The administration wants to cut the equivalent of 88 positions for private-sector consultants working on the project, saving $29.8 million annually, according to a budget document released this week.
The department would create new state jobs for 70 public employees, offsetting some of the savings.
The changes reflect years of concerns that private-sector consultants had taken over the project with insufficient oversight.
In 2018, the California State Auditor released a report that found that the California High-Speed Rail Authority relied heavily on outside consultants, “for whom the state’s best interests may not be the highest priority,” according to the audit summary. The audit recommended that the authority hire and assign full-time state employees to serve as contract managers.
California has been developing the high-speed project since 2008, when voters approved a bond to begin paying for it. At the time, the route was slated to cost $40 billion. The most recent cost projection from the Authority estimates the total cost for phase 1, Los Angeles to San Francisco, to run about $80 billion.
In his first State of the State address, Newsom called for the state to focus on completing the Merced-to-Bakersfield portion of the line first.
He asked for a fairly small cut in spending on the project in the revised state budget proposal he released earlier this month. His new spending plan attempts to close a sudden $54.3 billion deficit fueled by the sudden recession brought by the coronavirus outbreak.
The High-Speed Rail Authority would lose about $20 million compared to the proposal Newsom offered before the pandemic, or less than 1 percent of the project’s $2.9 billion budget for the upcoming financial year, according to budget documents.
Authority spokesman Melissa Figueroa said that the position cuts were determined after the agency underwent a strategic review of its structure “to properly align both state and consultant resources for functions and roles.”
That effort incorporated recommendations from the 2018 audit, Figueroa said.
“Now that certain functions have long term strategies for supporting the Authority’s mission, it is time to transfer functions that are more efficiently delivered by state resources,” according to the budget change proposal.
If approved, the High-Speed Rail Authority would continue to have 270 consultants on staff through June 2022, when the contract with consulting firm WSP expires, Figueroa said.
The upcoming expiration of the contract was also listed as a reason for the suggested changeover to state personnel.
The change is “long overdue,” said Ted Toppin, executive director of Professional Engineers in California Government, which represents 13,000 state-employed engineers and related professionals.
“I don’t think it’s an exaggeration to say that high-speed rail has been a gravy train for engineering consultants,” he said.
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