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77–859 PDF 2002

THE ALAMEDA CORRIDOR PROJECT: ITS

SUCCESSES AND CHALLENGES

HEARING

BEFORE THE

SUBCOMMITTEE ON GOVERNMENT EFFICIENCY,

FINANCIAL MANAGEMENT AND

INTERGOVERNMENTAL RELATIONS

OF THE

COMMITTEE ON

GOVERNMENT REFORM

HOUSE OF REPRESENTATIVES

ONE HUNDRED SEVENTH CONGRESS

FIRST SESSION

APRIL 16, 2001

Serial No. 107–50

Printed for the use of the Committee on Government Reform

(

Available via the World Wide Web: http://www.gpo.gov/congress/house

http://www.house.gov/reform

(II)

COMMITTEE ON GOVERNMENT REFORM

DAN BURTON, Indiana, Chairman

BENJAMIN A. GILMAN, New York

CONSTANCE A. MORELLA, Maryland

CHRISTOPHER SHAYS, Connecticut

ILEANA ROS-LEHTINEN, Florida

JOHN M. MCHUGH, New York

STEPHEN HORN, California

JOHN L. MICA, Florida

THOMAS M. DAVIS, Virginia

MARK E. SOUDER, Indiana

JOE SCARBOROUGH, Florida

STEVEN C. LATOURETTE, Ohio

BOB BARR, Georgia

DAN MILLER, Florida

DOUG OSE, California

RON LEWIS, Kentucky

JO ANN DAVIS, Virginia

TODD RUSSELL PLATTS, Pennsylvania

DAVE WELDON, Florida

CHRIS CANNON, Utah

ADAM H. PUTNAM, Florida

C.L. ‘‘BUTCH’’ OTTER, Idaho

EDWARD L. SCHROCK, Virginia

——— ———

HENRY A. WAXMAN, California

TOM LANTOS, California

MAJOR R. OWENS, New York

EDOLPHUS TOWNS, New York

PAUL E. KANJORSKI, Pennsylvania

PATSY T. MINK, Hawaii

CAROLYN B. MALONEY, New York

ELEANOR HOLMES NORTON, Washington,

DC

ELIJAH E. CUMMINGS, Maryland

DENNIS J. KUCINICH, Ohio

ROD R. BLAGOJEVICH, Illinois

DANNY K. DAVIS, Illinois

JOHN F. TIERNEY, Massachusetts

JIM TURNER, Texas

THOMAS H. ALLEN, Maine

JANICE D. SCHAKOWSKY, Illinois

WM. LACY CLAY, Missouri

——— ———

——— ———

———

BERNARD SANDERS, Vermont

(Independent)

KEVIN BINGER, Staff Director

DANIEL R. MOLL, Deputy Staff Director

JAMES C. WILSON, Chief Counsel

ROBERT A. BRIGGS, Chief Clerk

PHIL SCHILIRO, Minority Staff Director

SUBCOMMITTEE ON GOVERNMENT EFFICIENCY, FINANCIAL MANAGEMENT AND

INTERGOVERNMENTAL RELATIONS

STEPHEN HORN, California, Chairman

RON LEWIS, Kentucky

DAN MILLER, Florida

DOUG OSE, California

ADAM H. PUTNAM, Florida

JANICE D. SCHAKOWSKY, Illinois

MAJOR R. OWENS, New York

PAUL E. KANJORSKI, Pennsylvania

CAROLYN B. MALONEY, New York

EX OFFICIO

DAN BURTON, Indiana HENRY A. WAXMAN, California

J. RUSSELL GEORGE, Staff Director and Chief Counsel

EARL PIERCE, Professional Staff Member

GRANT NEWMAN, Clerk

(III)

C O N T E N T S

Page

Hearing held on April 16, 2001 .............................................................................. 1

Statement of:

Hankla, James, chief ecexutive officer, Alameda Corridor Transportation

Authority; Tim Buresh, director of engineering and construction, Alameda Corridor Transportation Authority; Jeffrey Brown, California

State Office of Research, representing State Senator Betty Karnette;

and Larry Wiggs, job training officer, Tutor-Saliba ................................... 46

Kellogg, Jeffrey, former Long Beach City councilman and former vice

chairman, Alameda Corridor Transportation Authority Board; Gill

Hicks, former general manager, Alameda Corridor Transportation Authority; James Preusch, vice president, managing director, A.G. Edwards & Sons, former treasurer, Alameda Corridor Transportation Authority; and Jeffrey D. Holt, vice president, Goldman Sachs & Co.,

senior managing underwriter, Alameda Corridor Project ......................... 3

Steinke, Richard, executive director, Port of Long Beach representing

the Alameda Corridor Transportation Authority Board; Larry Keller,

executive director, Port of Los Angeles; and Rollin Bredenberg, vice

president, service design and performance, Burnington Northern Santa

Fe Railroad .................................................................................................... 30

Letters, statements, etc., submitted for the record by:

Buresh, Tim, director of engineering and construction, Alameda Corridor

Transportation Authority, prepared statement of ...................................... 55

Hankla, James, chief ecexutive officer, Alameda Corridor Transportation

Authority, prepared statement of ................................................................ 49

Hicks, Gill, former general manager, Alameda Corridor Transportation

Authority, prepared statement of ................................................................ 7

Holt, Jeffrey D., vice president, Goldman Sachs & Co., senior managing

underwriter, Alameda Corridor Project, prepared statement of ............... 43

Keller, Larry, executive director, Port of Los Angeles, prepared statement

of ..................................................................................................................... 37

Preusch, James, vice president, managing director, A.G. Edwards & Sons,

former treasurer, Alameda Corridor Transportation Authority, prepared

statement of ................................................................................................... 13

Steinke, Richard, executive director, Port of Long Beach representing

the Alameda Corridor Transportation Authority Board, prepared statement of ........................................................................................................... 32

Wiggs, Larry, job training officer, Tutor-Saliba, prepared statement of ..... 63

(1)

THE ALAMEDA CORRIDOR PROJECT: ITS

SUCCESSES AND CHALLENGES

MONDAY, APRIL 16, 2001

HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON GOVERNMENT EFFICIENCY, FINANCIAL

MANAGEMENT AND INTERGOVERNMENTAL RELATIONS, COMMITTEE ON GOVERNMENT REFORM, Long Beach, CA.

The subcommittee met, pursuant to notice, at 8:58 a.m., in the

Harbor Department Administration Building Board Room, Port of

Long Beach, 925 Harbor Plaza, Long Beach, CA, Hon. Stephen

Horn (chairman of the subcommittee) presiding.

Present: Representatives Horn and Millender-McDonald.

Staff present: J. Russell George, staff director and chief counsel;

Bonnie Heald, director of communications; and Grant Newman, assistant to the committee.

Mr. HORN. This meeting of the Subcommittee on Government Efficiency, Financial Management and Intergovernmental Relations

will come to order.

More often than not congressional hearings are called to examine

a problem. Sometimes it involves an outrageous waste of Federal

taxpayer money, other times it may involve an abusive use of

power. Today’s hearing is different and refreshing. We are here

today to examine the multi-billion dollar transportation project

that, unlike most publicly funded programs of this magnitude, is

nearing completion on schedule and within budget. By this time

next year trains will be speeding their Pacific Rim cargo along the

Alameda Corridor between the Ports of Long Beach and Los Angeles and transcontinental rail networks 20 miles away.

The intermodal project, which includes a 10-mile, 33-foot deep

trench and 29 new bridges will ease traffic congestion and cut noise

and air pollution in each of the seven cities along its path. The

project will also allow cargo from the combined port complex, the

busiest in the Nation and the third busiest in the world, to move

two to three times faster toward destinations throughout the

United States. Nearly one quarter of all waterborne imports currently enter this country through these ports and that volume is

expected to double within the next 20 years. The need for such a

project was clear, the challenges however were enormous.

When the Alameda Corridor Transportation Authority was created in 1989, board members had the daunting task of building a

consensus among seven distinct city governments, huge railroad

companies that were in the process of merging, and Federal, State,

and regional government agencies. The support of all of these entiVerDate 11-MAY-2000 10:48 Apr 29, 2002 Jkt 000000 PO 00000 Frm 00005 Fmt 6633 Sfmt 6633 C:\DOCS\77859.TXT HGOVREF1 PsN: HGOVREF1
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ties was vital to the completion of the $2.4 billion project. Today

we would like to learn how that consensus was achieved. We would

like to hear about the specific challenges, how they were met and

finally how the project is progressing.

There are a number of proposals for similar projects in other cities, such as Seattle and New Orleans, perhaps Houston and others.

In addition, projects are being discussed for other congested California areas north and east of Los Angeles. We hope that today’s

testimony will provide guidance for those who are considering these

proposals. I congratulate all of our witnesses who are here with us

today for their contributions to this highly successful public/private

enterprise.

I would like to welcome our first panel of witnesses who helped

put this project together. Jeffrey Kellogg of the Newark Co., former

Long Beach City councilman and former vice chairman of the Alameda Corridor Transportation Authority Board of Directors; Gill

Hicks, president of Gill Hicks and Associates, Inc., and former general manager of the Alameda Corridor Transportation Authorty;

James Preusch, vice president and managing director of A.G. Edwards and Son and former treasurer of the Alameda Corridor

Transportation Authority; and Jeffrey D. Holt, vice president of

Goldman Sachs & Co., and senior managing underwriter of the Alameda Corridor Project.

On panel two we will hear the stakeholders of this project, the

ports and the railroads. Richard Steinke, the executive director of

the Port of Long Beach, who will also represent the Alameda Corridor Transportation Authority Board of Directors; followed by

Larry Keller, his counterpart, executive director of the Port of Los

Angeles and Rollin Bredenberg, vice president of service, design

and performance for Burlington Northern Santa Fe Railroad.

Our third and final panel will provide an update on the progress

and successes of the project and the challenges that remain. James

Hankla, chief executive officer of the Alameda Corridor Transportation Authority, former city manager of the city of Long Beach,

former chief administrative officer for the county of Los Angeles;

Tim Buresh, director of engineering and construction for the Alameda Corridor Transportation Authority; Jeffrey Brown of the California State Office of Research, who is also representing State Senator Betty Karnette.

I welcome all of you and look forward to your testimony. Let me

explain how we conduct this hearing. Technically we are an investigating committee, and as I said earlier, this is the good luck day

with this committee. We have had about 100 different hearings in

the last 2 years and we will do the same process here. The

minute—if you have a written statement—that we introduce you,

that automatically goes in the hearing record with the gentleman

from my left, and your right, and that will all be put in there with

exhibits and everything else. What we would like you to do is summarize your testimony within 5 minutes. We would like to have a

lot of time for questions and answers, because that is the way we

learn a lot. Your statements are very fine. They have been gone

over by staff and I have had a chance to look at some. So if we can

get panel one up here. You cannot see it apparently, but I can see

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it. Mr. Kellogg is on the right side. Mr. Hicks next to him. That

is Mr. Hicks. Then we have Mr. Preusch and we have Mr. Holt.

I might add for the second panel and the third one, you might

want to just get around here and then it will be more intimate

than having you just sitting and seeing their backs. So why doesn’t

the second panel just come up? We will put you in the right place

when that time comes. Those chairs might even be more comfortable. The commissioners are very good at being comfortable.

This is a beautiful building and we thank all of the people in the

Port for helping us with this Corridor hearing, and you have been

so good in the past when we have had hearings on the Customs

Service and trying to help them, a very fine service.

So we have Mr. Kellogg, Mr. Hicks, Mr. Preusch and Mr. Holt.

Ms. HEALD. Mr. Holt is here and we are trying to find him.

Mr. HORN. Oh, OK. Well he will be the fourth one anyhow, so

it does not matter.

Let me just say that we also swear in all witnesses. So if you will

stand and raise your right hands.

[Witnesses sworn.]

Mr. HORN. The clerk will note the three witnesses have assumed

the oath.

We will now begin with Mr. Jeffrey Kellogg, former Long Beach

city councilman and I think mayor pro tem and former vice chairman of the Alameda Corridor Transportation Authority Board. So,

Jeff, we are delighted to have you here.

STATEMENTS OF JEFFREY KELLOGG, FORMER LONG BEACH

CITY COUNCILMAN AND FORMER VICE CHAIRMAN, ALAMEDA CORRIDOR TRANSPORTATION AUTHORITY BOARD;

GILL HICKS, FORMER GENERAL MANAGER, ALAMEDA CORRIDOR TRANSPORTATION AUTHORITY; JAMES PREUSCH,

VICE PRESIDENT, MANAGING DIRECTOR, A.G. EDWARDS &

SONS, FORMER TREASURER, ALAMEDA CORRIDOR TRANSPORTATION AUTHORITY; AND JEFFREY D. HOLT, VICE

PRESIDENT, GOLDMAN SACHS & CO., SENIOR MANAGING

UNDERWRITER, ALAMEDA CORRIDOR PROJECT

Mr. KELLOGG. Actually by starting with me you are jumping a

little bit ahead because Mr. Hicks was involved with the Southern

California Association——

Mr. HORN. Have we got those microphones OK? The clerk will

check. Can you hear it out in the audience?

Mr. KELLOGG. The problem with these tables is you do not know

where the microphones are unless you look over at them. That is

fine.

Mr. HORN. Fine, but you have got to speak up.

Mr. KELLOGG. It is on.

Mr. Chairman, my involvement is from the beginning of the Alameda Corridor in 1988 as a newly elected member of the Long

Beach City Council. I am one of the original members of that governing board. The beginning process though really began with Mr.

Hicks and the Southern California Association of Governments as

they went through a process of determining the planning for the

growth of the Ports of Long Beach and Los Angeles. I wish I could

sit here today and tell you that I had this great vision, and if I was

4

still in elected office I probably would make that claim, but the fact

remains that I was simply trying to find a way of removing train

traffic and eliminating a lot of the problems that trains were causing in my neighborhoods as a Council member.

Someone showed me a document about this proposed Alameda

Corridor. I got involved more out of luck than anything else. I became one of the original members and I was a chairman, I believe,

four different times of that governing board during my 12 years. It

is probably one of the projects I am most proud of during my tenure as a member of the city council, and also representing the city

of Long Beach on that governing board.

There are too many stories that I have talked to your staff about

on the project that are beneficial to it, some of the challenges along

the way. I could probably—as you mentioned, you many times have

to talk to different public works projects that have not had a success rate, as this one has been. Every time I did go back to Washington, DC, or Sacramento to lobby, it usually began with the following: Good morning, my name is Jeff Kellogg and I am not with

the Metropolitan Transportation Agency. We are not part of the

MTA, because the MTA, or the big dig project in Boston were at

that time at the forefront of how to spend a lot of money and not

necessarily get a lot of results.

If I had to tell you what I felt was the strongest point on the Alameda Corridor that made it successful, it is because of one strong

factor. You had people that were vested in it financially. The Ports

of Long Beach and Los Angeles stepped up. When we went back

to Washington, DC, or Sacramento to ask for additional funding,

we did not say we have no funding, we said we have funding, we

need more funding to make this project work. The strongest point

is to have a partner in this who is willing to step up financially,

whether it be corridor or cities. In other parts of this country who

are trying to do similar projects, if they are not willing to put financial dollars up to make the project initially begin, I believe they

will have a difficult time getting any more support back in Washington, DC, for example.

The other issue that we felt very strongly about, we had a sole

purpose. We are building one corridor to connect the Ports of Long

Beach and Los Angeles to downtown Los Angeles and move the

cargo. We are not trying to do 10 or 15 different items. We did not

have 10 or 15 different political agendas taking place. We had one

agenda, to build this corridor, to help improve moving cargo out of

the Ports of Long Beach and Los Angeles. That impact is positive

for the Federal Government, as well as the local area. For a local

official, it meant less trains running through my neighborhood. So

we had from the very smallest part, as an elected official, all the

way to the top end of government realizing the benefits of it all.

Those two points were critical as I looked at this. Having the

people who were willing to financially invest in the project from the

very beginning and then the community continuing to focus on the

mission statement of what this was to do, and that was to build

this project, not to become social engineers, but to just advance an

engineering project of this magnitude.

Mr. Chairman, that is the best advice I can give to anyone. It

was a wonderful experience for me. I had a tremendous time workVerDate 11-MAY-2000 10:48 Apr 29, 2002 Jkt 000000 PO 00000 Frm 00008 Fmt 6633 Sfmt 6633 C:\DOCS\77859.TXT HGOVREF1 PsN: HGOVREF1
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ing with different people and the Ports of both Long Beach and Los

Angeles. I truly believe it is a model for everyone else to follow.

Thank you, Mr. Chairman.

Mr. HORN. Well, I thank you very much because that was a good

summary, and here we are even before the end of the 5-minute situation.

Mr. Hicks, who was one of the early pioneers in guiding the Alameda Corridor project.

Mr. HICKS. Good morning, Mr. Chairman, ladies, and gentlemen.

Thank you very much for the invitation to speak to you today.

You have asked me to discuss some of the challenges faced by

this project. I am going to speak primarily to the issues prior to

construction. There are other speakers here today who will touch

base on that.

As you know, the Alameda Corridor began modestly as a lowbudget planning study in the early 1980’s and has now developed into a $2.4 billion program, one of the largest public works projects

in the United States. I believe that the success of the Alameda Corridor is due in part to the successful execution of what I call the

seven C’s of project development, and they are communication, coordination, credibility, compromise, consensus, coalition and champions. These C words reflect the necessary components of implementing a complex project involving many stakeholders with competing agendas. Successfully navigating these seven C’s is normally

a prerequisite to obtaining another C word, namely capital.

Conversly, missteps in any of these areas, if serious enough, could

easily sink or derail a major project.

In the early days of the program, one of the key challenges was

what is the project. What is the project definition? And in the early

1980’s, the Southern California Association of Governments created

a Ports Advisory Committee which looked at the options. And after

only 5 months, in March 1982, the Ports Advisory Committee did

reach consensus on a comprehensive list of highway improvements

that included the widening of Alameda Street from the ports to

Route 91.

From 1982 to 1984, the Ports Advisory Committee focused on

railroad access for the ports, and in December 1984 the SCAG Executive Committee adopted a plan for the consolidation of all portrelated railroad traffic onto the former Southern Pacific San Pedro

Branch. This corridor is largely industrial and thus more compatible with the heavy freight trains than three other harbor-access

lines that cut through residential neighborhoods.

When the plan for the consolidated corridor was originally proposed in 1984 the railroads looked at it and were generally opposed

because, of course, they had their own privately owned rights-ofway. It was like asking three neighbors on a residential street to

share the same driveway. Ultimately however, through simulations

of the railroad traffic and other studies, we were able to convince

the railroad that, yes indeed, the project would speed up the trains

and reduce the significant amount of delay to their own trains;

thus, improving the efficiency of the rail line and facilitating the

movement of international cargo were important objectives, along

with the goals of reducing vehicular delays at grade crossings, improving emergency access, and reducing noise and air pollution.

6

The SCAG study demonstrated that the consolidated corridor

would be a win-win solution for all concerned.

Another major challenge, of course, was obtaining additional

funding beyond the seed funding that the ports provided in the

early days of ACTA. We first approached the L.A. County Transportation Commission, which was the earlier agency before the

MTA. Initially there was not even a category in which to compete.

We were not a freeway, we were not buses, we were not commuter

rail. For 2 years we lobbied the agency for a category for goods

movement so that the Alameda Corridor could compete in this

arena. Eventually over time we were successful in getting commitments from the MTA for $347 million in State, Federal and county

grants. These efforts were also supported by the California Transportation Commission, another major champion of that project.

One of the highlights of the program, of course, was obtaining

the Federal loan in 1996 and 1997. Through a variety of legislation,

the ISTEA, the National Highway System Desigination Act which

desiginated the Alameda Corridor as a high-priority corridor, we

became eligible for the innovative financing. In 1996, the Omnibus

Budget legislation allowed for a $58.68 million appropriation to

support a $400 million loan. In 1997, in January, President Clinton

held a signing ceremony for the loan at the White House.

This process, culminating in the landmark loan, was the result

of extensive communications, coordination, credible analyses of national economic impact of port activity, consensus and coalition

building, compromise and the support of key champions within the

legislative and executive branches of the State and Federal Governments. Members of ACTA’s coalition and advocacy team successfully communicated the key message that the project was vital to

the health of the Nation’s economy because it would dramatically

improve a critical international trade corridor linking every other

State in the Nation to the largest port complex in the United

States. Congressman Horn and several of his colleagues were true

champions in this endeavor and deserve enormous credit for the

successful effort.

Mr. Chairman, there are other challenges that I have listed in

my written testimony that you can read at your leisure, but in the

interest of time, I would like to stop here.

Mr. HORN. Well thank you very much, Gill. You have been a real

pioneer and I am sure you will have plenty of people saying how

did you do it and how can we do it. So that will be helpful.

Our next presenter is James Preusch, the vice president and

managing director of A.G. Edwards & Sons, former treasurer of the

Alameda Corridor Transportation Authority. He also was the chief

financial officer to the Port of Los Angeles. So he really knew the

territory.

Mr. Preusch.

[The prepared statement of Mr. Hicks follows:]

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Mr. PREUSCH. Thank you, Mr. Chairman, and good morning. It

is a pleasure to be here. I want to thank you for your support and

encouragement of the ACTA project. It was one of the things that

helped us move the financing along.

Let me talk about several factors that led to the success in financing the ACTA project.

First, I think was the recognition that ACTA represented a solution to a bona fide need. As Mr. Hicks pointed out, in the early

1970’s and the 1980’s, the three rails were using different routes;

asking them to consolidate, was vital to eliminating 200 separate

points of conflict where surface streets crossed—met rail lines, creating traffic conflicts, safety, noise and environmental impacts at

each one of those points. The fact that there was a very clear and

substantive need, I think brought people together to resolve that

need. The ACTA project was the outgrowth and the solution.

Second, the project developed a great deal of regional support

and involvement. As people began to understand what the project

represented and really grasp the nature of the challenge, they recognized this as a vital solution to resolving that conflict. I think an

important aspect was the recognition that cargo would come to our

country through the San Pedro Bay ports regardless of whether or

not there was a plan to deal with that eventuality or not. The fact

that the cargo was coming motivated people to do something about

it. There was little that could be done to stop the cargo movement

and the recognition that it would be here motivated people

throughout the community to get on board to find a workable solution.

In the early 1990’s, as the concept was beginning to take shape,

there were some preliminary estimates of costs that led to several

funding strategies. The initial thinking included right-of-way funding by the ports, funding from State and local sources, bond financing supported by a truck or rail user-fee and a Federal grant of

$700 million. It soon became clear that in spite of the need and

support for ACTA, a Federal grant of that magnitude was simply

out of the question. Many Members of Congress and the administration encouraged flexibility and some cooperation in resolving

that problem, and we saw creative, experienced staff members

within the U.S. DOT and with the new latitude in the ISTEA legislation find ways to craft a loan for ACTA’s benefit. The cargo use

fee which grew out of the negotiations with the railroads was essential to supporting the debt structure that was necessary to provide the financing.

In 1994, the ports made a major financial commitment by purchasing miles of railroad right-of-way potentially needed for the

project for some $394 million. That was a very bold move, but that

extraordinary commitment of cash when ACTA’s costs were unknown and its financial viability unproven was vital. The use-fee,

which was negotiated as part of the funding package, was essential

in assemblying and leveraging those funding sources.

I want to talk for just a minute more about the outgrowth of the

Federal loan in the TIFIA legislation that came about in TEA–21.

TIFIA, as you know, provides $10.6 billion in loanable money between 1999 and 2003. When ACTA received its loan, the loan was

negotiated, and the first $140 million draw was received before the

12

ACTA costs were clearly known or the details of the bond structure

were in hand. Today the TIFIA process has become more conservative to the frustration of many of the applicants. The result has

been some stagnation. I would like to encourage that in going forward these projects find ways to become more flexible with TIFIA

funding that can go to the ports or to ACTA, and to more flexibility

in using TIFIA that might be possible with charges during reauthorization.

Thank you.

[The prepared statement of Mr. Preusch follows:]

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Mr. HORN. Well, that is very helpful and I am sure in the question period, maybe you will reveal some of the other options that

you must mentioned would be needed if someone is going to try to

replicate this.

Is Mr. Holt—somebody said he is in the building—— Ms. HEALD. No, he is not in the building.

Mr. HORN. Well, we will go to the next panel then, Let me go

through two panels I think and then we will have questions.

Panel two: Richard Steinke, executive director, Port of Long

Beach. Just stay where you are, folks, we will have a grand convention here before the end. Welcome, Richard. And then Larry Keller,

executive director of the Port of Los Angeles; and Rollin

Bredenberg, vice president, service design and performance, Burlington Northern Santa Fe Railroad.

So we will start with Mr. Steinke.

STATEMENTS OF RICHARD STEINKE, EXECUTIVE DIRECTOR,

PORT OF LONG BEACH REPRESENTING THE ALAMEDA CORRIDOR TRANSPORTATION AUTHORITY BOARD; LARRY KELLER, EXECUTIVE DIRECTOR, PORT OF LOS ANGELES; AND

ROLLIN BREDENBERG, VICE PRESIDENT, SERVICE DESIGN

AND PERFORMANCE, BURNINGTON NORTHERN SANTA FE

RAILROAD

Mr. STEINKE. Good morning, Mr. Chairman.

I would like to tell you a little bit about what I consider the challenges and successes of the Alameda Corridor transportation

project. As executive director of one of the Nation’s busiest ports

and as a member of the governing board of ACTA, I can tell you

that the word that best describes ACTA to me is perseverance.

Most people think that ACTA is only a few years old, but as Mr.

Kellogg, Mr. Preusch, and Mr. Hicks indicated, it really has its origins going back to the early 1980’s. This intermodal project was

first conceptualized during this time and it has taken over 15 years

to transition from concept to design and now to construction. With

any large-scale project, there will always be challenges, and during

this period of time, this project has certainly seen its share of these

obstacles that it has had to overcome.

I stand before you today happily being able to tell you that we

have overcome these obstacles and are scheduled for an on-time

and under-budget completion of ACTA in April 2002. There has

been a tremendous amount of inter-governmental cooperation by a

whole host of entities. First of all, there had to be cooperation between the Port of Long Beach and the Port of Los Angeles. Also

we share one bay, we are two separate and distinct harbor departments within two different cities. And while we compete vigorously

for customers and market share, we also have recognized that we

must cooperate on regional infrastructure projects. The Alameda

Corridor is a good case in point. The project traverses important

corridor cities and cooperation and consensus had to be attained

from the cities of Long Beach, Los Angeles, Carson, Compton,

South Gate, Huntington Park and Vernon. A number of major regional governmental organizations have also had to be involved in

this project including the Metropolitan Transportation Authority,

Southern California Association of Governments, Metrolink, SouthVerDate 11-MAY-2000 10:48 Apr 29, 2002 Jkt 000000 PO 00000 Frm 00034 Fmt 6633 Sfmt 6633 C:\DOCS\77859.TXT HGOVREF1 PsN: HGOVREF1
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ern California Regional Rail Authority and others. A significant

role has been played by the State of California and our Federal

Government has served an essential role through the various agencies involved in reviewing and approving the project and funding

for the same. You can mix or you can combine any or all of these

entities because all of us have had to work cooperatively through

a myriad of issues to make this project work successfully. Years

have been spent in negotiations on issues ranging from permits

and environmental documentation to funding issues and construction, to name a few. I will not go into detail about the funding of

the project, but suffice to say that besides the Ports of Long Beach

and Los Angeles, various other sources of governmental funding

have been used to finance the $2.4 billion project, including the

$400 million loan from the Department of Transportation.

This is truly a public-private partnership, and while I previously

mentioned the governmental stakeholders that have been involved

in this project, it also required cooperation with the railroads.

When this project started, we were dealing with three major railroad companies—Southern Pacific, Union Pacific, and Santa Fe, all

who had separate lines that ran to the ports. By the time all of the

operating agreements and final documents were completed, there

were mergers and acquisitions that resulted in our railroad partners being Union Pacific and Burlington Northern Santa Fe.

Probably the key aspect of this project has been the recognition

by all of the parties that this is a critical and beneficial infrastructure project that will positively impact not only southern California, but also the State’s and the Nation’s surface transportation

system. Without that recognition and without the various parties

working toward the greater good, the project would still be in a

planning mode. We all look forward to this time next year when

all the various entities will rightfully be able to say they contributed to the success of a critical linchpin in our Nation’s transport

system of goods movement. This has been a great example of intergovernmental interdependence that will assure the continuing

movement of goods from our Pacific gateway ports to consumers

across the country.

Thank you.

Mr. HORN. Thank you.

[The prepared statement of Mr. Steinke follows:]

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Mr. HORN. Let me introduce Ms. Millender—Juanita MillenderMcDonald. She has been very helpful on the Alameda Corridor and

we are glad to have her here this morning.

Mr. Holt has arrived now and what I would like to do is swear

in Mr. Holt and the three witnesses.

[Witnesses sworn.]

Mr. HORN. The clerk will note that the fourth witness of panel

one and all of panel two have taken the oath.

So we now go to the executive director of the Port of Los Angeles,

Larry Keller. Glad to have you here.

Mr. KELLER. Good morning, Mr. Chairman and Congress Member Millender-McDonald.

We are proud to be one of the founding partners of the Alameda

Corridor and thank you for this opportunity to appear before your

subcommittee to discuss this vital infrastructure project. I would

also personally like to thank both of you for your support of this

project over the years that it has been in existence. It is much appreciated and it has made it possible.

At the core of our success to date has been the significant intergovernmental cooperation and bipartisan support received from all

levels of government. It has been unprecedented and certainly signifies the value placed on the need for seamless transcontinental

cargo delivery. In reality, the beneficiary of the Alameda Corridor’s

successful completion and operation is the American public, to

whom our domestic and global transportation efficiency is critical.

In the early 1980’s, it was apparent an improved infrastructure

would be required if the cargo transportation system serving the

Ports of Los Angeles and Long Beach was to handle the predicted

growth in cargo through the west coast ports. In the ensuing two

decades, cargo through southern California has increased more

than 700 percent. Globally, containerization has become the undeniable mode for efficient, cost-effective cargo handling and intermodalism has become the delivery mode of choice.

Our growth projections proved to be conservative. Container

growth at Los Angeles in the last 5 years has been an explosive

76 percent. Business has been brisk despite economic uncertainties

with some of our trading partners around the world starting in

1997. In fact, the Port of Los Angeles saw a 27 percent overall increase in container cargo last year alone. With our neighbor, the

Port of Long Beach, our total cargo places us third in the world behind the Ports of Singapore and Hong Kong.

Needless to say, we must be prepared for continuing growth

surges in the near and long term. Our planning has been likened

to a chess game where you must contemplate at least 12 moves

ahead and there is no single all-encompassing solution for our future. The puzzle of our highway and rail efficiency has numerous

pieces which must fit precisely together in order to achieve a functioning whole. No longer can we afford to have cross traffic at

intersections which slows cargo transit and delays our people.

And as environmentally responsible public agencies, we are also

charged with addressing air emissions and other quality of life

issues caused by idling vehicle traffic and costly delays to people

and commerce. One answer was to design a better corridor for the

short but critical 20-mile stretch between the ports and downtown

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railheads. That piece of the puzzle was the construction of the Alameda Corridor.

At the extreme south end of the Corridor are port grade separations, street improvements and similar infrastructure projects serving major terminal developments designed to meet current and future transportation needs. Efficient infrastructure is the centerpiece of our future potential in planning for road and rail improvements and is a normal but important part of our terminal design

work.

At the Port of Los Angeles alone, we have spent more than $200

million in recent years for infrastructure improvements to link the

Corridor with our Pier 300 and 400 projects. These Pier 300 and

Pier 400 landfill and terminal projects are dependent upon the Corridor and highway access to carry almost 5 million containers of

cargo today alone. For our two ports, that number can be expected

to swell to about 24 million containers in just 20 years.

No longer are container terminals built on 100 acres, which was

common just 10 years ago. When completed in less than 4 years,

our newest terminal on Pier 400 will cover almost 500 acres, built

on a manmade landfill of some 600 acres. This is responsible planning and careful readiness.

Our projections are matched by those of our customers to develop

the best technology, design and logistics to set the standard for our

industry. We are committed to continued improvements in coordination with the Alameda Corridor project completion early next

year.

Further, the Ports of Los Angeles and Long Beach are jointly

pursuing an MTA grant for $7.2 million for an intelligent transportation system to put the whole thing together. We have each committed over $1 million in matching funds because we feel so strongly about efficient transportation. The goal is to provide real time

traffic information to truckers using the ports, using tools like

interactive transit signage and programmable signs driven by TV

cameras mounted on freeway bridges. These measures in sync with

express rail access provided by the Corridor will ensure that all

cargo, both local and intermodal loads, will move swiftly from our

docks to their ultimate destinations.

Growth will continue here. That is a given. The reason for our

continued growth is quite simple. Today, half our cargo stays in our

five-county area to serve this consumer pool of 16 million people.

We are a distribution and manufacturing hub for import and export cargo. In about 10 years, it is estimated that the Los Angeles

regional population could swell to 20 million people. The addition

of a population the current size of the city of Los Angeles. The

other 50 percent of our cargo goes to points east of the Rockies because of our excellent access to America’s rail system.

America depends on us, we depend on you, we thank you for your

efforts. Projects like the Alameda Corridor ensure that we can in

fact deliver as promised.

Thank you very much.

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Mr. HORN. Thank you for that very succinct presentation.

And now Rollin Bredenberg is vice president, service design and

performance for the Burlington Northern Santa Fe Railroad. Welcome.

[The prepared statement of Mr. Keller follows:]

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Mr. BREDENBERG. Good morning, Mr. Chairman, ladies and gentlemen, thank you for the opportunity to speak to you today. I am

Rollin Bredenberg, vice president, service design and performance

with Burlington Northern Santa Fe.

When the Corridor first started being negotiated, I was at that

time general manager on the Southern Pacific Railroad and so

have seen this from a couple of angles. I can tell you from either

angle it was not the railroad’s great vision that got the project

started.

As a matter of fact, the different railroads had different slants

on whether the project should even go or not. Southern Pacific had

arguably the best existing infrastructure with the San Pedro and

Wilmington branches serving as a paired track feeder to the ports.

Southern Pacific also had the ICTF facility, the near dock facility,

that facility started producing so many trains that even their

paired track operation started to get slow, and because of other

problems that the Southern Pacific had, even Southern Pacific

went along with this. Union Pacific had their harbor subdivision,

a single track, unsignaled mainline. The Santa Fe was in probably

the worst position with its harbor subdivision, a 23-mile branch

line that goes down through the L.A. Airport and Inglewood area.

The infrastructure that existed in the mid-1980’s, and remains

today substantially, could not and has not sustained growth. When

the Corridor opens up in April 2002, we will be past the time when

we needed to have that corridor open.

The use-fee that the railroads will be paying for the use of the

Corridor can be absorbed by traffic on the Corridor because much

of that traffic would have to be drayed at a higher cost to facilities

in Vernon or Los Angeles. Not only that, but today there is no

place to expand intermodal production lift facilities anywhere in

the Los Angeles basin short of San Bernadino, on our railroad.

The project model for the Alameda Corridor is not a model that

can be replicated other places that do not have the fundamental

franchise need or infrastructure need by the railroads to sustain

growth. That is the reason why the railroads over time will retire

a $1.1 billion bond and I believe $400 million loan. At the rate of

$30 per 40-foot container, we will be paying and passing the costs

on to our customers or absorbing in margin ourselves what we

would not have been able to do without this project.

As we move toward substantial completion of the project, Union

Pacific and BNSF and ACTA have been able to reach consensus on

all of the important decisions necessary for a successful implementation and operation.

Thank you.

Mr. HORN. Thank you very much. That will be helpful in the

question period there.

Let us go back now to Mr. Jeffrey D. Holt, vice president, Goldman Sachs & Co., senior managing underwriter for the Alameda

Corridor Project. Thank you, Mr. Holt, for coming.

Mr. HOLT. Thank you, Mr. Chairman and distinguished members.

My name is Jeff Holt. I am a vice president of Goldman, Sachs

& Co., and I am the manager of the municipal finance division of

the Fixed Income Currency and Commodities Group, and my offices

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are in San Francisco. I served as the senior managing underwriter

for the Alameda Corridor project. It is my pleasure to address the

committee concerning the financing aspects of the Alameda Corridor project. The views I present today are my own and do not

necessarily represent those of Goldman, Sachs & Co.

In my business, I see many great proposals for new infrastructure ideas. Engineers bring in beautiful conceptual drawings, planners project tremendous statistical benefits and policymakers

stress the need for such projects. In the end, each and every one

of these projects comes down to financial feasibility. The big question is always, how do we pay for the large public works projects

that everyone needs but that no one agency, on its own, can afford.

The Alameda Corridor is possibly the best example of how multiple

parties in a public/private partnership can come together to fund

such large projects.

The effort started with the ports of Los Angeles and Long Beach.

Of all the stakeholders, one group, the ports, finally stepped up to

take the leadership position, and they brought their checkbook. The

all-important $400 million in development money used to secure

the right-of-way was only surpassed in importance by the many

dedicated and skilled personnel they lent to the effort on a full-time

basis. The ports provided the organization, the vision, and the enthusiasm to make the project happen.

Next the railroads agreed to combine three separate lines into

one. They proved ultimately reasonable through the negotiations

and the entire debt burden of $1.6 billion will be paid from the $30-

per-box corridor user-fee.

The Federal Government added several critical financing components. Through the local MPO, the LACMTA, the Federal Government is passing through $347 million in grant funding for the

project. The LACMTA is graciously accelerating that funding

through its own financing efforts in order to turn those future

grants into construction dollars now. In addition, the U.S. DOT

closed the last portion of the funding gap with a very innovative

loan. The U.S. DOT staff came to the finance team early in the

process and asked us how they could be helpful. We said give us

more grants. They said the grant well is dry, so how about a loan.

We said we can borrow in the tax exempt market, why do we need

taxable Federal loans. They said, we can give a loan with very favorable terms. So we got busy and designed a loan whose terms

one could only describe as being very close to straight equity, and

they agreed. That $400 million loan finished the funding package

and completely closed the gap. That loan stands as a prototype for

the U.S. DOT’s now popular TIFIA program. The key piece to that

loan was a $59 million congressional appropriation in a key budget

vote in a key budget year. That $59 million appropriation for a

loan-loss reserve made a $400 million loan available which, in turn,

made it possible to borrow an additional $1.2 billion from the capital markets to complete the $2.4 billion total project cost.

I also want to compliment the ACTA Board. During the final

stages of the process, the negotiations with the railroads made the

project costs increase by several hundred million dollars. Rather

than succumb to whispers of potential cost overruns, the ACTA

board held fast in their courage that the project was feasible in its

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proposed form and size, and they moved ahead with the final approvals. Last, bondholders stepped forward and provided $1.2 billion in

bond proceeds to complete the funding package. Interest rates were

very favorable at the time. Swarms of lawyers wrote stacks of documents, including a 650-page official statement, the primary disclosure document for the municipal market. In the end, the projected

revenue stream was converted to construction dollars with the

maximum leverage that the capital markets would allow and with

the least risk to the principals possible. The bond financing was

non-recourse to the ports and non-recourse to the railroads. Bondholders accepted a basketful of risks, including construction risks,

interruption risks and long-term business, revenue and economic

risks. The ports provided a limited backup pledge, which under

current projections will never be drawn. This was groundbreaking

financing in many ways, but most importantly, it was the first time

that any financing for intermodal cargo facilities had been secured

almost solely from the container cargo stream coming through a

single gateway port. The strong market forces that make containers come through the Los Angeles/Long Beach area provided the

credit and security to bondholders. So in the end, the problem became the solution.

The blended cost of capital for the combined financings was near

6.5 percent. On the date of financial closing, it was expected that

the debt service for the $1.6 billion in debt would have been paid

off on the last possible day that container use charges could be collected. As you all are well aware, the San Pedro Ports have been

growing at double digit numbers for several years running. Given

the tremendous growth through the last 3 years and the fact that

the management team has brought the project in on time and on

budget, it is now expected that the Federal loan will be paid off

many, many years early. By all financial standards, this project is

a raging success.

In closing, I must say that it was the governmental partners that

brought the critical elements together for a successful project. They

saw the original need for the Corridor using regional long-term

planning. They brought all of the parties together across many jurisdictions to solve the organizational, logistical and financial problems. They staffed the Carson office with dedicated and brilliant

men and women, and most importantly, they have, and still have,

the will to succeed.

Thank you.

[The prepared statement of Mr. Holt follows:]

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Mr. HORN. Thank you. I think we will now—if panel three is

here, we will merge you in and then we can put questions to all

of you and not have to replicate it. I see Mr. Hankla, Mr. Buresh,

Mr. Brown and Mr. Wiggs are here.

Gentlemen, we do have an oath to be administered, so Mr. Holt

and the new panelists please rise.

[Witnesses sworn.]

Mr. HORN. The clerk will note that all five of the witnesses have

affirmed the oath. That duty done, we will start with Mr. Hankla,

chief executive officer, Alameda Corridor Transportation Authority,

and as I noted, former city manager of Long Beach, former chief

administrative officer of the largest county in the Nation, which is

Los Angeles County. So thank you for coming.

STATEMENTS OF JAMES HANKLA, CHIEF ECEXUTIVE OFFICER, ALAMEDA CORRIDOR TRANSPORTATION AUTHORITY;

TIM BURESH, DIRECTOR OF ENGINEERING AND CONSTRUCTION, ALAMEDA CORRIDOR TRANSPORTATION AUTHORITY;

JEFFREY BROWN, CALIFORNIA STATE OFFICE OF RESEARCH, REPRESENTING STATE SENATOR BETTY

KARNETTE; AND LARRY WIGGS, JOB TRAINING OFFICER,

TUTOR-SALIBA

Mr. HANKLA. Thank you, Mr. Chairman and Congresswoman

Millender-McDonald. It is always nice to see both of you. My name

is Jim Hankla. I am the chief executive officer of the Alameda Corridor Transportation Authority, known by the acronym ACTA. We

are the public agency building the Alameda Corridor rail cargo expressway, otherwise known as a toll road for trains.

Thank you for inviting us here today to discuss how our project

came together and how we have benefited from intergovernmental

cooperation. At ACTA, we believe very strongly in government efficiency and think there are good lessons to be learned from our experience in this area, so we are very grateful for the opportunity

to appear before you today.

I especially want to thank you, Mr. Chairman, and also Congresswoman Millender-McDonald for your longstanding and active

support of the Alameda Corridor project. I doubt that this project

would be in existence today were it not for your efforts. As you

know, intergovernmental cooperation has been at the heart of the

success of the Alameda Corridor project.

In 1981, a Ports Advisory Committee was created in response to

growing concerns about the ability of ground transportation systems to accommodate increasing levels of traffic in the port area.

The committee was formed by the Southern California Association

of Governments. Its members included representatives of the ports,

the U.S. Navy, the Army Corps of Engineers, the railroads, the

trucking industry, and the Los Angles County Transportation Commission, the predecessor agency to the Los Angeles County MTA.

Perhaps the most basic example of intergovernmental cooperation can be found in the very structure of the Alameda Corridor

Transportation Authority itself. ACTA is a Joint Powers Authority

created by the cities of Los Angeles and Long Beach in 1989. The

seven-member governing board includes representatives from each

city council, two representatives from each port and a representaVerDate 11-MAY-2000 10:48 Apr 29, 2002 Jkt 000000 PO 00000 Frm 00050 Fmt 6633 Sfmt 6633 C:\DOCS\77859.TXT HGOVREF1 PsN: HGOVREF1
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tive from the Los Angeles County Metropolitan Transportation Authority.

By putting aside their friendly but unmistakable rivalry to cooperate on the Alameda Corridor project, the two ports are benefiting not just the region but the entire Nation, and they should be

praised for their leadership.

In the early 1990’s, ACTA began reaching out to Members of

Congress to line up bipartisan support for the project. Members of

Congress and elected officials at all levels were invited to the port

area to see for themselves the critical need for the Alameda Corridor. In 1995, Congress approved legislation that identified the Alameda Corridor as a project of national significance. I should note,

Mr. Chairman, that as a Member of Congress, you and the Congresswoman were both instrumental in the success of this effort.

The congressional identification of the Alameda Corridor as a

project of national significance was the trigger needed to secure

Federal funding for the project. In 1997, Congress appropriated $57

million needed to back a Federal loan for the project, and in 1998,

the U.S. Department of Transportation authorized a $400 million

loan for the Alameda Corridor project. Neither of these actions

would have been possible without a broad coalition of support from

elected officials and our strategic partners in the Federal Government.

The process that resulted in the Department of Transportation

loan became the model for the Transportation Infrastructure Finance and Innovation Act of 1998 [TIFIA]. Through TIFIA, the Department of Transportation and the Federal Highway Administration now provide financial assistance to projects across the country

identified as being nationally significant. I understand that the

Federal Government is considering an expansion of this program.

I can tell you unequivocally that this innovative program worked

well for ACTA. In effect, it allowed us to leverage Federal financial

support to complete our funding package with money from the public and private sectors, which I will get into in a moment.

At the State level, ACTA worked closely with members of the legislature, Caltrans’ staff and the California Transportation Commission to include the Alameda Corridor in short and long-range

plans, and to expedite its funding. Through Caltrans, ACTA also

received a grant as partial funding for a major rail/rail grade separation, known as the Redondo Junction, to grade separate freight

train movements from commuter and intercity passenger rail services, thus providing benefit to both freight and passenger rail services.

At the local level, we worked closely with the Los Angeles County

MTA to set aside State and Federal grant funds, as well as local

transportation sales tax revenue that MTA allocates at its discretion for use on the Alameda Corridor project.

The ports, of course, provided the most essential risk capital,

$394 million for rights-of-way purchases and startup financing.

Innovative financing was provided. The collective assistance offered by the Federal, State and local agencies and elected officials

provided the base funding—the leverage if you will—for the biggest

piece of our innovative financing package, more than $1.1 billion in

proceeds from revenue bonds sold by ACTA. Approximately 55 perVerDate 11-MAY-2000 10:48 Apr 29, 2002 Jkt 000000 PO 00000 Frm 00051 Fmt 6633 Sfmt 6633 C:\DOCS\77859.TXT HGOVREF1 PsN: HGOVREF1
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cent are taxable bonds and the remaining 45 percent are tax exempt.

The bonds and the Federal loan are to be retired with revenues

from the fees paid by the railroads for use of the corridor. These

fees are based on the number of full and empty cargo containers

hauled by the railroads on the corridor. The fee program is the

product of the successful partnership developed between ACTA and

the railroads that transport freight from the ports. I sometimes

refer to this, as I said earlier, as a toll road for trains.

In total, ACTA’s innovative $2.4 billion financing package breaks

down as follows: 51 percent from revenue bonds; 18 percent from

Federal loans; 18 percent from the ports; 8 percent from California

State grants and 5 percent from other sources, much of it administered through the Los Angeles Metropolitan Transportation Authority.

The Alameda Corridor project truly is a public/private partnership that has benefited from the cooperation of our strategic partners, the multiple Federal, State and local agencies, elected officials and, of course, the railroads.

Because of our success in multi-agency cooperation, ACTA has

been approached numerous times by organizations planning large

transportation related infrastructure projects. We are happy to

share our experiences with them because we believe the public benefits from efficiencies achieved when government agencies put

aside competition to cooperate for the greater good.

We would also be pleased to provide any guidance that will assist

the subcommittee in applying our experiences to other programs

and projects.

Thank you again for having us here today, Mr. Chairman. We

would be happy to address any questions you may have.

Mr. HORN. Thank you.

Mr. Tim Buresh is director of engineering and construction, Alameda Corridor Transportation Authority. Mr. Buresh.

[The prepared statement of Mr. Hankla follows:]

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Mr. BURESH. Good morning, Mr. Chairman and Congresswoman.

If you will please refer to the slide show I will use to accompany

my remarks, I will provide a brief description of the project and a

status report of construction.

As has already been mentioned, the Corridor is a 20-mile raillink between the ports and the transcontinental railroads which

are located just east of downtown Los Angeles. The Corridor is

being built primarily to smoothly accommodate an exponential increase in cargo shipped through the ports. Port cargo volume doubled in the 1990’s. By 2020 those volumes are expected to triple to

approximately 24 million containers per year. Unfortunately the

existing rail system now serving the ports, two railroads with four

low-speed branch lines, are insufficient to handle such volumes.

Trains on the existing lines, which are often more than a mile

long, typically travel at less than 15 miles an hour and the system

can only accommodate about 20 unit trains per day. This threatens

the region’s competitiveness in international trade and causes

major delays of vehicle traffic at street-level railroad crossings

throughout the Los Angeles Basin. On the Alameda Corridor, these

trains will now travel at over twice their current speed and the

Corridor will be able to accommodate over 100 unit trains per day,

a five fold increase.

How do we accomplish that kind of increase? By consolidating

the rail lines into a single two-track expressway that is completely

grade-separated and eliminates the conflicts at more than 200

street-level rail crossings.

Besides safeguarding the region’s competitiveness in the global

marketplace and easing traffic congestion, the Alameda Corridor

has the added benefits of reducing air pollution from idling cars

and trucks and slower-moving trains and cutting noise pollution

from trains. The Alameda Corridor is one of the largest air abatement projects in California. We are also providing job training and

placement services to 1,000 residents of Corridor communities, a

societal benefit that will last well beyond the construction of the

Alameda Corridor. Mr. Wiggs will expand upon this point later.

The Corridor is a large, complex project. It is one of the largest

transportation projects in the Nation and currently the largest single public works project in California. The centerpiece of the project

is the Mid-Corridor Trench, a 10-mile long, 30-foot deep trench that

will carry trains below ground level between State Route 91 to the

border separating the cities of Vernon and Los Angeles. At this

date over 6 miles of the trench has been excavated, track work is

under way with over 3 miles of permanent track already in place,

as you can see on this slide.

There are over 30 bridges as part of the Mid-Corridor project. At

this time only four bridges remain to be completed. Twenty-six are

already opened up to traffic, as is this one at Zoie Street in Huntington Park. By this fall the trench structure will be complete and

all bridges will be in place. Track work and street reconstruction

will continue through the spring of 2002.

There are many construction elements that make up the Alameda Corridor. Besides the Mid-Corridor Trench, the two biggest

pieces are the Henry Ford Avenue grade separation on the south

end and the Redondo Junction grade separation at the north end.

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This photograph is a picture of the Henry Ford Avenue grade

separation, which replaces a single track rail with a mile long twotrack rail bridge over the Dominguez Channel and State Route 47

with transition ramps at Henry Ford Avenue.

The Redondo Junction grade structure is a bridge structure

stretching the length of eight football fields in the vicinity of Washington Boulevard and Santa Fe Avenue in Los Angeles. This

project separates passenger rail lines from cargo rail lines by elevating Amtrak and Metrolink commuter tracks above the Alameda

Corridor mainline. This project will be completed and opened up in

July of this year with an immediate benefit to all of the passenger

rail which uses it daily.

Right now, we are in the middle of full-scale construction up and

down the 20-mile route, with up to 1,500 people working on various

construction projects on any given day. These projects are rapidly

working toward completion. Major project segments will be completed and opened to traffic this year.

I am pleased to report that the Alameda Corridor project is on

schedule to open on April 15, 2002. This was the original project

completion date and there has been no schedule delay to this

project. I would also like to report that ACTA remains well within

our original budget of $2.4 billion.

Any project of this scope inevitably encounters significant hurdles in the construction process that can lead to delays. There are

many reasons why our project remains on schedule, but at the top

of the list are our agreements with the corridor communities and

our decision to use a design-build contract for the Mid-Corridor

Trench.

ACTA has Memoranda of Understanding [MOUs], with each of

the cities along the route detailing expedited permitting processes,

haul routes for construction traffic and the processes for lane closures and temporary detours. By agreeing in advance on these and

other issues, we have streamlined a complex construction process.

For instance, the Santa Fe Avenue bridge that you see here required the cooperation of the city of Los Angeles, the city of Vernon

and Los Angeles County, in addition to ACTA, to become a reality.

On the Mid-Corridor design/build project, we have saved an estimated 18 months in project delivery by using the design/build approach. The design/build approach allows for the overlapping of

some design and construction work. ACTA has obtained design/

build authority through a city of Los Angeles ordnance. This enabled ACTA to award the Mid-Corridor contract based on the lowest ultimate cost as opposed to the traditional bid process. This

contract ensures that the contractor’s work will be completed by a

fixed date and a fixed cost or be subject to significant financial penalties.

These are just two of the many examples of how ACTA has

cleared some hurdles and saved time by making the construction

process more efficient.

ACTA continues to face strategic challenges in completion of the

project. For example, ACTA will be obtaining final environmental

permits for stormwater discharge. ACTA has installed state-of-theart stormwater treatment and collection systems. However, some of

the proposed discharge standards are extremely stringent. For exVerDate 11-MAY-2000 10:48 Apr 29, 2002 Jkt 000000 PO 00000 Frm 00057 Fmt 6633 Sfmt 6633 C:\DOCS\77859.TXT HGOVREF1 PsN: HGOVREF1
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ample, falling rain may be too contaminated to be discharged into

the Los Angeles River and San Pedro Bay estuaries. We continue

to strive for a common-sense solution to this situation.

The ports in the Los Angeles region have continued their rapid

growth. Mr. Keller outlined many of those statistics in his remarks.

ACTA is taking all reasonable steps to ensure that there is adequate capacity to meet this demand. The trench and north end of

the project definitely have adequate capacity for the foreseeable future. At the south end, ACTA is strengthening connections between

the ports and to the Corridor. For example, this photograph shows

that the existing connections to Terminal Island must be expanded

within a few short years. This will require a new bridge. ACTA is

working cooperatively with the ports and the Coast Guard to deliver a less expensive bridge which will save time as well as cost.

ACTA will continue to explore other opportunities to enhance its

capacity and efficiency.

That concludes my remarks, Mr. Chairman.

Mr. HORN. Thank you very much for that presentation. It gives

us a better view. OK, we will now go to Mr. Jeffrey Brown, the

California State Office of Research representing State Senator

Berry Karnette.

[The prepared statement of Mr. Buresh follows:]

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Mr. BROWN. Good morning, Chairman Horn, Congresswoman

Millender-McDonald, I am Jeff Brown with the California Senate

Office of Research. I am here today to speak on behalf of State Senator Betty Karnette. Unfortunately the Senate floor session has

prevented Senator Karnette from attending today’s hearing. But

she would like to thank you for the opportunity to comment today

on the Alameda Corridor, which the Senator truly believes to be

America’s Corridor of National Significance.

In addition, Senator Karnette would like to thank all of the men

and women of the Alameda Corridor Transportation Authority

[ACTA]. It is their world-class professionalism and dedication that

have delivered one of America’s largest transportation projects on

time and on budget. Moreover, ACTA not only implemented the

Nation’s major transportation corridor with efficiency and innovation, but incorporated a jobs development and training program to

assist in developing a sustainable economic development effort for

the Alameda Corridor region.

Given the significant growth in international trade, and the increasing share of rail and freight cargo moving east and west, there

is a critical need to effectively implement a comprehensive regional

transportation plan. The Alameda Corridor is now the efficiency

and innovation standard on how to do transportation planning and

implementation.

Years of supporting and working on the Alameda Corridor have

helped Senator Karnette, as former chair of the Transportation

Committee and as current chair of the Subcommittee on the Alameda Corridor to recognize that California’s trade-based economy

requires California to expand the State’s policy in facilitating goods

movement and to increase State support for projects that promote

international trade.

Last year, Senator Karnette authored Senate Concurrent Resolution 96, the Global Gateways Development Program which will

help contribute to the regional transportation infrastructure and be

the State’s goods movement blueprint. In addition, SCR–96 will

help lay the groundwork for the State to develop an effective and

strategic plan to influence the next Federal transportation reauthorization bill. The goal of SCR–96, as inspired by the Alameda

Corridor, is to improve major freight gateways in California, to enhance overall mobility, including increased access at and to international ports of entry, international airports, seaports and other

major intermodal transfer facilities, goods movement distribution

centers and trade corridors in California.

The measure requires the Department of Transportation in cooperation with business transportation and housing, the trade and

commerce agency, the California Transportation Commission and

other appropriate parties to submit a final report to the legislature

by July 1, 2001.

This $2.4 billion public-private partnership is not simply a transportation project, but a project dedicated to helping the Alameda

Corridor region to produce a sustainable economic development

strategy that will effectively meet the challenges of a 21st century

global economy.

International trade is a key element to local, regional, State and

national economies. The Corridor is enabling southern California

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businesses to prosper as well as to create a substantial number of

new jobs. ACTA chose not only to be a major transportation project

but to partner in the economic development of the Corridor region.

In order to realize the potential for the quality of life and the attraction of new industries and jobs, a strong collaborative effort

among all interested parties involved in the Alameda Corridor

project needed to be developed. to achieve this goal, a comprehensive regional strategic plan has been created and is being effectively implemented. The job development and training program required by the Alameda Corridor Transportation Authority for the

Corridor community residents is an important component in helping to develop a sustainable economic development effort for the Alameda Corridor region. This opportunity for sustained community

development is enormous.

ACTA, local organizations, communities along the corridor have

demonstrated a collaborative spirit and visionary leadership to develop the opportunities which are helping to realize the full potential of the Alameda Corridor region.

In the past, we have often viewed transportation, economic, environmental and social goals as competing. Over the past decade,

however, a new vision of the future has emerged. One arguing that

progress in all areas is not only possible, but required for communities and regions to be sustained over the long-term. Consensus is

emerging among business, government, environmental, regional

and community leaders about sustainability and the importance of

creating sustainable regions and community. This project is addressing that goal. The core essence of sustainability is the focus

on the future and a collaborative commitment to ensure prosperity

and opportunity for the next generation. Economic regions increasingly compete with one another to attract private investment and

talented workers to assure a rising standard of living. However,

few regions are able to implement policies region-wide and support

and effectively implement a sustainable economic development

strategy. The Alameda Corridor has been an important agent in

helping the region meet these challenges of a new economy. The effort motivated Senator Karnette to author SB–653, the Alameda

Corridor Industrial Reclamation Act of 1999, which the legislature

passed and the Governor signed. The bill is doing the following: It

is directing several local entities to provide assistance, both short

and long-term, to coordinate, plan and implement strategies to assist cities and unincorporated communities impacted by the Alameda Corridor, to expand their commercial and industrial base. In

addition, it is improving workforce preparedness to meet the needs

of a changing manufacturing and technological environment.

Chairman Horn, Congresswoman Millender-McDonald, I would

like to thank you again for the opportunity to praise this remarkable transportation project and to salute the men and women who

are making it a reality.

Mr. HORN. Thank you very much for coming down here to testify.

Mr. Wiggs. Mr. Wiggs is the job training officer for Tutor-Saliba.

Mr. WIGGS. Thank you very much. Chairman Horn and Congresswoman Millender-McDonald, it is a pleasure to be here representing the Tutor-Saliba Corp., the Tutor-Saliba Team and its

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president, Ron Tutor, who is the president and the prime contractor for the mid-corridor component of the Alameda Corridor project.

I am here today to speak briefly on the job training program that

has been alluded to and the development component and the performance statistics and accomplishments of the program at the end

of the second year of operation. I want to point out that while the

first quarter 2001 performance statistics are not yet compiled, rest

assured that the goals established by the Alameda Corridor Transportation Authority are growing closer to achievement.

As a condition of contract approval, the recommended contractor

for the mid-corridor segment of the Alameda Corridor project, the

Tutor-Saliba Team, was required to develop and fund a program

designed to provide pre-apprenticeship training, construction training for 650 residents and non-trade construction training to 350

residents.

The Century Housing Corp., the Carpenter’s Educational Training Institute [CETI], the Alameda Corridor Jobs Coalition Training

and Employment Corp. were contracted by Tutor-Saliba to administer and implement the job training program.

At the end of the first program year, organization changes took

place within the job training program resulting in the Carpenter’s

Training and Education Employment Institute relinquishing all of

its training programs in the State of California, thus backing out

of our program, as well as a non-trade training entity backing out,

thus being substituted by Century Housing Community Training

Program and the project-by-project consulting program.

The main criteria for eligibility in a training project is residency

within a specific geographic area adjacent to the Alameda Corridor

project and the graduation of the 1,000 Corridor community residents represents the satisfaction of the training goals established

by ACTA.

Following the pre-apprenticeship training, the placement goal is

triggered. Here, the goal is to place the 650 graduates in State-approved union apprenticeship programs. I want to point out that

while the additional 350 non-trade construction trainees are not—

there is no requirement for placement, we are happy to note that

10 percent of the current trainees have been placed in support positions within the construction industry.

The employment goals set forth two performance criteria. The

first is that 30 percent of all the work hours on the mid-corridor

segment of the Alameda Corridor project be performed by Corridor

community residents or local workers. Again, those individuals who

are within an established geographic boundary of the Alameda Corridor location.

The second requirement is that 30 percent of all the local work

be performed by graduates of the training program.

I would like to take the next few moments to give you a comparison as to where we were at the end of year one, December 1999

and at the end of year two, December 2000, with respect to our various goals. At the end of December 1999, we had established program graduate rate of 167. At the end of 2000, we had 674 Corridor residents graduating from our combined programs.

The graduates in the construction pre-apprenticeship training;

i.e., the goal is 650. At the end of the first program year, 97; the

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second year was 486. The graduates in the non-trade training, the

goal was 350; the first year resulted in 70 graduates; second year,

188.

The placement accomplishments, again, the goal is to place those

650 in union apprenticeships. Graduates at the end of the first year

was 70; second year, 295 in union apprenticeship programs.

In the non-construction jobs, these are jobs that individuals opted

out rather than going into union apprenticeships, they were still

related to the construction industry, there were 13 in the first year,

49 in the second year.

Total placements, 83 the first year; 344 end of year two.

Now the breakdown I wanted to share with you on the three segments of our contract, mid-corridor project, that is a 10-mile

trench; the first year, we had 14 graduates; second year, 116.

The north and south Alameda projects, the first year, 4; second

year 14. And then other construction projects within the L.A. County region, 65 first year and 214 second year for a total of 344.

Our local worker goal, the number of local workers in the first

year we had 223 representing the various surrounding community

corridor cities. At the end of the second year, we had 559 who had

been placed and were gainfully employed.

Local worker hours, 21 percent, the goal was 30 percent. At the

end of the second year, 29 percent.

Percentage of graduate hours, 6 percent and 12 percent. We are

struggling in that area, I should note, but we are making substantial improvement with our subcontractors hiring more of our trainees and maximizing their hours. And I want to point out that several subcontracts on the Alameda mid-corridor project have yet to

come on-line, so we feel very certain that those numbers will be increasing in the next three quarters.

One area that ACTA has asked us to really focus on is to ensure

the equitable distribution of our resources; i.e., jobs and training.

I’ll provide this pie chart to just indicate to you where we are with

our training graduates, and this replicates itself around the work

force as well.

Black population of our training graduates, 57 percent; Hispanic,

23; and other, 20 percent. The gender is split 66 percent male, 25

percent female.

This is important to note, because as our graduates enter in the

program, with a few exceptions, they are without wage or at minimum wage. But upon completion of the program and entering into

the union apprenticeship, the average of our apprenticeship is

$11.95, so at the end of their 8 week training, they are virtually—

they are making $12 a hour with benefits, with vacation time and

health benefits. At the end of their 4 to 5 year apprenticeship program, they can command a $25.62 hourly wage, as of this date.

And this is nationwide within the construction industry.

The next chart is one that we prepared because this is the guide

that we are using as a tool for our training officers as well as to

share with all parties involved how your particular community or

city fares with respect to our placement of local workers and job

trainees.

The labor force goal is essentially the labor-force, percentage of

the labor-force per Corridor city and the goal that we are to

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achieve. For example, the city of Carson has a labor-force goal of

6.97 percent. The actual to date is 4.41. There is some effort that

we need to do in that regard to increase the numbers of trainees

and graduates working on that project within the city of Carson.

So where are we? To date, within the 2-years of our program,

3,100 Corridor residents have responded to our outreach effort.

That is, 3,100 individuals have received written communications

inviting them to participate in the Alameda Corridor jobs program;

67 percent of our goal has been achieved; i.e., 674 program graduates; 45 percent of our placement goal at the end of 2000, December, has been achieved with 295 graduates being placed in union

apprenticeships; 130 graduates have been placed on the Alameda

Corridor project specifically; 653 non-trainee local workers have

been hired on the mid-corridor segment of the project. There are

many others who were hired by contractors on both the north and

south end projects. Twenty-nine percent of all of our work hours

have been performed, the goal is 30; 12 percent of the local work

hours were performed by graduates, again the goal is 30. And we

completed 70 percent of the mid-corridor segment of the Alameda

Corridor project, 30 percent of our work remains to be completed

by 2002, April.

That concludes my comments, Members.

[The prepared statement of Mr. Wiggs follows:]

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Mr. HORN. Thank you very much. We appreciate your presentation and the statistics there.

Let me now move to some questions. I am going to spend 5 minutes on them and then I am going to yield to my colleague and she

will spend another 5 minutes and we will go back and forth, so we

can cover some of this ground and get it from various perspectives.

Let me just start with a few simple ones.

Either Mr. Hicks or Mr. Kellogg might be on this. There were

some problems involving some of the smaller cities along the Corridor. How were those problems resolved?

Mr. KELLOGG. Mr. Chairman, I always like to tell people in the

private sector, in government you have a term called mitigation

when you get something resolved. A lot of times it is called blackmail, but that said, there were issues that were going on in the cities that needed to be addressed. They were addressed.

The problems that communities had up and down the corridors

were real. My concern was— Mr. HORN. Cannot hear up here.

Mr. KELLOGG. My problem at the time, Mr. Chairman, was that

as we were negotiating with the cities, unfortunately we followed

another project and that project was an MTA project. As was mentioned earlier, some of the successes of this project is because we

stayed very focused on what we were trying to accomplish. This

was a project, as Mr. Hankla mentioned, a road for trains, it was

not a program that we were going to build fire stations, things that

were not related to the transportation issues, because we had to

stay very focused on it.

What finally happened is the cities realized the benefits of this

project, eliminating something that has been historically having a

negative effect, and that is the impact of train traffic through their

communities, cutting their cities in two, three, four different sections. This project, just by going below grade, had a tremendous

impact on that. Many of the cities along the Corridor finally realized that. They accepted the fact that we were putting—we, this

project, was putting a lot of money toward making those improvements and everyone stayed focused on what this project was. I

think that was critical to working with those cities, working

through the problems and getting beyond them at the very beginning. In the beginning a lot of people looked at this project as if

this was a wish list of the many things outside the parameters of

what the Alameda Corridor was. The Alameda Corridor, on its

own, would have a tremendous impact positively in each community and I believe all the community leaders up and down the Corridor finally realized that and accepted the fact that this was the

answer to a lot of their problems. What we were not going to do

was answer a lot of problems that had nothing to do with the Corridor.

And so finally, reasonable minds came together and the project

moved forward. I think Mr. Buresh made a comment about, again,

keeping focused on this project, having all the permits in place.

One of, as was mentioned, the criteria for this if you are moving

forward with a construction project and you do not have agreements with the cities that you are passing through and you expect

when you enter that city to get all your permitting done in a timely

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fashion, you are horribly mistaken. By the time we began the actual construction of the trench, for example, all the permits were

in place, the agreements with the cities, and we passed through

those cities with relative ease. And that was a critical point.

But this project took a lot of time and I know there was a lot

of comments about that, especially dealing with a lot of the communities, but reasonable minds did take place finally.

Mr. HORN. Any other members of the panel want to make a comment on this? Mr. Hankla.

Mr. HANKLA. The only point that I would add to what Mr. Kellogg has said, Mr. Chairman, is that essentially there was litigation. The litigation was ultimately resolved in the favor of the Alameda Corridor Transportation Authority, which allowed the Authority to restructure itself.

Notwithstanding the success on the litigation front, it was obvious that we were going to need the cooperation, just as Mr. Kellogg

said, to secure the necessary permits in a timely fashion and the

cooperation we would need in carrying out the construction project

through these cities. The scope of the negotiations then narrowed

to a payment to those cities, those six cities, to secure their cooperation. Alameda Corridor Transportation Authority did make

that payment. My recollection is it was about $12 million, and as

a consequence of that, those MOUs went in place and we have been

administering the project pursuant to those MOUs.

Mr. HORN. Thank you. On that, we will switch to Ms. McDonald

for 5 minutes and then I will go back.

Ms. MILLENDER-MCDONALD. Thank you, Mr. Chairman. I do

have other meetings to attend, but I am going to try to see if I can

get all of my questions answered at this point.

Let me first say, in seeing Mr. Hicks in front of me, it reminds

me of the time when in the State legislature, the bill that I passed

on gridlock, those three rail tracks that you were talking about— Mr. Steinke, I think is your name—reminds me of the fact that Mr.

Hicks was in front of us at that time on the transportation committee in Sacramento and it was indeed the bill that I authored to

ungridlock those three railroads to get them to the table to start

the Alameda Corridor running and also the bonding bill that I authored as well as the bill to make this Corridor a Corridor of National Significance. I never thought that I would get to Congress

in time to ungridlock the $400 million that Mr. Holt spoke about

in terms of ensuring that we did get this funding. And so it seems

like a baby that is about to be born, way over time, as one of you

said, but then right on time, so that is a dichotomy in and of itself.

But as I sit here and really am sitting here 1 year out from the

opening of this Corridor and really taking the traffic as it should

be, not only downtown Los Angeles but across this great Nation,

in listening to Mr. Keller, he kind of brought back the whole notion

that I speak so often to the Members of Congress that 50 percent

of this Corridor does come across the Nation and indeed we are a

significant partner not only in this State but in this Nation in

terms of economics.

Mr. Kellogg, getting back to you though on the cities, I am going

to have to disagree with my friend, those cities still have not been

really given the due diligence that they should have in terms of

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this Corridor. We are talking about jobs that Mr. Wiggs has outlined, and yet I have a bone to pick with him as well, as well as

the economic significance of this whole Corridor. This is why I introduced that bill, not only for the national significance of it, but

also the economic viability of those cities along the Corridor, the

37th Congressional District’s cities really are impacted by this Corridor and yet, they have not seen the jobs that should have come,

they have not seen the economic vitality that we had wanted to

have here. So I need to have someone on this panel speak to me

about the jobs.

When Mr. Wiggs talks about the jobs, they are extremely low in

numbers and unemployment is still tremendously high in Wilmington, Carson, Compton, Watts, Lynwood, all of those cities that are

severely impacted by this. I recall that I had to go to DOT and get at $1.5 million for mitigation of those cities because of the tremendous impact of this Corridor. So please tell me now why is it that the jobs have not come

in as they should have and the economic vitality has not been

reached by those cities—someone please talk to me.

Mr. HANKLA. Congresswoman, I think it would be certainly on

point to tell you that of this entire program, we have probably

spent almost as much time and energy in trying to get the jobs program up and running as we have on problems of the Corridor.

I think we had a false start in the efforts to accomplish the training of the skilled workers program through the auspices of the Carpenter’s Educational and Training Institute. It was only after we

shifted to Century Housing Corp. that we began to record substantial success in those numbers. To the extent that we have also implemented the Alameda Corridor Conservation Corps, which is another 200-plus members that is separate and apart from the Job

Training Program, which is training young adults between the ages

of 18 and 23, and is also assisting them with their high school diplomas and also placing them in the union apprentice programs.

When you add that 200-plus members—and I think they are at

over 200 now—I think then our numbers come up to exactly what

was promised.

Now the project is not over. And let me say that the economic

benefits—

Ms. MILLENDER-MCDONALD. What is that number that was

promised, Mr. Hankla?

Mr. HANKLA. The number that was promised was basically 650

trainees in the trades and 350 in non-trade training. Now with

roughly one-third of the project yet remaining, we think we will

meet those numbers. When you overlay that with the numbers on

the Alameda Corridor Conservation Corps, which were never promised, but were essentially undertaken by our Board of Directors as

more or less an insurance policy to make sure we hit those

number—

Ms. MILLENDER-MCDONALD. I just wanted someone to get back

to the numbers that the Inspector General was told we would get

for the jobs on the Alameda Corridor at my next round of questions.

Mr. HANKLA. And basically that was 650 in trades, 350 in nontrades.

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Now in terms of the economic benefits that these communities

are going to derive, I think it is fair to say that most of these communities are tremendously negatively impacted today by a monumental construction project.

If I were to sit here today and tell you we have been able to mitigate all of the inconveniences caused those cities by this project,

that would be totally, utterly false. It cannot be done. But as we

open those new bridges, and we have opened over 20 bridges today,

and there is transportation taking place where it never took place

before, connecting cities from east to west where they have been

disjointed for over 100 years.

We see the L.A. Economic Development Corp. beginning to market large parcels of real estate along the Corridor for major employers. That is where the economic benefit is going to come for these

communities. It will come after our project, aside from the labor

training project, which I think is beginning to show the numbers.

Mr. HORN. Let me move a little bit to the railroad situation. The

Alameda Corridor is a win-win situation for cities and railroads, as

you have just mentioned. Other California proposals for similar

projects appear to lack that balance. What do these projects need

to do in order to get the railroad support?

Mr. HANKLA. Is that question directed to me, Mr. Chairman.

Mr. HORN. Yeah, beyond the State. There are about 30 ports in

California.

Mr. HANKLA. Well, I believe it perhaps goes without saying that

these projects need to find the hot button that will interest the railroads in participating in these projects. That may be something

akin to what was done in the Alameda Corridor, such as purchasing right-of-way, I frankly do not think the Alameda Corridor

would have happened had that particular step not taken place.

That may well be the linchpin in terms of these other rail projects

that are important to cargo movement in southern California. If I

had to pick one single linchpin, that would be it.

Mr. HORN. Any other comments on that anybody wants to make?

Yes, Mr. Bredenberg.

Mr. BREDENBERG. Congressman, I would like to clarify that, however. In the case of the Alameda Corridor, a very inadequate infrastructure was purchased from the railroads, an infrastructure that

did not have the capacity to absorb growth. It would be very difficult to interest the railroads in purchasing right-of-way if they

have the infrastructure at the time and have already provisioned

for the funding of the amplification of that infrastructure to handle

the growth it is going to be seeing in the next 30 to 40 years.

Mr. HORN. Thank you. Yes, Mr. Buresh.

Mr. BURESH. Mr. Congressman, I think one of the big keys to the

Corridor’s success is the fact that it is a systemic solution. That is,

that it provides a comprehensive solution to moving containers

from the ports to the transcontinental railroads. The classic trap

facing many transportation agencies is that they focus on congestion issues. Basically they develop a grade separation here, improve

an intersection there and so forth. The problem is that is basically

a reactive rather than a proactive solution and it does nothing to

change your fundamental flow and movement patterns of goods, either their efficiency or their cost.

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When the Corridor comes into play, it changes a lot of those economics. You have got a consolidation of that flow of traffic, there

is a big increase in speed for the rail trains happening through

there, there is a big increase in the safety and efficiency, an increase in capacity for the future. And fundamentally, the transportation economics for the railroads have changed and therefore justifies their investment in those toll charges.

So I think it is inherent that other mega projects of that scale

must combine that systemic overview on there. And while a particular community may need a grade separation as its major mitigation, it has to look elsewhere to find an enhancement to the railroads to offset that and combine that in there in a systemic improvement. That is the real challenge.

Mr. HORN. Let me move to another field on this last question on

this 5 minutes. Regarding the stormwater discharge standards, Mr.

Buresh, you say that falling rain may be too contaminated to flow

into the Los Angeles River. Can you explain this or elaborate on

it?

Mr. BURESH. We ran into a great problem in the process of

dewatering on this project where we had basically a temporary situation of having to discharge water and we could not meet the discharge standards for trace metals. These are very, very low. We

were able to discharge under the agreement that we proceed with

a series of studies to validate that we did no harm to the environment. Based on those studies, which demonstrated no harm, I

would have a serious series of challenges to raise those limits. I

think they are extremely low. Essentially, the trace metal limits

are so low that rainfall coming through the atmosphere in L.A.

picks up enough trace metals out of the atmosphere, that we may

not be able to be in compliance. That essentially puts us in the

business of polishing rain.

I think it has come to the point that it is almost absurd and it

requires an overall solution and I think it is going to have to come

out of the Congress. We are just one of many projects being impacted. Some of the environmental cleanup work that is reflected

in these standards is very necessary and should be going forward;

however, the standards do need to be real world standards that

communities and agencies can meet. Fundamentally, we are part

of the solution, not a problem here. We have cleaned up a 20-mile

corridor, we have better stormwater control and cleanup standards

than has probably been seen in most sections of railroad anywhere

in the country and yet, we found ourselves extremely vulnerable to

those standards.

Mr. HORN. Were those State or Federal standards or both?

Mr. BURESH. Both are in here, but it comes out of the Federal

Clean Water Control Program.

Mr. HORN. But you think it will be solved?

Mr. BURESH. I believe that we will be able to solve it. But I think

it poses a grave risk for any other large-scale transportation

project.

Mr. HANKLA. Mr. Chairman, by way of scale, the potential fines

that could have been levied against the Alameda Corridor, for the

privilege of cleaning up 20 miles of the most polluted environment

in the United States, was $794 million.

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Mr. HORN. $794 million. And how did we come to that?

Mr. HANKLA. That was basically based upon the requirement by

the Regional Water Quality Control Board that we meet the standards of the national toxic rule which establishes limits of trace metals which can be discharged into I guess threatened bodies of

water?

Mr. BURESH. That is correct.

Mr. Chairman, the way the fines are set up, if I put out of a gallon of water and it has say 10 different trace metals in there, I can

collect a fine for each one of those metals per gallon as a violation.

It has a huge compounding effect.

These rules basically exist to punish agencies that are attempting to do the right thing. We are very easy targets to get. Meanwhile, we have spent $40 million cleaning up messes left from

other people out there that are true lawbreakers. They are hard to

catch, the regulatory agencies do not go after them. We are very

easy to find.

Mr. HORN. We are hoping with a new administrator there, she

will have common sense and that is basically—the former administrator just simply had lawsuits all over the place and hardly ever

cleaned-up any major dumps, and you are absolutely right about

that. So hopefully we will get some action this time.

Now I will yield to my colleague from—

Ms. MILLENDER-MCDONALD. Following up on the questions that

you have raised, Mr. Hankla, the 790, did you say $3 million?

Mr. HANKLA. $94.

Ms. MILLENDER-MCDONALD. $94 million. Were these additional

fines that you had to try to get for this cleanup or was it all encompassed in the $2.4 billion that this project cost?

Mr. HANKLA. Basically it is the potential fine that could have

been levied by the Regional Water Quality Control Board. We were

successful in Sacramento, with the tremendous assistance of Senator Karnette and Assemblyman Lowenthal, in securing some relief. There was a bill previously that had been passed by the legislature and signed by the Governor called the Migdon Bill that

would have removed the discretion on the part of the Regional

Board and would have made the levying of those fines mandatory.

We were able to secure the relief that returned that discretion to

the Regional Water Quality Control Board. Our subsequent interaction with staff, we believe, will lead to relatively reasonable fines.

Frankly, I do not think we should be fined at all, but we have already been fined about $180,000 for our work on the Corridor.

Ms. MILLENDER-MCDONALD. Well, certainly you should not be

fined when it is something that is out of the realm of your—you

have no cause for this type of—the rainfall, the falling rain, and

the contamination of it. So that is something that perhaps, Mr.

Chairman, we can pursue or follow-up on to make sure that some

relief can be done there.

Mr. Keller, in terms of the dredging of the 300 and 400 pier, I

have been following that for years because it certainly does speak

to the quadrupled freight cargo that we are anticipating and projecting. Will this falling rain affect anything that we are doing

down in the pier—would it not affect that as well?

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Mr. KELLER. Congressmember, it really never has. That is a natural function of the ports and certainly the downstream portion

during major rain events and that type of thing, it is our duty to

clean-up as best we can, particularly floating materials.

The dredging, however, has had a beneficial effect overall because materials that have historically been washed into the harbor

from former industrial activities have been cleaned up and removed. As you know, under our dredging permits, we are allowed

only to take clean material out to sea. Hazardous material is

hauled to upland waste disposal sites and encapsulated. So the actual dredging is a beneficial effect that does largely cleanup the effects of former industrial activity. And these are the same type of

activities that Mr. Hankla and Mr. Buresh are dealing with on

shore, where the materials have percolated down into groundwater.

Ms. MILLENDER-MCDONALD. Uh-huh.

Mr. KELLER. We have inherited the activities from water and

materials that were dumped directly into our waters.

Ms. MILLENDER-MCDONALD. I have sent a letter to Ms. Christine

Todd-Whitman to come and look at some of the brownfields in this

area, Mr. Chairman, and perhaps you and I can come together with

her to look at some of the things that you are talking about, because after all, this is the region that is going to be the engine that

drives the economy of this State, especially given the power problem that we now face. But this has always been, in my estimation,

and will always be the engine that drives it.

As you said, Mr. Keller, we are a third behind Hong Kong and

Singapore, we have gone to Hong Kong to look at their port system.

I have not gone to Singapore and perhaps we need to go there and

we can talk with our new chairman and see if we can get that trip

out, Mr. Chairman.

But are you saying that right now we are going to have a 700

percent increase in cargo with the dredging of both 400 and 300

pier completed, we will go into 24 million tons of cargo? Explain

that to me. I wrote it down as you were speaking and I may not

have gotten it all correctly.

Mr. KELLER. Congresswoman, our cargo has increased 700 percent since the early 1980’s and in the next 20 years—the two ports

right now are putting through about 10 million containers, imports

and exports. By the year 2020, we expect that number to rise to

24 million—from 10 million to 24 million.

We are not, by any means, done with our development between

the two ports. We have additional landfills, consolidations and

dredging projects in order to allow the larger ships to come in.

Ms. MILLENDER-MCDONALD. Uh-huh, absolutely.

That is why it is so critically important that we make sure that

the air, the quality of the environment is conducive to your continuing that, because we are looking forward to that, as we talk

about international trade and other entities that will help us in our

economic vitality.

Mr. HORN. Let me ask you, what is the extent you have engaged

in eminent domain in order to get the project done?

Mr. BURESH. Mr. Chairman, the bulk of the real estate which

was required for the Corridor was obtained either from the initial

rail purchase executed by the ports or has come from the ports or

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additional purchases from the railroads or from the Corridor cities.

There are approximately 200 parcels that we have been required

to obtain from third parties other than the ones I previously mentioned.

Mr. HORN. So what percent of the land was picked by eminent

domain?

Mr. BURESH. Approximately 10 percent.

Mr. HORN. Ten percent. That is rather unusual in a major program like this, is it not?

Mr. BURESH. That is very unusual, and again, that underscores

the importance of that initial purchase of the railroad right-of-way

by the ports.

Mr. HORN. I think you would agree, Mr. Hankla, on that, if you

look at a nationwide perspective.

Mr. HANKLA. Yes, sir.

Mr. HORN. Well, that is very good news because you did not drive

a lot of people out of their houses. But did we have that problem

anywhere along the line?

Mr. HANKLA. Actually no, there has been very little residential

relocation, other than we have some people who live in junkyards

and they will get relocated. But basically no housing was taken

out, it is mostly commercial space.

Mr. HORN. What about the Pacific Coast highway, what is the

situation with that in terms of—I can see you saying oh, no, not

this one—but who wants to take that on?

Mr. BURESH. Nobody wants to take that.

Mr. HORN. Looks like you have got the gavel.

Mr. BURESH. OK. There were a series of related transportation

projects funded called the Port Access Demonstration Projects.

These were done by various cities, the city of Carson and Los Angeles County in particular. One of those projects was the PCH or Pacific Coast Highway grade separation. This takes place through the

Equilon Oil Refinery.

Mr. HORN. I am sorry, which oil refinery?

Mr. BURESH. The Equilon Oil Refinery, used to be Texaco, now

it is owned by both Texaco and Shell.

Mr. HORN. Oh, OK.

Mr. BURESH. At that particular grade separation—and I would

emphasize, all the other grade separations along the Corridor are

either done or very close to being done. By the end of the year, they

will all be in place, whether they were done directly by the Corridor or by some of our sister agencies as part of the PADP

projects.

The one exception is the PCH grade separation, which is a

CALTRANS project. That project is not yet underway. The design

is not complete, they have not obtained a final deal with Equilon

to expand access across their refinery. Building a grade separation

at that particular location will require an extensive relocation of refinery utilities. That work has not yet begun, there is not even a

business or engineering solution to that work.

Our concern from the Corridor’s point of view is very simple. We

already have our main tracks in place at this location, we do not

need additional work there. That allows us to run 100 trains per

day or more with impunity, but the reality is that when we put

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that many trains in there, we will effectively have stopped or completely blocked Pacific Coast Highway. Highway No. 1 of the State

is going to come to a standstill.

The solution CALTRANS is putting forward will be a detour of

Pacific Coast Highway, beginning at the Terminal Island Freeway

going north to Sepulveda, going west on Sepulveda, coming down

Alameda Street and then resuming its former route. Essentially,

we will deactivate this portion of the Pacific Coast Highway. It is

a cause of great alarm for us. Right now we see, when train traffic

appears down there, a large number of illegal movements on the

part of vehicles, people turning U-turns in the middle of streets. I

think it is just a question of time before somebody with a tanker

does something like that and we have a tragedy on our hands.

The other thing is that this particular intersection is close to the

port, we get a large number of trucks moving through here. This

is an important part of our grid system, and having that capacity

in place is critical, especially as the 710 becomes more congested,

either because of port growth or because of CALTRANS construction on the 710. If you happened to drive it this morning, you noticed all the K-rail or temporary concrete barriers along the median. That is just the first step in some repaving and correction of

drainage problems along the 710. The minute those K-rails went

up, we saw a significant increase in truck traffic in other portions

of the grid, in particular along Alameda Street, on PCH and on

Anaheim, as well as on the 110 freeway. So it is important that we

fix this portion of our grid before other portions experience increased, more increased capacity problems.

Mr. HORN. Mr. Brown, you have come from Sacramento and you

have spent a lot of time on transportation for Senator Karnette.

Where are we on the PCH side and where are we particularly on

710? How are we going to handle the truck traffic that is there now

and that we hoped, when the Alameda Corridor was complete, it

might not be doubling, just as the Corridor is with rail containers.

How do you feel about this and what do they say in Sacramento

and at CALTRANS on all that?

Mr. BROWN. Well, Mr. Chairman, with regard to the 710, a study

is underway, we should have that hopefully within the very near

future. CALTRANS is prone to be delinquent in delivering its reports, but given the critical nature of the 710, we hope that we can

hold their feet to the fire, get the study done and produced to the

legislature on time so that we can begin to address and begin to

implement a solution to the 710.

With regard to the Pacific Coast Highway, which as Tim has just

outlined, is most critical, Senator Karnette, Assemblywoman

Orapeza and Assemblyman Lowenthal will be—Senator Karnette is

convening a meeting on April 27 with ACTA and with CALTRANS

to discuss at length and hopefully come up with a solution that provides a win-win strategy. The solution that currently is on the

table by CALTRANS, as I understand it from members I have just

outlined, is unacceptable. It brings with it a great deal of liability,

it does not allow the freight and goods movement as well as movement by vehicles and the general public, to move in a safe and conducive capacity. In the future it will potential bring tremendous liability with those tanker trucks.

88

So I hope that we can begin to address solving the Pacific Coast

Highway situation with a plan that ACTA brought up and was discussed at length 1 year ago. We hope that through productive and

constructive discussions with CALTRANS, with the members that

will meet with them on the 27th, that we will be moving in the direction, hopefully, that CALTRANS has outlined. In addition to

CALTRANS’ gracious and generous offer to contribute in making

this happen with some of their engineering ability and maybe some

of their construction management contribution, which would be

sorely needed in order to divert us away from this potential problem that we face.

Mr. HORN. Is one option to either get the trucks isolated that will

still be using 710 or the cars that are isolated to still get some sort

of special lanes for cars, because people that go to work up in that

area, it is a terrible situation where you have got a truck on the

side, truck behind you and truck in front of you. Is there any way

CALTRANS has got some creative methods to get them moving?

Mr. BROWN. The short answer to that, Mr. Chairman, is no. I

think that the design that ACTA has provided addresses the elements that you have just outlined with a long overpass instead of

a short overpass or a roundabout or whatever the configuration

that CALTRANS currently has on the table. That does not in any

way address what you have just suggested and questioned. In looking at the plans that ACTA has put forth and discussed at great

length with CALTRANS and with the legislature, the long bridge

is what is necessary in order to meet these needs for the present

time as well as to address the future impact of freight and vehicular movement on the PCH.

Mr. HORN. What does the Alameda Corridor think of doing something to either help the individual vehicle traffic—and most of

those are just one person in a car—or getting the isolations of the

trucks left over to go to various places where, but not to where the

railroad yard is that the Alameda Corridor feeds into?

Mr. HANKLA. Mr. Chairman, an organization called Gateway Cities currently has a cooperative study underway relative to the 710

Freeway. There is no question it is a serious concern to the cities

of the region and the residents of the region and it has every prospect of getting worse. Now what the ultimate recommendations will

be coming out of that study, we are not involved with. We have

representatives that observe those deliberations. How ACTA might

be involved in any future effort would be strictly a policy matter

for our Board of Directors.

Mr. STEINKE. Mr. Chairman, if I might add a little bit more detail about the 710 as it pertains to truck trips into and out of the

Port of Long Beach and Los Angeles, the two ports have embarked

upon a $600,000 study looking at some interim solutions, some

things that we might be able to do. It is called the Transportation

Master Plan. We are looking at ways to either look at moving traffic to some of the other arterials like the underused Terminal Island Freeway or the 110, looking at empty containers that might

be able to be isolated away from the ports some things like that.

The results of this study are going to be fed into a major invest- ment study, a $4.2 million study that Mr. Brown was referring to,

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straints on the 710. And that is what Mr. Hankla was referring to

that the Gateway Cities Council of Governments is keeping very

close tabs on. That study will take some time to complete but it

should come up with some capacity recommendations which will

hopefully be implemented over the course of the next several years.

The two ports, with the growth that we are experiencing, cannot

afford to wait for 5, 6, 8, or 10 years to have capacity improvements take place on the 710 and that is why we are looking at

some short-term mitigation measures to try to move trucks to different locations, reduce truck trips, extend hours, do some other

things that give the ports more elasticity than they currently have.

Mr. HORN. We have met, and I think you and all your colleagues,

with the Gateway Cities people and their problems with 5 and the

Orange and the interconnection with what goes on in Los Angeles

County.

As you know, one of their basic thrusts is to go east with the Alameda Corridor, to solve some of the pollution problems that are

going on. I think the group feels there are some of the things come

into the ports, especially coal from Utah that they either tie down

the loads or not, I do not know, but it is a real problem still. I

thought we had done all that and now I do not think we have.

So who would want to grapple with the extension of the Alameda

Corridor? I am not saying you should do it, but I am saying that

a lot of Members of Congress, starting with Mr. Dreier, or really

starting with the rail yard and then going east. You have got Mr.

Dreier’s District, Mr. Jerry Lewis’ District, Ken Calvert’s District,

all of that, to go to the Nevada line essentially. But certainly to get

into Riverside and San Bernardino.

Any comments? I do not think I see too many hands on this. Mr.

Hicks.

Mr. HICKS. Mr. Chairman, there are a number of efforts to look

at grade separations and other improvements east of downtown Los

Angeles. The so-called Alameda Corridor East in the San Gabriel

Valley is approximately a $900 million effort. It has raised about

$400 million thus far for their program.

Another program is called OnTrac in Orange County, which is

also called the Orange County Gateway. It’s approximately a $450

million railroad lowering project similar to the ACTA trench along

Alameda Street. They have raised about $32 million thus far and

are looking of course for additional funding.

The county of Riverside and the county of San Bernardino are

also putting together a plan for grade separations and have teamed

up with the San Gabriel Valley and Orange County to prepare a

report per AB 2928 in the State, which requires them to collaborate

and develop a long-range plan for grade separation improvements

in all four areas. Once that report is done, then some funding will

become available through the State to help supplement those

projects. But it will not be enough. Clearly, significantly more funding will be required, hopefully through the TEA–21 reauthorization

and other sources.

There are needs east of downtown Los Angeles. Clearly all those

trains continue east and go through various communities on their

way to the San Bernardino area.

Mr. HORN. Mr. Kellogg, did you want to comment on that?

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Mr. KELLOGG. Mr. Chairman, I know in the past I have had discussions with Supervisor Antonovich on this, some rather heated

ones. I have talked to Congressman Lewis and Dreier on it. Obviously they do have concerns, but my only caution—and I have been

removed from the Alameda Corridor for 9 months, but as I mentioned to them, in particular Supervisor Antonovich, we have many

issues in the corridor cities that we need to address first and foremost. My caution was always not to look at the Ports of Long

Beach and Los Angeles as a funding source. My comment to him

was what you are attempting to do is build the second coming of

the transcontinental railroad by piecemeal and using the funding

from the Ports of Long Beach and Los Angeles. We have issues we

have to address in this general area and, again, as my opening

comments, the communities up there, the impacts they have, they

do have to step up financially because to look at the ports as the

financial vehicle I find inappropriate, but I think there would be

some legal questions as well. But I know they have looked many

times when I was serving on the Alameda Corridor as—their solution to a lot of their funding was to come back to the Ports of Long

Beach and Los Angeles, and I think that would be a travesty and

it would be irresponsible to the corridor cities who do have direct

needs that we have to address on this project.

Ms. MILLENDER-MCDONALD. Mr. Chairman, if I might just comment on that. The reason they are looking at the ports is because

after all, you are going to quadruple in your cargo container movement, which means that they perceive 710 as being the conduit for

the trucks. Of course it is. The Alameda Corridor is not a corridor

for the trucks to go through, and so they are looking at the 710.

Indeed, Congressman Horn and I did meet with the Gateway Cities

folks just last month and they raised this issue and raised the

whole capacity issue, especially given NAFTA. NAFTA is now opening up new truck traffic and we are just going to be inundated with

trying to take this cargo from the ports out east. So they have suggested that the port, as well as the Federal—in other words, they

want to mimic what we have done for the Alameda Corridor, for

the Alameda Corridor East. They want pretty much the same type

of model in order to move the truck traffic out east and beyond.

And so it is a problem, Mr. Chairman. I have talked with SCAG

about this and again, we need to look at and convene, Mr. Chairman, a regional—we had tried to put that in place last year when

I suggested to them last year that we need to look at that, because

indeed Congresswoman Napolitano and all of those who are witnessing the heavy truck traffic on the 710, the gridlock that the

chairman talks about in terms of cars interwoven with the trucks,

we have got to do something about that. No one wants to travel the

710 now because of the gridlock. And so indeed we have got to

study that, whether it is ACTA, whether it is whatever, whether

it is SCAG, whether it is CALTRANS, we have got to do that.

Mr. Brown, my question is why is it that we are still in a dilemma of the PCH in terms of making sure the grade separation

takes place? I mean that is also a critical component to what we

are talking about in terms of moving cargo in and onto the 710 and

beyond. So what is going on here that we cannot get that grade

separation going?

91

Mr. BROWN. I think it is CALTRANS’ way of doing business,

which you have experienced for many years.

Ms. MILLENDER-MCDONALD. God knows, yes.

Mr. HORN. That is Mr. Brown—I am going to start—the reporter

cannot quite hear everybody.

Mr. BROWN. I am sorry, Jeff Brown.

I think CALTRANS—and Tim knows the history of this a lot better—because of the long history and lack of action on the part of

I guess the city of L.A. and CALTRANS to address the Pacific

Coast Highway grid sep is the answer to your question, Congresswoman. I just think that it has been on the back-burner, it has remained on the back-burner. Because of a decade of keeping it on

the back burner, the project costs have gone up. I think the parties

involved have, to some degree, alienated Equilon in the negotiating

process of right-of-ways, and as a result of that it escalated their

costs—it has almost doubled from what it was last year.

I think what we need to address the problem in a timely, costefficient, and efficient way with innovative approaches is to address

this in a public/private partnership way, CALTRANS partnering to

a great degree with ACTA, because we are about to get a black eye

if we do not address Pacific Coast Highway grade sep.

Ms. MILLENDER-MCDONALD. I do not think anyone wants to come

into a project that is already over-budget—or you are saying lack

of funding, because you have an override, right?

Mr. BROWN. It is tremendous, I mean I think the figure now is

$115 million. Last year, it was about $30 million less. I think that

with some type of public/private partnership collaborative effort, we

might be able to bring that cost down and get the project underway. But I think we, the State, will have to prevail upon ACTA

and their gracious offer to help us get ourselves out of this knot.

Because based on historical inaction on the part of the city and

CALTRANS, we are where we are today and that is absolutely at

step one. We need a partner to pull us along quickly, efficiently and

hopefully in a cost-effective way.

Ms. MILLENDER-MCDONALD. Mr. Hankla, where are you on assisting them in making sure that we open up PCH so that we can

begin to look at this regional intermodal transportation mode?

Mr. HANKLA. Congresswoman Millender-McDonald, let me say

that we have met on a number of occasions with CALTRANS, we

have made suggestions to CALTRANS and offered some technical

assistance to CALTRANS. What seems to be the rub, if I may be

so bold, is that CALTRANS would like ACTA to make up the financial shortfall. I think that is highly problematic from the standpoint of management of our funds, as well as the policies established by our Board of Directors.

Mr. HORN. CALTRANS is funded by the Federal Trust Fund for

most of the interstate highway. This is partly interstate

highway——

Ms. MILLENDER-MCDONALD. It is.

Mr. HORN [continuing]. And presumably only 10 percent is put

in by the States across the country. So we give them a good hefty

bit when all of us drive in to our friendly gasoline station and see

the Federal tax go in the pocket back east and we have fought very

92

vigorously to make sure that people do not use that for other

things than primarily interstate highways.

Ms. MILLENDER-MCDONALD. Mr. Chairman, I suggest, given the

fact that this is Government Reform and Efficiency, that perhaps

a letter goes out asking them to delineate the cost that has been

incurred to date, to see whether or not it has been efficiently done,

so that we can get a handle on this. You know, we are looking at

not only this quadrupled container traffic coming in, but also the

truck traffic that is going to be increased. And if we do not get

some of these corridors opened up, you are talking about gridlock,

it is just going to be a tremendous detriment to us down here economically. So perhaps I would like to suggest that you and I

together——

Mr. HORN. They are going to have a meeting on this and——

Ms. MILLENDER-MCDONALD. The 24th, April 24.

Mr. HORN. Yeah.

Mr. BROWN. April 27.

Mr. HORN. The State legislative personnel, both Assembly and

State Senate, are the ones that tell CALTRANS what to do.

Ms. MILLENDER-MCDONALD. Of course, they should dictate to

them.

Mr. HORN. It is not the Federal legislators.

Ms. MILLENDER-MCDONALD. But our funding, we can ask just

how to date that has been implemented in terms of getting the corridors taken care of; in my opinion, it certainly would not be a

problem.

Mr. HORN. We talked with them, as I recall, in 1993 and we had

very mixed feelings when we left discussions with our friends in

CALTRANS, but I think they have helped in a number of ways

ever since; is that not so?

Mr. HANKLA. Mr. Chairman, by frame of reference, I believe this

project was essentially initially funded in 1987.

Mr. HORN. 1987?

Ms. MILLENDER-MCDONALD. And we are still pretty much in the

same position where we are, have we crawled, have we snailed,

have we done anything in terms of moving on?

Mr. HANKLA. To term the movement glacial would probably be

an overstatement.

Mr. HORN. Is that ahead of a snail or behind a snail? [Laughter.]

Ms. MILLENDER-MCDONALD. Or even a snail.

Mr. HORN. Even a snail. It is a melting one, anyhow, it is a glacial one.

Ms. MILLENDER-MCDONALD. I really do think that we will wait

to hear what the meeting on the 27th brings about, but certainly

with the funding from the Federal, I think we will be in a position

to ask if we can get some kind of efficiency report or something to

see just where we are and where the money has come down, because it is important that we get that corridor up and going, given

this truck traffic increase as well as the cargo container increase.

Mr. Chairman, you spoke about eminent domain, my bill did not

move any residents any place, we did not have that type—I wanted

to make sure, given that they were poor people along that corridor

anyway. So that particular eminent domain bill that Mr. Hicks and

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all of us fought for in Sacramento with Mr. Kellogg did not bring

about any undue hardship on anyone.

Mr. HORN. I want you to know that there are low income people

on both sides of the tracks and the L.A. River.

Ms. MILLENDER-MCDONALD. That is very true, I am not

suggesting—— Mr. HORN. And based on that, that is how I got the money to

solve the L.A. River problem. You know, this is not people sitting

in Carmel on bluffs.

Ms. MILLENDER-MCDONALD. That is very true, we connect in

Long Beach, so how well I know.

Mr. HORN. And we have gotten everybody on both sides of the

river to help us; on all of these things, we try to have a bipartisan

approach in Los Angeles County, and I must say my colleagues

have signed on the dotted line every time.

Ms. MILLENDER-MCDONALD. Uh-huh.

Mr. HORN. Whether it be Ms. Waters, whether it be the ones related like Jerry Lewis and Ken Calvert. We work together, in brief.

Let me ask you, Mr. Wiggs, I am particularly interested in what

we learned from the experiences you had with the project and I

was very interested to see the data you had on apprenticeships.

There are a number of firms in the area where women are the

CEOs and the workers. To what extent have we had those firms

that are right in the area get jobs along the way in terms of the

Alameda Corridor?

Mr. WIGGS. Let me go back and describe for you just the process

of how our trainees gain entry into the program. We have established what we call intake sites or points of entry for any Corridor

resident that is located within your Congressional District; Congresswoman Millender-McDonald’s Congressional District; your colleague, Maxine Waters’, Lucille Roybal-Allard and to an extent

Congressman Becerra’s District, so that we can get individuals

from the entire breadth and length of the Alameda Corridor participating in the job training program, thus representing all of the

geographic and demographic constituencies in the areas.

In my opinion, we have had great success in the last year, year

two has been a turning point in the program. The labor unions, the

trade unions, have stepped up to permit our graduates’ entry into

their unions, thus ensuring them a position in the new apprenticeship program. The private sector is a sector that we have not

reached out to in any great way because the structure of our program is union apprenticeships. That is the goal that we are striving, attempting to achieve within the project.

Any private sector support has come by way of the small number

of placements from our non-trade component. There again, they are

essentially support staff to the construction industry.

If I were to name the central lesson that has been learned from

this project, it is two-fold; one you and Congresswoman Millender

are probably familiar with. The first is the trade unions opening up

their union roles to be as receptive as possible for new blood, as

it were. Our project has some 350 labor personnel coming out of

the trade unions or labor locals. Our goal in that regard was to

have the highest number of apprentices per journey level. At that

particular trade, there are about 25 percent of apprentices to jourVerDate 11-MAY-2000 10:48 Apr 29, 2002 Jkt 000000 PO 00000 Frm 00097 Fmt 6633 Sfmt 6633 C:\DOCS\77859.TXT HGOVREF1 PsN: HGOVREF1
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ney level. That is the rule of thumb. We have not met that basic

goal yet. We are approximately 50 percent below that threshold

mark and in the last month we in fact may have even—may meet

substantial difficulty in getting that additional 50 percent labor

union support. It is not a formal support, it is an informal relationship. They have agreed—they being the three labor unions operative in the Alameda Corridor parameters—to work with us. Nothing formal. We attempted early on to get a memorandum of understanding between the labor unions and the Alameda Corridor

Project, at least our mid-corridor segment, whereby any individual

that we would sponsor into the labor union would be accepted.

That was not received by the three labor unions, they agreed that

they would take a percentage of our graduates proportionate equally amongst the three unions. It was a very small number at that

point. Subsequent to meeting that number with that labor union,

then informally, they have expanded and permitted us to go beyond

that.

I say that because I recall reading several weeks ago, emanating

from the White House, there is a position that there may be an

elimination of PLAs, project labor agreements, with any new

projects of this magnitude. That would, in my opinion, serve a substantial disincentive for any future project of this nature to incorporate local workers and apprentices in their program because the

project labor agreement is that binding document that at the frontend, if established properly, will then hold the hands of both the

contractor and the labor unions to buy into a concept. Absent a

project labor agreement, then the workforce of course then becomes

probably non-union and absolutely antithetical to what this project

and other projects do, enhance the lives of individuals and transition them into a union workforce.

Mr. HORN. Any more thoughts on that?

Ms. MILLENDER-MCDONALD. Mr. Wiggs, you know, you and I

have gone back and forth on these jobs and the inability of the

training; first of all, the unions to accept those who were trained

by Tutor-Saliba and the training program, to go on board without

having to pay a union fee before coming aboard. Has that been dismissed or where are we on trying to get those who have been

pretrained or into the apprenticeship training program to at least

get on board and start working and then pay the union fee, because

after all, these folks are folks who did not have jobs and do not

have funds for that?

Mr. WIGGS. We have worked that out. I am happy to report to

you that the issue of union sponsorship and payment of dues has

been worked out. That was worked out several months after we

met in your office and you encouraged us to work out that relationship.

That is not the issue at this point. The issue now, of course, is

for more and more subcontractors and others in the area to accept

our trainees as apprentices, bring them on to their workforces,

their labo-force, and give them the requisite number of hours to

continue their apprenticeship training.

Ms. MILLENDER-MCDONALD. So there was not an MOU done to

enable that to go forth, if I am understanding you correctly?

Mr. WIGGS. That is correct.

95

Ms. MILLENDER-MCDONALD. Then is it ACTA who comes back

and talks about that or what happens here that there is a

slight—— Mr. HORN. Mr. Hankla.

Ms. MILLENDER-MCDONALD. Yeah, Mr. Hankla.

Mr. HANKLA. ACTA has certainly jawboned this issue, both with

Tutor-Saliba and with the unions. The relationship, the critical relationship, is between the general contractor and those unions.

Ms. MILLENDER-MCDONALD. Right.

Mr. HANKLA. We cannot insert ourself in that relationship. If we

do, we create certain imbalances and legal responsibilities. However, we have been pleased with the progress that Mr. Tutor has

been making with the unions recently. We have certainly helped

him out to the extent that we have talked, and I personally have

talked, to the unions about securing their support.

It is a problem that is not solved yet, but our ability to impact

the problem at this point is limited to jawboning.

Ms. MILLENDER-MCDONALD. To what?

Mr. HANKLA. Jawboning. We talk a lot and we do and we have.

Mr. HORN. A good labor term.

Mr. HANKLA. Yes.

Mr. HORN. J-a-w-i-n-g.

Ms. MILLENDER-MCDONALD. We do understand that jawboning,

yeah.

All right, well, Mr. Wiggs, I did see that there is a slight underpercentage of jobs in the work force in the Carson area; also in the

Compton area I saw in your grid, and Lynwood.

Mr. WIGGS. Compton has exceeded its goals substantially by

three-fold.

Ms. MILLENDER-MCDONALD. Maybe I did not have my glasses on

when I saw that.

Mr. WIGGS. Lynwood is approximately about a percentage point

ahead of its goals.

Ms. MILLENDER-MCDONALD. And what about the Watts area?

Mr. WIGGS. Watts area is part of the Los Angeles community.

Ms. MILLENDER-MCDONALD. Which is part of my district.

Mr. WIGGS. It has approximately 45 percent of the entire labor

force of the Alameda Corridor communities. They have the highest

numerical number of workers and trainees on the project, yet we

are still under goal about 9 percent, given the substantial numbers

that the city of L.A. has.

Ms. MILLENDER-MCDONALD. Yeah, but I am talking about the

city of L.A., Watts, Wilmington, the two W’s that I have talked

about for years. They are still under-represented in this job market.

Mr. WIGGS. If I may take a moment to somewhat take a different

perspective. The Wilmington community, about 12 percent of our

trainees and graduates are from the Wilmington community specifically. Unfortunately, I do not have the following numbers, I did

a report several months ago—— Ms. MILLENDER-MCDONALD. Can you send that to my office, I

will be in the rest of this week and I would like to get that.

The last question that I have, Mr. Chairman, so that I can move

on and leave for my next meeting, I had wanted to talk with Mr.

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Brown, but I suppose he has either left or he is out for this moment. But I would really like to talk with him. And again I appreciate Senator Betty Karnette having someone to come in and speak

today—may I put that on the record? But I would like to talk with

them about their SB–653, especially when you are talking about

improving the work force preparedness to meet the changing manufacturing environment. With my being the ranking member on

Small Business, Work Force and Empowerment, I am interested in

working—is this Mr. Brown? Yes, Mr. Brown, thank you.

I just wanted to ask you to elaborate on your SB–653, especially

directing certain local entities to provide assistance and so forth

and so on for communities impacted by the Alameda Corridor. And

again, will you extend my graciousness to the Senator for having

someone here to represent her, and I know why she is not here.

She is doing the people’s business in Sacramento. Also improving

the work force preparedness, can you expound on that for me somewhat?

Mr. BROWN. The SB–653 was actually a partnership with ACTA

and L.A. County Economic Commission to invest in firstly identifying brownfield locations of the Corridor—— Ms. MILLENDER-MCDONALD. I am sorry?

Mr. BROWN. Brownfield locations.

Ms. MILLENDER-MCDONALD. Uh-huh.

Mr. BROWN. Which could be graded according to their toxicity so

that you could begin to address the mitigation necessary to attract

businesses. The L.A. EDC, as Mr. Hankla pointed out in his presentation, has reached out nationally to attract manufacturing concerns and advance transportation technologies to begin, hopefully

in the near future, to create new plants there that would in turn

help generate quality of life jobs.

I think if you have that in place, and one of the long-term goals

of 653, although not part of the legislation, but certainly the intent

and good will of that legislation; if you are able to attract the manufacturing concerns and the advanced transportation technology

concerns to those sites, you will generate quality of life jobs for people in the corridor which will hopefully enhance small and midsized business in that community and hopefully will begin to initiate affordable housing strategies. You know, they are building

blocks to the process. I think this is one of the key foundational

building blocks, SB–653, in identifying the sites, grading them and

then beginning an extensive marketing strategy that will attract

the businesses to provide precision manufacturing jobs and advanced transportation jobs for people in this corridor and in the

surrounding vicinities.

Ms. MILLENDER-MCDONALD. Have you gotten cities to come together in a joint policy authority or whatever it might be to engage

in the solicitation of companies and manufacturing companies to

come out and look at the area?

Mr. BROWN. Well, actually, that has been the responsibility of

the L.A. EDC, Lee Harrington, and Richard Hollingsworth of Gateway Cities. They have been sort of at the front of that effort and

I believe there have been two or three tours of industry, CEOs and

decisionmakers to the corridor to look at these sites and to begin

that process.

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One thing that Senator Karnette would like to do and we have

been trying to schedule that is to get an inter-agency effort with

Health and Human Services, Winston Hickok, and the treasurer

whose report on smart investment and the double-double bottom

line addresses exactly what the potential of the Alameda Corridor

community region has to offer in revitalizing this manufacturing

hub with quality jobs, helping to raise small and mid-sized businesses to a higher level of earnings and to generate, as I said, affordable housing.

Ms. MILLENDER-MCDONALD. Well, I am interested in following

you and following the Senator on her movements, given the signage

of this bill, and making sure that those cities that are affected really do become cities that have quality of life jobs and economic vitality.

Mr. Chairman, let me thank you again for your insight in bringing this committee to Long Beach; and to all of you who have been

here today, I must leave because I have other commitments and

when I got the word, I had to stop and come in, but thank you so

very much.

Mr. HORN. Good to see you.

Ms. MILLENDER-MCDONALD. Uh-huh.

Mr. HORN. Mr. Wiggs, I was very impressed with the data you

gave to us and you told us some lessons about your experience on

this. I guess let me ask you, if you could change one thing, what

would it be in terms of what you have to go toward goals and so

forth?

Mr. WIGGS. I think the fundamental change would be at the beginning—the front-end of the program design was the appointed

authority determining that a job training, development program

would be part of its criteria for selection of contractors—would be

to establish a punitive system as well; and that is to say that if

there is no performance, a monetary punitive statement in any contractual document setting forth that failing to perform established

goals will result in—my terminology would be impacting contractors’ retention. Because at this point, as I have shared with staff,

the impetus for contract compliance is great, but it is one where

there is the reference of goal, goal versus requirement. Wherever

there is that reference point, there is a feeling that if you do not

achieve the established goal, and you have demonstrated your best

faith, given best faith efforts, the obvious response is OK, I did it,

so what.

That means that there is a harder effort for the implementers

and those who are encouraging goal attainment to really apply the

pressure upon subcontractors and others to perform. At this point,

we are grappling in the final stages of our contract as to what we

should do as a contractor for our subs who less than achieve their

goals. Therefore, the only thing that is left for us to do is to attack

the retention or at least threaten that retention will be attacked

should that become a necessity. I have gotten some response from

our subcontractors in the last quarter, numbers have begun to increase, meaning specifically that trainees have been brought on

their work forces and have been maximized—the hours have been

maximized. So I would think at the beginning would be some reference that attachment of retention or some percentage of retention

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should be withheld for job training assurance for performance purposes.

Mr. HORN. That is helpful. And a lot of them have been integrated into the various unions?

Mr. WIGGS. Yes.

Mr. HORN. So there has been good cooperation there.

Mr. WIGGS. Oh, we have not had union, trade union problems.

I spoke to you early on about the Laborers Union, but again, the

informal agreements have been working well. We are not getting

those formal agreements unless you have at the front-end of a

project as well that labor agreement specifically setting forth the

terms of the training program; i.e., numbers of local workers or

whatever designation of worker category you are using, shall be

employed on this project from beginning-to-end and the trade

unions are signing off on that agreement at the front end.

Mr. HANKLA. Mr. Chairman, I think it is important to note that

in the mix of workers on the Corridor, approximately 60 percent— correct me if I am wrong—would be laborers. So if we have a problem with the Laborers Union, that is much larger as a problem

than, for example, if we had a problem with the Electricians’ Union. I think that has been one of our problems and I think that

Mr. Wiggs would agree that best efforts at this point with the Laborers have as yet to produce the kind of results we would like.

And since they are so over-represented in terms of the workforce,

it has an interesting and negative impact on the numbers.

Mr. HORN. That is very important.

Anybody have something they want to get on the record before

we close it out? Although if you have a good idea, we keep it open

to put something, a memorandum or letter, in the mail or whatever. But this has been very enlightening for me of all the progress

that has been made. You will have lots of visitors.

Mr. Buresh.

Mr. BURESH. There are a couple of comments I would like to get

into, to go back to some of our discussions, if you will, about the

overall transportation system. I think it is the lessons to be learned

from the Corridor and some of the opportunities in here. This has

been a very effective partnership between the ports and the railroads that impacts the transportation system dramatically.

When the Corridor comes on-line, one of the benefits will be the

dramatic reduction in travel time for a container traveling by rail

from the ports to say San Bernardino. Presently that trip I believe

takes 10 to 12 hours depending on rail traffic congestion. Now that

trip will go down to an average of say 3 hours for the BurlingtonNorthern Railroad. That suddenly changes possibilities and those

things which would not make economic sense in the past suddenly

become more viable.

We talked about AB–2928, that is a required study by several

counties to address goods movement, but it has turned into a grade

separation study. It is not really addressing goods movement. More

important, it is not addressing how you change that flow of goods.

I think for those of us who have worked with CALTRANS and been

driving through their large long-term projects, that is a project delivery time line that is broken and we cannot count on. I think we

need to find ways to shift more containers from trucks to rail and

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expand that as a viable alternative, to start either reducing truck

trip length or the number of truck trips. I believe that the current

studies are not addressing that opportunity or taking advantage of

the increased opportunities that the opening of the Corridor will

present in a very short time.

We need to also come up with a different project delivery method

for CALTRANS. Frankly, there has not been a penalty for their

failure to perform. At peak construction volume on the Corridor, we

put in place over $2 million worth of work per day. CALTRANS on

average puts in $3 million per day in the entire State. Clearly

things could be speeded up, expansions could be made more rapidly, and more responsive, to our changing needs.

The ports are unusual in that we can see where our growth is

coming, we can see what the demand is going to be. Mr. Keller referred to the fact that half of those containers go to Los Angeles,

well they come from the ports, but they go somewhere. We have

over 20 million square feet of new warehouse or big box space

opening up in San Bernardino. By definition, trucks come from

somewhere to feed them, they leave them to feed somewhere else.

And the whole time that all those facilities have been getting installed out there, we have not addressed whether we should serve

them in any way other than traditional truck road, which consists

of once they leave my loading dock, I do not think about them, I

do not care how they get where they are going. I think as a region,

we have got to get our arms around that and come up with a wiser

approach to having a good mix between rail and truck service and

having the right kinds of truck service into those facilities.

Mr. HORN. That is a very helpful perspective.

Mr. Hankla.

Mr. HANKLA. There is one other item, and that is, I think as

these other projects search for the nexus that will allow them to

become reality, the one thing that they should be looking toward

is how they can add value in terms of cargo and goods movement,

and in particular how they would add value for the railroads, because they are the principal partners. We added value, or the Alameda Corridor would not exist. How do they add value, that is the

question.

Mr. HORN. Well, give me some examples of the value added.

Mr. HANKLA. Well, does this improve in some fashion the railroad’s ability to move cargo; does it move it faster, does it move it

cheaper, does it move it better. Those, I think, will become the sine

qua non that the railroads are going to be looking for to get involved in a partnership and these other projects. Without the railroads, you do not have a partnership.

Mr. HORN. So you would see a much faster movement of goods

from port to wholesale and retail, once it is out of Los Angeles

County, and it is apparently quite a bit in Los Angeles County. But

I take it the trucks will handle most of that. Is there sort of any

rule of thumb, Mr. Keller, Mr. Steinke, as to whether you see the

truck traffic changing and doing maybe within 150 miles or something like that, or San Diego, as opposed to putting it on a railcar?

Mr. STEINKE. Congressman, I think those are some of the studies

that groups like the Transportation Research Board are looking at

and as Mr. Buresh said, the idea of maybe taking a train, a unit

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train, to a place like Ontario or San Bernardino, to eliminate trips

on the 710; whether or not those make economic sense. And I think

that those studies are taking place by the groups that I just mentioned. Traditionally, we think of intermodal cargo as anything

about 300 miles and further, and so that is where we come up with

our basic ratios of about 50 percent serving the local market and

then 50 percent moving what we call intermodally. But I think we

need to continue to look at what makes sense, if there is a train

movement that goes into San Bernardino County, and then serves

the areas closer in. Those are things that other groups are looking

at, whether that makes sense. I think we need to continue to investigate those kinds of things.

Mr. HORN. Mr. Keller.

Mr. KELLER. That is certainly one part of the model. Another

one, Congressman, that we have discussed actively is strengthening the whole distribution system. We have truckers who will drive

at night, we have terminals in the ports that will stay open at

night. But the containers have nowhere to go. The same distribution centers we are talking about want to open at 8 a.m., and close

at 6 p.m., leaving the trucker with no secure spot to drop the container.

We have to strengthen that system, and in so doing, we would

effectively free up the freeways for roughly sometime between 9

p.m., and 7 a.m., a time when most commuters and most other citizens are not using those freeways and highways. We think that has

enormous potential as well and we are actively engaged with several of the groups who can make this happen, particularly with

some of the smaller importers and exporters.

So we think that there are solutions here and they are all being

studied.

Mr. HORN. That is an exciting idea as to certain times where the

bulk of the traffic could go and other times not.

Any other comments? Yeah, Mr. Brown.

Mr. BROWN. Congressman, I would just like to go back to the Alameda Corridor East and I think Mr. Kellogg identified it as sort

of a piecemeal process. AB–2928 invested $273 million for those

four counties to invest in building the Corridor which is now, as

Mr. Buresh indicated, a grade separation project, not necessarily a

goods movement project. What is key, in order for this project to

build it from the Redondo junction to the desert is that there needs

to be a regional approach. We cannot do it in a piecemeal fashion,

we cannot do it through a parochial lens. All of the districts—congressional districts, legislative districts east of the Redondo junction need to look at this as a team effort or else we will build this

in a piecemeal fashion and it will take twice as long and probably

three times the money. And we will have a great deal of congestion.

So I just want to suggest that in talking with your colleagues in

Congress, that the approach to building the Alameda Corridor East

be one of a regional approach.

Mr. HORN. That makes a lot of sense and that is how we got this far. Now as I remember, it was $800 million, the Secretary of

Transportation signed on and said you did not have to start paying

it back until what—— Mr. BURESH. $400.

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Mr. HORN. $400. What did you do with the other $400?

Mr. HANKLA. We got $400 from the Federal Government in a

loan.

Mr. HORN. Good heavens, I thought it was $800.

Mr. HANKLA. The ports advanced $400 risk capital up front.

Mr. HORN. That was Secretary Pen ̃ a.

Mr. HANKLA. We got approximately $400 million, give or take,

through California Transportation Commission MTA, the rest was

bond funded.

Mr. HORN. So have you fixed a figure on the container and how

long it will take to pay the Federal Government back?

Mr. HANKLA. It will be based—at current projections it looks like

there will be an early retirement of the debt all around. How early,

I could not say. But based upon cargo growth, it appears that the

debt will be retired earlier than anticipated.

Mr. HORN. Do you have any thoughts on the financing here that

somebody wants to comment on? Yes, Mr. Preusch.

Mr. PREUSCH. The $800 million was the amount that the $400

million loan grew to before the amortization actually occurred.

With the increasing volumes that we are seeing, it probably will

not get to that point. As Mr. Hankla pointed out, all of the debt

should be retired quite a bit sooner than the loan agreement anticipated.

One of the things, if I could make one other point, with regard

to regional issues and concerns related to the Alameda Corridor

East or the Placentia project, I think it is important to recognize

not just how, as Mr. Hankla pointed out, the railroads would benefit, but who the ultimate beneficiaries are. About half, 55 percent,

of the cargo coming through the San Pedro Bay ports is moving to

points well east for consumers that are back there. There needs to

be some mechanism to connect the benefit that those ultimate consumers receive to the costs of moving those goods faster and with

less congestion, less impact here.

One of the things that the airline industry has done is to use a

passenger facility fee. Each one of us pays a very, very small

amount to fly through LAX whether we live here or not. There may

be a parallel structure that could be imposed on goods movements

in a way that would cause the ultimate consumer to help support

some of these projects in a more regional or national sense.

I think it is important that the money not be redistributed, that

it be applied where the needs are, in this area as an example. But

as has been said many, many times, we cannot expect the ports,

we cannot expect ACTA to fund every grade separation between

here and Chicago or New York.

Mr. HORN. Well said. I am interested in what you think—these

would be the sort of duplicate for what was the harbor maintenance tax that the Supreme Court threw out.

Mr. PREUSCH. I think the issue with the harbor maintenance tax

was the redistribution of money, it was not necessarily used where

it was collected. I think perhaps an approach that would bring a

fee back to a port or a region where the congestion is occurring,

where the relief is needed might work a little more effectively.

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Mr. HORN. Do you see any other option in terms of replacing the

harbor maintenance tax that would withstand Constitutional muster?

Mr. PREUSCH. I do not know that I have explored it that thoroughly. I think that is likely the case. One of the issues there, of

course, was the redistribution. To the extent that money is collected for cargo coming through an area, it needs to be used to support that same area. That is the principle that has worked with the

passenger facility charge in the airline fee and I think that is a

pretty good model to at least explore.

Mr. HORN. Yeah, and of course the airlines were very upset

about that when Los Angeles International put that on, but I first

remember that in Yugoslavia back in the 1960’s and 1970’s. They

get you going out of town, that is for sure.

Well, thank you for that dialog and thank you all, gentlemen, for

your help in this. A lot of people are going to want a copy at other

ports in America as to what you all said this morning. So thanks

for coming and we appreciate it.

Let me thank the staff that put this together. Right to my left,

your right, staff director and chief counsel, Russell George; Dianne

Guensberg, professional staff has returned to Washington. On my

right is the professional staff member and director of communications, Bonnie Heald, who came from Long Beach here. Earl Pierce,

professional staff is back in Washington, as is Matthew Ebert, policy advisor. Grant Newman is here doing all the work and he is

over there. Put your hand up, Grant. And then Brian Hom, our intern is staying in Washington.

Now we want to thank the people here that helped us a lot and

they are Steve Sykora and Arturo Garcia. We are delighted to have

this facility. They are both related to public relations for the Port

of Long Beach. And then Bill Warren, this will be his last hearing

in the last 10 days and I am sure he is glad to get back to Georgia—the court reporter.

We thank you all and with that, we are adjourned.

[Whereupon, at 11:46 a.m., the subcommittee was adjourned.]

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