Hotline #733 - November 18, 2011

[The lead story is based on an updated version of the NARP Blog’s “Congress protects state-supported trains, slashes Amtrak operating funds, and kills high-speed rail”]

President Barack Obama today signed into law the “minibus” spending bill that funds the Agriculture, Commerce-Justice-Science, and Transportation-Housing & Urban Development departments for Fiscal 2012.  House and Senate negotiators had reached agreement on Monday.  The conference report was adopted in the House by a 298-121 vote, and in the Senate by a 70-30 vote.

The bill funds Amtrak at $1.42 billion and drops the House subcommittee’s language forbidding use of federal funds on short-distance trains.  But there is no new funding for the High-Speed and Intercity Passenger Rail Program of grants to states for infrastructure and equipment investments.  The Senate had included $100 million for this, the House nothing. 

The Amtrak operating number is alarmingly tight at $466 million, which is $95 million (or 17%) below the 2011 level. 

If passenger train advocates had not prevailed and eliminated the House subcommittee language, continued service on at least 150 weekday trains and travel for more than nine million passengers a year would have been put at risk.  This included such popular services as California’s Capitol Corridor and Pacific Surfliner, the Midwest’s Hiawatha and Heartland Flyer, and Maine’s Downeaster.

Amtrak capital funding was increased by negotiators above the Senate’s $936 million and the House subcommittee’s $898 million.  The good news is that Amtrak’s two orders of new equipment will not be affected (single-level, long-distance cars and electric locomotives).

But the offsetting price is heavy.  Amtrak Operating was slashed to $466 million.  While well above the House subcommittee’s proposal of $227 million—which NARP believes would have forced a system shutdown—this was well below the Senate’s $544 million and the 2011 level of $561 million.  The $466 million figure is slightly more than the $457.5 million Amtrak actually needed for 2011.

The new operating level presents a bigger problem than may first appear.  Amtrak cannot count on record revenues every year, or on besting the bottom line in its budget (which it did for 2011 by $30 million).  A major economic downturn or accident could wreak havoc in fiscal 2012.  Legislators, it seems, are looking to provide the bare minimum to keep existing trains running or, as some observers would put it, giving Amtrak “just enough to fail.”

Negotiators also included a provision encouraging Amtrak to build up an operating reserve account:

“The conferees encourage Amtrak to carry $200 million in reserves within their Operating account, and encourage use of any favorable ticket revenue to get to this amount before using this favorable ticket revenue on Capital expenses unless such Capital expenses are necessary to ensure the safe operation and maintenance of the passenger rail system.”

Given the very tight operating grant level legislators have just provided, it is not clear how they expect Amtrak to build up its reserves. This language perhaps is intended as advance warning that appropriators will continue to look at ways to eat away at Amtrak’s grant in future budgeting cycles.

The news was also bad for the High-Speed and Intercity Passenger Rail Program, which saw all funding eliminated.  This comes as a disappointment, following a successful summer and fall by the Federal Railroad Administration.  The FRA made great strides in clearing the way for states to request bids, hire engineers and workers, and begin upgrading tracks around the U.S.  This zero-out could also negatively impact California’s Los Angeles-to-San Francisco high-speed rail project, which has been caught in turmoil over a new business plan which increased the final price tag of the project.  Nonetheless, funding already in the pipeline will provide a lot of jobs and service improvements over the next few years—if Congress does not continue to ratchet Amtrak funding down to the point where the trains stop running.

Senator Dick Durbin (D-IL) praised the push-back against the House-led attack on state supported services, and remained upbeat in the face of the elimination of high-speed rail funding.  The senior Senator from Illinois predicted that the $500 million in funding for the Transportation Investment Generating Economic Recovery (TIGER) Program could be used to continue work on a high-speed rail projects.  TIGER is targeted at projects of regional significance that span multiple jurisdictions—difficult to finance through traditional funding structures)—with an emphasis on existing rail, highway, and transit systems over new-build.

“By rejecting the House Republican proposal that would have devastated Illinois Amtrak, the members of the Conference Committee affirmed Congress’ commitment to continue growing passenger service in the United States,” said Durbin.  “While I am disappointed that the final bill did not include funding specifically for high speed rail, I am confident that our commitment will continue through the TIGER grant program… Across the country, high speed rail is consistent with the TIGER grant program’s objective—to fund nationally significant transportation projects that will improve safety, spur economic development, reduce congestion through multimodal investments and create thousands of good paying jobs.” 

That view was contradicted by Representative Bill Shuster (R-PA), who chairs the House subcommittee on Railroads, Pipelines and Hazardous Materials.  In a statement issued yesterday, Shuster claimed that this vote was a sign that GOP had successfully killed the President’s vision for a national high-speed rail network, clearing the way to refocusing efforts on the Northeast Corridor.

“Today’s vote marks the end to President Obama’s misguided high speed rail program, but it also represents a new beginning for true intercity high-speed passenger rail service in America,” said Shuster.  “By zeroing out high-speed intercity passenger rail funding, we are being given the unique opportunity to refocus and reform the high-speed rail program on the rail lines that will produce the most benefit for the least amount of cost.”


Amtrak buy-out, impending Reduction in Force, and establishment of six business.

Amtrak non-union employees have until November 25 to decide whether or not to take the proffered buy-out.  The “Voluntary Separation Incentive Plan Offer” went to employees with at least one year of service.  Those who do not accept run the risk of receiving a less generous, involuntary separation agreement as part of a Reduction in Force starting in January. 

Amtrak is reorganizing (again!) into six business lines, with a “reduction in the number of non-agreement employees across all departments.”  The business lines are:

• Northeast Corridor Infrastructure and Investment Development
• Northeast Corridor Operations
• State Supported Services
• Commuter Services
• Long-Distance Services
• Corporate Asset Development

See computer page 33 (printed page 29) of Amtrak’s latest strategic business plan.  From Amtrak’s home page, click on “Inside Amtrak,” then “Reports and Documents,” and then—towards the bottom—the second item under “Comprehensive Business Plan.”


Ten railroad unions have signed onto a labor agreement with Class I railroads, lessening the threat of a labor strike that could halt the movement of Amtrak trains running over freight lines in early December.

The talks are being led by a Presidential Emergency Board, named by President Barack Obama in October to prevent a strike.  The Association of American Railroads warns a strike could cost the U.S. economy $2 billion a day.  The move instituted a 60-day “cooling off” period which ends December 6—at which point the workers would be permitted to strike under the Railway Labor Act.

However, now that the 10 union milestone has been reached—representing 60 percent of the 132,000 employees in negotiations—it seems likely that the two sides will come to an agreement.

“A strike is unlikely,” Citigroup Global Markets Inc. analyst Christian Wetherbee told Bloomberg News. “The more that you get to sign up for an agreement, the more likely that you end up with a resolution” by the deadline.


The U.S.  Department of Transportation announced today that the California Department of Transportation (Caltrans) will receive $21 million to begin engineering on three projects to improve Southern California’s Pacific Surfliner route—one of America’s busiest passenger rail corridors.

“These dollars will help Californians to have better access to faster, more efficient passenger rail service throughout the state,” said Transportation Secretary Ray LaHood. “The projects will help relieve congestion, create jobs and help ensure the world’s eighth largest economy continues to grow.”

The engineering will focus on three upgrades to the Los Angeles-San Diego line:

• City of Oceanside: $4 million will go to preliminary engineering and environmental work for the construction of second main track (connecting two existing sections of double track) and the replacement of an aging railway bridge over the San Luis Rey River, reducing delays and improving on time performance.
• City of Del Mar:  $7 million will go for preliminary engineering and environmental work for a 1.1 mile section of second main track, the replacement of a 95-year old timber railway bridge, and signal improvements. A permanent seasonal rail platform with direct access to the Del Mar Fairgrounds—whch hosts more than 300 events every year, and serves as a major generator of passenger traffic in the summer—will be designed as part of this project. This project will improve on-time performance for intercity, commuter, and freight operations.
• Elvira to Morena Double-Track Project: $10 million will go to the design, environmental, and engineering work to connect two sections of double track, resulting in a 10.3-mile stretch of double track as part of the long-range plan to double track the San Diego segment of the Pacific Surfliner corridor.

Minot, North Dakota, regained Amtrak service November 15, Amtrak officials announced this week.
Severe flooding in the region forced a rerouting of the Empire Builder throughout much of the summer, and damage to Minot’s historic station has hindered resumption of the service.  Amtrak and local work crews have made necessary repairs to the station, establishing a temporary waiting area and ticket counter in a section of the station normally reserved for baggage.  Accordingly, baggage service will remain suspended until further repairs can be made.

“We appreciate the patience of our customers and are pleased to announce the restoration of service in Minot,” said Daryl Pesce, the Chicago-based Amtrak General Superintendent.

The restoration of the train comes just in time for the Thanksgiving holiday travel week, the railroad’s busiest time of the year.  As well, the economy in North Dakota is booming thanks to the oil industry – although this is making housing unaffordable for many long-time residents.


The planned higher-speed intercity rail corridor between the Twin Cities and Chicago should be routed along the Mississippi River, according to a study released by the Minnesota Department of Transportation and the Federal Railroad Administration on November 15.

The Mississippi River alignment was selected as the preferred alternative, beating out a competing corridor that would have followed Interstate 94 and included Eau Claire, Wisconsin as a stop.

“Now, we can focus all our efforts on developing that one corridor,” Dan Krom, director of MnDOT’s passenger-rail office, told the Pioneer Press.  “If we can get to Chicago in 5-1/2 hours, we can compete with autos.”

The river route would connect St. Paul, via Hastings and Winona, to downtown Chicago and Milwaukee utilizing portions of Amtrak’s existing Hiawatha route.  The alignment was selected because it hits the most population centers in Minnesota and has the shortest operating time.  Additionally, the existing Amtrak tracks ensures the lowest start-up capital costs.

“With the route finalized and the environmental phase of the study beginning, now is the time for state lawmakers and members of Congress to begin working together to make high-speed rail a priority in Minnesota and throughout the Midwest,” said Winona Mayor Jerry Miller, who also serves as Chairman of the Minnesota High-Speed Rail Commission.


A vice president for Amtrak revealed that the railroad’s share of the New York-Washington air-rail travel market has grown to 73%.  His statement came at the annual meeting of the New Jersey Association of Railroad Passengers in Bordentown, New Jersey.

Drew Galloway, Amtrak assistant vice president for Northeast Corridor Infrastructure and Investment Development, also said Amtrak has 93% of the air-rail travel market between Washington and Philadelphia.

You can read the full minutes of NJ-ARP’s meeting on the NARP Blog.


Congresswoman Jean Schmidt (R-OH) has introduced a bill in the House called the Amtrak Food and Beverage Service Savings Act, which would require the Federal Railroad Administration to seek competitive bids to provide food and beverage service on Amtrak’s trains.

The FRA would be required to submit a request for proposals on the Northeast Corridor, long-distance routes, and state-run routes.  Bids resulting in the lowest cost or the greatest revenues to Amtrak will be selected.  While Amtrak would be allowed to submit a bid to continue to provide food and beverage service, Representative Schmidt hopes that the private sector will be interested in providing the service at less cost, or greater profit.  The bill allows for planned operating deficits, but “only to the extent that such net loss was anticipated in the bid selected.” 

It is not clear how the bill would affect existing Amtrak labor contracts.


Travelers Advisory

In preparation for the Thanksgiving week—the busiest week of the year for passenger trains—take a minute and read up on Amtrak’s holiday travel tips [PDF].