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Wednesday, June 2, 2010

Schwarzenegger Fires State Official Protesting $1.4 Billion Presidio Spending Scheme

Posted By on Wed, Jun 2, 2010 at 4:45 PM

click to enlarge Gov. Arnold Schwarzenegger has dealt harshly with those opposing his cockamamie fiscal schemes... - WWW.PRESIDIOPARKWAY.ORG
  • Gov. Arnold Schwarzenegger has dealt harshly with those opposing his cockamamie fiscal schemes...
For those wondering whether California is on its way to becoming Greece, witness an alarming pattern in which the governor comes up with ways to plunge the state even further into debt, then fires public officials who cry foul.

In March, Gov. Arnold Schwarzenegger fired San Francisco State Building Authority commissioner Don Casper, who complained that a scheme to sell  state buildings then lease them back would cost California billions of extra dollars in the long run. Next, Schwarzenegger fired Los Angeles State Building Authority commissioner Jerry Epstein for voicing the same concerns.

And, last week, Schwarzenegger pulled Larry Zarian off the California Transportation Commission after that official opposed a plan to spend an extra $500 million -- minimum -- in order to give private companies a greater role in building the Doyle Drive freeway extension in the Presidio.

click to enlarge Wait -- $1.4 billion? Dig faster! - WWW.PRESIDIOPARKWAY.ORG
  • Wait -- $1.4 billion? Dig faster!
"Appointees to state or local boards or commissions should not be

puppets. This is not pre-2000 Albania," said Casper. "Short-term

borrowing is a way of masking the long term effects of the state's


The Presidio project is now moving ahead as a "public-private

partnership," in which a single, no-bid consortium designs, builds, and

finances the construction of the project for an as much as $1.4

billion, to be paid back over 30 years with state highway funds.


who include California Transportation Commission staff, say the project

was scheduled to be completed for half that amount, before the San

Francisco County Transportation Authority -- with the help of

Schwarzenegger appointees -- came up with this costly scheme. It was designed

to obtain financing faster than would be possible the normal, slow manner,

which involves obtaining legislative approval for spending taxpayer

money, and holding biddings in order to obtain the lowest possible

construction price.

Work is now under way to replace the aging Doyle Drive approach to the Golden Gate Bridge. But officials have changed direction on how to finance the project. According to a State Transportation Commission staff report, the state a year ago had in place a plan to design the mile-long offramp, put its construction out to bid to private builders, and get the thing built, all for about $500 million.

Obtaining all the necessary state, federal, and local funding for such a gargantuan project, however, can be time-consuming and uncertain. So San Francisco officials took advantage of a Schwarzenegger policy of encouraging private investment in state operations.

Under the new scheme, a builder-investor will be tapped to design, build, and pay for the Doyle Drive offramp, and then be repaid over 30 years with $1.4 billion in state highway funds. This way, the project potentially gets funded more quickly. And the state doesn't look like it's worsening California's fiscal crisis by borrowing money, exactly. Instead of getting involved with bond debt, we'll instead be essentially renting a freeway offramp. For a lot of money. For a long, long time.

"It will waste half a billion dollars," said Bruce Blanning, executive director of Professional Engineers in California Government, a trade association that opposes the financing scheme. "The money wasted on this project because they've abandoned competitive bidding could be used to meet the needs of San Franciscans on other projects."

On May 20, California Transportation Commissioner Larry Zarian voted against the more costly scheme. And Schwarzenegger promptly terminated him from the Commission. Zarian isn't the first on this commission to be so treated. Last fall, the governor deep-sixed Jim Ghielmetti after he raised questions about public-private highway partnerships.

"It seems to be a pattern," The LA Times quoted him as saying.

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