Caltrain’s high-speed rail tab raises red flag 

The California High-Speed Rail Authority is disputing bills from Caltrain that are worth more than $108,000, The San Francisco Examiner has learned.

Under a 2009 contract between the two agencies for rail work on the Peninsula, Caltrain and the rail authority are supposed to split costs for a number of duties, including engineering, operations planning, and program management. Caltrain initially absorbs the costs, but then is reimbursed by the authority.

Of the $108,834 disputed by the authority, at least $39,000 was related to attorney fees racked up by Caltrain. But under the contract between the two agencies, the authority does not appear to be obligated to pay for legal work.

“Good catch,” former rail authority counsel George Spanos wrote in response to a legal bill flagged by contract administrator Vickie Janek. “I say don’t pay it.”

Mark Simon, a spokesman for Caltrain, said all the legal work carried out was related to high-speed rail issues.

But the dispute extends beyond legal work. In fact, the authority found something to complain about in all eight of the invoices Caltrain submitted between November 2009 and January 2011, according to documents obtained by The Examiner.

“This, to me, is a sign of overbilling,” said Quentin Kopp, a former member of the high-speed rail board and longtime advocate of the project.

Along with legal fees, other disputed charges include $12,986 for technological equipment and small expenses for travel, lodging and food.

In one case, Caltrain sought to bill the authority $330 for a lunch session for workers. In another example, Caltrain tried to recoup $52.50 paid out in petty cash to an employee. The authority denied those requests because they weren’t covered in the agencies’ contract. Caltrain did not challenge those decisions.

Simon said because this was the first time Caltrain has ever entered into such a deal, people were unsure how the process would work. For instance, he said, Caltrain believed that legal fees were billable under its memorandum of understanding with the High-Speed Rail Authority.

But after officials from the High-Speed Rail Authority said they had their own legal counsel and wouldn’t reimburse Caltrain’s legal fees, Caltrain stopped billing them, Simon said.

In the end, Simon said the disputed amounts are a small percentage of the overall $2.2 million the agency has billed the rail authority.

“We’re not getting rich off high-speed rail, and we’re not trying to,” Simon said.

By partnering with Caltrain, the high-speed rail will be able to share the right of way on the Peninsula. Conversely, Caltrain will receive much-needed funding to electrify its tracks, an upgrade the agency has frequently cited as key to its long-term sustainability.

But the partnership has grown tense recently — due in large part to concerns about high-speed rail impacts in Peninsula communities — and Kopp said the billing disagreements are part of a bigger problem.

“I think Caltrain has been very clever in this deal,” Kopp said. “And the authority has been a sucker.”

Price points

$108,834.04: Total Caltrain fees disputed by the Calfornia High-Speed Rail Authority
$2.2 million: Total Caltrain reimbursement requests
5: Percentage of reimbursement requests withheld by the rail authority

Sampling of funding disputes in which Caltrain sought to be reimbursed by the rail authority:

$52.50: Petty cash payout to employee
$26.01: Materials purchased at Office Max
$108.40: Beverages for office
$330.65: Lunch for training session

Source: California High-Speed Rail Authority

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Will Reisman

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