Leadership turnover at the California High-Speed Rail Authority could signal shakeup

The organizational chart of top management at California’s bullet train authority disappeared from the agency’s website about three months ago, sending what now seems like a sign of impending shakeup.

Chief Executive Jeff Morales announced his departure on April 21 in a letter sent to Gov. Jerry Brown and the rail authority. Late last year, the senor deputy officer left, and before that the chief administrator and the computer systems director said goodbye.

A leadership exodus has also roiled the authority’s corporate “rail delivery partner,” Parsons Brinckerhoff, which makes many of the day-to-day engineering and construction decisions in the effort to build a high speed rail line between Los Angeles and San Francisco, and is critical to the bullet train project’s success or failure.

Gary Griggs, the company’s top executive on the California project who has worked on BART, the San Francisco subway, and the Taiwan bullet train, quietly announced his retirement recently. Griggs was preceded by Tony Daniels, Hans Van Winkle, Brent Felker and Jim Van Epps — all since about 2012. A deputy, Gay Knipper, was just let go as well.

It adds up to a senior management upheaval at a time when the rail authority is wrestling with construction falling behind schedule, cost estimates heading higher and a hostile wind blowing from the Trump administration.

The rail authority has disclosed little publicly about the exits, and after denying Morales’ rumored departure, had little to say when he revealed that the rumors were true.

“There was no particular thing that precipitated his decision beyond determining that it was simply time to move on,” spokeswoman Lisa Marie Alley said.

The chief of the state department overseeing the rail agency offers a similar assessment.

“Jeff made a call on his own that it is time to do something else,” State Transportation Agency Secretary Brian Kelly said in an interview Saturday. “Jeff has brought this project a long, long way. And all of us together have been assessing what do we do as we go forward.”

Kelly said the rail program is moving from the planning stage to a construction push that has 1,000 workers building bridges and preparing to lay track in the Central Valley — a new phase that will require different leadership skills. An evaluation of the organization began late last year, he said.

A spokeswoman for Parsons Brinckerhoff said “it is not unusual for a project of this size and duration to experience personnel changes.

“Gary Griggs,” she said, “is retiring following a successful career in our industry, and Gay Knipper has recently accepted an opportunity with another firm. The project attracts many qualified candidates from around the world who are interested in working on the next phase of this program.”

But some construction industry executives, academic experts and officials with direct knowledge of the rail authority’s operations say the exits reflect both tensions within the authority’s ranks and loss of confidence about the project’s future.

“When you have a large infeasible project, it is better to not be in the room when it comes to a halt,” said James Moore, vice dean for academic programs at USC’s Viterbi School of Engineering—noting that his views are not those of the university.

Moore, who heads the school’s transportation engineering program, said the technology for high speed rail does not exist to deliver on the promises made for the system, and engineers generally will flee such projects as the future becomes clouded.

Art Bauer, who led the state Senate’s oversight of high speed rail for years, offers a similar interpretation: “The departures are a signal that the project is over with. If this project were booming, people would be clamoring to be part of it. People want to be part of a success and have bragging rights.”

Among the project’s many supporters, the departures cause little concern.

They say their confidence is bolstered, in part, because the rail authority still includes former utility industry attorney Dan Richard and former banking executive Michael Rossi.

“As long as Dan Richard is at the helm and Mike Rossi oversees finance, then you are in good shape,” said Thea Selby, a former member of the rail authority board.

Supporters also note that the state just sold bonds to pay for work in the Central Valley, and a Superior Court judge tentatively rejected an effort by opponents to block the use of the money, which they contend would violate the terms of a 2008 bond act.

The opponents said they plan to appeal if the ruling is made final.

Meanwhile, political insiders are scrutinizing the details of recent departures for clues as to what may come next.

Morales’ five-year tenure at the top of the project had ups and downs.

The project did begin construction in the Central Valley, and Morales helped build political support that won additional state funding from greenhouse gas fees.

But the project failed to obtain any private investment and still has a massive $40-billion funding gap. It is falling behind schedule and facing estimates of higher costs as well.

While Morales likely did not get fired, he did battle with the rail authority’s board of directors and came to lose the confidence of at least some of the members, according to multiple officials who are involved in the project.

There was mounting evidence that the project was slipping into trouble that could not be repaired.

Asked about whether there was friction between the board and Morales, Kelly said, “In most respects they have been working very much together.”

When the 2016 business plan was issued, Morales won a tactical battle to lower the estimated final cost of the project to $64 billion, prevailing over those who wanted a price billions of dollars higher, according to individuals with knowledge of the dealings.

When the Federal Railroad Administration warned in December that the cost of the initial construction segment in the Central Valley could increase by 50% to $10 billion and the estimate became public weeks later, Morales and Richard both asserted that the estimate was part of a risk analysis that was wrong.

Morales’ resignation letter two weeks ago was addressed to Brown as well as the authority’s board.

A spokesman for the governor said Brown was not involved in Morales’ decision to leave.

But the executive turnover does offer Brown an opportunity to install fresh management, possibly better skilled at dealing with the immediate problems of managing property acquisition, environmental approvals, large-scale construction and making amends with the Trump administration.

Morales was part of President Obama’s transition team, not a background likely to win many friends in the conservative Congress.

Brown has hoped to make the bullet train system a part of his legacy, but he has said little about the program’s specific challenges this year and in his State of the State speech said only, “We have roads, we have tunnels, we have railroads and even a dam that the president can help us with.” He has not acted to fill a vacancy on the rail authority board.

Many project insiders speculate that the governor is quietly considering a restructuring of the entire project before he leaves office after the gubernatorial election next year.

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UPDATES:

3:07 p.m., May 4: This article was updated to more fully describe Gov. Jerry Brown’s comments on high speed rail in his State of the State address and other public remarks.

4:47 p.m., May 2: This article was updated to indicate that James Moore’s stated opinions are not those of USC.

This article was originally published at 2:30 p.m., May 1.