Subcommittee rejects Davis' plan to merge high-speed rail board

SACRAMENTO -- Gov. Gray Davis' plan to save some money by merging California's ambitious high-speed rail project with the Department of Transportation was rejected Wednesday by a state Senate budget subcommittee.

The panel voted 2-1 to keep the California High-Speed Rail Authority as a separate agency as it plans a 700-mile system that would link the state's major cities with trains running at top speeds of more than 200 mph.

When he unveiled his budget proposals in January, Davis said the state could save $589,000 by making the authority part of the department and eliminating its executive director post, which is now occupied by a part-timer who is planning to retire.

The authority's other three employees could transfer to the department under the plan.

The Department of Finance said the move would give the authority's nine-member board access to additional staffers through the department.

But the Legislature's budget adviser, the legislative analyst's office, recommended against the consolidation, saying it would "complicate the lines of authority" by leaving the board without a staff of its own.

"Who would have the final word if there is a disagreement between the board and Caltrans?" asked Paul Steenhausen, a transportation expert with the analyst's office.

In her evaluation of Davis' budget proposals, Legislative Analyst Elizabeth Hill said the merger would save only $400,000, most of it by redirecting $250,000 in excess department funds to the high-speed rail program.

Sen. Denise Ducheny, D-San Diego, asked why the authority couldn't remain independent and contract with the department if it needs additional staff to work on the rail project.

Mehdi Morshed, the authority's executive director, said he had already discussed that possibility with the department's director and deputy director.

"This has always been part of our future plan, to keep the staff of the authority to a minimum and to accomplish our task by figuring out where the best resources were available, both within public agencies as well as private agencies that have the expertise," he said.

Morshed, a former Senate aide, has said that lawmakers created the authority as an independent agency to keep the high-speed rail project from becoming bogged down in the Caltrans bureaucracy.

The attorney general's office has recommended that if the merger goes through the authority delay issuing an environmental impact report on the system later this year to ensure that inexperienced staff work doesn't make the document more vulnerable to court challenges.

A proposal on the November 2004 ballot would authorize the state to sell nearly $10 billion in bonds to help fund the first leg of the project, a high-speed rail line linking Los Angeles and the San Francisco area.

The subcommittee's decision is a blow to Davis' merger plan, but the action could be reversed later by the full Senate Budget Committee or in budget negotiations with the Assembly.

An Assembly budget subcommittee has not yet considered the proposal.

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On the Net: www.lao.ca.gov and www.cahighspeedrail.com