DEPENDS ON A CLEAR POSITION BY
THE STATE THAT WOULD EVER THE
COSTS ARE OVER THE REVENUE THAT
IT WILL BACK UP. BECAUSE THE
AUTHORITY CAN'T AND SAN JOAQUIN
JOINT POWERS AUTHORITY CAN'T
EITHER, SO IT SHOULD BE CLEAR
THAT THE STATE IS AT RISK HERE
IF THE DEMAND FORECAST OR NOT
MET WHETHER THEY WILL BE MET OR
NOT. IS A MATTER OF OPINION. SO
UM, I DEFINITELY ECHO MR
THOMPSON'S COMMENTS. THIS IS
ALSO AN ISSUE THAT OUR OFFICE
HAS BROUGHT UP IN THE PAST. UM
WHAT ARE THE ISSUES WE
SPECIFICALLY RAISED IS WHETHER
THE PROPOSED SORT OF APPROACH
THAT THE AUTHORITY HAS IS
CONSISTENT WITH SORT OF THE
INTENT OF THE PROPOSITION
REGARDING AN OPERATING SUBSIDY.
I'M NOT AN ATTORNEY, UM AND I'M
NOT GOING TO TRY TO OPINE ON
LEGALLY, WHETHER OR NOT IT'S
COMPLIANT WITH PROP. ONE A. UM
BUT CERTAINLY I THINK THERE IS A
QUESTION THAT IS A REASONABLE
ONE TO RAISE ABOUT WHAT VOTERS
MIGHT HAVE UNDERSTOOD AND
OPERATING SUBSIDY BE. MY
UNDERSTANDING IS THAT THE
AUTHORITIES ARGUMENT LARGELY
RELIES ON THE FACT THAT THEY'RE
USING THIS THIRD PARTY OPERATOR,
THE SAME SAME WORKING INSTRUCT
POWERS AUTHORITY. AND SO THEY
THEMSELVES THAT AUTHORITY ITSELF
WON'T HAVE AN OPERATING LOSS
BECAUSE THEY'LL BE CHARGING RENT
TO, SO I GET THAT. BUT THERE IS
ALSO SOME LANGUAGE IN IN THE
MEASURE THAT TALKS ABOUT THAT
OPERATED BY THE AUTHORITY OR
PURSUANT TO ITS AUTHORITY AGAIN.
I'M NOT AN ATTORNEY, BUT I THINK
THESE ARE THE KINDS OF QUESTIONS
THAT ARE IMPORTANT ONES. AND I
THINK THERE'S BOTH THE YOU KNOW
WHAT'S WHAT'S CONSISTENT WITH
THE LAW. BUT THERE'S ALSO SORT
OF WHAT'S CONSISTENT WITH THE
INTENT IN THE LEGISLATURES
COMFORT LEVEL WITH THAT, AND
THERE'S PROBABLY JUST AGAIN.
THERE'S UNCERTAINTY. THERE'S
UNCERTAINTY ABOUT RIDERSHIP.
THERE'S UNCERTAINTY ABOUT HOW
MUCH REVENUE THAT'S GOING TO
GENERATE UM, ULTIMATELY, WE MAY
NOT KNOW. THE EXTENT TO WHICH AN
OPERATING SUBSIDY IS REQUIRED
UNTIL OPERATIONS ACTUALLY BEGIN
AND THEN WELL, THEN WE'LL SEE
WHAT THE NUMBERS COME IN AT. SO
UM, UH, I DON'T HAVE YES. TOO
MUCH MORE TO ADD, UM, TURN IT
OVER TO MR BELKNAP. IF HE HAS
ANYTHING ELSE, SENATOR, IT
SOUNDS LIKE THERE NEEDS TO BE
ILLEGAL ANALYSIS AND POSSIBLY
STATUTORY CLARIFICATION ON WHAT
DOES THAT SUBSIDY MEAN? AND WHAT
DOES IT WHAT DOES IT APPLY TO
THE WHOLE? PHASE ONE VALID
VALLEY CENTER, BAKERSFIELD,
MERCED TO BAKERSFIELD. IS GOING
TO REQUIRE BY A SUBSIDY THAT
HOPEFULLY IS EQUAL TO OR LESS
THAN WHAT THE STATE IS ALREADY
PROVIDING FOR A SENSE OF QUEENS.
SO UM IT'S BEEN POSED IN THE
PAST. AND ASKED FOR A BETTER
DEFINITION OF WHAT WE MEAN. THAT
HASN'T HAPPENED. I DON'T BELIEVE
AND SO WHAT'S GOING TO HAPPEN?
ONCE WE GET DONE, OR AT LEAST
PARTIALLY DONE AND. IF WE WORK
IN CAPITAL COST AMORTIZATION,
AND WE SEE THAT IT DOESN'T
REVENUES DON'T COVER THAT. THE
ANSWER IS WELL, SORRY. WE'VE GOT
A SYSTEM WOULD JUST WORK HERE
WHEN WE CAN DO ABOUT IT. THERE
IS NO RELIEF FOR THE
MISUNDERSTANDING OF THE
ORIGINAL. PROP. ONE A THAT'S
JUST A STATEMENT. THOSE ARE THE
ON THE END OF MY QUESTIONS.
QUESTION OKAY, SENATOR, SENATOR
SER. SO LET'S MOVE FORWARD TO
WHAT YOU'RE TALKING ABOUT.
YOU'VE GOT TO HAVE SOME. YOU'VE
GOT TO HAVE A POT OF MONEY EVERY
YEAR THAT'S DEDICATED TO MAKING
THIS HAPPEN. BUT AS YOU KNOW, A
PROJECT ANY PROJECTS, WHETHER
IT'S A LONG TERM INFRASTRUCTURE,
KETCHUP PROJECT OR THIS PROJECT,
YOU'RE NOT GOING TO SPEND IT ALL
IN ONE YEAR. YOU KNOW YOU DON'T
NEED $200 BILLION THIS YEAR.
WHAT WOULD IT TAKE FOR THE
LEGISLATURE? TO SAY THEY
PRIORITIZE THIS BECAUSE I THINK
THERE'S A LOT OF A LOT OF
SUPPORT THROUGH THE LEGISLATURE.
MAYBE NOT FROM ME, BUT FROM
OTHERS. UM, THAT THEY WANT THIS
TO GO FORWARD. WHAT KIND OF
COMMITMENT AND HOW MANY YEARS OF
THAT COMMITMENT WOULD WE HAVE TO
MAKE TO BE ABLE TO MAKE THIS
PROJECT MOVE FORWARD. AT A PACE
THAT IT NEEDS TO MOVE FORWARD AT
AND HOW DO WE ARRIVE AT THAT
NUMBER? WE CAN TELL PEOPLE. THIS
IS GOING TO COST $2 BILLION A
YEAR FOR THE NEXT 40 YEARS. THIS
IS WHY WE ARE YOU SO STRONGLY
THAT YOU SHOULD ASK THAT THIS
QUESTION BE STUDIED AND REPORTED
TO YOU. THE ANSWER. I CAN GIVE
YOU IS THE INTERSTATE HIGHWAY
PROGRAM, WHICH IS THE BEST
POSSIBLE EXAMPLE TO THINK ABOUT
WHERE THEY SET UP A STABLE,
CONTINUING SOURCE OF FUNDING THE
GAS TAX. IT TURNS OUT, THEY HAD
TO INCREASE IT ABOUT HALFWAY
THROUGH THE PROGRAM. THEY HAD A
30 OR 40 YEAR PROGRAM, BUT THEY
ADJUSTED THE PROGRAM TO THE
BUDGET, NOT THE OTHER WAY AROUND
, AND IT WAS ENOUGH FOR THEM TO
OPERATE IN A PLANNED AND
RESPONSIBLE WAY. THEY TRAINED A
CADRE OF PEOPLE. THEY DEVELOPED
THEIR STANDARDS. THEY
IMPLEMENTED OVER A LONG PERIOD
OF TIME, AND THEY GOT IT DONE.
NOT AS FAST AS YOU MIGHT HAVE
WANTED. BUT THEY GOT IT DONE.
AND IF YOU WANT IT TO BE DONE
HERE, I THINK THAT THIS AS I
SAID, CHASING YOUR TAIL
FINANCIALLY IS NOT GOING TO GET
IT YOU AND DON'T DEPEND ON THE
FEDERAL GOVERNMENT RIGHT NOW TO
COME UP WITH. YOU KNOW THE
CHUNKS OF MONEY WHENEVER YOU
NEED IT. THAT'S NOT GOING TO
WORK NOW WHETHER THERE WILL BE A
FEDERAL EQUIVALENT OF THE
INTERSTATE HIGHWAY PROGRAM,
CALLED THE HIGH SPEED RAILWAY
PROGRAM WENT ON 9010 PROGRAM. I
DON'T KNOW THAT'S WHAT YOU NEED
SOMETHING IN LIKE THAT. BUT EVEN
THEN THERE'S GOT TO BE A STATE
SHARE. ONE WAY OR THE OTHER.
THEY WILL HAVE TO BE AT ST SHARE
EVERY YEAR, PREDICTABLY AND
STABLE E SO THAT THE PROGRAM CAN
BE MANAGED PROPERLY. OTHERWISE
YOU'RE GOING TO CONTINUE TO HAVE
ITS FLIGHT OUT IN TIME BOUNCE
AROUND CONTRACTS NETWORK THE WAY
THEY SHOULD. THAT IS JUST A FACT
OF LIFE THAT THAT YOU NEED TO
CONTEND WITH. AND FROM A BUDGET
PERSPECTIVE FOR US, UM THAT'S
SOMETHING THAT WE NEED TO KNOW,
BECAUSE THAT'S SOMETHING YOU
HAVE TO PUT ASIDE HOW MUCH MONEY
WE HAVE PUT ASIDE TO ACCOMPLISH
THIS GOAL FOR THE NEXT FEW
YEARS. AND THAT GETS SPENT
FURTHER THAT GETS ALLOCATED
FIRST BEFORE WE GO AND SPEND ALL
OF OUR MONEY ON OTHER STEP,
BECAUSE THIS IS VERY DIFFICULT
IN BUDGET YEARS WHEN WE HAVE
WE'RE STARING DOWN THE BARREL OF
A $73 BILLION SHORTFALL. AND
TRYING TO FIGURE OUT WHERE ALL
THAT MONEY IS COMING FROM, AND
TO HAVE A $3.7 BILLION ASK OR A
$5 BILLION. ASK FOR, YOU KNOW
WHATEVER IT IS IT'S SHORT THIS
YEAR. TO BE ABLE TO ACCOMPLISH
THESE THINGS. IT WOULD BE A LOT
EASIER IF WE KNEW WHAT THE
NUMBER WAS EVERY YEAR. JUST
ALLOCATED IT AND THEN GOING
FORWARD. YOU KNOW, THEY COULD
GIVE US UPDATES ON HOW MUCH
LONGER WE'RE GOING TO BE PAYING
THIS $2 BILLION BECAUSE IT'S $2
MILLION THAT WE WOULDN'T BE
SPENDING ON OTHER STUFF. BUT AT
LEAST WE'LL BE MAKING SOME KIND
OF PROGRESS TO TRY AND GET THIS
DONE. I'M NOT A BIG FAN, AND
THIS IS WHY, BECAUSE IT'S FOR
ME. IT'S A FINANCIAL BOONDOGGLE
AND WE DON'T HAVE AND WE CAN'T
GET AN END GAME IN OUR HEAD OF
WHAT THAT LOOKS LIKE AT THE END,
AND BUT AT LEAST THAT'S A
SUGGESTION ON HOW GOING FORWARD
WE MIGHT WANT TO. OFFER TO THE
LEGISLATION. LEGISLATORS TO YOU
KNOW, LOOKING IN A DIFFERENT WAY
. AS FAR AS THE BUDGET IS
CONCERNED, BECAUSE YOU'RE RIGHT.
YOU CAN'T GO FORWARD. YOU CAN'T
PLAN IF YOU DON'T KNOW IF THE
FUNDING IS GOING TO BE THERE OR
NOT. THANK YOU. YES, YOU MAY
PHASE ONE IS NOT GOING TO HAPPEN
TILL MERCED TO BAKERSFIELD
HAPPENS. NOW WHAT YOU'VE ASKED
FOR GLOBAL FOR HOW MUCH AND HOW
LONG TO GET TO PHASE ONE. IF YOU
JUST TAKE THAT AND SAID, WE'LL
HAVE WHAT MERCED TO BAKERSFIELD.
THAT'S EXACTLY THE
RECOMMENDATION WE MADE IS HAVE
THE AUTHORITY. CLEARLY SPECIFY
WHEN DO THEY NEED FUNDING TO
COMPLETE MERCED TO BAKERSFIELD?
NOT NOT ETHEREAL TO THE MONTH.
WHEN DO WE NEED THE FUNDING AND
HOW MUCH AND THAT'S TWO THINGS.
ONE IS YOU'RE FIGURING OUT WHEN
ARE THESE UNFUNDED COMPONENTS
WHEN THEY HAVE TO BE STARTED? UM
AND THE OTHER IS FIGURING OUT
THE PROSPECTS OF FEDERAL FUNDS.
UM AND TO THE EXTENT THAT YOU'RE
NOT GOING TO GET THOSE FEDERAL
FUNDS IS PROBABLY COME FROM
STATE FUNDS. AND THAT'S THE
CALCULATION THAT YOU NEED TO
STAKEHOLDERS AND THAT WE'RE
SUGGESTING NEEDS TO OCCUR,
FORMER SAID TO BAKERSFIELD
SEGMENT. THANK YOU JUST SEE YOU
GOTTA YOU GOTTA IN FAIRNESS,
KEEP THE THIRD CATEGORY AND ALSO
YOU HAVE FEDERAL FUNDS. STATE
FUNDS IN THE NEW ALSO HAVE
WHATEVER COMES OUT OF THE
EXPRESSION OF INTEREST PROCESS.
THAT'S JUST BEGINNING NOW
BECAUSE UM YOU KNOW THERE IS
THERE IS POTENTIAL THERE
ABSOLUTELY JUST WANT TO MAKE
SURE THAT RECORDS CLEAR ON THAT
OTHERWISE. I THINK THE NARRATIVE
BECOMES HIS TAXPAYER MONEY 100.
UM THAT WE HAVE TO CONCEDE THAT
AT THIS POINT, AS OPPOSED TO
DEVELOPERS WRITES IN THOSE KINDS
OF THINGS I WANT TO, THERE IS NO
DOUBT THAT THERE IS POTENTIAL
FOR PRIVATE MONEY. THE PROBLEM
IS THAT IN THE PRIOR REQUEST FOR
EXPRESSION OF INTEREST THAT THE
AUTHORITIES SENT OUT THE ANSWER
WAS VERY CLEARLY. BUILD A SYSTEM
AND SHOW THE SHOW IS THAT IT
WORKS AND THEN WE'LL ELABORATE,
WILL DECIDE HOW MUCH IT'S WORTH
TO INVEST, BUT YOU CANNOT GET
MUCH MONEY UNTIL YOU HAVE
SOMETHING TO DEMONSTRATE. DO YOU
THINK I'M TALKING ABOUT? I
APPRECIATE YOUR COMMENT. I'M
TALKING ABOUT SOMETHING OF A
PARTNERSHIP INTERESTS IN THE
GOING CONCERN. AND LESS ABOUT
CONCESSIONS PER SE AND MORE
ABOUT THE DEVELOPMENT INTERESTS
THAT ARE UP AND DOWN THAT
CORRIDOR. THE CAN GENERATE, UM
YOU KNOW, BY WAY OF NEXUS AND
LOCAL GOVERNMENT EXACTLY INS IN
HIGH SPEED RAIL EXACTLY SHINS.
IF THE LEGISLATURE DECIDES TO GO
THAT ROUTE AND ALLOW THAT
OPPORTUNITY TO GENERATE MONEY
FROM DEVELOPMENT OPPORTUNITIES
UP AND DOWN A QUARTER THAT GOES
ALL THE WAY BASICALLY ALL THE
WAY UP AND DOWN THE STATE. IT'S
ALWAYS SUDDEN. WE'RE TALKING
ABOUT. MILLIONS OF DOLLARS PER
MILE IN DEVELOPMENT
OPPORTUNITIES. I THINK IT JUST
THE SAME. IT'S JUST THE REASON
REACH THAT WE'RE LOOKING AT
RIGHT NOW IS JUST ALMOST A BLANK
SLATE IN THAT REGARD,
DEVELOPMENT FUNDAMENTALLY HASN'T
EVEN REALLY OCCURRED ALONG THAT
CORRIDOR. WE SEE TREMENDOUS
OPPORTUNITIES ON THE PENINSULA
OF THE SAN FRANCISCO FOR THOSE
KIND OF DEVELOPMENT
OPPORTUNITIES. THE QUESTION IS,
CAN THE LEGISLATURE WILL THE
LEGISLATURE? UM CREATE A CREATE
A AN ACTUAL NEXUS BETWEEN WHAT
LOCAL GOVERNMENTS ENTITLED ALONG
THAT CORRIDOR AND WHAT THEY CAN
EXACT FOR PURPOSES OF HIGH SPEED
RAIL IN OTHER OPPORTUNITIES.
COMMUNITY BENEFITS, FOR EXAMPLE,
WHICH WISHES WE HAVE PRACTICED
DOING THAT WITH THE LOCAL
GOVERNMENT LEVEL LEVEL, FOR
EXAMPLE, WITH REDEVELOPMENT
AGENCIES. SO I THINK I THINK
IT'S SOMETHING THAT WE HAVE
CREATED ALL THE TOOLS FOR IN THE
STATE. I MENTIONED IT TO THE
PRIOR PANEL. UM WE HAVE KOREA'S
WE HAVE FACILITIES DISTRICT WAS
WE INCREASED SPECIAL DISTRICTS
WHEREVER WE WANT. DEVELOPERS CAN
DO THAT LOCAL GOVERNMENTS CAN DO
THAT. I THINK WHAT WE HAVEN'T
DONE IS LAY OUT THE STRATEGY FOR
THAT, UM, IN AN EXPRESSION OF
INTEREST DOCUMENT, I THINK MR
KELLY SEEMED TO INDICATE YEAH,
MAYBE WE NEED TO ADD THAT THE
NEXT TIME AROUND. I'M SURE THAT
WE START SPARKING SOME INTEREST
ALONG ALONG THE CORRIDOR IN
TERMS OF WHAT KIND OF
DEVELOPMENT OPPORTUNITIES OR
MAYBE MM. IT'S MUCH BETTER FOR
US TO DEVOTE TO SUBSIDIZE.
AFFORDABLE HOUSING OPPORTUNITIES
WHEN WE HAVE A HOUSING CRISIS IN
THE STATE OF THOSE DEVELOPERS
COULD CONTINUE TO SUBSIDIZE THIS
PROJECT. ALONG THE CORRIDOR THAN
IT IS FOR US TO TRY TO SUBSIDIZE
THE PROJECT. THAT'S MY TWO CENTS
ON THAT. SENATOR ALAN I DON'T
KNOW IF YOU WANT BEFORE, BUT I
THOUGHT YOU DID. AND I KNOW I
HAVE BEEN TALKING MORE THAN I
USUALLY DO AS A CHAIR BECAUSE OF
THE NATURE OF THE SUBJECT. WE
HAVE PUBLIC COMMENTS STILL TO
GO. I KNOW I HAVE TO ABSOLUTELY
HAVE TO BE ON MY FEET OUT ON THE
SIDEWALK BY 515 TO GET
SOMEWHERE, SO WE HAVE TO GO AND
I HAD SOME VERY FRUITFUL SIDEBAR
JUST NOW, I GUESS WELL, SO I
JUST MIGHT MY ONE QUESTION IT IS
FOR YOU AND MR THOMPSON KNOWING
EVERYTHING THAT YOU KNOW. I
MEAN, YOU'VE BEEN TASKED WITH
ADVISING THE LEGISLATURE AND
THIS PROJECT. I MEAN, I TOTALLY
HEAR YOU RIGHT IN THE YOUR POINT
IS, IF YOU'RE GOING TO DO IT,
YOU'VE GOT TO COME UP WITH A
PLAN FOR ALL THIS MONEY, BUT YOU
READ THE NEWS ABOUT WHAT'S GOING
ON THE FEDERAL LEVEL. UM, YOU
ALSO UNDERSTAND WHAT'S HAPPENING
WITH OUR BUDGET. THE STATE YOU
KNOW, OBVIOUSLY, IF THERE WAS AN
ENDLESS SOURCE OF MONEY THAT
THIS WOULDN'T BE A PROBLEM, BUT
WE'VE GOT A TON OF OTHER
PRIORITIES AND NEEDS. BOTH BOTH
SHORT TERM AND LONG TERM FOR OUR
STATE. WHERE YOU NOW
PHILOSOPHICALLY ON NEXT STEPS.
UM YOU KNOW, I TOTALLY HEAR WHAT
YOU'RE SAYING. YOU'RE BASICALLY
SAYING, WELL, YOU KNOW IF YOU
WANT TO DO THIS, RIGHT, GET THE
MONEY, BUT YOU UNDERSTAND HOW
HARD THAT IS GIVEN THE AMOUNT
THAT WE'RE TALKING ABOUT HERE.
WHAT ADVICE DO YOU GIVE? WOULD
YOU GIVE TO US? GIVEN EVERYTHING
YOU KNOW. I WOULD SAY THAT IF
YOU CAN'T COME UP WITH THE MONEY
, AND IT'S NOT THE HIGHEST
PRIORITY, THEN MAYBE YOU CAN'T
DO IT. I DON'T KNOW HOW TO
SQUARE THAT CIRCLE. YEAH IT'S AN
IMPORTANT PROJECT. BUT AS THEIR
FIRST RECOMMENDATION WAS THAT
YOU MAKE SURE THAT THIS IS STILL
YOUR PRIORITY, GIVEN THAT IT'S
COSTING MORE IN TAKING LONGER
AND WE'LL DO WHAT WOULD YOU SAY
IT'S STILL OUR PRIORITY. I MEAN,
IT'S NEVER BEEN A PRIORITY
ENOUGH TO HAVE TO HAVE RECEIVED
THE KIND OF FUNDING THAT IT
REALLY NEEDED. WE HAVE ALWAYS
BEEN KIND OF WHAT THAT DOES THAT
ANSWER THE QUESTION. I DON'T
KNOW I THERE'S NO NO WAY TO
SOLVE THIS PROBLEM WITHOUT
DECIDING THAT IT IS A PRIORITY
HIGH ENOUGH TO GET THE JOB DONE.
I CONTRASTED THIS WITH CHINA
WHERE THEY BUILT 20,000 MILES IN
THE TIME THAT WE STARTED THIS
PROJECT BECAUSE THEY WANTED TO
DO IT. THEY PUT THE MONEY BEHIND
IT. THEY HAD THE AUTHORITY TO
GET IT DONE, AND THEY DID IT.
WHAT WAS THE COST DIFFERENTIALS
BETWEEN THERE. I DON'T KNOW. AND
I HAVE SEEN THE NUMBERS AND I
DON'T BELIEVE THEM. SO YOU NEVER
KNOW ABOUT THAT, BUT BUT, YOU
KNOW, WE HAVE STARTED A PROJECT
WITHOUT THE MONEY. UM AS BRIAN
SAID THE TOTAL COST OF THE
PROJECT AT THAT TIME WAS ABOUT
$30 BILLION. I THINK AND THE
THOUGHT WAS, THE STATE WOULD
COME UP WITH A THIRD. THE FEDS
WILL COME UP WITH A THIRD IN THE
PRIVATE SECTOR SOMEHOW WOULD
COME UP WITH THE THIRD. THOSE
WERE NOT REALISTIC. SICK WAS NOT
GOING TO WORK. AND AS WE STAND
NOW, IT'S STILL NOT GOING TO
WORK I BECAUSE THE PRICE HAS
GONE UP FASTER THAN THE SOURCES
OF THE MONEY, SO IF WE WANT TO
FIX IT THEN WE HAVE. I CAN'T
THINK OF A SIMPLE SOLUTION OTHER
THAN FIX IT. SO MR THOMPSON AND
SENATOR ALLEN, THERE IS, UH, A
RECOMMENDATION IN YOUR REPORT
THAT I THINK ANSWERS HIS
QUESTION. IF WE'RE WILLING TO DO
THAT, AND THAT IS, WE SUGGEST
THE LEGISLATURE EXCUSE ME MIGHT
WANT TO COMMISSION AN
INDEPENDENT REVIEW OF THE
ECONOMIC AND FINANCIAL
JUSTIFICATION. ECONOMIC AND
FINANCIAL JUSTIFICATION FOR THE
PROJECT, INCLUDING THE ABILITY
TO OPERATE WITHOUT SUBSIDY.
HOWEVER WE DEFINE THAT BEFORE
RECOMMITTING TO THE FULL PHASE
ONE SYSTEM THAT ALMOST SOUNDS
LIKE A TIME OUT, BUT I DON'T
KNOW HOW ELSE TO ANSWER THAT
QUESTION. THANK YOU, SENATOR
ALLEN. ANYTHING ELSE? I KNOW YOU
HAVE THE FOUR AND I APPRECIATE
YOUR CANDID ANSWER. ALRIGHT
LET'S SEEMS THAT THAT CONCLUDES
THE QUESTIONS AND THE Q AND A
WITH THIS PANEL AND FOR THIS
PANEL, AND I REALLY APPRECIATE
YOU KNOW, A COUPLE OF YOU NOTED
THAT PROBABLY ALL OF YOU THAT
YOU ABBREVIATED YOUR
PRESENTATIONS IN THE INTEREST OF
TIME, AND I KNOW THAT PEOPLE WHO
ARE HERE TO SPEAK IN PUBLIC
COMMENT. APPRECIATE THAT AS
WELL. AND WE DO HAVE AGAIN FOR
THOSE WHO ARE TRACKING WHAT
WE'RE DOING TODAY. FULL,
THOROUGH. PAPER PRESENTATIONS
FROM FROM ALL THESE WITNESSES,
SO THANK YOU AGAIN FOR BEING
HERE. LOOK FORWARD TO WORKING
WITH YOU SOME MORE ON THIS. DO
IT? WHAT FORMAT LICCARDO. SO
WE'RE GOING TO GO AHEAD NOW MOVE
ONTO PUBLIC COMMENT. THOSE
WISHING TO TESTIFY WILL NEED TO
LIMIT THEIR THEIR COMMENTS TO
TWO MINUTES EACH, AND THAT'S THE
MAXIMUM NOT MINIMUM. AFTER
CONCLUSION OF PUBLIC TESTIMONY.
UM WE WILL ADJOURN THIS MEETING.
SO THIS IS THIS IS THE WRAP UP.
UM WE'RE STILL TAKING PUBLIC
TESTIMONY FROM THIS IS MY FIRST
TIME IN THIS SESSION DURING
DURING THE MEETING, AND I KNOW
WE'VE CHANGED THE RULES A LITTLE
BIT ABOUT WHERE WITNESSES WILL
BE SO IF YOU WANT TO SPEAK UNDER
PUBLIC COMMENT, PLEASE COME UP
TO THE MICROPHONE HERE IN FRONT
OF THE WELL. SERGEANTS WILL
HELP. IDENTIFY WHERE TO BE.
THANK YOU MIGHT TRY TO TALK
REALLY FAST. BUT I HAVE A LOT TO
SAY. GOOD AFTERNOON, SENATOR
CORTEZ IAN, HONORABLE MEMBERS OF
THE SENATE TRANSPORTATION
COMMITTEE. MY NAME IS AARON
LAHANE. AND I'M HERE ON BEHALF
OF THE INTERNATIONAL BROTHERHOOD
OF BOILERMAKERS. BOILERMAKERS
HAVE BEEN AROUND FOR OVER 140
YEARS BUILDING THE
TRANSPORTATION AND ENERGY
INFRASTRUCTURE THAT'S MOVED THE
MASSES PROTECTED THE NATION AND
POWERED OUR ECONOMY. WE REMAIN
IN STRONG SUPPORT OF
CALIFORNIA'S TRANSFORMATIVE HIGH
SPEED RAIL PROJECT. WE THANK MR
KELLY FOR HIS ALMOST THREE
DECADES. WHERE IS HE OF PUBLIC
SERVICE TO THE STATE OF
CALIFORNIA? IT'S PROBABLY
ESCAPE. NOW UM, THIS PROJECT HAS
ALREADY PUT THOUSANDS OF
BUILDING TRADES MEMBERS TO WORK,
AND IT WILL PUT THOUSANDS OF
MORE TO WORK AS WE BRING THIS
TRAIN INTO THE STATION, SO TO
SPEAK. WE'RE GRATEFUL FOR THE
CONTINUED SUPPORT OF HIS
LEGISLATURE AND THE FEDERAL
GOVERNMENT HAS PLAYED IN MOVING
THIS IMPORTANT PROJECT FORWARD
AND I THANK YOU IN ADVANCE FOR
YOUR CONTINUED SUPPORT. I ALSO
WANT TO THANK THE SENATE FOR ITS
CONTINUED UNWAVERING COMMITMENT
TO HIGH ROAD LABOR STANDARDS,
INCLUDING YOUR VERY HARD WORK ON
SP 150, WHICH IS VERY MUCH
APPRECIATED AS A HIGH SPEED RAIL
PROJECT MOVES TOWARDS
PROCUREMENT. WE ASK THAT YOU
URGE SUPPORT OF THE WORKFORCE
THAT WILL BE EXPECTED TO BUILD
THE ROLLING STOCK THAT WILL
TRAVEL AT VERY HIGH SPEEDS
THROUGH OUR COMMUNITY. HUSING
ACROSS THE RAIL LINES THAT ARE
BROTHERS AND SISTERS ARE LAYING
RIGHT NOW. ONE OF THE
SHORTLISTED VENDORS. SEAMANS HAS
A FACILITY IN SACRAMENTO, WHERE
TRAIN CARS ARE BUILT CURRENTLY
FOR REGIONAL TRANSIT THROUGHOUT
THE STATE THAT IS LOCKED IN AN
OVERLY HOSTILE BATTLE OVER
WORKER REPRESENTATION. WE'VE
BEEN WORKING WITH THE I B W WE
APPROACHED DEMONS WELL OVER A
YEAR AND A HALF AGO AFTER
HEARING FROM WORKERS WHO HAD
VERY VALID WORKPLACE CONCERNS
AND ONE OF THE BENEFIT OF A
UNION. WORKERS TOLD US MANY
THINGS THAT CONCERNED US,
INCLUDING THEY WEREN'T MAKING
ENOUGH AND WAGES TO SUPPORT
THEIR FAMILY. MANY WERE SEEKING
AT WORK AND THE GIG ECONOMY
DIDN'T EVEN SEEKING PUBLIC
ASSISTANCE JUST TO FEED THEIR
FAMILIES. SOME EXPRESSED
CONCERNS OVER SAFETY
OVERTRAINING HOW WORKPLACE
CONCERNS WERE HANDLED AND NOT
HANDLED. WE WERE HONORED EARLIER
TO HAVE SEVERAL WORKERS FROM THE
SEMEN FACILITIES HERE TODAY. WE
ASSUME SEAMAN'S LIKE IT DOES IN
GERMANY OR RECOGNIZED THE GREAT
PARTNERSHIPS, UNIONS COULD
PROVIDE A TRUE PARTNERSHIP OF
PROGRESS. BUT THIS IS NOT WHAT
HAPPENED. WORKERS WHO HAVE
EXPRESSED THEIR SUPPORT OF
ORGANIZING HAVE TOLD US THEY
HAVE BEEN FACED BULLYING AND
INTIMIDATION AT SIEMENS
SACRAMENTO, THEY FILED UNFAIR
LABOR PRACTICE AFTER BEING
TRANSFERRED INTO DIED OVER TIME.
ONE SEAMAN SUPERVISOR TOLD TOLD
ONE OF THE GENTLEMEN THAT FILED
THE U. L. P S THAT THEY WERE
CLOSE UP AND MOVE IF FORCED TO
PARTNER WITH A LABOR UNION. THIS
IS CERTAINLY NOT THE CALIFORNIA
WAY OF DOING THINGS. HIGH SPEED
RAIL IS A UNIQUELY CALIFORNIA
PROJECT. IT WILL CONNECT THE BAY
AREA WITH THE CENTRAL VALLEY
WITH L A, AND IT SHOULD REFLECT
CALIFORNIA VALUES. AS THINGS
STAND TODAY, SEAMAN'S MIGHT BE
LOCATED IN CALIFORNIA, BUT IT IS
NOT A CALIFORNIA COMPANY THAT'S
EMBRACING CALIFORNIA VALUES. WE
CONTINUE. WE ASK THAT YOU
CONTINUE TO SUPPORT THE
CALIFORNIA HIGH SPEED RAIL AND
THEN YOU ALSO CONSIDER
SUPPORTING WORKERS LIKE YOU HAVE
ALWAYS DONE. AND IN ACCORDANCE
WITH SB 150, ENSURE THAT THE
UPCOMING PROCUREMENT PROCESS
DOES THE SAME. THANK YOU VERY
MUCH. I TRY TO BE BRIEF. THANK
YOU. THANK YOU, MR CHAIRMAN
MEMBERS MATT CRIMMINS ON BEHALF
OF THE CALIFORNIA NEVADA
CONFERENCE OF OPERATING
ENGINEERS HERE TODAY IN STRONG
SUPPORT OF THE BUSINESS PLAN AND
STRONG SUPPORT OF OUR HUNDREDS
OF MEMBERS AND APPRENTICES WHO
ARE ACTIVELY WORKING ON THE
PROJECT. THANK YOU. THANK YOU.
MR CHAIR AND MEMBERS ANDRES
RAMIREZ ON BEHALF OF THE
TRANSBAY JOINT POWERS AUTHORITY,
WHICH OWNS AND OPERATES THE
SALESFORCE TRANSIT CENTER IN
DOWNTOWN SAN FRANCISCO, AND HIS
PORTAL PROJECT WILL BE THE
NORTHERN TERMINUS NOT ONLY FOR
ELECTRIFIED CALTRAIN, BUT FOR
HIGH SPEED RAIL. JUST WANT TO
EXPRESS OUR STRONG SUPPORT FOR
THE HIGH SPEED RAIL AUTHORITIES.
DRAFT BUSINESS PLAN IN 2024
COMMEND THE LEADERSHIP OF HIGH
SPEED RAIL AND ALSO JUST WANT TO
BRIEFLY UPLIFT AND EMPHASIZED
THE IMPORTANCE OF THE CAP AND
TRADE PROGRAM AND CAP AND
TRADES. EARLY REAUTHORIZATION.
SHIN NOT ONLY FOR THE PORTAL
PROJECT AND FOR HIGH SPEED RAIL,
BUT OTHER STATEWIDE PROJECTS,
MEGAPROJECTS OF STATEWIDE
SIGNIFICANCE, SO WE LOOK FORWARD
TO CONTINUED CONVERSATIONS ON
THAT TOPIC. THANK YOU. THANK
YOU, MR CHAIR MEMBER OF THE
COMMITTEE, JEREMY SMITH. HERE ON
BEHALF OF THE STATE BUILDING AND
CONSTRUCTION TRADES COUNCIL.
WE'RE HERE TODAY IN SUPPORT OF
THE BUSINESS PLAN. WE APPRECIATE
CEO KELLY'S 30 YEARS OF PUBLIC
SERVICE. BEFORE THAT HE WORKED
IN THIS BUILDING WELL ACROSS THE
WAY FOR THE FOR THE CALIFORNIA
STATE SENATE WORK GLAD HE'S AT
THE HIGH SPEED RAIL AUTHORITY.
HE WILL BE MISSED. UM WE JUST
WANTED TO URGE ALL OF YOU TO UM,
YOU KNOW, STAY THE COURSE SO TO
SPEAK, AND RECOGNIZE THE
IMPORTANCE OF CONTINUING
INVESTMENT, HIGH SPEED RAIL WITH
REVITALIZED PARTNERSHIP BETWEEN
THE STATE AND THE BIDEN
ADMINISTRATION. CALIFORNIA IS
CLOSER THAN EVER TOWARDS
REALIZING A WORLD CLASS HIGH
SPEED RAIL SYSTEM. I WANTED TO
TOUCH ON A FEW NUMBERS BEFORE I
FINISHED. THE PROJECT HAS
CREATED 12,183 TOTAL JOBS. 8493
JOURNEY LEVEL WORKERS. AND 1621
APPRENTICES WITH OVER 70% OF
THESE WORKERS COMING FROM EIGHT
COUNTIES IN THE CENTRAL VALLEY.
IT IS WORKING. I THINK WE HEARD
TODAY AND YESTERDAY THERE ARE
WAYS THAT IT COULD WORK BETTER.
THERE ARE CONCERNS ABOUT FUTURE
FUNDING, BUT IT IS WORKING. IT
IS GETTING BUILT IN HIS PUTTING
PEOPLE TO WORK. IT WILL ONLY GET
MORE EXPENSIVE. THE LONGER WE
WAIT TO FUND IT FULLY. I DID
WANT TO, UM TOUCH ON THE
INTERNATIONAL BROTHERHOOD
BROTHER MAKERS, THE SPEAKER FROM
THAT UNION AND THEIR CONCERNS
WITH ORGANIZING ITS SEAMAN'S,
IT'S WHAT YOU'VE ALL READ ABOUT
IN OTHER INDUSTRIES, A
MULTINATIONAL MULTIBILLION
DOLLAR COMPANY SPENDING UNTOLD
THOUSANDS AND MILLIONS OF
DOLLARS TO THWART AN ORGANIZING
CAMPAIGN. AND WE HOPE THAT HIGH
SPEED RAIL RAIL AUTHORITY CAN,
UM KEEP THAT IN MIND AND
REMEMBER THAT AS THEY THINK
ABOUT THE PROCUREMENT OF TRAIN
SETS OVER THE NEXT SEVERAL
MONTHS, SO CAN WE SUPPORT THE
BUSINESS PLAN? ASK YOU TO STAND
WITH OUR MEMBERS AND SUPPORT THE
GOVERNOR'S CONTINUED INVESTMENT.
HIGH SPEED RAIL. THANK YOU.
THANK YOU. GOOD AFTERNOON,
COLLECTING WITH THE AMERICAN
COUNCIL OF ENGINEERING COMPANIES
REMAIN SUPPORTIVE TO THE
AUTHORITIES BUSINESS PLAN AND
SUPPORT THE AUTHORITIES GOLD
MOVING FORWARD THIS YEAR. WE
ALSO LOOK FORWARD TO THE
CONTINUED PARTNERSHIP WITH THE
AUTHORITY. THANK YOU. GOOD
AFTERNOON, SIR. CHAIRMAN
SENATORS TIMOTHY JEFFERIES
INTERNATIONAL BROTHER EBOLA
MAKERS AS YOU HEARD OF COMMENTS
ABOUT SIEMENS AND ABOUT THE WORK
ONCE THEY THANK YOU. THE PROJECT
SHOULD DEFINITELY GO. I HEARD A
COMMENT EARLIER FROM DIOCESE
THAT KNOWS EXCITED. SO THE
BULLET MECHANISM MY COLLEAGUE
SPOKE ABOUT MISS ERIN MAHAN'S
BOOK ABOUT WERE EXCITED. THEY
WERE EXCITED FOR THE INFORMATION
SOME INFORMATION THEY HADN'T
HEARD A WHILE AS FAR AS HIGH
SPEED CONCERNS, SO THOSE THAT
DID TAKE THEIR TIME OFF THE JOB
TO COME IN. THEY ARE EXCITED
ABOUT THE UPDATED NEWS ABOUT THE
HIGH HIGH SPEED RAIL AND I
APPRECIATE YOUR SUPPORT FOR THE
HIGH SPEED RAIL AUTHORITY. THANK
YOU. THANK YOU. WE APPRECIATE
ALL THE TESTIMONY, AND IT LOOKS
LIKE THAT CONCLUDES OUR PUBLIC
TESTIMONY AT THIS POINT ANY
ADDITIONAL COMMENTS OR QUESTIONS
FROM THE DAYS FROM MEMBERS OF
THE COMMITTEE? ALRIGHT SEE?
NONE. LET ME THANK AGAIN. THE
PANELISTS, UM FROM BOTH PANELS
AGAIN. EVERYONE WHO CAME HERE TO
TESTIFY. EVERYONE WHO CAME HERE
DIDN'T TESTIFY THAT CAME HERE TO
PARTICIPATE IN THOSE WHO HAVE
BEEN MONITORING THIS HEARING. UM
THROUGH THE ELECTRONIC SYSTEM,
AND I WANT TO THANK OUR
COMMITTEE STAFF FOR DOING AN
AWFUL LOT OF WORK TO GET THIS
SET UP AND ARE SERGEANTS FOR
HELPING US MAINTAIN ORDER. SO
THANK YOU ALL WE WILL NÓ
ADJOURNED. THIS MEETING. THANK
YOU. THANK YOU, MR CHAIR.