CFO outlines budget changes: NEPA positions, IT hires and cap‑and‑trade shortfall risk

Jamie Matalka, chief financial officer for the California High‑Speed Rail Authority, told the Finance and Audit Committee the recently enacted state budget includes four key changes affecting the authority’s operations: new positions for NEPA implementation, IT hires, a pause on proposed austerity reductions and modest reimbursement authority for an inspector general office.

"Thirteen new positions for implementing the NEPA assignment MOU" were added, Matalka said, referencing the agreement under which the authority serves as lead agency for NEPA and related federal environmental compliance tied to projects connected to the high‑speed rail system. He said the authority is aware of eight local projects that may be included under the NEPA assignment.

Matalka said the budget also provides eight new information‑technology positions over two years to develop standards and security frameworks needed to support train operations. A previously proposed cut of six positions and other austerity measures are on pause for now; the Department of Finance may trigger those reductions midyear depending on revenue updates, he said. The budget also includes up to $113,000 in reimbursement authority to support administrative needs for the authority’s Office of Inspector General.

Matalka presented cash and fund balances through May 2025. He reported roughly $4.2 billion in funds overall, broken out as about $331 million in Proposition 1A bond funds, about $3.8 billion in cap‑and‑trade funds and roughly $13 million in the property management fund; he noted the May 2025 cap‑and‑trade auction will add about $149 million once the state controller processes related entries. Matalka said recent auctions have come in below planning assumptions and that the authority’s planning assumption is roughly $1 billion per auction. "Our base assumption is about $250 million per auction," he said, noting recent dips and a recent 10% increase in allowance prices in a market movement.

Matalka reported dispute balances rose about $49 million since the last reporting period — largely driven by disputes with one contractor — but that staff recently resolved about $53 million in disputes, which will show in the next reporting cycle. He also gave portfolio summaries: capital outlay expenditures for the reporting period were about $128 million, bringing year‑to‑date capital expenditures to about $1.3 billion through the 92 percent complete fiscal year. He said the authority’s contingency balance remains nearly $1.5 billion after 10 executed change orders in the reporting period totaling about $15.2 million.

On procurement goals, Matalka said the program is slightly below overall small‑business goals but above targets for disadvantaged business enterprise (DBE) and disabled‑veteran business enterprise (DVBE) goals. He reported 932 small businesses working on the program, including 327 DBEs and 116 DVBEs.

Committee members asked whether cap‑and‑trade revenue volatility would affect funding if refineries exit the state; Matalka said the authority and administration are monitoring markets and policy developments and that allowance price increases could raise auction proceeds in future cycles. He said the authority is processing federal grant reimbursements and noted the Merced extension design project recently received about $102,000 in federal reimbursement under a RAISE grant.

No formal committee vote was taken on budget matters during the meeting.