Is the California High-Speed Rail Authority Paying for Legendary Leadership?

Editor’s Note, 4/21/2017 – High-Speed Rail Authority Executive Director Jeff Morales announced his resignation today.  Kevin Dayton’s analysis, published by CPC ten days earlier, leads us to believe that Morales’ departure is good news for California taxpayers.

Robert Moses was the legendary “Master Builder” of 20th Century New York City. William Mulholland was the legendary engineer of 20th Century Los Angeles. And Jeff Morales could become the legendary administrator of 21st Century California, by serving as the executive director of the California High-Speed Rail Authority.

The most prominent evangelist for the vision of California High-Speed Rail, of course, is Governor Jerry Brown. He sees the project as an emancipator, freeing Californians from passenger vehicles propelled by internal-combustion engines. A convenient new public transit network, combined with government incentives and disincentives, will transform life for California households. People will reside in compact neighborhoods near transit centers, improve their health by walking and biking to local small businesses, and curb their excessive consumption of energy, goods and services. Income disparities will recede, housing will become more reasonable in size and cost, and social justice will abound. Community will flourish. So will the relationship of humanity to the natural environment.

This vision to transform civilization is reflected in utopian fiction (see Ecotopia) that has quietly influenced generations of Californians and now seems prescient in many ways. This vision also apparently motivates about 40% of Californians to consistently support California High-Speed Rail despite its soaring cost and frequent setbacks.

Meanwhile, the appointed California High-Speed Rail Authority board sets policies that conform with Governor Brown’s vision. And for almost five years, management of the Authority’s day-to-day activities to advance Brown’s vision has been overseen by Jeff Morales.

Jeff Morales defends California High-Speed Rail to a Santa Clarita delegation at the California State Capitol, March 15, 2015.

Jeff Morales defends California High-Speed Rail to a Santa Clarita delegation at the California State Capitol, March 15, 2015.

When Morales was appointed in May 2012, the chairman of the California High-Speed Rail Authority board declared him “exactly the right person to take the helm at this pivotal time and capitalize on the positive momentum that has built up over the last several months.” Morales is still directing the agency with its alleged “positive momentum” after almost five years.

Morales was director of the California Department of Transportation (Caltrans) during the truncated administration of Governor Gray Davis. When he left the position in 2004, a Los Angeles Times article (Caltrans Director Resigns) described him as a capable administrator who tried to diversify Caltrans to include mass transit as well as highways. He later became an executive for Parsons Brinckerhoff, an engineering firm engaged in project planning and management for the California High-Speed Rail Authority since the 1990s.

Critics saw that connection tie as a conflict-of-interest. Press reports at the time (see Conflict for New Boss of High Speed Rail?claimed the Authority consulted with the state Attorney General and the Fair Political Practices Commission and concluded there wasn’t a conflict. Opponents lacked the political clout to stop it.

Since then, the Authority board has continued to maintain and award new contracts to Parsons Brinckerhoff. This includes a $700 million contract in June 2015, a $120 million contract extension in May 2013, and a $5 million per month contract extension in November 2014.

Critics remain frustrated. At board meetings and legislative hearings, Morales is skilled at answering questions about the Authority’s performance with language that sounds remarkably technical but provides little insight. A comment at the February 14, 2017 board meeting about an upcoming report to the legislature is typical:

And we will of course, have an extensive discussion and a focus on risk management, which is a major focus of the program – our key responsibility in delivering it. We have consistently identified major areas: right of way, utilities – we talked about some of that today – third-party agreements as risk areas we identified back when we awarded the contracts. We have seen some cost pressures in those areas as we had identified them. We have managed them and we continue to manage those.

If Morales has deep passion about changing the world through mass transit, he does not betray it in his public statements. Nor does he ruminate publicly about how the project is destined for failure because of the flawed wording of Proposition 1A (2008) and contractual mandates and deadlines associated with the award of federal grants.

Instead, he loyally serves Gov. Brown and the appointed Authority board and ensures that the construction industry continues to get work from the program. He absorbs the blows of critics who explain how the high-speed rail system is failing to comply with Proposition 1A, which authorized the state to borrow $9.95 billion to get started on what was supposed to be a $45 billion project.

That ballot measure grossly underestimated that cost. If ever completed, California High-Speed Rail may end up the most expensive construction project in human history. It’s now estimated to cost $64 billion for just the route between San Francisco and Los Angeles – and that route now includes cost-saving track-sharing with commuter rail systems. It’s reasonable to assume that the cost to build the complete system proposed in Proposition 1A (with connections to Sacramento and San Diego) may end up exceeding $200 billion, including bond interest.

How much does the state government pay to someone for defending a utopian vision that is heading toward a dystopian disaster? Jeff Morales has the 71st highest salary of any state employee, according to the California State Controller’s Public Pay website, with a listed salary of $382,346 and benefit costs totaling an additional $113,705. Transparent California reveals that taxpayers shelled out $1,271,283 to Morales from his appointment in mid-2012 through 2015, plus additional benefits totaling $309,137. Budgets for the California High-Speed Rail Authority show his Fiscal Year 2015-16 salary as $383,484 and his Fiscal Year 2016-17 salary as $393,100.

Californians should demand exceptional performance for a public official making so much money. What would Morales do if he freed himself from political demands and could independently develop and implement a strategy for the proposed system? Here are three possible options:

  1. Revamp the Program: Declare that legislators erred badly when they wrote Proposition 1A in 2008, admit the real costs and engineering challenges, and call for state voters to consider an overhauled ballot proposition.
  2. Lower Expectations: Announce intentions to convert the Initial Construction Segment (Madera to Shafter) into a dedicated track for 125 mph diesel locomotives on the California Amtrak San Joaquin Line, and then coordinate with transportation agencies such as the Alameda Corridor Express and Capitol Corridor to eventually extend the dedicated track throughout the Central Valley. Future generations could electrify the complete track for high-speed rail.
  3. Business as Usual: Continue to collect almost $500,000 per year in salary and benefits while scraping enough money together each year to ensure taxpayer-funded contracts keep flowing to construction industry colleagues.

Governor Brown has 20 months left in office. The money is soon going to run out. Credible candidates for governor in 2018 aren’t taking the risk of offending Democratic Party activists by questioning the value of California High-Speed Rail. Will Morales earn his almost $500,000 in annual state compensation by proposing a legendary solution for 21st Century California?


Kevin Dayton is the President & CEO of Labor Issues Solutions, LLC, and is the author of frequent postings about generally unreported California state and local policy issues at www.laborissuessolutions.com. Follow him on Twitter at @DaytonPubPolicy.