Rebooting high-speed rail
Meet Dan Richard, the guy trying to save the state’s plan
Dan Richard, incoming chairman of the board for the California High-Speed Rail Authority is not the easiest man to get hold of.
One interview got scuttled when it turned out Gov. Jerry Brown wanted to meet Richard at the same time. Subsequent calls were missed. Voice mails were exchanged—“I’m driving back from Fresno right now, because there’s no high-speed rail. Try you later.”
There was more travel and more missed connections, before SN&R finally caught up with Richard by phone in Washington, D.C.
It was late on the East Coast, still Richard gamely tackled questions like, “What happened to high-speed rail?” And “What are you going to do to save it?”
“Well, I am not the guy who is going to save high-speed rail,” he demurred. “But I know that guy: His name is Edmund G. Brown.”
Gov. Brown appointed Richard to the high-speed rail board back in August 2011, to exert more control over the besieged project. Back in 2008, voters approved $10 billion in bonds for seed money to build a 240-mile, 220-mile-per-hour train system that, if ever built, could whisk riders from Sacramento to Los Angeles in two hours.
Richard was voted in as board chairman last month. He served as science and energy adviser back in the first Jerry Brown administration in 1978. Before that he worked as an administrator at NASA. Later, he served on the BART board for more than a decade, helping bring BART to the San Francisco airport. He ran an infrastructure-finance company, and was a senior vice president at Pacific Gas and Electric Company.
Brown’s other new appointee to the board, Mike Rossi, is a banker whose résumé includes companies like Cerberus Capital Management and Bank of America Corporation.
It’s Brown’s way of rebooting high-speed rail, trying to bring some political stability.
The rail project is supposed to break ground this year—beginning the first leg from Bakersfield to Chowchilla. But lawmakers, mostly Republicans, some Democrats too, are demanding “not one more dime” be spent on the system. Public opinion polls show voters turning against the project they (narrowly) supported back in 2008. Sacramento Bee columnist Dan Walters, for years California’s leading cheerleader against high-speed rail, can almost taste victory. “It’s time to pull the plug,” he proclaimed in January.
But Brown has signaled he won’t let California’s high-speed-rail plans go the way of Florida’s, or Wisconsin’s, or Ohio’s, where governors have rejected federal money, killing the idea for years to come.
“The governor believes this is something we can do and will do. I believe this is something we can do and will do,” Richard said. “And confounding our critics will be the cherry on top.”
But some critics he’ll need to win over. Richard says the authority made its own headaches in the Central Valley, where it was clumsy in handling the concerns of farmers and other landowners along the long, straight spine of the proposed system. Rather than seeing rail as a force for economic development, some Valley communities turned against the project.
“We’re talking about someone’s third-generation dairy farm. You can’t just go tromping in with thinly veiled references to eminent domain. I think there’s been a lot that has engendered bad feelings.”
Richard also seems sensitive to rail authority’s reputation for pie-in-the-sky promises. For years the rail authority criticized for low-balling cost estimates and overestimated benefits of the system.
After Richard and Rossi’s arrival on the board, the CHSRA put out a new business plan that was, in Richard’s words, “a little bit too real for some people.”
It was stark, projecting a cost of $100 billion and a completion date of 2033. The previous business plan had promised a cost of just $40 billion or so.
“It was something of a double-edged sword,” Richard said of the new price tag. He didn’t want to be accused of being a Pollyanna. But at the same time, “I knew some people were going to get sticker shock.”
Sure enough, the new cost estimates set off more cries of “boondoggle.”
Gov. Brown again tried to calm anxieties, calling the new estimates “silly” and “way off.” For one, the November business plan made some pretty conservative assumptions—like a high inflation rate and a dragged-out construction timeline.
“The governor has said, ‘You guys need to do it better, faster and cheaper,’” Richard explained.
So now the board is working on a new business plan, due near the end of March. The details aren’t public yet, but the general idea is to get private investment coming in sooner and to accelerate the construction timeline. Time is money, after all.
There’s talk now of a “blended” system in some major urban areas—the Bay Area and Los Angeles in particular.
The authority thinks is can save some time and money by using the same right-of-way as existing commuter rail systems in some places. It would also give up controversial elements like elevated tracks in some communities where the locals have objected strongly.
The new business plan will also likely pump more money into the “bookends” of the system sooner. This may be an effort to smooth relations with lawmakers from Bay Area and Southern California who complained that starting the project in the Central Valley, away from the major population centers, was like building “a train to nowhere.”
Brown is also considering using some money from the state’s newly approved “cap and trade” system, intended to help curb global warming, to boost fund construction of the rail system.
In the governor’s proposed budget, some new carbon fees collected from polluting factories and power plants—estimated to be $1 billion in the first year—would be divvied up to fund a variety of environmental goals, including clean energy, natural-resource conservation and “low carbon transportation.” That last could be a source of high-speed rail money. Call it “cap and train.”
Cap and train is already very unpopular with some state lawmakers. Assemblyman Dan Logue (R-Marysville) a critic of both high-speed rail and the state’s greenhouse-gas law, says this idea is doomed. “Cap and trade is designed to bring companies into compliance with emissions laws, not to fund pet projects,” he told SN&R. “It’s illegal.”
In fact, Logue says the whole high-speed rail project is “a train wreck” and ought to be ended. “We’re laying off teachers and police. We can’t wrap our arms around a $100 billion project right now. We just don’t have the money.”
State lawmakers could decide for now not to spend any of the bond money voters approved for the project. Logue would go further. “Let’s put it on the ballot and let the people vote again. I’m confident voters would kill it.”
Brown has argued that high-speed rail is an important part of trying to rebuild and remake California’s economy, and would, like airports or highways in past decades, boost growth.
That’s why labor groups and construction companies are ramping up their support for the project.
“This is a pivotal moment,” said Jim Earp, executive director of the California Alliance for Jobs, which promotes public-works projects. “I think the governor has really stepped up.”
Daniel Krause, executive director of Californians for High Speed Rail, is also hopeful about the new direction being charted by the governor and his appointees. “People are going to start seeing the direct benefits sooner, and we think that’s going to increase support.”
What worries Krause is attacks on the project by some Democratic members of the state Legislature, like Sens. Alan Lowenthal (Long Beach) and Joe Simitian (San Mateo), both vociferous critics of the project.
The federal government has so far kicked in $6 billion to match some of the bonds approved by California voters.
“We’ve been surprised that some Democrats want to join tea party governors like [Florida’s] Rick Scott or [Wisconsin’s] Scott Walker and reject this high-speed rail money,” said Krause.
Richard said in his experience, “No project at this stage knows where all the money is coming from.”
The situation in D.C. looks grim now, but “Historically, there’s been a strong bipartisan support for high-speed rail. It’s only recently that there’s been this partisan cast,” said Richard. “My hope is that we will get past this next election and that will settle down.”
As for private investment, Richard said there’s plenty of interest from finance groups, but there’s “a lull now, as investors wait to see where California is going.”
“We need to show that we’ve got a plan that can garner support and lead to political stability.”
When asked, “What happened to high-speed rail?” Richard laughed and said, “That’s a big question.”
In a nutshell, “You had this small number of people laboring for years on high-speed rail, keeping it alive.” When the bond measures passed in 2008, suddenly that small group of people was handed $10 billion. “It was like going from this little pick-up football team to being in the NFL,” said Richard.
But the folks who nursed the dream of high-speed rail weren’t so great at the business of high-speed rail. Now the project is changing hands, from the boosters to the businessmen.
“Nothing like this gets built without the visionaries at the beginning. But at some point, you transition from the people who envision it to the people who make it happen,” said Richard.