[0:08] Good morning, everyone. This is the regular August meeting of the CalTrain Board of Directors. And Madam Secretary, please call the roll to establish that we have a quorum. Director Abbey Koga is delayed, director Burt. Director Canapas, absent director Cohen. Here. Director G. President. Director Walton. Director Simlita. Here. Vice Chair Medina. President. And Chair Heminger. Here. You have a quorum.

[0:35] So unlike the Texas legislature, we'll proceed to do our business now.

[0:43] Let's do the Pledge of Allegiance.

[0:48] Pledge of Allegiance to the United States of America, to the Republic, which just stands,

[0:55] one nation under God, indivisible with liberty and justice for all.

[1:00] I

[1:07] believe that brings us to item 4 which is consideration of any request to declare an emergency and participate in our meetings nonetheless.

[1:19] Any requests? Any request to change the order of business?

[1:24] Seeing none, we'll leave it as it is. Item 6 is for public comment on items not on our agenda.

[1:32] and today are there any Madam Secretary?

[1:35] We do have one in person, Jeff Carter.

[1:46] Thank you very much.

[1:47] Good morning, everybody.

[1:48] Texas, I just say they do need help.

[1:52] Just like the mentioned that notice, you know, pretty good increase in ridership on trains.

[1:59] I've been riding and a lot of good increase in bike activity came down here on train 112 today.

[2:06] that one had a lot of bike activity and then my normal

[2:12] train when I go home from work at night from 22nd Street is

[2:17] train 518 and that one also is usually quite busy so you know I think

[2:23] really appreciate you know people are appreciating the new trains and all the

[2:28] everything that staff is doing to you know get Cal train you know back to

[2:33] pre-pandemic levels. Also looking forward to when the APCs are going to be certified. I know

[2:41] staffs diligently working on that and you know that's it for now. Thank you very much.

[2:48] We also have two virtual hands raised, Roland.

[2:56] Good morning and thank you. So what I would like

[2:59] to do this morning is to attract your attention to page four of your supplemental reading file,

[3:07] which is the B-New update, which shows that the preliminary design has now been delayed

[3:14] that these four months, because essentially what they're doing is they redesigning one of the

[3:19] cap cars and turning it into a battery electric locomotive. So the impact on the schedule is uncertain,

[3:29] But the thing I want to bring to you attention is that we are now two years and eighteen

[3:33] and a half million dollars into this thing and absolutely nothing to show for it whereby

[3:39] some members of the public suggested that we just buy battery electric locomotives

[3:45] and just tow EMUs up and down the patterns and all the way down to gear oil and back.

[3:53] The last thing I'd like to bring to you attention is that I'll certainly be a fancy meeting on

[3:59] Monday, and the best sound by it I got from the mayor of Salinas is that the Bay Area

[4:05] absolutely loves Monterey Bay on weekends.

[4:09] So my question in terms of planning is when are we going to start saying some kind of

[4:14] you know weekend service down to Giroi and hopefully beyond, and a midday service.

[4:21] And quite frankly, as I just counted correctly pointed out, everybody absolutely loves the

[4:25] B.M.U. That's included us, you know, a child's annual date and beyond. And down here, you know,

[5:02] Thank you. Good morning, Chair Steve Heminger and members. Alita Dupree for the record she and her with team folds. Wish I could be with you today. But I was in the room yesterday. I went to Sam Transit and some of you saw me and I did use the trains yesterday. We did have some problems around San Mateo. I endured some delays. I think it was a great crossing or track issue. I don't think the delays exceeded 10 minutes, but that's

[5:32] concerning. So I want to make sure that we tighten everything up with these great crossings.

[5:38] I also find that as I use your system, our system, is that I'm making multiple stops along the way.

[5:49] I'm not just writing San Francisco to San Carlos and back. Sometimes I write from San Francisco to

[5:56] San Mateo, then I backtracked to Berlin game, etc.

[6:03] What I'm finding I need to do is buy day passes on the app.

[6:07] It saves me money over buying Clipper.

[6:10] Because Clipper charges me for each ride.

[6:13] On one time last year I wrote Clipper back and forth to celebrate a couple of times

[6:18] and I guess it was a thing to save me money.

[6:22] I have to reach out the staff for that.

[6:24] but Clipper 2 is coming, though we don't have a date yet. However, Bart is planning to implement open payments later this month.

[6:36] This was disclosed at the Clipper Executive Board meeting, so what I'm sharing with you is public information that anyone can access, because I don't have special access to anything anyway, nor should I.

[6:48] So, how can we be ready for this?

[6:52] I'd like to see a skid into some kind of fair capping,

[6:55] because nobody should have to worry about overpaying.

[6:58] Thank you.

[7:00] We do have one more hand raised.

[7:02] Would you like to hear that?

[7:03] Yes.

[7:04] Susan, that is Adrian Brent.

[7:12] Okay, good morning, directors.

[7:14] Thank you for taking me.

[7:15] I joined a little bit late.

[7:17] I finally had a chance to review your special meeting on the budget.

[7:22] some months ago, and I was able to watch that video and I just had a couple of comments

[7:28] to add regarding distance-based fares.

[7:31] There was some conversation around that topic among the board and staff, and I believe

[7:38] the executive director said that we do have distance-based fares now, and I want to, there's

[7:43] a nuance to that is that we actually have zone-based fares right now, and I would like

[7:49] it too if you cross from one county into another in your car and you had to pay for gas to cross each

[7:56] entire county entirely. And that's what we have with the zone-based fare right now. If you cross

[8:02] from any zone into any other with one station stop, you have to pay for two entire fare zones.

[8:10] And so we actually have shorter rides that cost more than longer rides. So we clearly do not have

[8:15] distance-based fares. The CAC, some years ago, I can look it up for you. The staff has the

[8:21] resolution. unanimously, we put a lot of energy into this. We put it resolution together.

[8:27] unanimously put together an approved resolution requesting that the staff in the board work on

[8:33] moving to distance-based fares that are completely equitable and smooth, just like Bart has had since

[8:39] opening day. So that's something that I wanted to really clarify because I came up

[8:45] And the other one was, I think, around a question about if we could work with one conductor.

[8:52] Currently, many trains already may come to your surprise run with one conductor,

[8:57] because the other one isn't there.

[8:59] And they don't always collect fares.

[9:02] So what I'd like to suggest there is that we go to one conductor

[9:05] and then have, just like in Europe, a separate team of fairness factors.

[9:09] And that's much more effective. Thank you.

[9:11] We

[9:15] do have Adina Levin who just raised her hand.

[9:18] Allow.

[9:20] Well, sure, we'll bring you all on.

[9:23] Adina Levin.

[9:25] All right.

[9:26] Yes.

[9:27] So also on the clipper topic,

[9:34] it was announced that there's going to be open payment on

[9:41] start starting on at the end of August as you know the first release of that

[9:48] feature which is also going to be coming out on you know all the other

[9:53] or Clipper Agency sometime in the coming months.

[9:58] And...

[10:00] CalTrain has seen a lot of increase in ridership over the weekend in recreation and entertainment. And, you know, has marketing programs really focusing on people jumping on CalTrain to get to, you know, musical events and sports events and so on. And so, would like to encourage. And this may be already being done on the team, even though we don't know exactly what

[10:30] that open payment feature is going to be released for CalTrain, you know, to be ready to market and, you know, work with the other agencies to also market the open payment convenience for recreation and entertainment because that really greatly increases the convenience.

[10:53] You know, lots of people, if you use transit regularly, it doesn't matter as much if you have to have a special flip of card.

[11:03] But if you don't and you think, okay, I'm going to take how train do I need to get a special card or pay cash or get a special app it's confusing.

[11:11] And it's so much easier if you can pay with the credit or debit card if you have so getting ready to market it.

[11:16] we don't know exactly what date but it is predictable. So I'm working on that marketing is a opportunity to increase ridership. Thank you.

[11:24] That ends public comments.

[11:27] Thank you Madam Secretary.

[11:29] Colleagues that was part one of our meeting today. Part two is a closed session conference with our council.

[11:37] And I'll let him announce what we will be doing in closed session and for how long.

[11:42] Thank you, Chair. The board will be discussing Merlino versus PCJPB, and we anticipate that the

[11:50] closed session will last approximately 25 minutes with travel time up to the Gallagher

[11:56] Conference.

[11:58] So, everybody stay here except us, and we'll be back as quickly as we can.

[12:15] We are back in session, and I'll ask our council if he has anything to say.

[12:23] Thank you, Chair.

[12:23] There is nothing to report from close session.

[12:26] All right.

[12:26] So we move now to part three of our meeting, which is what we're used to seeing.

[12:33] And we'll begin with the report of our executive director.

[12:37] Great.

[12:37] Good morning, Chair Heminger Directors. Welcome back after a summer hiatus. It doesn't really feel like we had a summer hiatus.

[12:47] I really appreciate all of the good work that's been happening.

[12:59] Excuse me, so I will provide a brief update.

[13:03] First, as always, we start with safety.

[13:07] Again, we're bringing other grade crossings on board with the AI technology and so we have

[13:16] one in each county at this point really working through, again, using AI to identify the

[13:23] behaviors and then making very cost-effective changes to those grade crossings.

[13:28] We are really getting a lot of attention on this approach.

[13:33] I was presented at the APTA Rail Conference.

[13:38] We also are going to be presenting at the National Conference in Boston,

[13:44] as well as the Asheville Conference.

[13:46] And our friends from FTA and FRA are going to be at all of those places.

[13:52] And so we also have a single page that we've put together

[13:56] that talks about the program, I think we're calling it rapid deployment.

[14:01] And so, I'd like to provide a copy to you after this, in your travels, if you're talking

[14:06] about this, it does a really good job of identifying what we've been doing and really highlights

[14:13] using Broadway Burling Game as an example of how effective these changes can be.

[14:18] I also wanted to show you this, which is something that the team is incredibly proud of.

[14:22] At the rail conference, we were awarded the Rail Safety Gold Award, which is the highest

[14:29] award that a railroad can receive.

[14:33] And it just speaks to the good work that the team has been doing over the course of,

[14:40] frankly, the last three years at this point to really understand how safety culture needs

[14:46] needs to be a daily commitment and it needs daily attention and so anyways just wanted

[14:54] to let you know that we are very grateful for the support that we

[15:01] Discussions that are happening at the board level, including Sam Trans last night, VTA tonight.

[15:07] And Jason is going to be focused on this during his report under the legislative update.

[15:15] We are at work on the Guadalupe Creek Bridge. You see a couple of pictures here.

[15:20] We have diverted 155 fish from the stream, and so we are definitely moving forward.

[15:33] It is incredibly important that we've been able to maximize work windows as a result

[15:39] of not only diverting fish, but diverting the train traffic here, and sharing the team

[15:45] are working real hard to ensure that we are going to get this thing done in two creek windows.

[15:51] So you see here, we've just removed the last piece of MT1.

[15:58] Really good news on time performance and ridership.

[16:03] You see, we have reattained our 95% and are on track for 95% this month, but early days.

[16:13] But the real news here is all about ridership growth.

[16:17] For the first month, we are over a million riders.

[16:22] And you see, we're back at 65% pre-COVID, really outperforming what we thought we would

[16:29] on the weekend at 150% in excess of that.

[16:34] And June really has seen quite the spike.

[16:37] Special events really are contributing to this.

[16:39] But here's the thing, if we weren't providing the customer experience, if we weren't providing

[16:45] the on-time performance, a lot of those special event riders wouldn't be coming back.

[16:50] So I think that's sort of a, I was going to say gateway drug, that's the wrong, that's

[16:56] the wrong term.

[16:58] Really, people are testing the service and we find that they're coming back.

[17:04] So this is really good news.

[17:05] The other thing I want to emphasize here, because we always used to talk about our 75%

[17:09] on revenue recovery, and that was nation-leading pre-COVID.

[17:17] It was really important to emphasize, and it's in my executive director's report,

[17:22] but we have a little bit of a plug there because we're waiting for our year end.

[17:26] But, Calthrine is back at 30% Fairbox Recovery, and from everything we can glean,

[17:32] that is likely nation-leading.

[17:35] So, I want to point out, as we're talking about efficiency measures, and we're talking

[17:40] about accountability measures as part of SB-63, I do want to report that CalTrain really

[17:46] is continuing to cover a lot of its costs out of the Fairbox, and, you know, I will continue

[17:55] to emphasize that during these reports.

[17:58] Talked about special events through the summer, and we're going to continue to talk about

[18:04] places where people can go via

[18:07] CalTrain. And we have a marketing

[18:11] team that is really doing a great job of

[18:13] establishing partnerships with our local

[18:15] sports team. There will be a press event

[18:20] on Monday regarding the big sync. I think

[18:23] this is one of the major outcomes of the

[18:25] transformation action plan. We are looking

[18:30] at changing the schedules. I think it's

[18:34] twice a year but really doing it in concert with all of the agencies and so we don't see

[18:41] first of all the conversations are happening up front to make sure that there's not a gap

[18:46] in terms of transfers between systems and to the degree possible we are doing it at the same time

[18:53] and I think that is really really helping for riders who are transferring between systems to really

[19:01] have the the journey be a little bit more we call it legible. I think one of the metrics

[19:06] that we've started tracking are these transfers at Nobre. And we have had, again, this

[19:14] month a high point of nearly, I think it's more than 27,000. And this is, you know, higher

[19:23] as a percentage than it was pre-COVID. And I think that is a testament to the fact that

[19:28] that transfer is really much more convenient for our riders, so we'll continue to track

[19:34] that as a key KPI for how people are getting between the systems.

[20:00] Well, let's see if there are any. Colleagues, any questions of our executive director, director Burke? Yeah, Michelle, thanks so much for the update. I noticed in the correspondence that staff is moving forward with, if not quiet cars, quiet zones within cars. Correct, a quiet car. Apparently, that term is somehow copyrighted or whatever.

[20:28] So we're looking for a new term. So if anyone has any good ideas, and then second, I just want to note that on those safety measures that you alluded to that have been installed at Broadway Burling game and now Churchill in Palo Alto, several of us got a first hand walk through with Mike meter on really the details of those because I hadn't quite understood how the package all work.

[20:56] You know, we had heard it here, but until you go to an intersection, and one of the things

[21:01] that was really striking is, in addition to a whole bunch of other measures, the rail

[21:05] century, triggers an alert if someone lingers for 10 seconds in the crosswalk or moves out

[21:16] of the crosswalk upstream for two seconds.

[21:19] And then at our top committee, Mike presented a mock-up of a technology that's like a cattle

[21:31] guard for people that will be placed outside of the crosswalk.

[21:36] And I'm just really excited about how strong the access prevention will be from this

[21:49] a set of measures more than I think many of us thought was possible. And lastly, I noted

[21:58] that the weekday ridership is now up to 52% of pre-COVID. Overall, we're up to 65.

[22:06] But are we able to disaggregate the weekday numbers so that we know what where we are on

[22:15] mute hours, which is what really drives a number of trains and drives the need for grade

[22:20] crossings.

[22:21] Yeah, in answer to that, we do have a methodology that we use that is based on assumptions

[22:28] and clipper data, the great thing that I'm reporting it now, we have just finished some testing

[22:38] on our APCs that now shows that we're in excess of 95% accuracy.

[22:43] So we're looking to get those implemented on the entire fleet by end of August.

[22:48] I will report back in September on that, but that really is going to give us a train by train station by station.

[22:57] Composite and that will help us with all of our future planning.

[23:00] Yep.

[23:04] Michelle, you mentioned a fair box recovery number and you said it too fast for me to remember it.

[23:12] It's that we think roughly 30%, so it was 30% for last fiscal year.

[23:18] We're waiting for the audited numbers, so I believe it's in excess of 30% at this point.

[23:26] And where we were during the boom time?

[23:29] More than that.

[23:31] We were at almost 75%.

[23:34] Yeah.

[23:35] Yeah.

[23:36] Okay. Colleagues, any other questions, comments? Any public comment on the report?

[23:44] We do have one in-person and a virtual handway, so that starting in-person is Jeff Carter.

[23:57] All right. Thank you very much. I really appreciate the report, especially the safety improvements

[24:03] at grade crossings and I'd like to hear more about rail

[24:08] sentry as mentioned by Director Burke.

[24:12] But sounds like we're, CalTrain really

[24:15] makes some good progress at the grade crossings.

[24:20] Of course, ridership, I mentioned that earlier.

[24:23] I'm just meant in a report.

[24:25] Week end is up significantly.

[24:28] And I think that's because of the every 30-minute service.

[24:32] Now you don't have to really think about taking the train because it was running once per hour, but now every 30 minutes, that's a big, big difference.

[24:42] And that's a big, you know, incentive.

[24:45] And then as far as coordinating with Bart, you know, I know that the budget probably won't allow it, but at some point, maybe Carl Trink get to every 20 minute service that would match, you know, the Bart service, which is every 20 minutes currently.

[25:00] Member and members, so lead a decree for the record. She and her with team vaults. Good helpful report today. Thank you. 65% on our ridership. My expectations are exceeded. I think we're going to get a few more points by the end of the year. I think we think we can hit 75% by the end of the year. We're getting close to what's happening in New York. They're running about 80 to 90% on their commuter rail. I think people are going

[25:29] to come back to work in person. But more so, there's new users out there that we haven't seen yet,

[25:38] that we can show them the benefits of riding our train, especially with half-hour clock face

[25:44] service. It's pretty hard to find a place to park in San Carlos or San Mateo or Berlin Game.

[25:51] Take the train. You know, Berlin Game is kind of like the rodeo drive of the Bay Area. I was there

[25:58] yesterday and had dinner. That's very nice there.

[26:05] And Fairbox Recovery, we're coming back.

[26:08] I mean, certainly all the other funding we have to work on. As far as Bart transfers go, I mean,

[26:16] it's hard to get a number for that because let's say that I buy a day pass through the app,

[26:22] And then I get on Bart, which uses Clipper exclusively.

[26:28] Well, there's really no way that you're going to know that.

[26:32] So we have to allow that there may be some more Bart transfers

[26:35] for people who are using other means of paying for CalTrain,

[26:40] whether it be the app, which I use sometimes,

[26:43] or the small cadre of people that are buying tickets at our vending machines.

[26:51] So overall, it's a good report.

[26:54] I think our ridership is going to go up from here.

[26:58] Thank you.

[26:59] Next we have is Adrian Brent.

[27:08] Okay, there's the unmute.

[27:10] Thank you.

[27:11] Yeah, I wanted to tag on to the rail century conversation.

[27:16] What director Bert was talking about is all really great stuff

[27:20] and I really applaud Mike and everyone involved on the rail

[27:23] century, including the additional pavement markings, the soft hit, the linear pull, the

[27:30] linear pull, all of that is really proving to be very effective, very exciting stuff.

[27:36] The next segment I think of crossing danger that I think rail century is not yet addressing

[27:44] and I'm not sure it can, is automated enforcement of vehicle code violations that are occurring

[27:53] chronically all the time at many of our busy crossings including Churchill and

[27:59] Palo Alto. And that is where motorists are often mindedly or deliberately or

[28:05] impatiently they queue across the railroad tracks. And so that's where they're

[28:11] stopping their vehicle in a queue of cars waiting for a traffic light. And that is

[28:16] against the vehicle code. You're never allowed to begin crossing unless there is

[28:21] enough room to get your vehicle all the way across safely.

[28:24] There are camera systems that automatically

[28:28] can site those, catch those violations.

[28:32] And you can site or send warning letters

[28:34] like they do in Florida with Brightline.

[28:38] And increasingly we're hearing about the new speed cameras

[28:41] in San Francisco, et cetera.

[28:44] It's a super, super dangerous behavior.

[28:46] It can result in obviously a fatality and has

[28:49] and can damage our trains, in the worst case,

[28:52] can even derail a train if you're very unlucky.

[28:55] There have been cases of vehicles derailing trains.

[28:58] It's not common, but it's possible.

[29:00] So I think it's really the next low-hanging fruit piece

[29:03] that needs to be addressed.

[29:05] So, and I'm sure Mike and the team are thinking about it,

[29:08] but I wanted to bring it to your attention.

[29:09] Thank you.

[29:11] Last speaker is Roland.

[29:16] Thank you.

[29:16] And I've got a quick question to say in my hand,

[29:19] was raised before you went to closed session.

[29:21] Is this an appropriate time to make the comment

[29:23] that I was going to make?

[29:24] No, it's his email.

[29:26] Sure.

[29:28] OK.

[29:29] So let me kiss Samara.

[29:31] And then I'll speak to the executive director's comment.

[29:35] And then I'd like to bring you attention.

[29:38] Maliza Maliza was not reaching to the record.

[30:00] We know who the responsible party is. It's very well documented in the NTSB final accident report, but none of that report can be deposed in court of evidence. The appropriate code of action is to reach out to plaintiff counsel and recommend that they redirect the lawsuit to the actual party responsible for what happened. Now moving on to the executive directly.

[30:29] this report, as Chair Heminger pointed out, the Fairbox Recovery is not tracking the

[30:38] ridership recovery.

[30:39] That's an issue that needs to be studied and addressed as smart, currently at 130 percent

[30:46] of Fairbox Recovery, and in closing on the gray crossings, what's happening is very encouraging.

[30:55] The issue I've got is that the previous comments are commented about people backing up on the tracks.

[31:03] The issue that you've got is that you do not have road markings, clearly delimitating the area where people are not supposed to be backing up.

[31:12] And the way automated code enforcement is done in the UK is not because they just kind of stuck on the tracks.

[31:18] It's when the out of gate tries to close, the detection system detects a calendar track

[31:25] a lot of times, two things happen.

[31:28] The PTC stops the train and the camera takes a picture with a $1,000 fine.

[31:32] Thank you.

[31:34] That ends public comments.

[31:36] Thank you, Madam Secretary, which brings us to item 9, the consent calendar, which consists

[31:42] of items 9A through 9K.

[31:46] Okay. So first of all colleagues, is there a request for many of you to consider any

[31:53] of these matters separately?

[31:58] Seeing none, why don't we get it on the table? Is there

[32:01] a motion to approve the consent calendar? Still move? Is there any public comment on the

[32:08] consent calendar? There are no public comments. Okay. So let's call the roll.

[32:12] Director Abikoga? I. Director Burt. Yes. Director Cohen.

[32:15] one. All right. Director G. Yes.

[32:17] Circuit Walton. All right.

[32:19] Director Zimuda. All right.

[32:20] Vice Chair Medina. Yes.

[32:21] Chair Heminger. All right. Motion passes.

[32:25] Wonderful.

[32:26] That brings us down to item 10,

[32:30] which is a report on a report

[32:35] that we will shortly hear from Peter Rogoff about.

[32:40] I assume

[32:41] And our executive director would like to give him a few words of introduction.

[32:47] If she doesn't mind, I'll take the privilege of the chair and add to hers because I probably

[32:54] have known Peter a little bit longer than I've known Michelle.

[32:59] And I think we met on the Hill when you were working for the Senate Appropriations Committee.

[33:07] And Peter, no matter who he was meeting with, had a skull for everybody because the authorizing

[33:16] committees in the Congress like to promise the moon to anybody who crosses their doorstep.

[33:22] And then they dump the funding requests on the appropriators and they've got to figure

[33:27] out a way to pay for it.

[33:29] So it's a dynamic, I think, that continues to this day.

[33:34] But it was especially suited, I think, to Peter's temperament.

[33:40] In between then and now, he of course served as our nation's federal transit administrator.

[33:47] And I'm sure he's got plenty of war stories to tell about that.

[33:53] But it's been a pleasure knowing him this long and it's a pleasure introducing him and handing it off to you, Michelle, to do the honors.

[34:02] Thank you chair and I'll be I'll be very brief. Really appreciate Peter coming to talk to the board.

[34:11] Just with respect to context, as you all know, we are in the process of rebuilding our capital team.

[34:20] And as part of that, I just thought it would be very important for us to really arm ourselves with a little bit of data.

[35:00] That can be basically under our control. I think all of us have experienced this, first of all, at CalTrain, but second, at some of the other agencies where all of you serve. In addition to hearing from Peter today, Sherry has been having conversations with some of our existing contractors to really try and figure out from their perspective what could lead to, I want to say more success.

[35:30] delivery, which also would include certainly pricing certainty, but we do find ourselves

[35:38] in a situation where our jobs are coming in over which they are potentially fundable,

[35:47] even with some of the funding resources that we have through various transportation authorities.

[35:53] So I just wanted to use this opportunity to level set everybody's understanding of the influences

[35:59] that we're seeing out in the market. And I can't think of a better person to talk about that

[36:04] than Peter. I've actually became familiar with him during an APTA CEO's conference during which

[36:12] he presented about a couple of years ago. And I know he's been doing some work with VTA as well.

[36:18] So with that as an introduction and context setting, Peter, I'll turn it over to you.

[36:24] Well, thank you, Michelle. And yes, Stephen, I met when we both had a lot more hair many years ago, and it's really good to be with you and I'll apologize quickly in advance to board member Bert, who had received a similar but now dated version of this presentation a couple of years ago.

[36:42] So a lot has already been said about my background.

[36:46] I would just point out separate from my spin around government in a variety of positions.

[36:51] I did head up sound transit in Seattle, the regional transit provider that does both bus rapid

[36:58] transit and light rail and commuter rail for the less than seven years before going off

[37:04] into private practice where I am now.

[37:05] Now, I was really been asked as I have a number of times now to provide background on the

[37:14] acute cost pressures and sizable cost growth that a number of agencies have experienced.

[37:19] And I think the most important thing to just remind people in terms of grounding this

[37:22] discussion is this is not unique to transit projects and it is not unique to transportation

[37:28] projects, as you can see from this slide, it is something that's burdening infrastructure,

[37:32] not only all over the country but all over the world.

[37:36] While all projects have their own nuances,

[37:39] I'm going to discuss really the major factors

[37:41] that are driving this spiking costs

[37:43] in infrastructure construction

[37:46] and also conclude with some presenting some good news

[37:50] in terms of best practices that agencies are using

[37:53] to try to mitigate those costs

[37:56] even in this difficult pricing environment.

[38:00] Let me just catch up.

[38:07] I think most importantly, there was a lot of talk about supply chain challenges and

[38:11] the reality is, those have not returned to normal, notwithstanding what you might believe

[38:17] from the media.

[38:18] Earlier, 55% of surveyed construction firms reported that they are still having significant

[38:23] supply chain problems.

[38:25] As you can see, these graphs here from the Federal Reserve Economic Data Set show the price

[38:29] trajectory of the major construction materials through the first quarter of this year.

[38:34] And they make clear that the steady price climbs of the last five years have not yet really

[38:38] begun to seriously reverse themselves.

[38:40] To make matters even more challenging, transit projects specifically often require specialized

[38:46] components that require long lead times, and the uncertainty regarding future tariffs require

[38:52] a manufacturer is using any foreign content to assume worst-case scenarios when pricing

[38:58] their product.

[39:00] Even with these continuing price increases in material costs, there is another factor

[39:04] that looms far larger when it comes to driving up the cost of delivering these projects.

[39:09] And that is the acute shortage of skilled labor and the costs associated with obtaining and

[39:15] retaining skilled labor.

[39:17] As shown here, the annual survey performed by the associated general contractors showed

[39:22] that almost 80% of firms were struggling to fill some or all available positions.

[39:27] The industry wide shortages of skilled labor runs across all crafts and disciplines from

[39:32] carpenters, brick layers, pipe fitters, architects, and engineers.

[39:37] You hear that it is basically near impossible to find seasoned construction managers in the

[39:41] current market, and I will tell you from my own experience that the same is true for system

[39:45] engineers.

[39:46] When I was at Sound Transit, thanks to the $54 billion ballot measure we passed in 2016, we had five major projects progressing at the same time.

[39:57] And on a number of occasions we were saddened to learn

[40:00] Public hearing bonuses were effectively embedded somewhere in the prices we were being charged by our contractors. In the current market environment, what the contracting community is effectively saying is this. We know we are going to be busy for the next five years, no matter what. We are going to be incredibly selective on the projects that we will even bid on. But if you want to pay me a premium to build your project, I will take that premium and use it to steal staff and skilled crafts people away from my competitors to get your project built.

[40:30] We just aren't growing the pool of needed labor anywhere near, fast enough to meet demand.

[40:35] The associated building and contractors in their outlook for 2025 projected that we would

[40:39] need to attract 439,000 new workers into construction just to keep a pace with demand this year.

[40:47] Just two months ago, the NFIB reported that the shortage of the construction worker situation

[40:52] is actually worsened as this year has progressed.

[40:56] It is hard to overstate how much the historic surge in construction spending over the last

[41:01] four years is straining the capacity of the industry and fundamentally changing the

[41:05] negotiating leverage of contractors versus project owners.

[41:09] It was commonplace not that long ago and we all made remember these times that contractors

[41:15] would make money on some projects, lose money on others, with the goal of netting positive

[41:20] over the long term.

[41:22] Today, with this historic volume of construction money out on the street through the Recovery Act,

[41:28] through the Inflation Rejection Act, through the Chips Act, it's not hard to understand that

[41:33] no contractor wants to explain to their board in the current environment why they have lost money

[41:37] on any project. The AI revolution has also brought an entirely new demand segment to the construction

[41:44] market, data centers. AI companies are now willing to pay top dollar to get them built quickly.

[41:51] and quite frankly, public agencies really can't compete with those private AI companies in

[41:56] terms of the price they're willing to pay. Another cost driver for capital projects has been

[42:02] interest rates. Transit capital projects are of course financed using a wide variety of dead

[42:06] instruments and interest rates impact all of them. Rates are also impacting the carrying cost

[42:12] borne by the construction firms. Just a year ago the benchmark federal funds rate was at its highest

[42:17] level in 22 years. They have come down a bit obviously but we are still way above the levels

[42:22] experienced when the first cost estimates were developed for many of the projects currently

[42:27] trying to advance. Another important factor in the cost trajectory of these projects is reduced

[42:33] competition in the marketplace. I chose this particular project because it's less than four

[42:39] miles from my home in Seattle, but the state moved 520 bridge connects interstate 5 to the University

[42:45] the Washington campus and when washed out estimated, initially, they thought that it would

[42:51] cost roughly $800 million to replace.

[42:54] A couple of years ago, they received just two bids, the lowest of which was $1.3 billion.

[43:00] Back in 2021, the state received an average of six bids per project.

[43:05] In 2023, the average dropped to two and a half bids per project and today they have projects

[43:10] that are getting zero bids and just none.

[43:13] It also has to be noted that there have been a number of consolidations and mergers within

[43:17] the construction industry, which brings fewer competitors to the table.

[43:22] A much smaller and more recent project reflecting these troubling trends has been a bus rapid

[43:27] transit project in Raleigh, North Carolina.

[43:30] The new Bern Avenue BRT is the first of four planned BRT routes for Raleigh, and it basically

[43:35] involves fairly simple street work and some station work.

[43:39] This project was initially budgeted at $71.5 million with an estimated completion date

[43:44] at the end of this year.

[43:47] When they opened their bid solicitations in May of last year, they had received zero

[43:51] bids.

[43:52] When they went out for bid a second time, they received only one bid that was rejected

[43:56] as unaffordable.

[43:57] It was more than $40 million higher than the city's independent cost estimate.

[44:02] Only by going out a third time with smaller contract packages could they get something

[44:07] in the realm of affordability.

[44:08] The project is now expected to cost 97 million, given all the time it is taken to go out

[44:14] to bid three times the project now won't be delivered until 2030.

[44:19] In 2023, I had the opportunity to assist the White House Infrastructure Team in organizing

[45:00] Group of contractors. The continuing uncertainty around materials costs, labor availability, interest rates, and other factors like local permitting were requiring them to build those uncertainties into their asking price. The contractors today are looking for less complexity, less uncertainty, far less risk or shared risk with the project owner and a clear path to profitability. A very recent example of this has been the very sad but instructive lesson of the Washington Street Bridge and Providence

[45:29] Rhode Island. The bridge is a major arterial with very high traffic that had to be shut down overnight

[45:36] when an inspection revealed some very frightening structural concerns. Rhode Island DOT went to work

[45:41] right away to replace it. They estimated a new bridge would cost between 250 and 300 million and

[45:47] they invited more than 65 firms to submit bids. They received zero bids. When they surveyed the

[45:55] industry as to why nobody wanted to bid. It really came down to the complexity of the

[45:59] job and the contract terms right on Rhode Island DOT was insisting on. Basically, Rhode

[46:05] Island was using the old command and control approach to crafting their bid solicitation.

[46:10] They unilaterally set the terms and conditions and expected that the contracting community

[46:14] would be so enticed by such a large project that they would find a way to live within those

[46:19] terms. They were wrong and nobody bid.

[46:23] After extensive consultations with the industry, Rhode Island DOT eventually re-scoped to

[46:28] contract packages and revised their contract returns and received two bids.

[46:34] The new bridge is now finally under construction at a price that is nearly twice their initial

[46:38] estimate and will be delivered two years later than planned.

[46:43] So when you combine all the factors I've cited, the rising cost of materials, the supply chain

[46:48] disruptions, the acute shortage of skilled labor, higher interest rates, a lack of competition,

[46:55] and contractors either avoiding complexity or charging a premium for it, you end up with

[47:00] a skyward pointing curve on the construction cost index. This one happens to be produced by the

[47:06] Federal Highway Administration for Highway projects. Sadly, the FTA doesn't produce a parallel

[47:12] index just for transit projects, but if they did, given the added complexity of major transit projects,

[47:18] that cost curve might be even steeper.

[47:21] Transit projects can introduce unique risks.

[47:24] They are often built in dense urban environments

[47:26] that require limited construction hours

[47:28] and carry mandatory noise restrictions.

[47:31] They often involve extensive utility relocations.

[47:35] And as I know, you've experienced in California,

[47:37] we've certainly experienced in Washington State.

[47:40] The utilities can either be very cooperative

[47:42] or not very cooperative.

[47:44] And it just takes a whole lot of work

[47:45] to get them to the table.

[47:47] The property is often required to be purchased from private and public entities that may seek

[47:51] to delay the project to extract a higher price for the needed land.

[47:56] Local municipal governments often seek to impose their own will on projects being built

[48:00] within their city limits, adding to the risk and cost of the project.

[48:04] In the worst case scenarios, municipalities can insist on project changes very late in

[48:09] the process, triggering expensive change orders.

[48:14] The data I've been citing has all been national in scope and it's hard to tell if a situation

[48:19] is even more acute in California, but there is data available indicating that the challenges

[48:23] in California are very real.

[48:26] CalTrans publishes a very transparent, quarterly project watch list identifying projects that

[48:32] are at risk of exceeding their budget estimates, including projects that might exceed those estimates

[48:37] by more than 20%.

[48:39] I recently compared the reports between March of 2021 and the report from March of this year.

[48:45] And over that four-year span, the total number of cow trans projects deemed to be at risk

[48:49] for budget overruns more than doubled and the estimated dollars at risk based on the size

[48:55] of those projects for those projects grew by 634% over four years.

[49:01] The number of projects categorized as very high risk grew by 141%.

[49:06] namely likely to grow by 20% or more.

[49:09] While these numbers are grim, there actually is some positive news embedded in this data.

[49:14] While the percentage of projects at high or very high risk continues to grow,

[49:18] the rate at which they are growing is finally slowing down.

[49:21] So it's possible that we may actually be turning a corner.

[49:26] There are also added challenges of building projects in California that

[49:29] informs contractors thinking when bidding on projects here.

[49:33] contractors must price into their bid's risk premiums due to California's litigation

[49:39] climate, union labor requirements, and intense scrutiny from regulatory agencies.

[49:45] So how can public agencies still get their projects built in this extraordinarily challenging

[49:50] pricing environment?

[49:51] And the good news is that there actually are several best practices that are emerging that agencies

[49:56] these can employ to contain costs even on-

[50:01] They recognized that there were still riskiest, they had talked to their contractors who identified some of the riskiest elements that were driving their bid prices. And basically, mastod at MBTA decide, you know what, we'll do those jobs separately, sometimes with our own workforce, take it off the table so you could take that out of your price.

[50:23] AGCs can consider stipends to keep more competitors interested in the project longer, and I will

[50:28] tell you that we did this with some considerable success up in Seattle.

[50:31] We actually paid firms, we pre-qualified three firms when we were building a major maintenance

[50:37] facility, and we gave them each a million dollars to help develop their plans and their bids.

[50:42] It didn't cover all of their costs, but it made three of the companies much more receptive

[50:47] to staying in the game until we selected a final winner.

[50:51] and I should say even those agencies that didn't win, we were able to use some of the concepts in their bids in the final design for the best possible project.

[51:01] Increasingly, agencies are learning that if they can consult with the contract in community, they can bundle contracts and sequence work in a manner that brings more bidders to the table.

[51:10] Some contractors are much more comfortable taking on smaller jobs than large complex ones that are either beyond their expertise or beyond their ability to secure the necessary bonding or insurance.

[51:22] They may be fine with, for example, building station platforms as part of a rail extension, but they don't want any part of building the electrical substations.

[51:32] Nothing drives up the cost of projects more quickly than late breaking and painfully expensive

[51:36] change orders, and sadly, the reality is we have some construction firms out there who have

[51:41] seemingly embraced change orders as a business strategy. They submit the lowest bid to get the

[51:47] work knowing that their path to profitability is through change orders. When it comes to transit

[51:52] projects agencies need to get all the stakeholders to understand the trade-offs that must be made.

[51:58] Community leaders and elected officials need to appreciate that once the music has stopped

[52:03] on the design, they are not free to demand changes or hold up permits until those changes

[52:08] are made.

[52:09] This education efforts requires a ton of outreach at the very beginning of the project

[52:14] to get everyone on board.

[52:16] Project owners also need to make sure that they are selecting a delivery method for the project

[52:20] that actually matches their staff's ability to execute it.

[52:24] Lastly, while project owners naturally want to tell their taxpayers when a project will

[52:28] finally be delivered, it may make more sense for them to first consult with the contracting

[52:33] community on when it can be delivered given their availability and availability of needed

[52:39] labor.

[52:40] What you don't want to do is promise the project by a certain date and have a celebratory

[52:45] ground breaking and then watch the project get further and further behind schedule because

[52:50] is the contractor can't get the needed skilled labor on site.

[52:54] A contractor may bid a much more reachable price

[52:58] if they know that your project could fit into their schedule.

[53:03] So in conclusion, the many cost drivers I have cited

[53:06] are being felt across all infrastructure sectors,

[53:09] not just transit, not just transportation projects,

[53:12] and not just in the United States.

[53:14] Marketplace dynamics have changed dramatically

[53:16] due to strained industry capacity, lack of competition,

[53:19] high interest rates and contractors pursuing less complex and more profitable projects.

[53:25] And the new cost estimates for cow train projects and the similar projects in this region

[53:29] are in line with those national trends.

[53:32] Market conditions in the construction industry are always in flux, but I will tell you when

[53:36] I administered the Federal Transit Component of the Recovery Act in the early years of the

[53:41] first Obama term, we benefited from a very beneficial pricing environment when construction

[53:46] firms were thrilled to get any kind of work. We were in the midst of the greatest recession since

[53:51] the Great Depression, and the contracting community was just focused on securing enough cash flow

[53:57] to pay their leases on their equipment and keep staff employed. The market environment today

[54:02] couldn't be more different with contractors focusing on avoiding uncertainty and taking great care

[54:08] when selecting the projects on which they build. But the good news is that there are a variety of

[54:13] measures that agencies can take to contain costs even under these dramatically different

[54:18] market conditions.

[54:20] So that pretty much summarizes my presentation and I'm happy to answer any questions or

[55:00] There were a lot of rice miles around here and I'll leave it at that. I did want to ask you

[55:07] just to kick things off about the first cost change because the first one often happens

[55:16] when you've got an engineer's estimate and you go out to bid or you reach some other

[55:23] major milestone and then you've got a bust. And the fact is the project was never going

[55:31] to be brought in at the original engineers estimate anyway. And I'm wondering because

[55:38] this is endemic, I mean it's project after project after project and whether it's escalation

[55:44] or some kind of reserve that they're not willing to acknowledge that there are things they

[55:50] don't know, and they won't know them until they get to a certain point in the construction.

[55:56] Is there a way to get at that problem?

[55:59] Because that's not the contractor, that's the government agency that is responsible for

[56:06] giving us some kind of benchmark.

[56:08] Well, two answers to that.

[56:10] One, I've thought a fair bit about, you move your, I'm sorry, there you go.

[56:16] I've thought a fair bit about, let's get that slide back up.

[56:19] But the cow trans data, and I said, well, there may be a silver lining because the rate

[56:25] at which things are growing is slowing down.

[56:29] They're still growing, but it's slowing down.

[56:32] That could be because prices are normalizing a bit.

[56:36] It could also be that those initial estimates are just getting better, which is to say the

[56:41] delta between the initial estimate and the actual price is narrowing, and that doesn't

[56:46] necessarily speak to anything being cheaper for the taxpayer.

[56:52] One of the challenges, well coupled, I would always identify, I would often say that,

[56:58] you know, when sometimes those initial cost estimates are put together, you're at somewhere

[57:04] between zero and 30 percent design, there's just too many unknowns in that which is why

[57:10] at the federal level they insist on so much contingency when you're at such a low level

[57:15] of design, that in combination with the rapidity of which things are changing, and it's not

[57:21] just the material costs, labor costs, I guess I specifically focused on not just hiring

[57:27] the labor, but retaining them in this environment where someone's going to offer them an opportunity

[57:32] to go work for somebody else on a different job at a higher wage and a very short period

[57:36] of time, you know, the rate at which that has risen, you almost need to assume double digit

[57:44] percentage growth year-over-year. So when you're actually saying and putting a

[57:52] number and and transmitting it to a public owner be it a transit agency or a

[57:56] highway department and saying I can get this this is the price for something I'm

[58:01] going to deliver for you two and a half or three years hence they don't know that

[58:07] that trend is going to stop and and that often doesn't get into independent

[58:12] cost estimates. They have a tendency of looking at conditions now and companies that have the luxury

[58:19] of being selective are saying, I'm going to look at a worst-case scenario and bitter accordingly

[58:24] because again, my book is already busy for the next five years. So that's why I said, you know,

[58:32] the attitude seems to be, if you're willing to pay this premium, I'm willing to take on those risks

[58:39] and absent paying that premium. I'm going to be busy anyway with what I'm already booked up to do.

[58:46] It's like I say, a dramatically different mindset and attitude from where we were years ago,

[58:53] but the public owner is kind of need to adjust to the new reality.

[58:58] And I want to point out, you know, I don't want to make out the contractors to be

[59:04] you know, ripping anyone off and just lining their pockets.

[59:10] They are now starting to make the margins that they hope to make, you know, years ago.

[59:17] And they have boards of directors and in some cases public owners to answer to also.

[59:22] So,

[59:25] colleagues, anyone who joined the conversation, director G?

[59:33] Peter, thank you very much. I mean, this is my life. I mean, the work I do and there's so many ways to unpack what you've just shared and so many more stories to tell.

[59:46] I mean, we all have a role in cost management or cost increases.

[59:52] Yep.

[59:53] The public owner is burdened by bureaucracy and formulas and d-

[1:00:00] Books for decades, you know, and, you know, when I managed underground utility projects, I had to tell my administration, I'll blow that 5% in the first week and I did. I mean, you just started digging and you hit something and then it just falls apart right there. I've known elected officials in this region who say, well, it's $800 million right now. Maybe if I wait a little longer, the cost will go down. I know elected officials on a community

[1:00:29] center who will wait in during construction and want that change now, otherwise we won't go.

[1:00:35] I mean, the owner has a role in this to help manage cost or cost increases or mitigate changes.

[1:00:42] And the public owner is just alleging and looking backwards rather than looking forwards and anticipating.

[1:00:49] So the owner has a role in this too.

[1:00:52] Absolutely. I sometimes in the most frustrating parts of my career, I've said that the problem with

[1:00:59] public transportation is so damn public and sometimes that rears its head so in the sound

[1:01:06] transit taxing district we had 52 separate cities. We didn't build in all 52 but we built

[1:01:12] in many and we had to get permits for each one. And because we had such a large ballot measure

[1:01:22] pass, and because, not unlike California, the legislature is capped what local taxes can

[1:01:29] be raised. You're going through communities that are really hard pressed to just pay their bills.

[1:01:36] And here comes a transit agency that's $54 billion rich that wants to build through their community,

[1:01:42] and they start thinking about, well, maybe they'd also like to rebuild the street grid around all

[1:01:48] their stations because we haven't been able to afford to do that for years.

[1:01:52] And that somehow sometimes starts creeping into the project costs, right?

[1:01:55] I mean, those are the realities of building a public project.

[1:02:00] And that's why I talk about, if local leaders really want the project to be built,

[1:02:07] and are invested in its success, they also have to be invested in delivering it affordably,

[1:02:13] and not have the cost to be somebody else's problem.

[1:02:18] That's the typical what's in it for me, or current conversations about return to source.

[1:02:25] How do we get something out of it?

[1:02:28] The other trend line that you didn't talk about is the trend line for mega projects.

[1:02:35] My parent company's a construction company and we're just seeing the larger projects in the terms of mega project trends continue to grow.

[1:02:42] So, and not many firms are able to do that, and so the pond mega projects is getting smaller

[1:02:49] as the mega projects grow, 3, 4, 500, billion dollar projects.

[1:02:53] And that's just more challenging.

[1:02:55] Because as you know, the mergers and consolidations have brought fewer and fewer, I mean, you

[1:03:01] can almost count on one hand the number of firms that can come in and step in and do something

[1:03:06] like that.

[1:03:07] So, yes, absolutely.

[1:03:11] There's a slide I took out of this in the interest of time.

[1:03:15] In Missouri, the St. Louis Convention Center put out an expansion,

[1:03:20] their Convention Center, a fairly large project that also got zero bids

[1:03:25] in their first go-around.

[1:03:27] And when they asked the contracting community, you know, what's up?

[1:03:31] But they gave me like, hey, we're busy, your terms are kind of complicated.

[1:03:38] And by the way, we're also building a new sports arena and a whole new federal headquarters

[1:03:44] of the National Geospatial Agency.

[1:03:48] So even just having local capacity to be able to hire local capacity, we're not sure it's

[1:03:55] there.

[1:03:56] And if we have to pay, you're probably familiar with travelers.

[1:04:02] We in Seattle, we would, our contractors were importing skilled labor from other states.

[1:04:09] They would come in and work, you know, five or six days, get day off, work for, get

[1:04:14] flown home.

[1:04:15] You got to put them up in hotel rooms.

[1:04:18] You know, some of them were coming from Nebraska.

[1:04:20] I always felt they were getting Seattle wages while keeping their family in Nebraska.

[1:04:25] I always felt like I wanted to have the basketball concession in Nebraska because like they were

[1:04:30] doing really well and we needed them really badly.

[1:04:35] Now, you're sort of alluding to the toolkit of how we can help manage and I'm a fan for

[1:04:41] on these large projects, RFIs, getting at the contractor community and early laying out

[1:04:47] here the challenges and listening to what they will offer, the different project delivery

[1:04:52] methods, whether it be design bill, progressive design billed CMGs, CMGC stipends.

[1:04:58] we have to change as a problem.

[1:05:00] Donor, the way we deliver project and manage risk and share in that risk. And we have to de-risk projects, because the invisible hand in all of this are the insurance companies and others that are not willing to ensure we're not willing to bond. And they never show up at a meeting like this. They don't even pay attention. They're just looking at the sheet of the price. Yeah. Here's your price if you want to do it. Yeah. Increasingly folks are not, I wouldn't say it's a, it's, it's, it's

[1:05:29] pervasive at this point.

[1:05:31] But there are increasing number of examples

[1:05:32] where public owners are having to agree

[1:05:35] to monitor material costs

[1:05:38] and they will share in the cost of the upside.

[1:05:41] I've not seen it so much on labor costs,

[1:05:44] which is also always obviously a bigger driver.

[1:05:48] So yes, there is,

[1:05:51] I really think bringing folks in and saying,

[1:05:54] what about this project scares you the most

[1:05:57] And how can we either share in that cost,

[1:06:01] or can I take it off the table?

[1:06:03] Can I just bid that out separately

[1:06:04] for someone who might be specialized in that

[1:06:07] rather than you extend beyond your specialty

[1:06:12] and boost the price of it

[1:06:14] because you're just scared of it.

[1:06:18] And you might be able to,

[1:06:19] in the aggregate, bring the cost down.

[1:06:22] I also hear you on the different delivery methods

[1:06:24] I glossed over it rather quickly,

[1:06:26] But one of the things I really caution people is they just assume with all these different methods of delivering projects now that their staff can do any of them.

[1:06:37] And I will speak for myself we had a very rough time that sound transit for a few years.

[1:06:43] Moving from design bid bill to design build because we had because we had so many projects we had a lot of internal in house engineers that thought it was their job to design the project.

[1:06:54] and in a normal design bid build scenario it was and they were just very

[1:06:59] low to see that authority to contractor staff. So there was all this oversight

[1:07:04] going on and all of the second guessing going on and we were paying for it

[1:07:08] twice. Now I won't name a public agency south of here who was doing design bid

[1:07:14] build. I wanted to do CMGC design. Bill and all I did was word search and replace

[1:07:19] based design bid billed with CMGC, it doesn't work, it's a different culture, different mindset.

[1:07:25] The last comment and the chair mentioned this is that we know the players out there

[1:07:30] who will bid low and then change order.

[1:07:33] And we have to change the public owner, I believe the public owner culture just passing

[1:07:37] those contractors around to each other.

[1:07:39] They are just burning public owners left and right, and we all know who they are.

[1:07:45] And so any thoughts about how we can moderate those players that are out there?

[1:07:52] Well, because the lawyers are here, you know, saying that we should just name and shame them is carries risks.

[1:08:02] But I think there is, we at least in our, in our point, allotment process when competing projects in Seattle,

[1:08:12] were able to bring in the past performance of that contractor, at least on our projects.

[1:08:21] I think there should be ways within free and fair competition rules allowing you to have

[1:08:30] reputational issues brought into the conversation.

[1:08:35] I remember vividly watching one of, it was one of the cities, one of the 52 cities and

[1:08:44] I had caused to be watching the Everett City Council one day and watch them give for

[1:08:51] them a very large contract to a contractor that we had had just the hardest time with.

[1:08:57] And I was literally like texting the member of that council who was on my board saying,

[1:09:02] you know, you sure you want to do this, but things were wait, you know, they never asked us,

[1:09:07] right? So, you know, there's there should be a way of bringing those those conditions.

[1:09:13] The other reality, and I'm sure you've experienced this, there are some contractors who do a very

[1:09:19] good straight-up job five times out of six, and on that sixth job, it's just, you know, a litigious

[1:09:24] nightmare. Someone has to be careful for, you know, penalizing them into perpetuity. Sometimes that

[1:09:32] That might mean it was the owner's fault, not the contractors for it.

[1:09:35] No, I'm a big fan per qualification, where you can bring some of those things in, but

[1:09:39] it's just more work for the public owner, but I would argue cheaper work than paying attorneys

[1:09:45] on the back end in certain James, but it's just the reality of it.

[1:09:48] Well, the other thing is educating the public as to why you may not be taking the lowest bid.

[1:09:55] Because you said we're not going to pay that price in the end anyway.

[1:09:58] Thank you.

[1:10:01] As you've laid out, it's a really important topic and a really multifaceted one. There's not one panacea to solving it, but there are a number of areas that you and others have identified as really flaws in our current approach and which ones we might be able to turn the dial on and manage better ourselves, which ones were.

[1:10:28] We're subject to what's happening in the market right now, and just first touching on that you alluded to the difference between kind of the market during the Great Recession.

[1:10:45] We, in our city, had a major project and saw first time ever bids coming in well below projected estimates.

[1:10:57] We didn't see that during the COVID downturn because we primed the pump so much.

[1:11:06] Not to mention the whole supply chain disruption, those two factors coming together.

[1:11:12] And availability of labor during COVID?

[1:11:14] Yeah.

[1:11:15] But we're that those trends, the priming of the pump is now what we're continuing to see even after out of that COVID period.

[1:11:27] And I've thought that really a lot of the U.S. problem has been, you talked about the

[1:11:36] significant labor shortage at all levels, all the way up to kind of project upper levels

[1:11:43] in engineering and project management down to the skilled labor force.

[1:11:48] And as we've gone from a period nationally of under investing in major infrastructure projects,

[1:11:56] including transportation to a surge, it certainly seems like, unfortunately, that surge

[1:12:05] in overdue investment has compounded our problem perhaps pretty significantly on the

[1:12:13] cost side, and we really haven't been talking about that reality very much.

[1:12:19] And it's unfortunate because those of us who have said we've been under investing for

[1:12:23] long time, we get what we were looking for and we've created a whole new problem or at least

[1:12:30] compounded a problem that was already bad. But I do think that we need to recognize that.

[1:12:38] I also was thinking about kind of the overlap between the themes that you really pointed out

[1:12:47] and those that have been identified by Alon Levy in New York and their study on the transit

[1:12:55] cost project and then Flybear and all of his studies on mega projects and risks.

[1:13:03] Interestingly, we now have for the first time ever a book that is the masses are reading

[1:13:10] on many more of the masses on how big things get done and hopefully they'll then trickle

[1:13:16] down more of us into the more comprehensive studies.

[1:13:20] But a lot of that looks at why the US and certain other countries,

[1:13:26] and now Canada, are encountering drastically higher costs

[1:13:35] for these projects than elsewhere in the world,

[1:13:37] and what are the lessons to be learned there?

[1:13:41] And those, once again, the lessons are many.

[1:13:44] Unfortunately, it's not one or two and we solve the problem.

[1:13:49] But one of the things that struck me as I've been waiting into this even more deeply

[1:13:54] as you know on our BART extension, but actually I first kind of dove into this back when

[1:14:01] high speed rail first came forward in California and some really smart knowledgeable people predicting

[1:15:00] Look, you're heading down this path, and yet the policy makers and the policy makers and even leadership, executive leadership in agencies, continue to just head down a wrong path. And the educational part of that, how do we turn that around? I think, Michelle, bringing you here.

[1:15:28] is really valuable for us and it's part of what maybe needs to be a more systematic approach to how do we educate the policy makers, the executive teams,

[1:15:45] the legislators at the policy level, not just the agency, the press and the public.

[1:15:53] because if we aren't aligned in understanding how we need to do projects and the

[1:16:00] realities we face, then even if we get one or two of those segments starting to

[1:16:07] get it, we get pressure from elsewhere. I had, you know, we're looking in Palo Alto

[1:16:12] that we have through VTA, a committee on the future of the University Avenue

[1:16:18] intermodal station, one of the bigger regional hubs, and I had our local paper editor ask

[1:16:29] me just last week, well what's my grand vision for this and what would I really love to see

[1:16:35] and my answer was I want to see the best project that we can fund and execute. And he goes,

[1:16:44] No, but a whiteboard and I go no. We've got, I can show you five of those over the last 30 years

[1:16:49] and they've all gone nowhere. So I do think that your presentation today made me really reflect on

[1:16:58] how can we do a more deliberate and systematic education process that then will hopefully have

[1:17:10] a change in the systematic approaches at all levels and the understanding of what's

[1:17:18] feasible versus what we would ideally love to see and we start moving more toward what's

[1:17:26] feasible.

[1:17:28] And I'll add that one of the points that you brought out earlier on the skilled labor issue

[1:17:32] and then you went beyond the skilled labor into the engineering labor, etc.,

[1:17:39] four years ago as we were addressing electrification, transformation in our community

[1:17:46] and encountering the workforce, skilled labor workforce issues and the engineering workforce issues

[1:17:52] with that. I engage with our local legislators to look at the state taking on a more systematic

[1:18:01] approach to this in housing labor, electrification labor, and civil engineering labor, and to my knowledge we still don't have any real good analysis of what capacities we need over the next two decades to achieve the outcomes that we're anticipating and planning for.

[1:18:25] and then begin to address those capacity needs.

[1:18:29] We are on a piecemeal basis addressing capacity.

[1:18:32] Well, we know that we need more,

[1:18:34] so we're funding this program.

[1:18:36] But there's no systematic approach to it.

[1:18:38] There's no analysis that has really looked forward in these areas

[1:18:43] and say, what's the shortage?

[1:18:46] But we're just hoping that the market will actually catch up to demand

[1:18:50] and actually train all those people.

[1:18:52] and I wholeheartedly agreed is one of the, there actually was at one time a workforce development component of the infrastructure bill, at least in a variety of drafts that in order to make sure that it's stated by partisan infrastructure law, certain things fell out of it, and unfortunately the workforce piece of it did, I was not in the middle of those negotiations, but it had been reported to me.

[1:19:18] You know, this goes back a long way, going back to the dissolution of trade

[1:19:26] high schools, which we did away with in part because people had very strong

[1:19:33] feelings that everyone should have the opportunity to go to college and we

[1:19:36] should not be tracking people certainly based on income and race into certain

[1:19:40] tracks in high schools. So we eliminated them and just then somehow the the

[1:19:45] training and development, the whole kind of apprenticeship and process didn't have

[1:19:52] a pipeline, it had to be developed and it was very haphazard.

[1:19:57] And now you know when you asked about

[1:20:00] In a career potential, that learning carpentry or learning pipe fitting, or it would be very different. But, you know, I got two kids in their 20s, and sometimes they're on receive, and sometimes they're not listening to anything. And, you know, so it's, it's, um, the, uh, we really do need to kind of take on the workforce component. And your point about high speed railing, California, by itself,

[1:20:28] through its own community college system probably should be much more focused on serving as a pipeline.

[1:20:35] You know, you see when governors entice companies to open a manufacturing facility,

[1:20:42] or some kind of specialized facility, they often bring their community college system to the table

[1:20:48] and say, what do you need? We'll train it basically on the state's time.

[1:20:53] And probably we need to do that more comprehensively in this area.

[1:20:59] Yeah, I think you're exactly right on the role of community colleges.

[1:21:02] In fact, one of the things that we were discussing four years ago was whether the pilot for

[1:21:08] backloric degrees through community colleges in California might be extended to increase the

[1:21:18] the very limited number of universities in our state that provide degrees in, for

[1:21:29] instance, power supply engineering and things like that.

[1:21:34] We only have two or three schools in the whole state that do it.

[1:21:38] So I think you're right and we just need to, so how do we get the systematic approach?

[1:21:44] We need to get the legislators educated to understand the problem.

[1:21:51] We hear on our level need to understand it.

[1:21:54] But as I kept backing up stream, how do we get to the solution?

[1:22:00] We have legislators who don't understand this.

[1:22:03] They got big plates, but we need to really figure out how do we go into a significant,

[1:22:11] to maybe a series of these kinds of seminars and their tight schedules for at least a group

[1:22:16] of them, so they really understand the problems and they can help us solve it.

[1:22:23] Especially trying to bridge, you've got legislators who love to sit on the education committee

[1:22:27] and something who likes to sit on the transportation committee and I'm not sure they talk to

[1:22:30] each other.

[1:22:31] So it's, it's, it's, it's, thank you.

[1:22:34] Let me ask if there are any public comment on Peter's report.

[1:22:39] that now. Starting with in-person Jeff Carter.

[1:22:53] Thank you very much. Appreciate the report. I understand a lot of things that you've said. Being the blue collar myself. I understand, you know, skilled labor trying to find skilled labor.

[1:23:07] When I went to high school, they had shop classes. Now they don't seem to have shop classes anymore.

[1:23:14] The average age in my industry, which was a ship repair, the average age was over 50.

[1:23:22] So you couldn't find young people to come in here and learn these skills.

[1:23:32] Also, you mentioned change orders, company I worked for.

[1:23:38] They had experts that could go over every little thing and find any little thing to create

[1:23:43] to change order and make more money for the company, so I completely understand that.

[1:23:52] Then the other thing, you know, high speed rail, you know, it's long overdue and cost

[1:23:59] or runs, unfortunately, you know, there's people that use, you know, things like CEQUA to

[1:24:07] to delay these type of projects, and as mentioned, delay and projects brings up the cost.

[1:24:16] So I think I really appreciate the report, and the CalTrain is looking into this.

[1:24:23] Thank you.

[1:24:24] Moving over to virtual hands raised, Roland.

[1:24:29] Thank you.

[1:24:31] I really appreciate this presentation, and the way I look at it, if you look at the first

[1:24:38] 20 slides. That pretty much describes basically what happened in Japan in the latter part of

[1:24:46] the last century. But a big difference in Japan is that most of the owners are private owners,

[1:24:54] private for profit on this and the Army recalls their gun.

[1:25:00] That's what the public owner would do. But how did they address these problems? Well, as I said, they had the exact same problem. In the case, the absentee chronic lack of a carpenters and retiring and not having a new generation of carpenters. They took a completely different approach, which was an engineering approach. They actually eliminated most of the carpentry in all that make a project.

[1:25:28] and they eliminated both the formwork and the falsework, so none of these props and all that,

[1:25:35] none of that exists, they're typically in Japan. And the way they did it is by starting a completely

[1:25:42] redesign of the Mega Project as a giant puzzle and breaking it all down into components and making sure

[1:25:50] that every single one of the components weighs less than 30 tons, so that they don't need special

[1:25:58] road permits to transport them to the building site, and then they assemble the gigantic puzzle at

[1:26:05] night. I'm not saying this anywhere in the United States, which possibly the exceptional exception

[1:26:11] of if you should look at NASA and SpaceX, be what SpaceX are doing, they essentially

[1:26:17] other Japanese equal the mega crochet. Thank you. Next we have Alita Dupri.

[1:26:25] Thanks again, Chair Steve. Having earned members Alita Dupri for the record she and her with

[1:26:30] team vaults. Wish I could be with you in person. I'm a big fan of sound transit. I have my reduced

[1:26:36] fare or record card had it for probably about a decade. So sound transit is always with me.

[1:26:45] I'm really seeing two parts to this complexity of contracting and a shortage of labor.

[1:26:54] I've seen it all over the country. When Las Vegas had a building boom of mega-resorts,

[1:27:00] a lot of workers came from all over the country to come in and do that heavy construction.

[1:27:07] and how do we get all this work done and the public's only willing to pay so much

[1:27:14] and I want to get this work done here at CalTrain and get it done at Bart

[1:27:20] and get 300 new accessible stations built on the New York City subway.

[1:27:25] And we're seeing the gateway tunnel between New York and New Jersey

[1:27:28] and Newport Authority bus terminals so much to do.

[1:27:31] So, where do we get the pipeline of people?

[1:27:35] I do wish that there was a greater pipeline of encouraging people over the years to learn

[1:27:43] the traits.

[1:27:45] I was blue collars they get.

[1:27:48] I just barely made it out of high school and ended up going in the army for a while.

[1:27:52] And so I worked in various kinds of blue collar work, but I wasn't involved in the skilled construction type trades.

[1:28:06] And I'm only one person. I'm retired now. But I believe that the trades are something that needs to absolutely be respected and promote it.

[1:28:17] because it really is the traits that are going to help bring the work forward in our country. Thank you.

[1:28:26] Next speaker is Doug Delong.

[1:28:34] Good morning, directors.

[1:28:37] Well, I appreciate all the thoughtful conversation that we've had on this item.

[1:28:44] But I had kind of a rather different take on the material.

[1:28:51] of this presentation that I reviewed in advance of the meeting.

[1:28:56] And it kind of resonated with some things that I've been aware of through, you know,

[1:29:04] concerned about issues like affordable housing and, you know, now what's getting a lot of

[1:29:09] press, the homelessness crisis, and, you know, years ago it was pretty clear to me that the

[1:29:16] local economy here in Mountain View, basically everything that wasn't the tech industry was being crushed by the tech industry.

[1:29:27] And, you know, the venture capital industry, their primary product is increasing income inequality.

[1:30:00] The question is to provide higher returns than any other vehicle. So their job, one, is increasing income and inequality. And they're very good at it. And they're creating homelessness faster than anybody could possibly deal with it. And now through this presentation, we're hearing that all these, this mania for AI data centers and crypto data centers, cryptocurrency data centers is basically throwing unlimited amounts of money at the

[1:30:29] construction industry and surprise surprise they have no interest in cost

[1:30:35] effectively bidding public infrastructure projects. So my takeaway is tech is

[1:30:43] not the solution, tech is the problem. Thank you very much.

[1:30:48] Last and final speakers, Adina Levin.

[1:30:53] Hello, Adina Levin with Seamless Bay Area. Glad to hear this presentation and to

[1:31:00] have the Caltrain Board engaging in this really important topic that impacts Caltrain and

[1:31:11] major projects in the Bay Area, California, and in the United States. It was good to hear

[1:31:20] where the interest in education, you know, at the higher level on what the problems are

[1:31:29] and what the causes are and potential ways of addressing them, there are initiatives

[1:31:38] like the Transit Cross project out of NYU that has, you know, put together a lot of information.

[1:31:46] There's Circula San Diego just put out a report this week.

[1:31:52] The Californians for Electric Rail have some good analysis about the role of patchwork

[1:31:58] funding in causing delays and overruns and having the education at the level of the people

[1:32:11] at agencies as well as people in the legislature is helpful.

[1:32:16] Last year, Buffy Wix led some hearings at Focus Day on permitting, and

[1:32:21] they talked about housing and energy and transportation.

[1:32:24] The transportation piece was the least mature, I think, out of that body of work.

[1:32:30] And there's an opportunity to come back and do more there.

[1:32:34] Another opportunity in the really short term, there's a state transit transformation task force,

[1:32:39] making policy recommendations to the legislature and there were some reluctance by transit to take this on would encourage Michelle Bouchart to work with CTA to make sure there's good recommendations coming out of that state task force. Thank you.

[1:32:54] We do have one more would you like to allow?

[1:32:57] Of course.

[1:32:59] Paul went.

[1:32:59] Hi,

[1:33:03] I'm just going to be very brief. This was just a wonderful eye-opening presentation. I applaud

[1:33:10] the speaker and and CalTrain board for for having this presentation that I just want to say. I

[1:33:18] attend these CalTrain board meetings and there's a lot of boring stuff that goes on and this just makes

[1:33:23] it all worthwhile to attend a very eye-opening. Most of the stuff I didn't realize, so thank you very

[1:33:31] much. That ends public comments.

[1:33:34] Well, and we won't take that personally, so colleagues, last call for any comments

[1:33:41] on this subject. Anybody?

[1:33:46] Peter, you're off the hook. It's great to see you again.

[1:33:52] That brings us to item 11, which is our legislative update and the proposed position on a bill.

[1:34:01] Mr. Baker.

[1:34:03] That's right, Mr. Chair, I was going to say I'll ask you to shift gears a little bit

[1:34:08] from thoughtful and interesting guy to me for a brief legislative update.

[1:34:13] I think what I'll do is do all the update first and then take that bill SB 30 so we can

[1:34:18] have it in a bite-sized chunk if that works for you.

[1:34:21] So in terms of appropriations, the House appropriations bill advanced out of Committee on July 14th

[1:34:27] And the Senate bill came out on July 24th, so that is moving along.

[1:34:32] The Senate bill appropriates the majority of public transit and rail funding authorized

[1:34:37] by the IAJA.

[1:34:38] And that's good news, because we weren't quite sure that that would happen.

[1:34:43] It provides about $21 billion for transit and $16 billion for passenger and freight rail,

[1:34:49] which is a little bit more than a fiscal year, $25.

[1:34:53] They'll be ongoing negotiations coming up in September.

[1:34:55] and there is a current.

[1:35:00] The current continuing resolution to fund the government is set to expire September 30th unless something else happens. The DOT announced Mark Mellonaro as a 16th Senate confirmed administrator to the FDA FTA.

[1:35:16] In terms of the surface transportation reauthorization, the DOT is issued a formal request for inviting comments for the next surface transportation bill, and Chairman Graves is continuing work on a bipartisan service bill before September 30th.

[1:35:30] October 30th, so we're tracking that.

[1:35:32] On June 30th, the DOT released revisions to the NEPO implementing process, including

[1:35:38] deadline reforms and page limit on environmental reviews.

[1:35:42] And then in high speed rail news, you probably have heard this on July 16th, Secretary Duffy

[1:35:46] announced the FRA would terminate two federal grant agreements totaling $4 billion for the

[1:35:52] California high speed rail project.

[1:35:55] on July 17th, California filed a lawsuit seeking declaratory and

[1:36:00] injective relief, and so we're following the progress of that.

[1:36:07] In terms of state legislative update, there are some dates up there in terms of the legislature's coming back on August 18th.

[1:36:15] And then there are days up there that you can read for yourself in terms of when the amended lines house passage in the governor to sign or

[1:36:23] our veto bills, that's particularly relevant schedule, considering SB-XB-63, it makes

[1:36:28] its way through the legislature and is bumping up against, I think, each of those deadlines

[1:36:33] on its way out of the legislature.

[1:36:36] In terms of a state budget agreement in late June, the governor and legislature did come

[1:36:41] to an agreement on the budget $321 billion and has reserves of $15.7 billion.

[1:36:48] dollars, our priority programs in the GHT reduction fund, which are those tourists

[1:36:54] that have been on the top, were maintained after there was some regional concern about

[1:36:59] those.

[1:36:59] There was cuts originally proposed by the governor, the legislature pushed back and those

[1:37:04] ended up coming out much more favorably than we then they might have.

[1:37:09] The budget also includes what we've talked about before, which is a $750 million emergency

[1:37:13] loan program for the general fund for select barrier transit agencies, including Caltrain.

[1:37:18] It's the folks that would receive funding from SB 63 if it were to pass.

[1:37:24] The loan would only take effect if SB 63 passes.

[1:37:28] And negotiations are ongoing in terms of what the loan terms would be.

[1:37:33] When they do come back on the 18th, the legislature is expected to resume discussion on the future

[1:37:37] of the cap and trade program.

[1:37:39] now it's called cap and invest, and that there are ongoing discussions that we are following

[1:37:46] around the region and in Sacramento about the future of that program, and a lot rides on

[1:37:51] that being extended and that funding coming to fruition.

[1:37:58] In terms of that, there's a CalSTAS, as I think you didn't mention this, CalSTAS transformation

[1:38:03] task force meeting on August 1st, and they have a draft report. It has for report for discussion,

[1:38:08] and they will deliver their final report on October 30th.

[1:38:13] As I mentioned, I'm thinking I'm going to skip over SB 30 real quick and come back to it

[1:38:17] since it is an action item and expect there may be some questions

[1:38:20] and just clean up the last piece which is SB 63.

[1:38:26] I think you're all pretty familiar with this.

[1:38:28] Here's a timeline of things that the one I think to focus on or the two are August 6th,

[1:38:33] which was yesterday or last night in this very room.

[1:38:36] Sam Trans met to discuss whether or not to opt-in and I'm pleased to report that the Sam

[1:38:41] Trans Board did degree to opt-in to the measure.

[1:38:47] They also voted to instruct the Bay Area Delegation to advance a slightly different expenditure

[1:38:52] plan, shifting some money from their municompetribution back to return source to San Mateo.

[1:39:01] And I wanted to thank, personally, Emily Beech and Jessica Epstein, and of course,

[1:39:05] April, Emily and Jessica did a Yomans work in terms of the staff reports, making sure

[1:39:10] all their boards were well informed with information coming over the weekends and in the evenings.

[1:39:15] And really, I think did good work that I think will come to the benefit of Bay Area Transit.

[1:39:21] The other date there is August 7th, where tonight VTA is going to meet and discuss whether

[1:39:26] are not the, they will opt in. I was obviously a big night for transit because this would

[1:39:32] be, this would make it a five county measure if VTA does in fact opt in. So if you want

[1:39:37] to send a hug emoji or a heart emoji to any of your friends on the VTA board, it might

[1:39:41] be a good time. It will be a monumental decision in there. I think a lot of folks' careers

[1:39:46] is not often you get to vote on something I think that's important for transit on a transit

[1:39:52] report. The staff recommendation from VTA is to opt-in at the rate.

[1:40:00] Or oversight body that would be established would be representatives from the tax counties, not MTC as a whole for instance. And they would separately ask the legislature to seek commitments from regional partners and leadership in the legislature to prioritize transportation needs in Santa Clara County for cap and trade and other state funding given Santa Clara County's contributions to CalTrain through SB 63. That's not a condition of opting in as I read the staff recommendation, but it is a request.

[1:40:29] just to work on those priorities.

[1:40:35] So that's my discussion of SB 63.

[1:40:40] I don't know if you want to, Mr. Chair, I want to pause here for questions on that or any

[1:40:43] of the rest of the updates and then take SB 30.

[1:40:45] No, I don't want to talk about this subject ever again.

[1:40:51] Good luck, VTA tonight.

[1:40:55] All right.

[1:40:56] I'm not Mr. Corteszi's bill.

[1:40:57] Bill.

[1:40:58] All right, let's move back to that.

[1:40:59] Thank you.

[1:41:01] So, Senator Cortese's bill, SB 30, we're recommending an oppose unless amended position.

[1:41:08] You'll note this is pretty late in the season for us to be opposing a bill.

[1:41:12] We've done that out of an attempt to work with the authors on this as it made its way through

[1:41:18] the legislature out of the Senate and in the assembly and now it has assembly approaches.

[1:41:24] It's probably its last stop in the legislature.

[1:41:26] We've had some of our Bay Area delegation as some of the errands voted against it.

[1:41:36] Assemblymember Pappin voted to obtain which sort of counts as a no, and the CTA as long

[1:41:42] had an oppose unless amended position in part because the effects that they know

[1:41:46] that this would have on CalTrain, where there's a fair amount of information up there.

[1:41:52] I don't want to read it all for you.

[1:41:54] Essentially, the bill would prevent agencies

[1:41:56] from transferring diesel locomotives

[1:41:59] of tiers zero or one, any tiers below two.

[1:42:05] And it would allow transfer of tiers two and above

[1:42:08] if there was a showing that greenhouse gas

[1:42:12] and emissions would be appropriate, it would be better for that.

[1:42:17] So our essentially asking is for the tier zero and one locomotive

[1:42:21] it's a countering as we have about nine of those locomotives and each of those locomotives

[1:42:25] in fact has been upgraded and it has better emissions than traditional zero and one

[1:42:32] tier locomotives but they keep that tier because the tier is based on one the locomotive is built

[1:42:37] even if you're even if you overall that as we have so we're just asking amendments that would say

[1:42:43] if we can have a positive showing that this actually would be better for the environment to make

[1:42:48] the transfer and that could be showing by the air district or a car that we would be allowed

[1:42:53] to make those transfers. And secondly there's a piece that would allow transfer of diesels to

[1:42:59] museums but that would as currently written would require the engine to be removed. It is I have learned

[1:43:06] a substantial thing to remove an engine from a diesel and also much less attractive to the museums

[1:43:12] because that's a big percentage and a big piece of what a diesel locomotive is. And so we would

[1:43:17] ask that the amendment say that the engine could be disabled rather than fully removed because

[1:43:23] it financially just doesn't make any sense to take the entire engine out and then try

[1:43:27] to transfer it and in fact to move it to a museum.

[1:43:31] So those are the amendments we would look at.

[1:43:36] Here they are up in writing and we'll see if I summarized them correctly and that's why

[1:43:42] we're recommending impose unless amended position.

[1:43:45] This would have real financial implications to CalTrain.

[1:43:47] It would mean several million dollars of our ability to be able to transfer these if we just

[1:43:54] decommissioned them and sold them a scrap for scrap.

[1:43:57] We don't make really much money on scrap.

[1:43:58] It ends up being about a push because it takes a lot to decommission them.

[1:44:02] So this really is a financial piece and that's why we're asking for an opposed unless amended position.

[1:44:11] All right, I do have a couple of questions, and colleagues, my general policy has always been that you should never oppose a bill introduced by a member of your delegation, unless you just really, really, really can't live with it.

[1:44:33] And I believe this bill was generated as a reaction to the transaction we did in Lima, Peru.

[1:44:42] is that correct? Yeah. Yeah. And isn't that transaction done and aren't the vehicles gone?

[1:44:52] Yes.

[1:44:55] That's my understanding.

[1:44:57] We still have some remaining.

[1:45:00] All right, two, so.

[1:45:05] Hold on, let somebody responsible come to the microphone. They were all moved

[1:45:13] to Stockton. We had, yeah, problems with one of the coaches, so we fixed it yesterday

[1:45:18] and UP took it, so we don't have any on our property anymore. Okay, of the Peruvian. And

[1:45:24] just to be clear, the transaction is complete. Lima has title to all of the trains.

[1:45:32] They

[1:45:33] answers to my question.

[1:45:34] I look for the lawyer when you said complete, because in that sense, the big thing is

[1:45:44] to the side now, right?

[1:45:46] It's moved.

[1:45:48] Well, we still have nine engines that are in our position that we're not subject to

[1:45:53] the Peru transaction, including engines that are still running Gilroy's service, as well

[1:45:57] as some of those.

[1:45:58] Those haven't happened yet.

[1:45:59] Right, those are not subject to the proof transaction.

[1:46:03] They are just, have you had any reaction to these two amendments from the author?

[1:46:09] We've, for months, requested that the author make them and we have not gotten any help from them.

[1:46:18] CTA has been, you know, testified in an opposition to the bill and asked for these amendments and the amendments haven't been taken.

[1:46:24] All right. Let me see if there are any other members of the board to the chair.

[1:46:32] I just want to be clear on the agenda that it's informational, but you're asking for action.

[1:46:39] So I want to make sure it actually can be even considered if that's not what is stated.

[1:46:44] Yes, the agenda also notes that all items on the agenda are subject to action by the board.

[1:46:51] So if notwithstanding that reference information rather than motion, the agenda preserves the opportunity for the Board to act and the title of the item does say consideration of position on SB 30, so we've given an appropriate note.

[1:47:05] I'm not the lawyer. I just wanted to check. I appreciate my cheek. Thank you.

[1:47:08] Thank you.

[1:47:08] Keep it as honest.

[1:47:10] Anyone else? Director Abbey Koga.

[1:47:13] Thank you, Chair. I am in alignment with your comments and I was going to suggest rather than oppose

[1:47:20] the less amended a support if amended position.

[1:47:27] So that's another way of getting at the objective.

[1:47:33] Colleagues, any other comments or discussion?

[1:47:37] Mr. Chairman, I'm in the same flavor.

[1:47:41] You know, when you have a member of your delegation,

[1:47:43] it's very severe to use the word,

[1:47:47] so support if amended is appropriate.

[1:47:52] All right.

[1:47:54] Any public comment on this?

[1:47:57] We do have virtual hands raised.

[1:48:00] First person is Alita Dupree?

[1:48:05] Thanks again, Chair Steve Hammigard, members.

[1:48:08] Alita Dupree for the record. She and her with team polls.

[1:48:11] I have a problem with this bill.

[1:48:15] And I'm not really seeing the rationale of this bill

[1:48:18] in restraining transit agencies from being able to appropriately dispose of their equipment.

[1:48:27] And I'm looking forward to seeing what Lima Peru is going to do in building their commuter rail.

[1:48:35] I'm sure it's going to take a lot of cars off the road.

[1:48:39] We don't live in a perfect world.

[1:48:41] and these locomotives represent stranded capital, and in a day and age when public

[1:48:53] transportation needs all the money it can get, we have to be able to transact

[1:49:00] business appropriately. We don't want to throw money away. Yes, these locomotives

[1:49:09] do produce emissions. And until they're at the end of their useful life, they're going

[1:49:14] to produce emissions. Unless somebody, the state, et cetera, is willing to pay caltrain

[1:49:24] and equivalent amount of what they can get to dispose of these locomotives. And caltrain

[1:49:32] should be able to dispose of them appropriately. So yes, ideally, I would like to see us remove

[1:49:39] a mission-producing equipment from the community. But the fact is that's not going to happen today,

[1:49:47] and it's not going to happen tomorrow, just as we can't expect people who trade in their cars to

[1:49:53] simply throw them away. They get a trade-in value with the dealer, and yes, people are still trading

[1:50:00] And gas lean cars for new gasoline cars. And this bill doesn't apply to freight railroads. So I can't support this bill. And I think it should, it should be opposed regardless of where you live. Thank you. Next public commenter of Adina Levin.

[1:50:21] Yes. So I am glad to see Caltrain paying some attention to this bill.

[1:50:31] So, the CalTrain has just electrified the portion of the line from Tamion to San Francisco,

[1:50:44] but as the staff have mentioned, there's still the diesel trains serving the Gilroy service.

[1:50:50] And in the state of California overall, what CalTrain has done is 50 miles out of a 1,500

[1:50:55] mild program of electrification in the state, and the amendments being proposed to assure

[1:51:04] that if a diesel train is being moved somewhere, we're having a train would reduce emissions

[1:51:12] compared to other forms of transportation. That seems like a sensible way of handling that.

[1:51:18] that during this legislative session, the Senator Cortesian is role and Senate transportation

[1:51:27] has played a key role in SB 63, VTA's decision tonight will go a long way towards settling

[1:51:41] out where the county is on that and I do think that, you know, even at this hour pushing for

[1:51:52] this bill to be made more constructive will be helpful not only for CalTrain, but for the rest

[1:51:59] of the 1500 miles of electrification needed in the state of California that can build on CalTrain's

[1:52:07] good example. Thank you. Next speaker is Roland.

[1:52:13] Thank you. So on SB 30 absolutely support

[1:52:18] and less amended but I want to talk about the $75 million folk out training in SB 63.

[1:52:27] I would like this bold to make it very clear to answer Clara County that this $75 million

[1:52:36] does not repeat, does not include the cost of the

[1:52:41] giro extension, which includes health and

[1:52:44] other wear li. Then the question comes to

[1:52:47] great, so how we're going to finance and grow

[1:52:50] the ridership. In that extension, quite

[1:52:53] frankly, San Francisco to giro should be

[1:52:55] one line end of discussion. The best

[1:52:59] solution is to follow the French example who

[1:53:02] turned the entire freeway network over to

[1:53:05] the private sector that releases, and they use the least revenues to finance the development

[1:53:13] of the high-speed rail network.

[1:53:17] And we have got a similar situation between San Jose and Giroi, because we are about

[1:53:25] to start funding the development of express lanes between North Morgan Hill and Giroi.

[1:53:33] And we have to make sure at a regional level, I mean at a regional level, that should

[1:53:41] this come to pass, is that all the revenue from these express lanes stayed within the corridor

[1:53:49] and does not get shifted to some other mega project in another part of Santa Clara County.

[1:53:56] And if we do this, everybody will be in support because we're not increasing taxes.

[1:54:02] We're following the French. We're following the Japanese model is to basically use their

[1:54:09] Instagram news and keep it there within the code scope on which you want to tend it and

[1:54:14] give people a choice whether they drive or they like out frame. Thank you.

[1:54:19] Last speaker is Adrian Brandt.

[1:55:00] I just wanted to point out that there are numerous YouTube videos showing our equipment down in Lima, and there's considerable political jockey and going on down there on how to get those trains into service as soon as possible. And so that I also want to, you know, really align myself with the Dino's comments. I think on a state level, it's going to be really important that other, you know,

[1:55:28] in support of other electrification throughout the state,

[1:55:31] that commuter rail and other agencies like ours

[1:55:34] are able to, if there is justification,

[1:55:38] as it says in the staff recommendation,

[1:55:41] if there's justification on a pollution basis,

[1:55:44] that we and other agencies are able to monetize

[1:55:49] and more easily and more environmentally, in fact,

[1:55:54] pass on their no longer needed locomotives.

[1:55:57] So, I think it's really very odd, just as a comment that Mr. Cortese's bill does not affect

[1:56:05] freight railroads when they are, by far, a much, much larger source of locomotive pollution.

[1:56:12] So that's a real head scratcher, but that's not our business.

[1:56:16] Thank you.

[1:56:18] That ends public comments.

[1:56:20] We do have Devon Ryan online and with her hand raised.

[1:56:24] But.

[1:56:25] Staff.

[1:56:26] Mr. Chair, I think we can, that may be from an earlier hand raise, I think, I just do want to make sure that the recommendation makes sense because we still at least would have a position on the bill and have a formal position in terms of amendments.

[1:56:41] I want to make clear the board is aware that over time we think this would cost us in

[1:56:46] terms of opportunity costs in terms of things we couldn't sell in the range of $20 million.

[1:56:51] So I just wanted to put that on the record so that you all know, or if you see Senator

[1:56:55] Courtais in the hall, you can mention our current fiscal situation and that that's not an easy

[1:57:01] hit even if it's over a reasonably amount of time.

[1:57:05] Director Burke.

[1:57:07] Yeah.

[1:57:08] Have we had any success in enlisting our other local legislators to lobby Senator Cortesia

[1:57:18] on our behalf?

[1:57:19] You know, our legislators, Patrick Carrons, who pursuant to the previous conversation

[1:57:25] came from Community College and now is district and now is on the assembly transportation.

[1:57:30] So maybe he'll be the solution to some of our previous speaker's issues, voted no on

[1:57:34] this bill and because of the concerns from CalTrain and Assemblymember Papin, like I said,

[1:57:40] abstained.

[1:57:40] And I know that they've had discussions with Senator Cortese.

[1:57:43] We've met with Senator Cortese's staff several times offered to me with him in person, but

[1:57:48] just not had much luck.

[1:57:50] Over time, he has accepted amendments, and so the bill didn't start out with all the tears

[1:57:55] being able to be transferred with a GHG and emissions showing, but it didn't get down

[1:58:02] of the ones we own, the nine.

[1:58:04] Senator Maxker, have we engaged with him?

[1:58:09] We've engaged with all of our, it's been a little while, because we've been doing this for a long time since the bill started in the Senate.

[1:58:16] With every member of our delegation, I think we've informed about this bill, informed about CalTransition, that it would cost us a fair amount of money, and that we were just asking to have same showing that other tier locomotives could have.

[1:58:28] Thank you.

[1:58:29] Thank you for the questions.

[1:58:30] So I believe what I heard is Director Abe Koga making a motion to support the bill if it's amended according to the information in the staff report.

[1:58:44] Is that as is there a second?

[1:58:47] Second.

[1:58:48] Any further discussion or debate?

[1:58:51] Yes, directors Mooda.

[1:58:52] I just have a question in terms of the language here.

[1:58:59] Unless amended, how do we state exactly how?

[1:59:06] Yeah, there were two amendments on the thing.

[1:59:12] Why don't we just get the screen?

[1:59:16] There we go.

[1:59:18] So there's two bullet points there.

[1:59:22] Okay, fine. Thank you. All righty. Let's vote. All the roll, please. Director Abikoka. Hi. Director Bert. Yes. Director Cohen. Hi. Director G. Yes. Director Walton. Director Zemuda. Hi. Vice-Chimadina. Yes. Chair Hemminger. Hi. Motion passes.

[1:59:41] Marvellous. We've got one more item here and that's a bunch of verbal reports which I will ask our

[1:59:47] speakers to give quickly. 12A is the Citizens Advisory Committee, Mr. Brant.

[1:59:58] There I am.

[2:00:00] There I am. Yes, so staff did cancel our meeting. So we don't have a meeting to report on. I was somewhat disappointed because I think, you know, they stated that there were no staff available to give us presentations, but I feel that we have a lot to offer in our value goes well beyond the staff presentation. So I'm hopeful that we can avoid a surprise cancellations and still perform a good role in terms of feedback and interacting with staff on issues that

[2:00:29] that occur whether other staff run vacation or not.

[2:00:34] Thank you.

[2:00:37] Thank you.

[2:00:38] 12B is me and I don't have a report.

[2:00:41] So 12C is the local policy maker group director Burke.

[2:00:46] We also did not have a meeting in July.

[2:00:51] And we don't have one, let's see, the next one scheduled

[2:00:55] for trying to remember it.

[2:00:58] End of this month.

[2:00:58] But I will say that Peter Rogoff's presentation, even though we may not be able to get him to

[2:01:05] make that presentation, as staff providing that may be of interest to the city's up and

[2:01:11] down the corridor, as they're struggling with grade separation issues.

[2:01:18] That it?

[2:01:22] Director Ovee has fled the building, so we will not get a TJPA report just as well, perhaps.

[2:01:30] item 13 is for respondents yes we have public comment we have public comment on

[2:01:37] the public comment okay virtual handraises Roland there were essentially no

[2:01:45] reports given but go ahead I agree but I would like to make a suggestion is that

[2:01:54] But when they are not available to make presentations, it's an opportunity for you to make it possible

[2:02:02] for members of the public to give presentations such as great crossing and answering new construction

[2:02:11] techniques, various ways that the Bureau of Extension could both be built, doing all the

[2:02:21] industry capital projects and how I could be funded. Thank you.

[2:02:26] That ends public comments.

[2:02:28] All right. So back to correspondence which

JPB Board of Directors Meeting

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