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The criticism continues for California’s high-speed rail program. On Tuesday, the state’s Legislative Analyst’s Office (LAO) released a report that identifies issues that could pose threats to the project’s development and recommends ways to address those issues.

Titled “High-Speed Rail is at a Critical Juncture,” the report states that the additional funding detailed in the California High Speed Rail Authority’s (CHSRA) 2009 business plan as being necessary to complete the project is “highly uncertain,” and federal deadlines and conditions attached to the funding already provided to the state would limit California’s options for the successful development of the system. In addition, the program’s existing governance structure is inadequate for the “imminent development and construction phases,” and the legislature lacks the information it needs to make critical multi-billion-dollar decisions about the project, LAO said.

As a result, the LAO suggests that the legislature be given more time and greater flexibility to make critical project decisions. The office recommends that CHSRA renegotiate the terms of the federal funding awarded to the state by the Federal Railroad Administration, including a requirement that all the money be spent on an initial section of the line in the Central Valley. CHSRA also should reevaluate which segment or segments should be constructed first based on criteria determined by the legislature, such as potential statewide benefits from building a particular segment, and whether a segment could generate the ridership and revenue needed to be financially viable.

In addition, significant improvements are needed to address the way that day-to-day and longer-term strategic decisions are made, according to LAO. The office recommends the legislature reject the state’s 2011-12 high-speed rail budget request of $185 million for project management, public outreach and other work, and only appropriate $7 million requested for the project’s administration.

Then, the legislature should pass a bill this session that shifts day-to-day high-speed rail project responsibilities from CHSRA to the California Department of Transportation (Caltrans), LAO recommends. A new and separate division of Caltrans dedicated to the high-speed project would be better positioned to manage the development of the system, the report states. The legislature also should remove decision-making authority from the CHSRA board to ensure the state’s overall interests, including state fiscal concerns, are fully taken into account as the project proceeds, according to LAO.

In a statement issued after the report was released, CHSRA Chief Executive Officer Roelof van Ark said he hopes the report encourages discussion of how to proceed with the state’s high-speed rail project, although he believes the project should be managed more like a business venture than a government program.

“I was brought on to ensure the successful implementation of California’s high-speed rail project. I believe this project has been successful thus far because it has strived to operate more like a private business than a typical government bureaucracy,” he said. “The LAO suggestions will be thoroughly reviewed in the context of our mandate to operate under the provisions of Proposition 1A. Additionally, the federal government has shown its strong support for California’s project with an initial investment of more than $3 billion and will be reviewing the LAO suggestions in light of the conditions placed upon us by the federal government.”