Sunday, December 4, 2011

Sacramento Bee: State High speed rail authority spends big on public relations

California high-speed rail authority spends millions to polish image

Published: Sunday, Dec. 4, 2011 - 12:00 am | Page 1A
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On his way off the California High-Speed Rail Authority board this year, former state Sen. Quentin Kopp ripped into the authority's controversial $9 million public relations contract with Ogilvy Public Relations Worldwide, urging its cancellation.

Everywhere, it seemed – from community meetings in the Central Valley to legislative hearings at the Capitol – the project was clobbered for its management and cost, and its worsening image, Kopp said in a March letter to Roelof van Ark, the rail authority's chief executive officer, was evidence of Ogilvy's "inadequate performance."

But the rail authority's public relations campaign has in recent years included not only its contract with Ogilvy – which is now being unwound – but also millions of dollars more in lucrative, publicly funded outreach contracts embedded in agency engineering contracts.

One of those agreements was with a company owned by a former aide to Kopp, and Kopp himself sought to bill the authority more than $1,100 for one outreach-related breakfast in San Francisco last year. Another contract went to a former assemblyman.

Last fiscal year alone, the authority spent $7.2 million on regional outreach, ranging from organizing public meetings to distributing newsletters and meeting with local officials, according to agency records obtained by The Bee.

The authority said it budgeted about $2.6 million for regional outreach this year, with 20 subcontractors statewide.

The magnitude of the effort and its many layers come to light at a critical point for the project. Officials plan to start construction in the Central Valley next year, but they must win the approval of a skeptical Legislature first. The regional subcontractors, overseen by engineering firms throughout the state, in some cases retained and billed the agency on behalf of subcontractors of their own.

"I guess the interesting question to me is, 'Why do they have to spend so much effort selling this to people if it has such strong support?' " said Sen. Doug LaMalfa, R-Richvale, a critic of the rail effort. "They've got to put up a wall of, you know, peaches and cream, to make it look palatable to the voters."

Public outreach is required by state environmental rules for public review, and it is necessary to communicate the significance of the project, agency officials said.

"I think we're making a pretty decent effort to do the best public outreach that we can," said Lance Simmens, the authority's deputy director for communications and public policy.

In the Merced-to-Fresno corridor, that outreach has included "efforts geared toward the agricultural community," periodic public information meetings, monitoring local media and updating the project mailing list and "email blast program," according to invoices.

In the Palmdale-to-Los Angeles area, it included meetings with elected officials and "key stakeholders." And in the Fresno-to-Bakersfield area, the rail authority relied on the work of former Assembly Republican leader Mike Villines, whose invoices listed his company's professional services contract at $80,000.

Last fiscal year, regional outreach expenses accounted for about 4 percent of total spending under agency engineering contracts, according to the authority. This year, the budgeted amount accounts for about 2 percent of total expenses.

In the Bay Area, an early battleground for the project because of intense local opposition, Denise LaPointe, an aide to Kopp when he was a senator, billed the authority more than $350,000 for outreach work done from September 2009 to June 2011, when her contract ended.

LaPointe created newsletters, worked on a public participation plan and conducted outreach and "stakeholder meetings & briefings." Her total billings included invoices for work done by a sub-subcontractor.

"There's a lot of work that was done," LaPointe said. "Any big project, I actually think there's pretty important public outreach that has to be done."

LaPointe was working for the rail authority and had done work on other transportation projects in California before Kopp joined the board, LaPointe and Kopp said. Kopp said he was not involved in LaPointe's ongoing engagement.

Kopp said LaPointe was influential in promoting the project in the Bay Area, in part because she "knows City Hall in San Francisco inside and out."

Kopp, a longtime proponent of high-speed rail, involved himself in outreach, too, according to invoices, including organizing a breakfast meeting last year in San Francisco to introduce van Ark to 25 elected officials in the area.

"I wanted everybody to meet van Ark, and I wanted him to just get the lay of the land and get the feel." Kopp said.

He sought reimbursement from the rail authority for the cost, more than $1,100. The authority reimbursed him the state maximum for a breakfast, $6.

"I remember asking somebody in the office if I could get reimbursed, and being told, 'No,' " Kopp said,
"That, frankly, annoyed me a little. But what the heck, it's called public service."

The authority was more accommodating of paying for Kopp's transportation to and from his home in San Francisco for meetings at the Capitol on two successive days in November 2009. Neumann Limousine, which dispatched a sedan, charged the authority $240 each way.

The rail authority's bid to build a system connecting Los Angeles and San Francisco has enjoyed a resurgence this fall, after Gov. Jerry Brown put his support behind it. Even as officials revised the project's cost estimate to almost $100 billion in inflation-adjusted dollars over 20 years – more than twice the previous estimate – the projection was seen by many observers as a sign of greater credibility within the rail authority.

But LaMalfa and other critics want the Legislature to ask Californians to reconsider the $9 billion bond measure that voters approved in 2008 to finance the project's construction, and its future remains uncertain.
In the agency's outreach effort, Ogilvy announced this summer that it was quitting its contract, saying it was "unable to develop a solid working relationship" with the authority. The authority since then has been seeking a replacement. Simmens said he expects that contract to be awarded soon.

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