I wasn’t able to attend the recent town hall held by State Senator Joe Simitian in Palo Alto, but Kathy Hamilton, a project critic, did, and she filed a very interesting report on the event. The crowd was generally anti-HSR, so that should be kept in mind in assessing the conversation. The upshot is that Senator Simitian made some important points about the project and how legislators are dealing with it that we need to consider over the coming months.

The room was full , approximately 200 people attended, creating the need for folding chairs in the back of the room. When asked the question “where is the silent majority of High Speed Rail supporters,” Simitian responded, accompanied by laughs from the audience, “apparently not in this room today.”

One doesn’t get a sense whether Simitian said this with a straight face or not. Hamilton clearly is trying to mock HSR supporters here, but Senator Simitian has seen the poll showing 76% of those surveyed in an Assembly district that mostly overlaps his own Senate district support high speed rail. So if anything Simitian was probably playing this straight, with an anti-HSR audience making its own conclusion, refusing to admit they are a vocal minority.

Anyhow, on to the important stuff:

I support High Speed Rail done right and what does high speed rail done right look like?

1. Project has to be financially sound and viable on a statewide basis over the long term.
2. Must be a viable and complete transportation system statewide over the long haul.
3. The High Speed Rail Authority [must have] done a legitimate job of listening to and responding to legitimate concerns that are raised by folks that will be effected by the operation of the High Speed Rail, not just on the peninsula but up and down the state.

Let’s take these in turn.

1. There is a significant amount of evidence that HSR around the world is financially viable and sound for the state of California. One also hopes that Simitian understands that HSR saves California a LOT of money in the long term, in highway and airport construction costs and in savings on oil prices.

2. As we know, HSR fits this bill very well. There’s really no need for discussion on this point.

3. “Listening to and responding to” is a rather important point. Simitian did NOT say, not have I ever understood him to say, that he agrees with the “tunnel or nothing” view of some on the Peninsula. Instead he believes, as many of us HSR supporters believe, that the Authority can do a better job communicating with the local governments. This is a goal virtually everyone supports.

So all in all, Simitian didn’t really give the anti-HSR crowd the red meat they wanted.

Hamilton then reported on Q&A:

How does the Senator feel about the Governor’s trip to China and their interest in financing the HSR system?

He believes there is no shortage of interest on an international level because of the dollars on the table. China, Belgium, France, Germany, Japan and South Korea have shown interest. Simitian said he has an open mind since there are no formal proposals on the table. “There are those who say, we need to consider it if someone wants to put their money on the table rather than California taxpayers. On the other hand, you have to ask yourself whether or not a critical piece of infrastructure ought to be in the hands of a foreign government.”

First, it’s not at all the case that HSR would be “in the hands of a foreign government” – for example, China might pay to build it, or France might operate it, but the state of California would still own it.

Second, if Simitian thinks that this should be funded by US-based sources – and I would agree that would be preferable – then he should find ways to increase state funding for the project and work to help support more federal funding for it. I’m guessing he probably is not going to be interested in finding more state funding, given California’s budget problems. But he would do well to ensure that he doesn’t undermine the project’s ability to win federal funding.

Hamilton then proceeded to break some pretty interesting news:

What’s all this about the Conflict of Interest with Board Members?

Hot off the presses, Sen. Simitian told the audience that there was a last minute attempt to exempt board members of the High Speed Rail during the budget negotiations considering State law, Conflict of Interest code 1099. There was an audible gasp of disbelief from the audience. Simitian said it did not fly but encouraged people to keep an eye on this. He said emphatically he could not support the exemption, because it’s” inappropriate on merits” and “from a process standpoint, it would be impossible to justify.”

Simitian didn’t say where this “last minute attempt” came from, but I am guessing it came from the governor’s office. This is a very clear signal that there is indeed recognition that the charges that Curt Pringle and Richard Katz are holding “incompatible offices” might have merit. My guess is that this only increases Simitian’s resolve to push through some kind of reform of the California High Speed Rail Authority.

One other point on this: if people don’t want to see these kinds of deals happening in budget negotiations, you ought to vote yes on Prop 25 to restore majority rule to the state budget process.

Back to the HSR Q&A:

What about those Ridership Numbers?

Budget language that has been put forth and specifically calls for the High Speed Rail Authority to respond to the concerns of the projections. They have to demonstrate a more rigorous analysis on ridership than we’ve seen to date. There could be a transportation hearing set in November but it is not yet scheduled.

I’ve always predicted that the Legislature would probably order some kind of revision or update to the ridership numbers, so this isn’t exactly news. However, it must be noted that while anti-HSR forces want to claim the ridership numbers are flawed merely because they said they are flawed, there has been no evidence whatsoever that proves the numbers are unreliable.

What do you think of lawsuits against the Authority?

“I think if people think that if the Authority is not playing by the rules of the game, litigation is an entirely appropriate tool. We sometimes worry about people abusing or misusing the legal process and I think that’s a legitimate concern but I also think the courts are there for a reason, it’s to hold all of us to be honest so if you think someone isn’t following the rules of the game, that’s the place to go and have the argument.”

I don’t think a sitting State Senator is going to tell people they should never use the legal system if they feel compelled to do so. And it is worth noting he did not specifically endorse the frivolous and spiteful HSR lawsuit filed today by the usual gang of HSR opponents.

Who has the power to stop High Speed Rail Authority at this point, if anyone?

“After a long pause, Simitian offered this. “I’m going to ask you to give me some time to think about that because there are many different means by which a “do over” could be accomplished. It could be as simple or as challenging as a different group of folks on the High Speed Rail Authority. It could be as simple or as difficult as the peer review body that was up and running and really exercising an appropriate role. It could be action at the state ballot level to undo the vote that has already occurred.

But he cautioned the audience that the rest of the state does not share the same set of feelings that we do here on the peninsula and as some of the southern California communities do.

Simitian said he’d be working this fall, before the key date in February, and would think about how we “unring the bell,” if we come to that conclusion a “do over” is needed based on the performance of the High Speed Rail Authority.

Simitian’s point here is really important, though I am certain it was promptly ignored by the more rabid anti-HSR folks in the audience. Simitian is saying here that an effort to repeal Prop 1A is not a smart idea. I wish Simitian hadn’t defined the Peninsula as a whole as having concerns about HSR – he has the AD-21 poll, so he knows damn well what people really think – but he does recognize that HSR remains popular across the state. Spending millions to try and repeal Prop 1A is a futile effort. Just look at how the Texas oil companies have sparked a huge public backlash with their efforts to repeal AB 32 (via Prop 23). HSR critics seem to think they’d have the field to themselves if they got a repeal on the ballot, but they wouldn’t – it would cause a reaction among HSR backers that would overwhelm the underfunded critics. And if they lost a repeal vote, their cause would receive a major setback.

One thing I do expect to see is some sort of push to, at minimum, change the membership of the CHSRA board. One might see the charges of “incompatible offices” as a first step in that direction.

I might also add that for HSR supporters, such changes might not necessarily be such a bad thing. We’re going to see change anyway given that California swears in a new governor in January. If that new governor is Jerry Brown, and it’s increasingly looking like it will be, then we could see some very positive changes on the CHSRA board, from a governor who has been pushing for California HSR as long as I’ve been alive.

Hamilton included several more Q&A items, but I wanted to close with this one:

If you do not see demonstrative private equity investment in the plan presented February 1st, will that affect your views of the business plan?

“Yes. Here’s one of the things I worry about. I worry that 10 years from now, folks are going to show up and say we need another 10 billion dollars. And I don’t think that was the bargain that was struck with the voters of California when they voted for the plan. So where’s the money going to come from? What makes you think that money is forthcoming based on the ridership studies you’ve done to date? And are the ridership studies you’ve done to date, credible enough that they are going to generate private investment?”

Simitian is not quite accurate here – California voters knew full well that the Prop 1A bond money wasn’t enough to complete the system. That’s why AB 3034, which became Prop 1A, includes many safeguards to ensure that if other funds don’t come through, Californians aren’t on the hook for the remaining costs.

Further, Simitian should already know the answer to his rhetorical questions. The interest expressed in funding the HSR system by China, Korea and Japan shows that investors absolutely think the ridership numbers are credible – as SNCF has also concluded – and so private investment is already on the table.

Still, I have been hearing from a number of sources that the new business plan is going to be seen as a “make or break” moment for the Authority in the eyes of some legislators. So expect and be ready to respond against a likely attack on that business plan, even if it makes a solid case for the project, from HSR opponents who will have every reason to try and spin the legislature and media that the plan is somehow flawed.

Overall I wouldn’t say any of what Simitian said is a surprise. But some context is needed, and that context is the November election. If indeed Jerry Brown does become governor, then Simitian will have a fellow Democrat in the Horseshoe who is a very, very strong HSR supporter. Brown is not going to tolerate the legislature pulling the plug on the project just 1 month into his administration, and anyone who thinks he will is simply delusional. Instead Brown will come in with his own proposals for reform – keep in mind that he is the current Attorney General, after all, and so he’s quite familiar with all of these matters – and work with the legislature to implement these reforms while keeping the project moving forward.

And of course, if Meg Whitman gets elected governor, you can bet that she will pull a Chris Christie and suspend the HSR project. Whitman will not say she thinks HSR is a bad idea, just that the state somehow can’t afford it, and she’ll suspend the funding, leaving the project still in existence on paper but not actually able to do anything more than it already has.

So ultimately, this isn’t really in the hands of the state Legislature. It is in the hands of the voters, just as HSR was in November 2008. And even though Simitian believes he should be able to block the project if it is not proceeding according to his liking in 2011, I hope he does realize that the state government, the Legislature included, has a mandate from the voters and from his own constituents to see that the system does get built.