Legislative Analyst's Office
Analysis of the 2003-04 Budget Bill
The California High-Speed Rail Authority (HSRA) is responsible for planning and constructing an intercity high-speed rail service that is fully integrated with the state's existing mass transportation network. The California High-Speed Rail Act of 1996 (Chapter 796, Statutes of 1996 [SB 1420, Kopp]) established HSRA as an independent authority consisting of nine board members appointed by the Legislature and Governor. The HSRA has an executive director and three staff positions.
The HSRA was due to expire December 31, 2003. Chapter 696, Statutes of 2002 (SB 796, Costa) repealed the expiration date, making the HSRA permanent. Additionally, Chapter 697, Statutes of 2002 (SB 1856, Costa) enacted the Safe, Reliable High-Speed Passenger Train Bond Act for the 21st Century. The act, if approved by voters in the November 2004 election, would authorize the issuance of $9.95 billion in general obligation bonds for rail improvements, including $9 billion to fund the design and implementation of a high-speed train network.
The proposal to consolidate the High-Speed Rail Authority (HSRA) into Caltrans would result in some savings, but would not improve the effectiveness and efficiency of the state's efforts to develop and implement a high-speed rail system. We recommend that the proposal be rejected and HSRA funding be restored. We further recommend that Caltrans' budget be reduced by $2,242,000. (Augment Item 2665-001-0046 by $2,242,000 and reduce Item 2660-001-0046 by $2,242,000.)
The administration proposes to consolidate the staff and administrative responsibilities of the HSRA into Caltrans in 2003-04. The proposal entails transferring $1,992,000 in support from the HSRA to Caltrans to continue a consultant contract and to pay for other administrative expenses. The proposal would result in the abolishment of all HSRA staff, for a savings of about $400,000. The budget proposes to generate the savings by eliminating the executive director position and having Caltrans "absorb" the three staff positions that would transfer over to the department. In turn, Caltrans would establish a new high-speed rail unit and supplement any additional personnel needs with existing staff. Our review raises a number of concerns, as discussed below.
Proposal Reduces HSRA's Accountability; Complicates Lines of Authority and Responsibility. Our review finds that the proposal would reduce accountability within the high-speed rail program. This is because the administration's proposal would statutorily eliminate the HSRA board's power to appoint an executive director, thereby leaving the authority without a focal point to hold accountable for carrying out its mission.
In addition, the proposal would have the practical effect of limiting the board's ability to carry out its mission while still holding it responsible for doing so. This is because the board would continue to be responsible for implementing the high-speed rail system even though it would no longer have the authority to allocate staff resources (since such staff would be under the control of the Director of Caltrans). Beyond these fundamental issues of accountability, authority, and responsibility, the proposal raises a number of practical issues, including:
Consolidation Does Not Improve Program Effectiveness. The HSRA is scheduled to finish its current efforts of preparing an environmental impact report for the entire high-speed rail project at the end of 2003. After that, its next major step is to put into place an implementation plan that will lay out in detail, among other things, the various construction and funding stages of the project. Our review finds that currently, Caltrans does not possess any expertise in high-speed rail development or planning that it can bring to the project. Thus, the consolidation would not enhance the program's effectiveness by virtue of the department's expertise.
Savings Not From Reduced Workload; But Due to Excess Positions in Caltrans. Our review also shows that the consolidation will not result in increased workload efficiency in developing a high-speed rail system. In fact, the workload will remain the same in 2003-04 regardless of whether it is carried out by HSRA (as it is now) or by Caltrans. Most of the savings proposed in the budget are not the result of increased efficiency. Rather, they result from Caltrans having excess positions and funds that it can redirect to the program. Absent the proposed consolidation, these positions and associated funds ($250,000) should be deleted.
Conclusion. For the reasons stated above, we recommend that the consolidation proposal be rejected and funding for HSRA be restored at $2,242,000. This amount would provide support for the consulting contract and three staff positions. In addition, we recommend funding for Caltrans be reduced by $2,242,000, the amount proposed to be transferred to Caltrans ($1,992,000) plus $250,000 from the elimination of Caltrans' excess positions.