Hotline #246 - June 7, 2002

Amtrak could face a shutdown of services in July unless it can get a $200 million loan soon, according to a letter to employees earlier this week from President David Gunn. However, Gunn said he remains optimistic that Amtrak will get the loan. Gunn also has been writing to and meeting with key Administration and Congressional leaders to bring them up to date on Amtrak's financial situation, which he says is much worse than he expected.

Assuming Amtrak gets the loan, and then gets $1.2 billion it has asked for in 2003, about one-sixth of the 2003 funds would immediately go to the financial institutions who made the loan used to survive fiscal 2002. Amtrak has required some short-term lending to finish most of the recent fiscal years.

At the June 6 Amtrak board meeting, Gunn presented a plan for reorganizing the company, effectively undoing many structural changes made during the previous Downs and Warrington managements. The biggest change would be a recentralization of command to the Washington headquarters, with the elimination of the three regional SBU's (strategic business units) -- Northeast Corridor (in Philadelphia), Intercity (Chicago), and West (Oakland). This also involves cutting the number of people with "vice president" in their title from 84 to about 20. The head of the Northeast Corridor SBU, Senior Vice President James Weinstein, has resigned effective June 15, after having come to Amtrak on February 4.

Gunn is also interested in restoring a "traditional railroad structure" to the company, to be in place early in fiscal 2003. "We will have an operating department, a mechanical department, an engineering department, etc.," he wrote in the letter to employees. Gunn ended the letter by saying, "One last thought. Guests may be called passengers." Indeed, examples of the word "passengers" replacing "guests" already were evident on Amtrak's web site by midweek.

In a Washington Post interview, Gunn said that if the loans aren't finalized and Amtrak runs out of operating cash, he would shut down all services nationwide. He has told Congressional leaders that Amtrak's financial situation had been sugar-coated in the past, and that the concept of operational self-sufficiency (as enacted by Congress in 1997) was a bad idea. The response from one of those leaders, Senate Commerce Committee Ranking Republican John McCain (Ariz.) was quoted in today's Post. McCain said that a shutdown of Amtrak would be disruptive in certain parts of the country, while repeating his claim that long-distance trains run only for "political" reasons. McCain wrote that he found Gunn's candor "refreshing" and that he would ask the Commerce Committee to hold a hearing to consider "what must be done to avoid a shutdown of the entire Amtrak system in July."

The Senate approved its version of the emergency supplemental bill (H.R.4775) early this morning, on a 71-22 vote, after rebuffing attempts by John McCain (R.-Ariz.) and Phil Gramm (R.-Tex.) to strip out funding items. McCain had 21 amendments ready, including two relating to Amtrak, but only three were discussed (none of them Amtrak-related), and those were blocked. One McCain amendment would have deleted all of the $55 million for Amtrak ($12 million for security, $23 million for overhauls, $20 million for wreck repairs), the other would have given the Secretary of Transportation (and thus, the White House) the power to determine whether overhauls and wreck repairs qualify as "emergencies." In any event, as the bill moves to a House-Senate conference committee, the Senate version still contains the Amtrak money. The House version has $29 billion; the Senate version has $31 billion.

A letter urging funding for Amtrak in 2003 in the amount of $1.975 billion was signed by 162 Representatives and sent to House appropriations leaders. That amount is the same as in the one-year Amtrak authorization bill, H.R.4545, approved by the Railroads Subcommittee on May 8. The amount includes the $1.2 billion Amtrak said it needs to survive in 2003, plus $400 million for life-safety work in the New York, Baltimore, and Washington tunnels, and $375 million for systemwide security. Click here for a complete list of the 162 names.

A similar letter in the Senate currently has 33 signatures.

The Railroads Subcommittee (chaired by Jack Quinn, R.-N.Y.) of the House Transportation and Infrastructure Committee held a hearing June 6 about recent derailments and safety in the rail industry in general. The lead witnesses were the chairman of the National Transportation Safety Board, Marian Blakey, and Federal Railroad Administrator Allan Rutter. "As judged by most indicators, the long-term safety trends on the nation's railroads are very favorable," Rutter said. He pointed out any train "mishap" resulting in at least $6,700 in damage must be reported as a "train accident," meaning that when the news media report accident totals, many minor "fender benders" or mechanical malfunctions are counted in the same way as the worst derailments.

Rutter said that 95% of all rail-related fatalities are in fact related to grade-crossing accidents and trespassers. Rep. John Mica (R.-Fla.) asked Rutter a series of questions that essentially were about whether Amtrak derailments are caused by poor Amtrak maintenance practices, and whether Amtrak's financial problems are leading to poor maintenance practices. Rutter stated that neither hypothesis is true.

The Phoenix West line may soon become property of the State of Arizona, benefiting from a fiscal 2003 budget signed into law June 4 by Governor Hull. The budget, which is for the year starting July 1, allocates $650,000 for the purchase of 78 miles of Union Pacific rail line from west of Phoenix to Wellton (near Yuma). The money would come from the state highway fund share of vehicle license tax collections. This is the line that was used by Amtrak's Sunset Limited until 1996, when the line was downgraded. The segment is vital to restoring Sunset Limited service to Phoenix, as well as development of an eventual Phoenix-Los Angeles corridor.

A rotating bridge over the Norwalk River was stuck open for four hours on Saturday, June 1, delaying thousands of Amtrak and Metro North passengers. The bridge is in South Norwalk on Metro-North's New York-New Haven line.

All of Amtrak's Michigan trains (Chicago-Detroit-Pontiac) have schedule changes in effect through September 30, as a result of various summer track work projects. Departure times from the originating station are about the same, but arrival at end stations is about 30 minutes later than shown in the April 29 timetable. Consult Amtrak or its web site before traveling on these trains.

The Vermont legislature passed a state budget this week that left out money needed to start a New York-Albany-Schenectady-Manchester service this year. Amtrak had told the state that $1.16 million was needed, based on its own ridership projection, which one local supporter told the Rutland Herald was too low. Also, the budget came below Amtrak's request for the Ethan Allen and Vermonter by $500,000. A contract between Amtrak and the state to run those two trains is still pending. At the state's request, Amtrak recently eliminated the baggage car on the Ethan Allen, which also ended bicycle carriage on that train.

A $223,000 renovation of the station in Slidell, La., has been progressing, and the waiting room and restrooms were completed June 4. The city has contributed $50,000, Amtrak $30,000, and the rest came from state grants. A coffee shop is expected to open in the fall, and the city has plans for community use of the building's second floor. Slidell is a stop for the Crescent.

The release of Census data has led to some anti-transit reporting this week. The Surface Transportation Policy Project said, "Over the last six years, total transit use has shot up 23%, outpacing the growth in driving." But Census data is based on just two snapshots -- the first weeks of April 1990 and 2000. STPP says, "The new Census figures show a smaller portion of commuters used transit to get to work in 2000 [than in 1990], down to 4.7% from 5.3% in 1990, with absolute numbers remaining essentially flat." However, respondents to the Census long form can show only one type of travel, so the data ignores much transit use.

Consider, for example, someone driving to work three days a week and using transit two days, or taking transit daily but reporting auto because of a long drive to the station. Also, STPP notes that Census Journey-to-Work data covers just 20% of all trips, and so ignores growing transit use for other purposes, and the value of that growth given the increasing number of hours when roads are congested. See the STPP web site for more.