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City Leaders Blast Rail Plan

Palo Alto City Council Rail Committee unimpressed after first glance at new high-speed rail business plan.

Palo Alto elected officials came out swinging this morning against a draft by the California High Speed Rail Authority, criticizing its ridership projections and funding plan.

The City Council Rail Committee today began their look into the 230-page document with a report from High Speed Rail Project Manager Rob Braulick, who began by outlining ridership projections that form the underpinning of the plan.

There are three ridership scenarios forecast in the new plan—low, medium, and high—each of which relies on a model that was criticized by local watchdog CARRD but validated by the Authority’s Peer Review Panel.

The scenarios are based on projections for California’s population growth, as well as trip-making patterns, gas prices, and airfare.

The “low” ridership forecast plans for the number of total residents hitting 44.6 million by 2040 and the “high” plans for 49.5 million. Previous versions of the business plan called for the population reaching 54.2 million.

Along with other new inputs, the Peer Review Panel concluded that the forecasting model, which was built by Cambridge Systematics, “provides a sound basis for additional model development to support future forecasting needs,” according to the Draft 2012 Business Plan.

Braulick said to the Rail Committee today that he wants an independent analysis of the new data.

“Even in the worst case they show—according to their data—making profits,” he said.

Pat Burt agreed that the numbers may be dubious.

 “Unfortunately the Authority has not done a fundamental review of their ridership model,” said Burt, who was reluctant to hire an outside firm to dive into an issue as complex as ridership modeling with so little time. The public has only 60 days to respond to the plan.

Burt suggested that the best analysis of the data is likely to come from CARRD, regardless of whether or not the city decides to pursue its own study.

“It’s now widely recognized that the strongest analysis that’s been done by an independent group has been done by our own CARRD,” he said.

One concern Burt honed in on had to do with assumptions in the new plan about the number of passengers projected to board trains in cities like Merced, which is the terminus for the Initial Operating Section in the Central Valley. 

”They assume massive boardings for cities like Merced,” he said. “These are the same fundamental flaws that we pointed out three years ago to the Authority. They’ve nothing to change the model."

The draft plan anticipates, for example, that about 7.3 million riders will be travelling between San Jose and the Central Valley—if that route is selected as the first operating segment—or else 9.1 million riders between the Central Valley and the San Fernando Valley.

The conversation this morning then turned to the subject to financing. The massive new price tag for the project—over $98 billion—raised the eyebrows of Committee Chairman Larry Klein, who was deeply skeptical of the Authority’s plan to raise additional fund using tax credit bonds.

“Tax credit bonds are in the same category of me getting an inheritance from an uncle I’ve never heard of,” said Klein.

Tax credit bonds are bonds that don’t require payment of tax on income.

Furthermore, said Pat Burt, they are unlikely to assuage concerns over the viability of the Authority’s funding plan.

“Tax credit bonds are beyond unproven,” said Burt, “they are nonexistent.”

The committee ultimately decided in a unanimous vote to ask Rob Braullick to come back with a highly focused proposal for a third-party study—one that looks at how the draft business plan affects the Peninsula specifically.

In the meantime, everyone with a stake in the outcome of California’s high-speed rail project will be taking a close look at the numbers and hurrying to weigh in before the state legislature reconvenes in January.

 

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