BILL ANALYSIS
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
289 (Galgiani)
Hearing Date: 08/02/2010 Amended: 08/02/2010
Consultant: Mark McKenzie Policy Vote: T&H 8-0
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BILL SUMMARY: AB 289, an urgency measure, would authorize the
Governor to appoint up to six additional civil service-exempt
staff for the management and administration of the High-Speed
Rail Authority (HSRA). The bill would also appropriate
$144,071,000 in high-speed rail bond funds and $77,500,000 in
specified federal funds to the HSRA for high-speed rail
purposes. Any appropriations in the 2010 Budget Act from these
sources to the HSRA would supersede the appropriations in this
bill.
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Fiscal Impact (in thousands)
Major Provisions 2010-11 2011-12 2012-13 Fund
Exempt staff appointments $413 $825
$825Bond*
Bond appropriations:
Capital outlay $86,750 Bond*
HSRA operations $57,321 Bond*
ARRA appropriation $77,500
Federal**
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*High-Speed Passenger Train Bond Fund
** American Recovery and Reinvestment Act (ARRA) Funds, in
Federal Trust Fund
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STAFF COMMENTS: This bill meets the criteria for referral to the
Suspense File.
Existing law authorizes the HSRA to appoint an executive
director to administer the affairs of the authority. The
position is exempt from civil service and the salary is
established by the HSRA and approved by the Department of
Personnel Affairs (DPA). HSRA has established a salary range of
$250,000 to $375,000 for this position. The state has paid an
outside consultant, KPMG, to perform an organizational
assessment of the HSRA. Among the recommendations, KPMG
suggests that the HSRA add certain management personnel. In
addition, a recent State Bureau of Audits report recommended
that the HSRA implement risk management strategies.
AB 289 would authorize the Governor, upon recommendation by the
executive director, to appoint up to six additional civil
service-exempt employees for the following positions to manage
and administer the work of the HSRA: Chief Program Manager,
Regional Director, Chief Financial Officer, and Director of Risk
Management and Project Controls. The compensation for these
positions would be established by the HSRA and approved by DPA,
and based upon a salary survey conducted by the HSRA using
independent outside advisors.
Staff notes that the Administration has requested staffing
augmentations of 29 positions for the HSRA, including the
addition of a Chief Financial Officer and Chief
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AB 289 (Galgiani)
Program Manager (as part of HSRA BCP #2), and three Regional
Director positions (as part of HSRA BCP #3). Total costs for
these positions are estimated at approximately $825,000
annually. The January Budget assumed the new positions would be
established on July 1, 2010, and budget documents reflect this.
However, the Administration indicates that the establishment
date has been accelerated and 27 positions were administratively
established on March 1, 2010. These positions would need
legislative approval to extend into the budget year, either
through the budget process or legislation. In addition, the
Budget Conference Committee recently approved one new position
and $183,000 to create and fill the position of Risk Manger. AB
289 would specify that these positions are exempt from civil
service. This would authorize these positions to have salaries
that exceed the civil service ranges, but the bill specifies
that the compensation could not exceed the highest comparable
salaries for a position of that type, based upon the salary
survey conducted by the HSRA. The additional cost associated
with the exemption from civil service would depend upon the
salary survey and the compensation recommendations of the HSRA
that are approved by DPA.
AB 289 would appropriate $144,071, 000 from the High-Speed
Passenger Train Bond Fund to the HSRA for high-speed rail
purposes as follows: $57,321,000 for support of the HSRA and
$86,750,000 for capital outlay. The bill specifies that federal
ARRA funds received on a reimbursement basis would be deposited
into the federal trust fund, and the bill would appropriate
$77,500,000 in federal ARRA funds to the HSRA for high-speed
rail purposes. Staff notes that the appropriation levels
specified in this bill may be inconsistent with the ultimate
decisions made in the budget process, but the bill specifies
that funds appropriated in the Budget Act of 2010 from these
sources to the HSRA would supersede the appropriations in the
bill. The specific purposes for the funds appropriated in AB
289 are undefined.
In January of 2010, the Federal Railroad Administration (FRA)
awarded the HSRA a $2.25 billion American Recovery and
Reinvestment Act (ARRA) grant, providing $400 million for the
San Francisco Transbay Terminal joint powers agency, and $1.85
billion for preliminary engineering and environmental work on
Phase I of the high-speed rail project (Anaheim to San
Francisco). As a condition of the grant, the HSRA must obtain
environmental clearances for the corridors by September 30,
2011, and construction must be completed by September 30, 2017.
AB 289 would provide guidance related to the expenditure of
federal high-speed rail funds, based upon existing federal law
and regulations that govern agreements between the HSRA and the
federal government. Specifically, this bill would require the
HSRA to establish priorities among the specified corridor
segments and prepare an expenditure plan, in consultation with
the FRA, for use of ARRA funds. The bill also requires ARRA
funds appropriated by the Legislature to be used for preliminary
engineering, project-level environmental work, mitigation, final
design, and construction of projects in four specified corridors
included in the HSRA fund application. Finally, the bill would
require any funds received by the HSRA from the Passenger Rail
Investment and Improvement Act of 2008 to be used for planning
and engineering of corridors not included in Phase I of the
project.