High-speed rail leaders say management structure has flaws

Published 11-29-2018

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SACRAMENTO, Calif. (AP) - A leader of California's high-speed rail project defended the decision to begin building tracks in the Central Valley without all approvals in hand Thursday but agreed with state auditors that the project overly relies on contractors and isn't keeping thorough records.

"We have not appropriately recorded in documentation why we've done things," Tom Richards, vice chairman of the board overseeing the project, told lawmakers. "It's inexcusable and frankly I'm embarrassed about it."

Richards was answering questions from lawmakers about a scathing state audit released in mid-November that found poor contract management and flawed decision making has driven cost overruns and delays. Lawmakers from both parties have become increasingly skeptical the project will ever be fully completed.

Voters in 2008 approved bond money to help build a train that can shuttle passengers between Los Angeles and San Francisco in less than three hours. It's nearly doubled in cost since, to a predicted $77 billion, and is 15 years from completion.

The public and lawmakers should be concerned about the audit's findings, auditor Elaine Howle told a legislative oversight panel.

Her report faulted the construction timeline and management structure. The authority broke ground in the Central Valley in 2013, before it had all the land it needed or had relocated necessary utilities. The cost of contracts keeps rising as changes are made amid construction on 119 miles (190 kilometers) of track.

It cited high turnover and little oversight of contract management and faulted the authority for relying on non-state employees to oversee contracts. Fifty-six people manage hundreds of contracts worth billions of dollars but just three serve full time, the audit found. One member of Howle's team said it was difficult to get a complete picture of the contractors' work because of a lack of documentation.

The state also risks losing about $3.5 billion in federal money.

Richards said part of the reason construction began early was to ensure the state met deadlines to keep that federal money. The decisions were made with "careful consideration" about how to maximize federal dollars and manage risks, he said. The board agrees with criticism about its management structure and is already working to change it, he said.

Democratic Assemblyman Jim Frazier suggested bringing more oversight to the project by an inspector general and said there aren't enough consequences for poor decisions.

"There's no accountability and there's no punitive action that goes on - nobody gets fired," he said. "Your authority has gone on with whatever they wanted to do without any oversight of this body."

Republican Assemblyman Jim Patterson of Fresno repeated his criticism that the project is not viable and asked the board for a "Plan B."

"Plan A has failed, and if you don't come to terms with it this project will die of its own weight," he said.

The audit comes as Democratic Gov. Jerry Brown, a strong defender of the project, prepares to leave office. Governor-elect Gavin Newsom, also a Democrat, has expressed concern about funding shortfalls.

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