[House Hearing, 106 Congress]
[From the U.S. Government Printing Office]
DEPARTMENT OF TRANSPORTATION AND RELATED AGENCIES APPROPRIATIONS FOR 2000
_______________________________________________________________________
HEARINGS
BEFORE A
SUBCOMMITTEE OF THE
COMMITTEE ON APPROPRIATIONS
HOUSE OF REPRESENTATIVES
ONE HUNDRED SIXTH CONGRESS
FIRST SESSION
________
SUBCOMMITTEE ON THE DEPARTMENT OF TRANSPORTATION AND RELATED AGENCIES
APPROPRIATIONS
FRANK R. WOLF, Virginia, Chairman
TOM DeLAY, Texas MARTIN OLAV SABO, Minnesota
RALPH REGULA, Ohio JOHN W. OLVER, Massachusetts
HAROLD ROGERS, Kentucky ED PASTOR, Arizona
RON PACKARD, California CAROLYN C. KILPATRICK, Michigan
SONNY CALLAHAN, Alabama JOSE E. SERRANO, New York
TODD TIAHRT, Kansas JAMES E. CLYBURN, South Carolina
ROBERT B. ADERHOLT, Alabama
KAY GRANGER, Texas
NOTE: Under Committee Rules, Mr. Young, as Chairman of the Full
Committee, and Mr. Obey, as Ranking Minority Member of the Full
Committee, are authorized to sit as Members of all Subcommittees.
John T. Blazey II, Richard E. Efford, Stephanie K. Gupta, and Linda J.
Muir, Subcommittee Staff
________
PART 5
Page
DEPARTMENT OF TRANSPORTATION:
Amtrak Reform Council........................................ 515
Federal Railroad Administration.............................. 267
Grants to Amtrak........................................... 1
Research and Special Programs Administration................. 587
Surface Transportation Board................................. 779
________
Printed for the use of the Committee on Appropriations
________
U.S. GOVERNMENT PRINTING OFFICE
60-844 WASHINGTON : 2000
COMMITTEE ON APPROPRIATIONS
C. W. BILL YOUNG, Florida, Chairman
RALPH REGULA, Ohio DAVID R. OBEY, Wisconsin
JERRY LEWIS, California JOHN P. MURTHA, Pennsylvania
JOHN EDWARD PORTER, Illinois NORMAN D. DICKS, Washington
HAROLD ROGERS, Kentucky MARTIN OLAV SABO, Minnesota
JOE SKEEN, New Mexico JULIAN C. DIXON, California
FRANK R. WOLF, Virginia STENY H. HOYER, Maryland
TOM DeLAY, Texas ALAN B. MOLLOHAN, West Virginia
JIM KOLBE, Arizona MARCY KAPTUR, Ohio
RON PACKARD, California NANCY PELOSI, California
SONNY CALLAHAN, Alabama PETER J. VISCLOSKY, Indiana
JAMES T. WALSH, New York NITA M. LOWEY, New York
CHARLES H. TAYLOR, North Carolina JOSE E. SERRANO, New York
DAVID L. HOBSON, Ohio ROSA L. DeLAURO, Connecticut
ERNEST J. ISTOOK, Jr., Oklahoma JAMES P. MORAN, Virginia
HENRY BONILLA, Texas JOHN W. OLVER, Massachusetts
JOE KNOLLENBERG, Michigan ED PASTOR, Arizona
DAN MILLER, Florida CARRIE P. MEEK, Florida
JAY DICKEY, Arkansas DAVID E.PRICE,North Carolina
JACK KINGSTON, Georgia CHET EDWARDS, Texas
RODNEY P. FRELINGHUYSEN, New Jersey ROBERT E. ``BUD'' CRAMER, Jr.,
ROGER F. WICKER, Mississippi Alabama
MICHAEL P. FORBES, New York JAMES E. CLYBURN, South Carolina
GEORGE R. NETHERCUTT, Jr., MAURICE D. HINCHEY, New York
Washington LUCILLE ROYBAL-ALLARD, California
RANDY ``DUKE'' CUNNINGHAM, SAM FARR, California
California JESSE L. JACKSON, Jr., Illinois
TODD TIAHRT, Kansas CAROLYN C. KILPATRICK, Michigan
ZACH WAMP, Tennessee ALLEN BOYD, Florida
TOM LATHAM, Iowa
ANNE M. NORTHUP, Kentucky
ROBERT B. ADERHOLT, Alabama
JO ANN EMERSON, Missouri
JOHN E. SUNUNU, New Hampshire
KAY GRANGER, Texas
JOHN E. PETERSON, Pennsylvania
James W. Dyer, Clerk and Staff Director
(ii)
DEPARTMENT OF TRANSPORTATION AND RELATED AGENCIES APPROPRIATIONS FOR
2000
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Thursday, March 4, 1999.
NATIONAL RAILROAD PASSENGER CORPORATION (AMTRAK)
WITNESS
GEORGE D. WARRINGTON, PRESIDENT AND CHIEF EXECUTIVE OFFICER, AMTRAK
U.S. DEPARTMENT OF TRANSPORTATION (DOT)
WITNESSES
JOLENE M. MOLITORIS, ADMINISTRATOR, FEDERAL RAILROAD ADMINISTRATION
JAMES T. McQUEEN, ASSOCIATE ADMINISTRATOR FOR RAILROAD DEVELOPMENT,
FEDERAL RAILROAD ADMINISTRATION
KENNETH M. MEAD, INSPECTOR GENERAL
MARK DAYTON, DIRECTOR OF COMPETITION, ECONOMICS, AND TECHNICAL ISSUES,
OFFICE OF INSPECTOR GENERAL
Introduction
Mr. Wolf. Maybe we can begin, Mr. Warrington, you can begin
and then we'll go to Mr. Mead and Ms. Molitoris.
Amtrak Opening Statement
Mr. Warrington. Thank you very much, Mr. Chairman.
I want to thank you for the opportunity to appear here
today. Amtrak has made tremendous progress since I testified
here before you last April in my role as acting president of
the Corporation. I know well that Amtrak must present
consistent, accurate and verifiable proof of our progress to
transform this corporation into a commercially oriented,
customer focused and financially sound business enterprise.
I fully understand that you have issued a challenge to this
railroad to become financially sound. I take this challenge
very seriously, otherwise, I would not have accepted the
position of president and chief executive officer this past
December.
new board of directors
Since my last appearance before you, Mr. Chairman, Amtrak
has undergone tremendous change. In accordance with the Amtrak
Reform and Accountability Act of 1997, the corporation has a
new board of directors, led by Governor Tommy Thompson from
Wisconsin. I wholeheartedly share this board's goal to make
Amtrak the envy of transportation providers worldwide.
This past December, the board appointed me to lead the
corporation's turnaround as its president and chief executive
officer. You may remember last April, as the interim president,
my interest level was not quite as high as it is today. At that
time, I looked forward to returning to my position as president
in Philadelphia of the Northeast Corridor operation.
amtrak's financial future
However, after a few months here in Washington, I realized
that the challenge as well as the promise of the Northeast
Corridor really was a microcosm of the bigger whole, the
national passenger rail system. I began to see how the lessons
that I learned leading the Northeast Corridor could be applied
to other parts of this country. I saw the possibilities for
bringing the national railroad passenger system forward to make
it not only operationally self-sufficient, but also one of the
best service providers in the marketplace.
I know, and I truly believe that this corporation can
become profitable, operating a national system.
Over the past year, I have led Amtrak's management team,
with the advice and support of the board of directors, in
crafting a business plan to revitalize the national passenger
rail system by transforming Amtrak into a business-like,
market-driven company that delivers services customers want.
Amtrak is putting in place a business planning process and an
internal discipline, an internal management discipline, to
stick to that process that will incrementally move this
corporation forward and prove to you and the American public
that we are genuinely making progress toward our shared goals.
I am proud to report that, since last April, Amtrak
achieved record passenger revenues, topping $1 billion. This
record was powered by the largest ridership increase in a
decade, 4 and a half percent. On-time performance, which is the
single most critical attribute for our customers, reached 78
percent, the highest it has been in 13 years.
In the first quarter of this fiscal year, Amtrak is
sustaining that trend, with ridership up another 3 percent and
revenues hitting the targets set in our strategic business
plan. We are accomplishing this despite competing against
extremely low fuel prices.
On-time performance now stands at 80 percent system-wide as
of January 30th. In fact, at the end of the first quarter of
fiscal year 1999, we are $41 million ahead of where the DOT
Inspector General's report projected we would be at this time
in the fiscal year.
We have a commercially focused business plan that will
maintain this momentum. It contains valuable lessons we've
learned from successful businesses we have incorporated to fit
Amtrak's unique environment, and frankly, our unique culture.
Our core objective is to increase our market share in the
travel market, squeezing every dollar of revenue we can by
leveraging our assets and never, ever missing a business
opportunity. It's all about making money and building and
delivering a consistent quality operation.
northeast corridor high-speed rail
We will achieve success by introducing high speed rail in
the Northeast, by developing other high speed corridors
nationwide, by forging partnerships, genuine partnerships, with
State governments, private businesses--including freight
railroads, operating a market based national route structure
and improving and guaranteeing consistency, and quality of
service. All of this will contribute to improving our image,
which will attract more travelers and ultimately improve our
bottom line.
At the end of this year, Amtrak will phase in America's
first high speed rail service on the northeast corridor. We
will make America proud. High speed rail in the northeast is
one of the cornerstones, that underpins Amtrak's financial
turnaround. We conservatively estimate that it will reap $180
million in net incremental revenue annually by the end of 2002.
This money will help to support our entire system across this
Nation.
I have no doubt in my mind that high speed rail in the
Northeast will revitalize train travel throughout America.
Amtrak has gained a unique expertise in planning, buildingand
soon operating high speed service. We are ready to leverage that
experience to develop high speed corridors in other densely populated
regions, another key component of our strategic business plan.
other regional high-speed rail
In January, along with Chairman Thompson, Secretary Slater,
Administrator Molitoris, Board Member Amy Rosen, and I traveled
to Chicago to announce a $25 million investment in high speed
service in the midwest, linking cities such as Chicago,
Milwaukee, Detroit and St. Louis. Late last year, I joined
other Amtrak board members, Federal, State and local officials
in New Orleans for the designation of a high speed corridor
along the Gulf Coast.
We are also making tangible investments in the Pacific
Northwest, the Southeast, upstate New York, New York-Albany-
Buffalo, Southern California along Amtrak's second busiest
corridor in this country, from Los Angeles to San Diego. Long
term capital funds will be critical over the long haul in
making these high speed rail corridors a reality.
You will note that these are regional corridors that cross
State lines. In other words, it's a cooperative effort,
partnerships which will make improved rail service a reality in
these regions. Building these partnerships is another key
component of our blueprint to fiscal solvency. This corporation
will aggressively forge alliances with States, with local
governments, with freight railroads, and commercial leaders to
generate additional revenue as well as savings.
market-based network analysis
I also understand there is a tremendous potential to
increase revenue and market share within the passenger rail
market by increasing and stimulating, not unlike what Southwest
Air has done, demand either in areas that Amtrak now serves or
by expanding service where it will positively impact the bottom
line. To accomplish this, Amtrak is undertaking a market based
analysis of our entire national system with an eye on growth
opportunities. It is another key strategic component of our
business plan that will speed our path of profitability and
better tailor our service to the needs of the transportation
marketplace.
I want Amtrak to have an expanded national system, one that
actually increases our market share. We must become a relevant
part of the country's transportation infrastructure, which
will, over the long haul, require long term capital investment.
We can't do that continually by cutting routes, services or
frequencies on our trains. We cannot cut ourselves to
prosperity.
However, Amtrak can only expand in those markets where
research, hard facts and data, not hunches, not nostalgia or
historical precedent, indicate a strong chance for commercial
success. While the market-based network analysis will give us
the demographics and the transportation trends, we need to
increase market share and revenue. We will never reach
prosperity if we do not deliver a high quality and consistent
level of service to our customers. Without a doubt, the single
most significant challenge before Amtrak today is to
fundamentally alter the way that we interact with our customer.
management improvements
We have put together a top level management team to
establish and implement company-wide service standards in
cooperation with all of our labor organizations. The team has
benchmarked the best practices in customer service at many
enterprises around this Nation: Ritz-Carlton, Sears Roebuck,
Continental Airlines, and the U.S. Postal Service, for that
matter.
Our road map to excellence relies on several tactics.
First, it will improve and expand our employee training. We
can't expect even the most competent and professional employees
to deliver consistent service without a fundamental and intense
training standard.
Second, we are thoroughly overhauling our hiring practices
and procedures. It is vital that we hire the right people for
the right job. We have not always done that in the past. We are
doing it now.
Third, we will offer our employees incentives and
recognition for exemplary job performance. It is crucial to
reward hard work and extra effort, particularly around customer
service. Finally, since none of these initiatives is effective
without excellent management, we are instituting a 360 degree
evaluation program for all managers in the company. Management
performance will be evaluated from above, from peers and from
direct-report employees. This is the only way to build
effective leadership.
labor's role
Recognizing labor's role in this initiative, I would like
to commend all union leadership for its shared commitment with
Amtrak for a prosperous future. It is clearly a cooperative
effort, and to that end, collective bargaining agreements have
been ratified or have been tentatively agreed upon with almost
90 percent of Amtrak's work force. I expect we will soon reach
agreements with the two remaining unions. Together, the leaders
of Amtrak's unions and management are working very hard to
ensure financial stability for the 22,000 employees covered by
collective bargaining agreements.
business plan
Without this cooperation to improve service standards, we
cannot maintain and grow our customer base, no matter what our
demographic studies might tell us about population and
transportation trends. If we can't deliver enviable service,
and service delivery is the one thing that we can always do
better than our competition, no number of studies and market
assessments will be worth the time and effort to implement.
I want to assure you that Amtrak is turning the corner to
become a commercially oriented, customer focused and
financially sound business enterprise. We have put in place the
most aggressive and commercially focused strategic business
plan in this corporation's 25 year history. I stand behind this
plan, and so does Amtrak's board of directors. For us, it is
about making money and putting customers first. It's about
keeping our commitment to you to achieve operating self-
sufficiency by following through on our business initiatives.
To do this will require a commitment from the Congress as
agreed to in the Amtrak Reform and Accountability Act of 1997,
to provide adequate capital investment funds which will enable
our business plan to succeed.
Let me share with you an example of wise capital investment
in technology. Three years ago our telephone reservation call
centers were the laughingstock of the travel industry. After
$10 million in capital investments, our call centers were named
the best in the travel industry by Call Center Magazine just
last month. Our call centers now generate more revenue per call
at less cost. For our customers, it means they spend less time
on hold. They receive more thorough, professional information,
and we sell more tickets less expensively. In the end, we will
end up saving about $17 million as a result of that $10 million
investment.
So you see, Amtrak's need for long-term Federal
capitalsupport is no different than all the other modes of
transportation: highways, airways, transit and maritime. As I have
stated, adequate capital enables Amtrak to enter more substantial
investment sharing partnerships with States and private businesses, to
boost our revenues, increase savings and grow ridership.
AMTRAK'S BUDGET REQUEST
To this end, Amtrak is asking the Subcommittee to support
the Administration's fiscal year 2000 budget request for $571
million for Amtrak, Mr. Chairman. This amounts to $38 million
less than Congress approved for Amtrak in fiscal year 1999, and
reflects Amtrak's genuine commitment to lessen our dependence
on Federal operating support. As with last fiscal year, our
budget request is a capital only grant.
The other key component of our grant request is Congress'
confirmation of Amtrak's ability to invest these funds in the
same manner as every other transportation mode does. Amtrak's
grant request asks that you renew our ability to use these
funds as other modes do for maintenance of equipment, as you
did in last year's bill, and to extend this flexibility to
cover maintenance of way investments as well.
working relationships
To prove beyond a shadow of a doubt that we are making real
progress, and to ensure you that Amtrak is using Federal funds
prudently, I will see to it that Amtrak continues to work
closely with you, Ken Mead, the DOT Inspector General, and his
Deputy, Mark Dayton and the Amtrak Reform Council.
Amtrak has established an excellent working relationship
with the ARC and its Chairman, Gil Carmichael, and Vice
Chairman, Paul Weyrich. I personally look forward to continuing
to work with them closely in the future and relying upon their
guidance.
amtrak's closing remarks
Let me close by telling you again how confident I am that
we will succeed in turning around Amtrak. Our performance
results for last year and the first quarter of this fiscal year
are evidence of that turnaround. As you watch us for the rest
of 1999, you will see more of the pieces of our business plan
unfold, business partnerships, the launch of high speed rail in
the Northeast, investment in corridor service, improved
customer service, and ridership and revenue growth.
Amtrak, all 24,000 employees, have been entrusted with a
national asset. It is in good hands today, and it will be in
even stronger hands tomorrow.
Thank you very much, Mr. Chairman.
[The prepared statement and biography of George Warrington
follow:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Wolf. Thank you, Mr. Warrington.
Ms. Molitoris, do you want to go next? Then Mr. Mead can
follow.
FRA Opening Statement
Ms. Molitoris. Thank you, Mr. Chairman. It's a pleasure to
be here and testify before you and the Committee about Amtrak
and our observations of its status today.
fra's amtrak request
There have been significant changes as have been outlined
by Mr. Warrington. I'll try not to repeat those he has
mentioned, but to mention others. The President's budget asks
for $571 million, which is the third installment of the five-
year, $5 billion plan to re-energize and recapitalize Amtrak.
In addition, that amount of money plus the capital
definition that is requested are the two ingredients, that are
foundational to continue the kind of success Mr. Warrington has
described. We have a new Board of Directors, as you know. The
chairman is Governor Tommy Thompson. Governor Thompson has said
very often during these past months to all that there is a
renaissance of passenger rail. That is underscored by the kind
of State investment that Amtrak is receiving.
state investments
In fact, over 20 percent of its public funds are now coming
through State investments. In your own State of Virginia, for
example, just last month, the Virginia Commonwealth
Transportation Board endorsed high speed improvements to the
Washington-Richmond corridor totaling $370 million in the next
15 years to raise Amtrak speeds to 110 miles an hour, reducing
the Washington to Richmond trip time to 90 minutes.
This is just a microcosm of what's happening all over the
country. People are demanding good rail passenger service as an
alternative, whether it's the Northwest, California, North
Carolina, Virginia. States are saying they need rail, they need
high speed rail. And the partnership between Amtrak and the
States, I believe, is a clear example to you that people think
this investment is worthwhile and important for the next
millennium.
fra/amtrak partnership
I'd like to comment on the change in the working
partnership between FRA and Amtrak. I can tell you that in the
last year, I have seen a real change in responsiveness. FRA is
vigorously pursuing all safety implications of the Northeast
high speed rail plan, as we are on all of the other Amtrak
routes. Mr. Warrington and his staff have become very
responsive. They are standing with us on all the safety
elements. I think this is crucial to their credibility. I can
testify to the fact that there has been a real change.
amtrak's future
The upsurge in ridership and revenues on Amtrak is
crucially important. We know that Amtrak must grow its way to
fiscal health and viability for the 21st century. The kind of
growth that Mr. Warrington has described is an indicator. I
think no one is more pleased than the Inspector General himself
to hear that Amtrak is so far ahead of projections, because it
means that the investments the Congress has approved in the
last several years, including the TRA funds, have really netted
the taxpayer the kind of return on investment that is so
important.
I want to underscore the performance standards that are
being instituted at Amtrak, because money alone cannot do it.
The kind of service that you receive and that I receive and
that all customers receive will get us return customers, and it
will also encourage that person to person marketing that's
going to be part of the upsurge and the return on investment
that we're seeking.
high-speed rail service
We look very much forward to the high speed rail
institution of service. As you know, the Pueblo test track is a
leased facility of the Department of Transportation. We
invested funds through the Congress' approval to upgrade the
track at Pueblo to assure that there would be testing
facilities for the high speed trains. Locomotives are being
tested right now; the trainsets will be there very soon.
If there was ever an opportunity in your schedule, it would
be a real eye opener to see what goes on at Pueblo, Mr.
Chairman. The testing, the rigorous testing, can assure all
Americans that these will be thesafest trainsets in the world.
amtrak board of directors
We appreciate the guidance that this committee and the
Congress has given us. The new Board of Directors at Amtrak is
a Board of real synergy with the leadership of the Chairman,
Governor Thompson, the Vice Chairman, former Governor Dukakis,
and all the members of the Board in concert with the Secretary.
It's a very exciting time for passenger service. If the
discipline continues, and I think the Board and the Corporation
are committed to pursuing that discipline, we are going to see
a continuation of these encouraging signs.
state funding flexibility
I might also mention, Mr. Chairman, that the National
Governors Association took the unprecedented step, just about a
week and a half ago, to pass a resolution encouraging the
Congress to consider more flexibility for the States in
investment in Amtrak, if a State so desires. That is an
indicator, a quite extraordinary indicator, of the kind of
national groundswell there is for passenger service in this
country.
amtrak safety statistics
We are pleased that the safety statistics at Amtrak
continue to improve. We will coordinate with Amtrak to assure
that these safety statistics continue to improve. And I might
say to you that we have even engaged in a memorandum of
understanding to assure every safety element of the plan that
Amtrak is pursuing. We are working together to assure that kind
of result for America.
fra closing remarks
So with the President's request, $571 million, the expanded
capital definition, which I might emphasize puts Amtrak on the
same plane as all other transportation modes who have this
ability, and really lets them operate more like a business:
that's what you want and that's what we want.
We appreciate the opportunity to be here, and to testify
today.
[The prepared statement and biography of Jolene Molitoris
follow:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Inspector General Opening Statement
Mr. Wolf. Mr. Mead.
Mr. Mead. Thank you, Mr. Chairman, Mr. Sabo, Ms.
Kilpatrick. Good to see you again.
Mr. Chairman, as you know, we are required to do an
independent assessment of Amtrak's financial profile every year
as it goes down the glide path toward 2003. That was issued
earlier, and some of our testimony will be based on that.
With me today is Mark Dayton of our senior management.
Among his other duties, he directs our Amtrak work. I often
feel he's both our right and left hand in the Amtrak area.
assessment of amtrak
Let me get to the point. Our overall assessment is that
with strong leadership, intense management and continued
favorable economic conditions, it will be possible--albeit
difficult--for Amtrak to meet its Congressional mandate and
become operationally self-sufficient by 2003. Nevertheless,
even if Amtrak does reach operating self-sufficiency, it will
continue to require indefinite, substantial capital funding.
Our testimony will address five areas related to Amtrak's
financial outlook. They are Amtrak's 1998 operating results;
Amtrak's ability to achieve operating self-sufficiency by 2003;
cost and schedule for the Northeast Corridor high-speed rail
project; Amtrak's funding needs for capital, and Amtrak's
request for funding flexibility.
amtrak's operating results
First, Amtrak's operating results. They were indeed better
than the $845 million operating loss projected for 1998, but
the loss still totaled $823 million. I should point out that
the loss did not include an $107 million cost-adjustment
related to Amtrak's labor settlements. Those costs, which
Amtrak had planned to record in 1999 raised the operating loss
to around $930 million, but the cash loss remained unchanged.
Of the $823 million, over $500 million is a cash loss, and the
remainder--about $300 million--was attributable to
depreciation.
Also, Amtrak's ridership and passenger revenue increased in
1998, as Mr. Warrington indicated--not quite as much as Amtrak
has projected, but it did increase. Non-passenger revenues from
activities such as commuter operations, mail and express
service, and commercial development have become very important
to Amtrak.
I want to stress this, due to the importance of the non-
passenger revenue category to Amtrak's survival. In 1998, non-
passenger revenue sources accounted for 37 percent of all
Amtrak revenue. That's $626 million out of about $1.7 billion.
Mr. Chairman, expenses for the railroad also were less than
projected. Amtrak had projected a 7 percent increase. Expenses
actually came in around 4 percent.
financial status
Second, our review of Amtrak's March 1998 strategic
business plan indicated that Amtrak would sustain an additional
$823 million in operating losses between 1999 and 2003. In
2003, Amtrak's unfunded cash loss, would be about $304 million.
That figure is $167 million more than Amtrak was forecasting.
Amtrak management, I should say, is aware of our concerns.
It is now executing plans projected to increase revenues and
reduce costs.
We made several recommendations in our assessment, and we
understand that Amtrak is in the process of addressing all of
them.
To reach operating self-sufficiency by the year 2003, first
and foremost Amtrak must provide good and timely service to its
customers. I think the on-time performance indicates that
Amtrak is moving clearly in that direction. It must also
implement--and this is essential--the high-speed rail service
in the Northeast Corridor. That is a key revenue driver. It has
to improve ridership and revenue on the intercity and Amtrak
West trains as well.
Amtrak also must vigorously pursue new mail and express
package business. This is a very promising area. We think it
has a lot of potential.
The west coast States also have proved to be big financial
supporters of Amtrak. Amtrak needs to pursue similar
partnerships, bottle that strength that they have in the west,
and get it to other States as well.
northeast corridor high-speed rail
Third, the cost of the high speed rail program in
theNortheast Corridor has grown to about $2.5 billion. That's about a
$500 million increase. That's happened for two reasons. First, Amtrak
expanded the size of the project, adding more trainsets, electric
locomotives, and other programs. Second, the cost of the
electrification project north of New Haven experienced some rather
significant cost overruns.
I hope we have experienced all the cost overruns and cost
increases, because if they go any higher, you're basically
going to have to divert capital funds that are targeted for
other projects in the system to that corridor.
The electrification project experienced repeated delays and
is on a very tight schedule, for implementation in October
1999. Full-system testing was originally scheduled for July of
this year. But that has slipped, and it won't occur until
October. The same month, the electrified service is scheduled
to begin.
Now, Amtrak, we think, can do it. But it's going to be
extremely tight. Three things have to come together in the
Northeast Corridor. First, the electrification has to be
completed. That has to work. Then we have to bring the high-
speed trainsets on, and they have to be tested, and they have
to work. The third thing--where the Northeast Corridor
intersects with the Central Artery in Boston, work on the
Central Artery has to be completed as well. The Central Artery
work appears to us to be on schedule.
CAPITAL INVESTMENT
Fourth, I'd like to speak to Amtrak's needs for capital
investment. I'm not talking about maintenance--I'm speaking
strictly about traditional capital investment. These investment
needs range from a minimum level of about $2.7 billion to a
developmental level of about $4 billion. The $2.7 billion will
keep the railroad infrastructure in good operating condition
until 2003. And the $4 billion would allow Amtrak to expand and
develop new business opportunities.
If Congress provides the funding consistent with the
Administration's request for this year, through 2003, Amtrak's
funding, we think, will fall short of even the minimum capital
needs by about $500 million. That amount will increase if
Amtrak's operating losses are higher than the railroad is
projecting.
expanded capital definition
Finally, Amtrak received Congressional approval to spend
its 1999 Federal ``capital appropriation'', and I put capital
appropriation in quotes, for maintenance of equipment. Amtrak
is now requesting permission to also spend its Federal funding
for what's called ``maintenance of way''. If Amtrak does not
get that approval, Amtrak will not be able to cover its
operating losses in 2000, and could be forced to default on
current obligations.
That could occur, ironically, even though Amtrak is likely
to have about a billion dollars in the bank which would be
Taxpayer Relief Act money. That's because that $1 billion in
TRA funding can't be used for maintenance of way. It can be
used for maintenance of equipment. So they are likely to have a
billion dollars in their bank account that they may not be able
to use.
I would just like to close, Mr. Chairman, by saying that
Amtrak has been cooperative and responsive in all phases of our
work. That's not to say there haven't been disagreements--some
sharp ones on occasion--but they have always been resolved
forthrightly and respectfully.
Thank you, sir.
[The prepared statement and biography of Kenneth Mead
follow:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Opening Remarks
Mr. Wolf. Thank you very much. I appreciate the testimony.
Your testimony, Mr. Mead, was much more optimistic than it was
a couple of years ago, clearly. If you recall two years ago
when Mr. Downs was here, we were talking in terms of
bankruptcy. So it looks like things have turned around a little
bit.
Let me also say before we get to the questions, I was
pleased with your appointment, Mr. Warrington. I think you
bring a degree of professionalism. I think it was Cicero or
Plato who said, they ought to give jobs only to people that
don't want them. You didn't appear to want the job very much
last year when we talked. I remember when you left the office,
I made a comment to one of my staff that I thought you probably
would do a good job, simply because you didn't want it. You
knew how tough it was.
So this Committee, in a bipartisan way, has always been
very, very supportive, in some respects more than the Congress
as a whole. So I hope that you can do well. We want to
cooperate in every way possible to give you every opportunity
to do well.
I have a number of questions, a long list, I'll go through
that we prepared. But based on some of the testimony, I just
wrote down some questions here.
scoring of expanded capital definition
As you know, there were scoring problems, Mr. Mead, with
regard to the operating of the way, the definition. Do you have
any comments about that? We're going to have to obviously check
with OMB on that. But have you looked at the scoring
implications of, for example, permitting money to be used for
operations of way as well as maintenance?
Mr. Mead. It presents a problem. As I understand it, you
have a 40 percent score on the current appropriation. Which
means that in the year thereafter, they can score a remaining
60 percent. And if you expand the definition to include
maintenance of way, they will need access to more of that
money, in the current fiscal year. So you'd have to jack up the
scoring a bit.
I don't think you'd have to get in the neighborhood of 80,
90 percent or anything like that.
Mr. Wolf. Well, we're going to look at that, and maybe the
Administration could work with us and help us with regard to
that. At one point I read in the paper stories about lifting
the caps. Now it looks like the caps will not be lifted, which
will make this whole process much more difficult.
Mr. Mead. I just wanted to say, there's almost an irony
here of Shakespearean proportions. If the definition isn't
changed, it could drive almost absurd behaviors. Forexample,
equipment that could be repaired--that is perfectly good equipment that
just needs to be repaired--might drive Amtrak to go buy new equipment,
or just not maintain it.
capital definition in taxpayer relief act
Mr. Wolf. Is there any way the definition could be changed
in the Taxpayer Relief Act (TRA)? Could we go and do that, to
allow that $1 billion to be used?
Mr. Dayton. We haven't looked at it directly. But one thing
that Amtrak might be able to do is, if they had the maintenance
of way definition in the Federal appropriation, they could tap
TRA for maintenance of equipment. Right now there is an overlap
between TRA and the annual appropriation, but they can't spend
the same money twice. If they had maintenance of way out of the
Federal appropriation, then with maintenance of equipment from
TRA, Amtrak could cover its operating expenses. But Amtrak
would have to address that in terms of the actual cash flow.
Mr. Warrington. Mr. Chairman, we made very firm commitments
and assurances to the Congress when the TRA was enacted that we
would reserve and use that money for high yield capital
investments. So as a matter of policy generally, the board has
taken a fairly aggressive position about trying very hard to
earmark and reserve that money for capital investments that
provide a high rate of return.
At the same time, the annual appropriation for operating
support reduces itself to zero by 2003, except for funds needed
for mandatory railroad retirement payments. In other words, we
will be reducing the share of that amount of money that we
would be allocating through this capital maintenance definition
over this period of years. As a matter of fact, the total
amount which we would be drawing down in 1999, this fiscal
year, $484 million, which is really two years' worth of
maintenance of equipment. Since we did not do it last year,
declines to $361 million in 2000 and $242 million in 2001.
So the share of that annual capital appropriation that we
would be using for capital maintenance will be declining as a
result of our other successful enterprises and commercial
enterprises and revenue streams. That was all with an eye
toward working hard to drive down the share of that money that
goes to that purpose, and reserving the TRA to the greatest
extent possible for the kind of capital investments that allow
us to ultimately reduce the requirement for capital maintenance
out of the actual appropriation by improving our cost structure
or generating revenue.
revised trip times on northeast corridor
Mr. Wolf. I think that's appropriate, and I think the
integrity of that amount was expected. And I think to go into
that would probably shatter your credibility.
On the issue of high speed rail, what will the change be in
trip time from Washington to New York, compared to now? What is
it now on Metroliner?
Mr. Warrington. Right now Metroliners, Mr. Chairman, have a
three hour running time between Washington and New York. Our
original planning for the high speed program was going to bring
that travel time down to about 2 hours and 45 minutes.
Some of the reasons why we have increased the costs
associated with the high speed program, which Ken referenced,
were conscious decisions to recategorize expenses and allocate
money toward investments that would further improve those
original estimates around travel time. We will run several peak
hour trains, once we're fully operational. We'll run several
peak hour Washington to New York trains at 2 hours and 28
minutes. Our original planning was 2:45, down from 3 hours.
With that kind of competitive performance, based upon the
modeling that we've done, we will have a very, very attractive
service, especially when you couple it up with the onboard
amenities and the basic appeal around high speed trainset
design, which we spent a lot of time and effort modeling and
researching with customers. On the North end, between New York
and Boston, today's 4 hour and 45 minute trip to 5 hour trip
will be reduced to about 3 hours and 10 minutes. We will get
that down to just over 3 hours over a period of 12 or 15
months.
Once again, we have modeled that travel time performance.
It's all about travel time, frequency and price. Today we will
be a very competitive and very attractive downtown to downtown
option for auto users, bus travelers and air shuttle
passengers.
Mr. Wolf. These 2:28, the stops would be in what?
Mr. Warrington. The 2:28 would be express, New York-
Philadelphia, which is our largest----
Mr. Wolf. It won't stop in Baltimore?
Mr. Warrington. Probably just Philadelphia. There is a lot
of MARC service today out of Baltimore. And we will make other
trains stop at Baltimore that have more local stops for that
local traffic.
maintenance of way definition
Mr. Wolf. Have you been told by the authorizing committees
in both the House and the Senate what their position is on the
maintenance of way definition change?
Mr. Warrington. We have not had that discussion yet, Mr.
Chairman.
Mr. Wolf. Will you inform us if you do? And I'll ask them,
too.
Mr. Warrington. Certainly we will.
funding flexibility within the states
Mr. Wolf. The issue of flexibility, I saw that the
Governors had voted for that. I think that was very, very
healthy. I would favor that. I think that's very positive.
Governor Carper wants to--I mean, you can't build many more
roads through Delaware, and they've got that toll so high as
you go through the booth as it is now. And that is a cash cow
for the State of Delaware.
But if he wants to put that money in rail, I think he ought
to have the opportunity. Are you following up, or is the
Administration? Are you looking for a change or have you
approached the authorizing committees, asking them for that
change? I know the highway lobby would probably go bonkers. I
would support it, frankly, I want you to know that.
But are you going to make a major effort to ask this
Congress to give the Governors the flexibility?
flexibility in tea 21 authorization
Ms. Molitoris. Mr. Chairman, I presume you're asking me.
Two things. First, if you recall TEA 21, the Administration's
proposal did include that. It was on the table primarily until
the end. You are probably quite astute in finding out where the
opposition was.
But I think there are certain discussions going on about
tweaking TEA 21 in this Congress, and perhaps that will be part
of the discussion. I know that the Administration continues to
support it, because we believe that people at the local level
know what they need most, especially since there is the
requirement that they be involved in funding from a variety of
levels. That would be an opportunity for them to invest in what
they think they need most.
governors' statement on flexibility
We certainly think the Governors' statement is a powerful
one in expressing to the Congress the will of the State
leadership. We will be following up on that, and are working
with Governor Thompson, who is taking a lead role.
Mr. Warrington. Mr. Chairman, that really was an
unprecedented action by the National Governors Association. And
we appreciate that deeply. It's the first time there's been
that kind of consensus.
Frankly, one of the things we're trying to do is build
those kinds of State----
Mr. Wolf. Was there any opposition to it at all?
Mr. Warrington. Very little, I understand. None, as a
matter of fact, they tell me. Across the board, we really felt
very good about it.
And you know, it's a reflection on our building
partnerships with States and regional entities. They have a
real stake in the economics associated with passenger train
service and inter city service. Building that kind of
infrastructure, both politically and financially, with States
and regions, really is one of the partnership futures that I
talked about earlier.
Specifically, we have followed up with the Senate Committee
on Environment and Public Works. We think there may be
opportunities around a TEA-21 technical corrections bill. And
Governor Thompson and Governor Carper and many other Governors
from the Midwest as well as the Northeast and the South, have
been following up with members, lots of members of Congress,
around the importance of that flexibility to their States.
It is particularly important because as we move forward
around mirroring Northeast Corridor styled high density rail
service around this country, in the Midwest, West, the
Southeast, it's very important that Governors who recognize the
critical economic role of inter-city rail passenger service--
high density, higher speed inter-city service--have the
flexibility to provide Federal highway money from such programs
as NHS or STP or CMAQ money, and devote it to those kinds of
programs, which would match or work very well with Amtrak
capital funding. That's the real partnership.
federal/state partnerships
That's something we've had success in a handful of States,
in the West, California, for example, the State of Washington,
New Jersey, Delaware, New York State recently with Governor
Pataki. We would really like to enable all the Governors to
establish those kinds of partnerships with us. Many of those
partnerships are basically 50-50 deals. They have been very
successful, and it creates a lot of local momentum and buy-in
and interest in rail passenger service. It really offloads the
hundred percent responsibility from the Federal Government.
It's something that we feel very good about.
Four or five years ago, if you quizzed or queried many of
the Governors in States around this country about their
relationship with and willingness to partner with Amtrak, you
would receive a very different kind of picture than the kind of
picture that I feel and I hear about today. There is a genuine
interest in recognizing the value of inter-city rail service,
and a genuine interest in financially participating in making
it happen. Why? Because it means improvements to the local
economy. We feel good about that.
Mr. Wolf. Well, I hope you're able to do that. Because you
have Governor Thompson who is a very capable person, he is a
sitting Governor, but you also have two former Governors,
Governor Dukakis and Governor Holton from my State. They are
both very talented, and very persuasive at times on the issues.
This is really important, particularly with the budget
numbers, as close and as tight as they are and this committee
wanting to help as much as it can. Flexibility, I think, is
where the future lies. I would urge you to try to do something
in this Congress.
air rights
One last question, then I'm going to recognize Mr. Sabo.
Are you looking at all of the air rights and your ability to
generate revenue from the use of them, around Union Station? I
guess the air rights are mainly with the Federal Government, is
that correct?
Mr. Warrington. Some of the air rights were sort of stolen
from us at midnight one night, by some technical action
occurring over here somewhere. But frankly--
Mr. Wolf. And those air rights now belong to the Federal
Government?
Mr. Warrington. I believe they belong to someone in GSA.
Mr. Wolf. Well, are you looking? Because I know Mr. Mead
said 37 percent is the figure, or from sources other than, the
air rights at Union Station, the air rights in Baltimore, the
air rights--you don't own 30th Street Station, do you?
Mr. Warrington. Yes, we do.
Mr. Wolf. They told me there is an effort to modernize the
30th Street Station. Are you looking at that as a possibility?
commercial revenue
Mr. Warrington. Over the past three years, we have improved
our commercial revenue streams. And a lot of it is around real
estate, about $200 million, primarily in the Northeast
Corridor. Every square foot of commercial real estate space, in
Penn Station, New York, for example, is leased out today at
midtown Manhattan rates. This is the first time in the
company's history we have 100% leased space at Penn Station.
Every facility between Washington and Boston is being
explored with the development community around air rights
development and commercial development, particularly tied to
the attractiveness of high speed rail, serving those
facilities. In Washington Union Station, for example, the New
York Avenue development group, the New York Corridor
development group gave spent quite a bit of time with around
air rights development. We see some opportunity for developing
the parcel out by the IBCD maintenance facility that we
continue to have the rights to.
In Delaware, we've got lots of opportunity in development
around the Wilmington station. Just yesterday, I met with Craig
Weiss, the President of Greyhound in Baltimore. He and I have
struck an agreement which deals basically with Greyhound and us
partnering at the Baltimore station. Amtrak and Greyhound would
invest, and joint ticket, making the facility a true intermodal
facility. And we've got negotiations hopefully concluding
within the next several months, for a hotel development on top
of today's Baltimore Union Station, all of which will generate
revenue streams for us.
At 30th Street Station in Philadelphia, we are in the final
stages of negotiating an arrangement around a combination
hotel, conference center, tied to high speed train service, and
perhaps a movie theater on the air rights, a 60 acre site just
north of the 30th Street Station. Every single locationthat
we've got on the Northeast Corridor we're exploiting around real estate
and commercial development opportunity and taking down revenue streams
from that. We are very, very aggressive about that, Mr. Chairman.
And on the north end, as the high speed program takes off
and electrification wraps up, stations like 128 and New London
and South Station in Boston, will see increasing commercial
activity, commercial development, office development. All of
that just works to generate more attractive ridership for us.
expanded capital definition
Mr. Wolf. Mr. Sabo.
Mr. Sabo. Thank you, Mr. Chairman.
Mr. Warrington, do you disagree with Mr. Mead's assessment
of your need for change in the capital definition in next
year's appropriation?
Mr. Warrington. We agree that we need the definition of
capital maintenance expanded. Without the expansion of that
definition, there's about $45 million or $47 million worth of
expense that we can't assign to that pot. We don't have any
other pots to assign it to. And we have basically borrowed
commercially up to our limit. We may have a very little bit of
flexibility there, but not enough to be able to cover that
requirement.
taxpayers relief act funds
Mr. Sabo. I am curious about the money from the Taxpayers
Relief Act. Is that money in hand? Are you getting interest
earnings off that? Or is that simply money we retain and you
draw?
Mr. Warrington. We have that money invested in three
different investment houses, Morgan Stanley, Bank of America
and Merrill Lynch. Through last month, it was earning an
average of between 5 and 5.6 percent, depending on which fund
it was in. And we have earned year to date about $39 million,
which goes back into that capital fund.
Mr. Sabo. Do the same restrictions apply to the interest
earnings?
Mr. Warrington. Yes.
long term capital needs
Mr. Sabo. I would also like, Mr. Warrington, if you'd
respond to Mr. Mead's assessment of your long term capital
needs. If I understand correctly, you're saying we're
underfunding basic capital needs through 2000.
Mr. Warrington. Yes. I'll be very focused about that, Mr.
Sabo. I firmly believe that Amtrak needs to demonstrate to you
and to the Congress credibly that we are making serious
progress around reducing and ultimately eliminating the
requirement for operating subsidies. That's going to come in
lots of forms. It's going to get more commercially oriented,
around real estate development, around mail and express as Ken
said, on the rear end of long distance trains.
All of those factors have been and will continue to combine
to improve our bottom line. It's going to require an
extraordinary amount of work, a lot of focus and a lot of
management discipline. But we need to demonstrate that we can
credibly chip away and get where we need to get to. I firmly
believe that as we establish that kind of credibility as an
institution, Amtrak has an obligation, to be very straight and
very between-the-eyes about what the real and genuine capital
requirements are for America's railroad. They are sizeable and
significant on a sustained basis.
federal capital investment
We believe that over the past 25 years, the modal equity
issue has seriously injured us. Every other federally funded
transportation mode in large measure indirectly, in some cases
directly, receives sizeable capital investments in
infrastructure that are not borne basically by the carrier, but
they are borne by the Federal Government, in highways and
marine dredging and the like. Amtrak has never fully received
the kind of sustained annual, regular capital funding that will
really enable us to grow.
And frankly, the way the argument has been going for 20
years is that Amtrak doesn't deserve that capital since Amtrak
only has 1 percent market share. Amtrak will not get more
market share unless Amtrak invests capital. It's a cyclical
argument.
I will assure you that with steady, sustained capital,
which we need to clearly define, and we need to do that over
the next year, as we conclude all of our market analysis, and
high density corridor planning work. We would like next fall to
begin the public policy discussion about what's a fair and
appropriate, reasonable and defensible, long-term sustained
annual Federal as well as State and local and regional level of
support. It has never been fully defined, and we have never
established the kind of credibility around operating subsidies
that enables us to make that case.
The number is probably sizeable. But until we conclude all
our planning work around the economics of the high speed
corridors around the country, and the economics of all of our
long distance trains, I feel uncomfortable asserting fair share
argument around capital requirements. But they will be there
and they will be sizeable.
I fully endorse Ken's assessment that we will need that if
we are going to grow. The only way we are going to be
successful is if we grow. We have nickel and dimed ourselves to
death in this organization over the last 20 years. It is no way
to run a business, and it's no way to be competitive in the
marketplace. What's behind success for this enterprise over the
next 5 to 10 to 15 years is a steady stream of sizeable,
significant capital. Our challenge is to build the right kind
of partnerships with the freight railroads and with the States
that make that capital investment attractive and enable it to
pay off for us.
Mr. Sabo. I'm not sure if I understand the answer, though.
Mr. Warrington. I agree with Ken.
Mr. Sabo. I think the answer is, you are ready for 2000 but
we may hear it for 2001 with additional justification. Is that
the answer?
Mr. Warrington. Yes. Mr. Sabo, frankly, the TRA fund will
basically expire. We will have basically spent it down by the
time we get to 2001. And we will have a public policy
discussion that we're going to need to have about what's the
right fix for the long haul around a regular, predictable,
steady infusion of capital.
What I can tell you today is, and I don't want to split
hairs with Ken about exactly what that number is, because it's
not just a 2001 or 2002 or 2003 issue. It's a 2000 to 2020
issue, as a matter of public policy. What's the appropriate and
fair and equitable allocation to inter-city rail service in
this country by the Federal Government, and as well by State
governments and regional entities.
outlays
Mr. Sabo. Thank you. Let me just follow up in asuggestion
the Chairman made. That is, you put your minds together on how we deal
with the scoring problem of outlays. The problems we're going to have
are immense here. They're going to be much tighter than what the
problems the Administration had in putting their budget together. I
assume that's the reason it's not explicitly in your budget.
Mr. Warrington. Okay.
Mr. Sabo. We look for your creativity.
Mr. Warrington. We'll try hard, Mr. Sabo.
Mr. Wolf. Ms. Kilpatrick.
Ms. Kilpatrick. Thank you, Mr. Chairman. Delighted to see
that we didn't go by seniority on this one, Mr. Pastor.
Mr. Pastor. This one is first come, first served.
[Laughter.]
Ms. Kilpatrick. Thank you, Mr. Chairman, and Mr. Pastor,
too, for being late, I guess I should say. [Laughter.]
revenue and operating assistance
Ms. Kilpatrick. I appreciate all the comments that have
been made this morning. It's refreshing to see the IG and the
CEO on the same page. You don't see that a lot. I come from a
state legislature where I did transportation issues in Amtrak
and the department did not get along as well. It's good to see
that.
I'm concerned about the 2002 phase-out of Federal
assistance on the operating side. I commend you, Mr.
Warrington, for the initiative you have in place in looking at
others to expand so the revenue stream will be what you need it
to be as you get beyond 2002.
Are you confident that you'll make that, that you'll reach
that and have the revenues you need without coming back and
asking us to extend it a year or two more?
Mr. Warrington. I feel very comfortable that it is
achievable. It is going to require a lot of work. Frankly, I
appreciate all of the oversight and analysis and second
guessing that goes on around it. Because it just makes us
sharper and smarter, more focused and disciplined about getting
there. There is a lot, a lot of oversight and focus and review
of every move we make and everything we do. It does nothing but
just keep us focused on the long haul and getting there, and
not getting tied up and lost in short-term problems.
business projections
We have a vision. We have a very clear plan about how to
get there. Ken is right, part of this depends upon a robust
economy that needs to continue to grow. Part of the reason why
we've been very successful over the past year on Metroliners
and in the Northeast Corridor and in exceeding our original
ridership projections last year and this year is because of the
business economy in the Northeast. It is doing very well in
every State in the Northeast.
I can't control that entirely. But we can make reasonable
projections. There are lots of opportunities to control things
that are at our disposal that are in management's doorstep
relating to the quality of service that we operate; the
controlling of costs that we incur in connection with the
delivery of this service; the training and the development of
our employees; and the on-time performance of our trains. There
are lots of things that are within our control.
The general economy of this country is not within our
control. We are reasonably optimistic that we can get there.
But, it's going to require a lot of work.
business plan
It's going to require in particular a commercial and
business focus. We tend to be an organization that is dominated
by railroad operating people. You have to have that. In
particular, operating people who know how to run trains safely.
Because safety is number one, as Jolene reminds me and I remind
her on a regular basis.
But once you get beyond the fundamentals around safety, we
are an operating railroad, and we operate trains very, very
well. We have an extraordinarily professional railroad
operating organization. The challenge over the past several
years, and looking forward, is to also build on that and
reorient that around commercial business smarts and sense, both
in terms of train operations and back office management. We're
getting there.
Ms. Kilpatrick. Refreshing. Thank you.
Mr. Mead. I would just like to add, when we sit in this
room a year from today, I expect that then we'll be able to
tell you a lot more about whether the concern you have about
the operating subsidies drying up at the end of 2002 is a real
concern. Right now, the imperative is to deal with getting
Amtrak through this year, and what the allowable objects of
expenditure will be for Amtrak's capital appropriation. If you
can fix that, you've done about all you can be expected to do
for this year.
Ms. Kilpatrick. Okay, I appreciate that.
Ms. Molitoris, or Mr. McQueen, I was in an 8:00 o'clock
meeting and it kind of ran over, I wasn't sure if he spoke, I
spoke with my staff, he has not. So I would acknowledge you at
the table, sir. Thank you, I know you work closely with her in
that regard. You are speaking through her. You work for her as
an administrative deputy, I would call an associate, as you
speak.
capital definition
The change in the definition, so that you're able to use
operating capital, how important is that? It's my understanding
that you got that approval last year from this committee. Has
it ever happened before? And if you don't get it, will we see
what Mr. Mead has said in terms of, well, really, things that
can be fixed not being fixed, and looking for new capital money
instead?
Ms. Molitoris. Ms. Kilpatrick, the definition is very
important. We think it is essential, along with the level of
$571 million that the Administration has requested. I think
it's important to continue to remind people who are considering
this that it really just puts Amtrak on the same level as all
the other transportation companies and modes. It's very
important for Amtrak to be able to operate as a business, to
make choices.
The chairman has commented and reminded us, as has Mr.
Sabo, that we need to work with the committee about scoring
issues. But we believe these two pieces are essential to our
request. And I don't believe that Amtrak can manage to its full
potential this year or in future years unless they have that
definitional expansion.
Last year, what was approved was the maintenance of
equipment. What we are asking Congress for today, or in this
request, is to have that expanded to include maintenance of
way.
Ms. Kilpatrick. And if not, if it's not granted, then the
maintenance of way that you're seeking, in the 2002 that's upon
us, will not happen, according to your projections and what
you're wanting to have? You have to have it, is it that strong?
Ms. Molitoris. Yes, it is.
midwest high-speed rail initiatives
Ms. Kilpatrick. I think my last question, in terms of high
speed rail, and I had some discussion with Mr. Warrington,
Northeast Corridor, we know that's America's famous corridor
and doing well and really probably the most effective train
service that we have in our country, I would think, or the most
anyway. I come from the Midwest. I know there has been some
Amtrak service throughout the State, certainly on the west
corridor of the State, from the Chicago border into Kalamazoo.
Can I anticipate any high speed rail service over the next few
years as we move out of 2002? What's that timetable?
Mr. Warrington. Yes, very much so. As a matter of fact, I
mentioned earlier that Governor Thompson, Secretary Slater,
Administrator Molitoris and I were in Chicago about a month
ago. We announced a $25 million investment to jump start what
we call the Midwest Regional Rail Initiative. It really is
taking the same approach which we've taken in the Northeast
Corridor, which is to incrementally build on a partnership with
the States, all the nine midwest States are involved in this
effort. We've done the planning together and we've done the
economic forecasts together.
The difference at Amtrak today is that rather than being
passive and just looking at this as an operating opportunity,
we are leading the planning, the development, the engineering,
the design work, because it's important to our economic future
to be the operator. The difference is that we are today willing
to invest. We don't want to invest alone. We want to invest as
partners with States, which is why this flexibility provision
is so important to Governors.
We invested $25 million, made a pledge of $25 million, to
begin the incremental investments to do a number of things. But
mostly, to reduce travel times on existing trains, and to
conclude the planning, design and engineering for an
incremental approach to introducing high speed service and more
frequencies over the next several years. Concerning Chicago-
Milwaukee, Minneapolis-Chicago-Detroit, Chicago-St. Louis,
Chicago-Cleveland, there is a basic Chicago hub service that
has lots of economic promise. This is based upon the basic
definition of attractive, potentially profitable service being
relatively short distance, 250, 300 miles, fairly reasonable
frequencies, attractive price, and good onboard amenities and
travel time.
The difference this year rather than in the past years is
that Amtrak is providing the leadership, the engineering, the
design, the procurement, the management, the vision around what
those kinds of opportunities are. We are forcing, leading and
building coalitions regionally with States, and the freights,
freight railroad industry, around launching these kinds of
services. It's not going to happen overnight. It has to be an
incremental approach. It's all about reducing travel times to
make train travel much more attractive.
It's a model which we have used and will continue to use
effectively in the Northeast Corridor. It can be mirrored in
all of those corridors in the Midwest and the Southeast.
Washington to Richmond to Charlotte ultimately New Orleans or
Jacksonville, over the next 10 or 15 years, that is our future.
Those are some of our growth markets. We cannot continue to
stagnate around the existing network. We have to grow market
share on the existing network, and improve our operating
performance through mail and express, for example, on the
existing network.
partnership with freight railroads
But our real long term vision has to be around high density
corridors and being the operator and the investor in these
corridors. One of the single most important factors that will
make that program a success for us and for those regions is
building partnerships with States, partnerships with the
freight railroad industry.
Generally, Amtrak has historically had a very combative
relationship with the freight industry. I will tell you that,
you can win battles and you can lose wars. Amtrak has always
lost the wars with the rail freight industry. It is not the
right way to do business. We need to be genuine about
partnering with them, and we need to be genuine about investing
in freight railroad trackage, and signal systems, and other
operating needs in order not to negatively affect freight
service, and to accommodate Amtrak passenger trains.
It has historically been a struggle. Our trains have often
suffered at the expense of a robust freight network that's been
growing around this country. We need to establish trust and
good communications with the rail freight industry, the Union
Pacific, the Burlington Northern, Santa Fe, CSX, and the
Canadian Pacific. If we're going to do this and do it right, we
need to do it right with the rail freight industry, rather than
be adversaries. There are lots of opportunities for doing that.
But I will tell you, frankly, it's also going to require
capital. We need to be willing to invest in capacity and
mitigation on rail freight lines in order to make passenger
train travel work and work at high speeds. We need to be able
to stand up to the cost and the expense of doing that. We've
never effectively stared that one straight in the face. What we
have chosen to do instead is issue press releases and go to
war. It doesn't work. It doesn't get you anywhere, because in
the end, they have you.
midwest high-speed rail initiatives
Ms. Kilpatrick. Mr. Chairman, one last one.
Have the nine Midwest Governors and their departments of
transportation bought into this like Amtrak has?
Mr. Warrington. Yes, very much so. As a matter of fact, we
have been true partners. At the NGA meeting last Sunday, I met
with Governor Carper who sponsored as Chairman of NGA, the
first roundtable around Amtrak and high speed corridor
opportunities around the country. We had terrific participation
by lots of Governors around the country.
The next day, last Monday, Governor Thompson sponsored a
Midwest Governors discussion around this high speed initiative.
All of the Governors and all of the secretaries of
transportation are very much on board.
Ms. Molitoris. Ms. Kilpatrick, may I just mention with
regard to that corridor that the State of Michigan and FRA have
been investing over the past several years during the Clinton
Administration on high speed rail between Chicago and Detroit.
We've invested $20 million, the State has invested $40 million.
We are working on positive train control and although it won't
be 100 miles per hour in the year 2000, we believe that the
service will begin around that time at a lower speed.
We are having a test site between Kalamazoo and Nileswhere
we'll be testing that technology. It's really one of the premier pilots
for positive train control in the country. It's a very strong State
commitment to this, and we continue to partner with them as part of
this midwest rail initiative.
One thing I didn't mention, Mr. Chairman, in addition to
the National Governors Conference and the meeting that Mr.
Warrington mentioned, there were Governors you might not
expect, Nevada, Nebraska, Iowa, places that don't jump out as
huge population centers, who are saying, we need to get
connected some way. In addition, Mayor Smith from the Board of
Amtrak, has organized a Mayor's Amtrak committee, because there
are hundreds of stations around the country that really serve
as economic drivers to cities and communities.
So we think the State of Michigan is really a tremendous
partner for high speed rail.
Ms. Kilpatrick. We are truly primed for Amtrak, coming from
the west through Niles and Kalamazoo, right on over to Detroit
and the other eastern part of the State. We're waiting for you.
Thank you.
Mr. Wolf. Mr. Pastor.
Y2K and AMTRAK
Mr. Pastor. Thank you, Mr. Chairman. First of all, let me
apologize for being late. I had an Energy and Water
Subcommittee hearing that I had to attend.
Thank you for being here. Let me ask a few questions that I
have in mind. The first one is, everybody's concerned about the
computer problem, Y2K. Maybe you want to give us an update of
where you're at. I'm assuming that computers are very important
in your business.
Mr. Warrington. Yes, we've always had lots of problems.
That's one, fortunately, that we're not overly concerned about.
Frankly, we've got a very good information technology
organization ourselves. I have a lot of confidence in our guys.
If there are problems, they will show up on several fronts.
Number one, if you don't make payroll, you have catastrophe.
Number two, if you can't make reservations, have catastrophe.
And number three, our signal systems on our Northeast Corridor,
which are driven by software, will not function properly.
I have been assured, and I have spent a significant amount
of time with our folks being briefed, that we have system
requirements well under control.
Mr. Pastor. What train do you expect to be on New Year's
Eve?
Mr. Warrington. Hopefully I'll be on a high speed train.
We're going to be launching high speed trains toward the end of
the year. We haven't nailed down precise dates yet. As Ken
said, the electrification project has had a few bumps.
But we're going to be launching toward the end of the year,
and perhaps it might be on New Year's Eve. We'll let you know.
Y2K AND RAILROAD INDUSTRY
Ms. Molitoris. Mr. Pastor, I might mention in terms of Y2K,
it's a priority for the Department of Transportation and the
whole Administration, of course. We have been pleased as the
second agency within the Department to be certified Y2K
compliant within the Department.
But in addition, we are working with all the freights on
their Y2K issues. Because outside the Northeast Corridor,
Amtrak needs those signal systems from the freights to be
operating and no glitches. So we are working directly through
the CEOs of all the freights to assure that not only Amtrak but
of course the freights themselves are Y2K compliant.
TILT TRAINS
Mr. Pastor. Thank you. This last summer, I had the
opportunity to take the train from Washington to Philadelphia.
It's one of the few times I've been on a train, in fact,
probably the only time I've been on a train that I can
remember. It was a very pleasant experience.
I remember getting to Union Station and all the
advertisement about the high speed train that's coming, I think
it's going to open this fall.
Mr. Warrington. Late this year.
Mr. Pastor. So with enthusiasm, I was thinking of probably
taking the train again. Then I think it was in January, I read
in the Washington Post, the headlines were, Amtrak's speedy new
tilt train is a bit wide around the curves. And I thought well,
maybe my enthusiasm got dampened a little bit. Maybe you want
to address that problem or that opportunity.
Mr. Warrington. Yes, the trains actually are not too wide.
We issued a performance specification to the vendor community.
There were lots of vendors who responded. The performance
specification required lots of things, but fundamentally
required a reduction in travel time. In other words the
propulsion systems needed to meet certain kinds of acceleration
requirements in order to make trip times. We provided them with
the clearance envelope.
So the vendors could figure out how much they could tilt,
how wide they could be, and how fast they had to be. We didn't
specify width and any kind of specific propulsion systems. We
basically said, you have a clearance envelope for safety
purposes, and you have a travel time that you have to meet.
Bombardier has assured, as the lead manufacturer, as part
of the consortium with Jack Astrom, who manufactured the TGV
high speed trains in France, that these trains will meet that
performance requirement. We are very comfortable with that and
our folks are very comfortable with that. All the engineering
requirements have been satisfied.
Mr. Pastor. Do you have a comment, Ms. Molitoris?
Ms. Molitoris. We are working closely with Amtrak on this
issue. We believe they can meet their trip time.
What I think the reference to the newspaper article was
about the fact that there has to be certain modeling and
certain levels of tilting in certain areas of the journey to
assure that safe operations occur within the envelope provided.
We're going to assure that that happens, and I think Amtrak and
George are working closely with us to assure that we will be
vigorous in that pursuit.
Mr. Pastor. Mr. Chairman, that means maybe I can take the
train from Washington to New York New Year's Eve and not tilt
over and get there on time and see the giant ball come down for
the new century.
SHIPMENT OF MAIL AND FREIGHT
One last question, Mr. Chairman. The Surface Transportation
Board in 1998 said in a ruling that Amtrak now had wide
latitude to carry mail and goods. I guess there was guarded
enthusiasm by the freight industry.
Since 1998, to this date, from that ruling to now, where
you talked about battles and wars, where are you on this war
and this battle? Which have you won? How does it look for you?
Are you being able to get cooperation?
Mr. Warrington. I think that's a terrific example, good
evidence of a turnaround in this relationship. The STB ruled in
Amtrak's favor across the board. We have established not only
goodrelationships with the freights around that program, but
we've actually moved to establish partnerships where we share revenue.
Matter of fact, just a month or so ago, we executed a
partnership with the BNSF Railroad around UPS and other shipper
traffic that was moving on BNSF but they couldn't handle it as
quickly as needed through their intermodal process. We and UPS
and BNSF have done a partnership where that traffic is now
moving on the rear end of our trains.
One of the advantages of that from an on-time performance
point of view is, when BNSF customers are on the rear end of an
Amtrak train and we're sharing in that revenue, there is also
an incentive for moving Amtrak's train over the road on time.
So that's a win-win for everybody, and it makes money for us.
We share it with BNSF and UPS gets their traffic over the road
on time.
There are lots of those kinds of opportunities around the
system that we are exploiting. As Ken said earlier, this is a
real growth opportunity for us. If you go back to the 1950's
and 1960's, and you look at the freight railroad industry's
business, 45 or 48 percent of passenger revenue was
attributable to mail and express business. That was back when
the passenger trains were ``profitable.''
We need to recreate that kind of financial performance, not
necessarily to that extent. But there is clearly something
short of a gold mine there for us if we do it right, and if we
do it in partnership and cooperatively with the freights. I
will execute an agreement with David Goode and the Norfolk
Southern very shortly around road railer, express service on
the Northeast Corridor and the Harrisburg Line. Once again, we
will be leveraging an asset we've got that's not being used
between midnight and 6:00 a.m. It's an opportunity for him to
move traffic in and out of the Port of Baltimore, the Port of
New York, and Newark quickly and very competitively. It's an
opportunity for me to make some money.
Those kinds of deals and opportunities are abound. We just
simply need to be quick and nimble and take advantage of them.
And in some cases, it requires us to invest to make money.
Those are the kinds of places where we want to invest our TRA
money to get the kind of partnerships and deals that make sense
for us.
The short answer is, we're in much better shape with the
freight industry on lots of fronts, but in particular around
the mail and express business than we were. In fact, it has
evolved into actual partnerships, where we're sharing revenues
and sharing business opportunities.
MAIL AND FREIGHT REVENUE
Mr. Pastor. In the agreement you just explained, what are
the ball park figures of some of the revenues that you're
anticipating?
Mr. Warrington. Each of these are worth several million
dollars a year. I think the Norfolk Southern arrangement will
be worth about $2.5 million a year on an annual basis, enabling
Norfolk to operate their trains over our tracks. There are
similar arrangements we've made with the other freights around
these kinds of specific opportunities.
One of the places where you get the highest yield on the
express business, and it's a place that the railroads got out
of many years ago because they had a hard time handling this
traffic, is the refrigerated car business. You make the most
money in the express business hauling perishables, fruit,
vegetables, and that kind of stuff. The freight railroads just
basically can't handle it these days, they decided it was too
much of a problem for them over the last number of years.
We have, in fact our board of directors authorized a pilot
program around what we call reefer, refrigerated express
business. Just last month, we began leasing eight refrigerated
cars. We will be experimenting with several shippers around
Florida to New York and West Coast refrigerated operations. If
we can do it and do it right, there is real yield, real revenue
around the reefer business.
Mr. Mead. I think it's important to underscore what Mr.
Warrington is saying here, and to give you some numbers. It's
plausible, according to our analysis, that they could be
getting $70 million in revenue from this area by 2002. That's
excluding mail--the premium express business could be more than
double what they're projecting for 1999. This is an important
area, because when Amtrak comes up here and they say they need
X dollars from the Congress, that figure will be less when you
have activities like this generating revenue.
The only advice I would have for Amtrak is, I think they
can move out more robustly and vigorously and with a sense of
urgency on this one. It really does hold some promise. The
market is an interesting one, because it's shippers who can't
afford, the premium air freight express, but still want to send
something express and make sure it shows up on time. This is
the market.
BARRIERS TO FREIGHT SHIPMENTS
Mr. Pastor. Where do you see some of the barriers? If you
want Amtrak to be more proactive, obviously there are some
limitations, there are some barriers. Maybe you may want to
give us some information on that.
Mr. Warrington. Yes, Ken and I have had several discussions
about this. One of the things that I need to do, which we're
working on, is building internal depth and strength around this
business. It has not historically been our core business. It
requires a certain amount of talents expertise, depth, and
strength to handle this kind of business, both operationally
and commercially. I am personally dealing directly with
building that kind of capability in the organization.
I think that's one of the things Ken has recommended to me,
and I've recognized that and I've had lots of discussions with
folks about how I can do that and do that quickly.
MAIL BUSINESS
I might mention also, the other real opportunity for us is
involved with the mail business. We have managed to establish a
very good relationship with the United States Postal Service.
As a matter of fact, I had lunch with Bill Henderson, the
Postmaster General, on Monday, around exploring opportunities
for us to handle more of their periodical and magazine
business, we think we can get to the point where we will enable
them to offload a lot of that mail, to Amtrak from the 11 or 13
regional postal distribution centers around the country.
Getting that stuff that clutters their distribution
centers, we will arrange for trucking deals to go right to the
printers and deliver it directly to end points without having
it flow through the Postal Service's regional distribution
centers.
We can do that much less expensively than the way it's
being hauled today, which is principally by air. The issuefor
the Postal Service is consistency and reliability. We're working very
hard.
mail tracking system
They are also very interested in a tracking system. In
fact, they have given us $800,000 to work with us together on a
tracking system for every mail shipment that's been carried on
an Amtrak train. The first phase of that system is going to be
in place in June, the second phase in December. It will make
them more comfortable with offloading more and more of this
business to Amtrak.
increasing mail efficiency
The other thing we're working with them on, hope to work
with them on, is in fact a suggestion Gil Carmichael, who is
the chairman of the ARC, made to me a couple of months ago
about looking for ways to get better efficiency around the
movement of mail such as that from truck across the platform to
our trains. This would help us not tie up passengers trains
loading and offloading the mail business.
One of the things we've talked to the Postal Service about
is convening the big, big, big shippers or printers, like
QuadGraphics, the guys who really sort of run that business to
look for partnerships and investment opportunities for all of
us to design and invest in the kind of equipment that enables
us to move that stuff on and off our trains and trucks quickly
and rapidly.
Ultimately, we should be designing our station facilities
across this country to be able to handle that kind of traffic
as well, efficiently, rather than in, frankly, the fairly
neanderthal sort of way we do it today. We are really not set
up operationally or physically the way we were 40 or 50 years
ago to handle that kind of stuff quickly.
Mr. Pastor. Mr. Chairman, I want to thank the panel and
thank you.
role of the inspector general
Mr. Wolf. Thanks, Mr. Pastor. We have a number of
questions. Just so you know we're not going to adjourn, we're
just going to go through until we finish.
Before we get to the questions, I think it's been good to
have the IG here. Some don't like it, some do. But it's a good
testing process. Frankly, I think you're doing a good job, and
I think probably you're handling yourself better today than
I've seen many of the previous testimony from Amtrak since I've
been on the committee. I think it's not bad to have Amtrak be
tested by the IG. I know sometimes you don't like what they're
going to say.
But I think it's good, and I think that's good for the
public interest. We try to do that, and I think you would be
able to agree with that, because you ought to be able to answer
any questions they raise, and they may single something that
you haven't thought about.
amtrak subsidy
I think, too, on the subsidy question, there is going to be
subsidy for Amtrak for a long, long time to come. I think
everyone should know that. I think there are two different
things, though, there's subsidy and poor service and subsidy
and excellent service. There for a period of time, people were
putting money in and the windows were dirty, the food was
terrible, and the trains were not on time. I think what you're
stressing with regard to excellent service, quality, is very,
very important.
expanded definition
Ms. Molitoris, the Administration's budget does not request
in bill language the expanded definition as you did last year.
Instead, you refer to this need in the detailed justification
for the fiscal year 2000 budget request. Why are you not
seeking it in bill language? Are you going to be amending it?
Was there a reason you didn't do it this way?
Ms. Molitoris. Mr. Chairman, it has been the
Administration's position that both the money and the
definition were essential for the future of Amtrak. Can I check
on that and get back to you?
[The information follows:]
No. The Administration believes that the Committee's
acceptance of the proposed definition is all that is required
to permit the Department to allow Amtrak to use its capital
grant for the uses proposed. Specific statutory language is not
required.
Mr. Wolf. Sure. It looked like a de-emphasis.
Ms. Molitoris. No. I can tell you with certitude that it's
not. But let me check on the point that you raise and get back
to the committee, please.
[The information follows:]
Capital Definition in Bill Language
Mr. Wolf. Will you be amending your bill language to
reflect this request as you did in fiscal year 1999?
[The information follows:]
No. The Administration believes that the Committee's
acceptance of the proposed definition is all that is required
to permit the Department to allow Amtrak to use its capital
grant for the uses proposed. Specific statutory language is not
required.
Mr. Wolf. Mr. Warrington, do you believe that Amtrak needs
this definition explicitly in bill language, as is the case
with transit, to allow the railroad to use its capital
appropriations for activities other than traditional capital
expenses?
Mr. Warrington. Amtrak should be afforded the same
opportunities as other modes of transportation. The definition
of capital allowed for transit agencies is an integral part of
Amtrak's Strategic Business Plan and critical for cash flow
management. If Amtrak is not permitted to use capital in the
same manner as transit and the other modes, it will not have
sufficient access to cash needed to cover its expenses in
FY2000.
capital expenditures
Mr. Wolf. Okay. Mr. Warrington, last year the board agreed
to hold its capital expenditures to 40 percent in the first
year. Has the board agreed to a similar restriction for fiscal
year 2000?
Mr. Warrington. No, Mr. Chairman, the board has not. That
was a decision that was made in connection with that particular
budget request. That was a self-imposed constraint.
[The information follows:]
Mr. Wolf. The 40 percent first year spending rate meant that of the
$609,000,000 appropriated, FRA will only release $244,000,000 to Amtrak
for capital expenditures during fiscal year 1999. What impact has this
had on Amtrak's short-term cash flow? Does this restriction require
more borrowing from TRA funds?
[The information from Amtrak follows:]
Because Amtrak is prohibited from accessing the balance of the
funds, it forces Amtrak to borrow against the TRA to satisfy short term
cash flow needs. This runs completely counter to the purpose of the
Congress providing the TRA in the first place--to provide much-needed
capital for high rate of return investments to enable the achievement
of operating self-sufficiency.
In addition to forcing borrowings from the TRA funds, it also
delays our ability to use these appropriated funds for capital
investment. In the current plan, which reflects the 40% spend out, the
funds are not available for capital investment until FY2001. If the
spend out were 100% Amtrak could begin using these funds for capital in
FY2000.
Mr. Wolf. At the time the Board made the 40 percent spending
commitment, Amtrak hoped to use the expanded capital definition to
cover what had previously been defined as operating costs, such as
maintenance of equipment and way. However, Congress only permitted a
limit expansion of traditional capital expenses, to include maintenance
of equipment. In fiscal year 2000, Amtrak and the Administration are
again seeking the expanded capital definition. In your grant request,
Mr. Warrington, Amtrak states that if the expanded definition ``were
not provided, Amtrak will not be able to remain on the glidepath to
operational self-sufficiency, nor will the corporation make it, on a
cash basis, through fiscal year 2000.'' Please explain to the
Committee, in detail, what you mean by this statement and why. Does
this mean that if Congress does not provide the expanded capital
definition this coming year that Congress may need to begin reviewing
options to liquidate the Corporation?
[The information from Amtrak follows:]
If all other elements stay the same, without the expanded capital
definition, Amtrak would have a $47 million cash shortfall in FY2000.
The irony would be that even though Amtrak would have $1 billion in the
bank, we would be unable to use those funds to satisfy our obligations.
Having exhausted our commercial lending lines of credit, we would have
no source of funds to pay for the cash need.
Mr. Wolf. If Amtrak is not allowable to use its federal
appropriations for maintenance of way, will Amtrak be able to continue
operating past fiscal year 2000? If so, how will the Corporation change
its operations?
[The information from Amtrak follows:]
Amtrak will not be able to make it through FY2000 on a cash basis
without the ability to spend federal capital appropriations on
maintenance of way. Despite having significant cash balances in TRA
funding, Amtrak would not be able to meet its operating cash flow
obligations without the expanded definition of capital.
Expanded Capital Definition
Mr. Wolf. Mr. Mead, your testimony states that if Amtrak does not
receive the expanded definition of capital, ``Amtrak will not be able
to cover its operating losses and could be forced to default on current
obligations. This could occur even though Amtrak is likely to have $1
billion in Taxpayer Relief Act (TRA) funds in the bank''. How is this
possible?
[The information from the IG follows:]
Taxpayer Relief Act (TRA) funds have the same restrictions on their
uses as do the current federal appropriations Amtrak is receiving. That
is, this funding can only be used for maintenance of equipment, not
maintenance of way. Therefore, once Amtrak's annual federal
appropriation is used to fully fund maintenance of equipment, no TRA
funds can legally be used to cover any additional operating expenses.
Mr. Wolf. We're going to have a number of other questions
in the whole area. Last year, the House expressed concern that
if approved the expanded capital definition that Amtrak would
use almost all the appropriated funds on what was traditionally
categorized as operating expenses. Mr. Warrington, it appears
from your strategic business plan that this has actually
occurred. Would you highlight for the committee how much Amtrak
plans to spend on traditional capital items in fiscal year
1999, and how much Amtrak plans to spend on maintenance of
equipment?
Mr. Warrington. Yes. In fiscal year 1999, the capital
maintenance number is about $484 million. And beyond that,
since our appropriation is $609 million, on top of that $484
million, the first roughly $50 million is being used for
principal on debt service, which is a legitimate capital
expense. The balance is being used for capital.
capital needs
Mr. Wolf. Ms. Molitoris, in your testimony you state,
``Approximately $361 million of the $571 million requested will
be used to maintain equipment and facilities necessary to
ensure Amtrak's safe operation and preserve and improve the
quality of service experienced by Amtrak.'' If the request is
enacted, that means 63 percent of the appropriated funds will
go for traditional operating expenses.
Won't allocating this much for traditional operating
expenses adversely impact the corporation's extensive capital
needs, such as the $3.2 billion needed for the northeast
corridor?
Ms. Molitoris. Mr. Chairman, I think we have said, last
year and this year, that fiscal years 1999 and 2000 were very
tight years. Those were going to be very difficult years.
I think the request, as it stands, is the best business
decision that Amtrak could make. It was our recommendation, in
terms of our budget analysis. I think that the description that
we have given in our testimony, as well as Mr. Warrington and
Ken Mead, tells you that we are pursuing other revenue streams
to lessen that percentage in the years to come. This is a very
tight budget; that is why I continue to stress that $571
million as being a crucial number, along with the flexibility
of the capital definition. It was our best judgment that that
is what would occur in the pursuit of a viable Amtrak.
expanded capital definition
Mr. Wolf. If we adopt the expanded capital definition,
would this mean that Amtrak will continue to use a large
percentage of its capital dollars for what had traditionally
been operating costs, which was 80 percent in fiscal year 1999
and 63 percent in fiscal year 2000? And would you specify for
the committee, Mr. Warrington, what you plan on using capital
dollars for during the next three fiscal years?
Mr. Warrington. Could you please repeat the question, Mr.
Chairman?
Mr. Wolf. Yes. If we adopt the expanded capital definition,
does this mean that Amtrak will continue to use a large
percentage of its capital dollars for what had traditionally
been operating expenses? I think we know the answer to that.
Please specify for the committee what you plan on using capital
dollars for during the next three fiscal years.
Mr. Warrington. Yes. A significant proportion of that
appropriation would be for what were, heretofore, operating
expenses.
Mr. Wolf. The percentage would be?
Mr. Warrington. Well, in fiscal year 1999 it's $484 million
out of $609 million, and in fiscal year 2000 it would be $360
million----
Mr. Wolf. That was $484 million, right?
Mr. Warrington. Let's see, $484 million out of $609
million. And in fiscal year 2000, it would be $361 million out
of $571 million, right, and in fiscal year 2001 it would be
$242 million out of $521 million. And then in the last year,
fiscal year 2002, it would be $185 million.
[The information follows:]
Mr. Wolf. If capital dollars are disproportionately used
for operating expenses, how can the Corporation claim to be
self-sufficient beginning in fiscal year 2003?
[The information from Amtrak follows:]
Amtrak's Strategic Business Plan provides the blueprint to
reach operating self-sufficiency by the end of FY2002. It is
defined by the Amtrak Reform and Accountability Act as
requiring no federal support for operations except for excess
Railroad Retirement (excess RRTA) costs. In FY2002, Amtrak will
use only $185 million of capital appropriations for capital
maintenance. This amount is equal to the amount of excess
Railroad Retirement cost Amtrak anticipates carrying in FY2002.
Mr. Wolf. What percentage of federal funds from
appropriations does Amtrak plan to use for maintenance purposes
to meet its fiscal year 2002 plan?
[The information from Amtrak follows:]
The only amount of the $521 million of federal funds from
appropriations which Amtrak plans to use for maintenance
purposes in FY 2002 is the value of excess RRTA--those
contributions Amtrak makes to the railroad retirement system in
excess of what is required for its own retirees. For FY 2002
this amount is projected to be $185 million or 35% of $521
million.
Mr. Wolf. Amtrak cannot use federal funds for operating
expenses after fiscal year 2002. Does Amtrak plan to use
federal funds for progressive overhauls after 2002? If so, is
clarification of this policy needed?
[The information from Amtrak follows:]
Amtrak has consistently used capital funds for progressive
overhauls since FY 1996. This overhaul plan replaces major
components of equipment on a more timely basis before component
failures. This program was determined to be more effective for
certain lines of equipment than heavy overhaul. It accomplishes
the same upgrades to equipment as a heavy overhaul but changes
the timing. Since they are of a capital nature Amtrak plans to
use federal funds for these overhauls after FY2002 in order to
maintain its equipment in a state of good repair.
Mr. Wolf. Mr. Mead, do you support Amtrak's request for greater
flexibility, so that the railroad can use its federal subsidy for
maintenance of way as well as maintenance of equipment?
[The information from the IG follows:]
Yes, I do. The inclusion of maintenance of way as well as
maintenance of equipment in the permissible uses of Amtrak's federal
appropriation would permit Amtrak to use its capital funds in the same
manner as rail transit systems financed by the Federal Transit
Administration. Amtrak needs the ability to decide whether refurbishing
its existing capital assets--a traditional operating expense--makes
better economic sense than investing in new replacement--a traditional
capital expense. Restricting Amtrak to capital use that only permits
new investment will ultimately bias its decisions regarding
replacement, rather than the maintenance, of assets--even when
maintenance is a less-costly and more economically efficient
alternative.
Besides making good economic sense, expanding Amtrak's permissible
uses for its federal appropriation is financially imperative next year.
If the same funding restrictions as in the FY 1999 appropriation are
applied next year, Amtrak will not be able to cover its operating
losses and could be forced to default on current obligations.
Mr. Wolf. Would it be reasonable to go even further and remove all
constraints on the use of the federal subsidy through fiscal year 2002?
[The information from the IG follows:]
Yes. We believe that the financial and political confusion these
restrictions have engendered have further complicated Amtrak's struggle
to achieve operating self-sufficiency.
By giving Amtrak an unrestricted grant through Fiscal Year 2002,
Amtrak would be able to spend the appropriation where most needed, with
the full knowledge that it must reach operating self-sufficiency by the
end of Fiscal Year 2002. We believe that any concerns about Amtrak
unwisely using its appropriation for operating costs, rather than
investing in capital needs, are unfounded. The foundation of Amtrak's
current strategic business plan, and thus its long-term viability, is
grounded on the revenues that are expected to flow from critical
capital projects. Amtrak fully understands that every dollar spent
unnecessarily on operating losses is a dollar taken from these capital
investments. We believe there is a strong argument to be made for
giving management, and the Reform Board, the flexibility to make the
business decisions they believe are necessary to meet their mandate
without the hindering financial restrictions encumbering them today.
Mr. Wolf. Mr. Warrington, what does operating self-sufficiency mean
to Amtrak? How does this differ from where we are now--no federal
appropriation for operating assistance?
[The information from Amtrak follows:]
Operational self-sufficiency is defined as a net operating loss of
zero, less the excess Railroad Retirement Tax Act (RRTA) payments that
Amtrak makes to cover the costs of the Railroad Retirement program for
non-Amtrak employees. While Amtrak is required to pay these costs, this
historical anomaly should not be an indicator of Amtrak's financial
performance.
Though Amtrak no longer receives an operating grant, our
operational costs have not changed--these costs are met by an internal
borrowing against Taxpayer Relief Act funds. This is also why adoption
of the expanded capital definition is critical; it will allow Amtrak to
use our capital appropriation on both maintenance of way and
maintenance of equipment expenses, which have previously been
considered operational costs.
Mr. Wolf. Mr. Mead, obviously, from your testimony, you are
in support of Amtrak's request for greater flexibility or was
it that if they didn't get it, they were going to go bankrupt?
Mr. Mead. Probably both. [Laughter.]
No, we do support it. It is going to encourage undesirable
behaviors if we don't adopt it. As I pointed out before, they
either won't do the maintenance, or they will go buy new
equipment when they don't need to. It just makes sense during
this period of time, I think, to expand it. I recognize the
difficulties on the scoring----
scoring of expanded definition
Mr. Wolf. Yes, the scoring is the problem. There were two
problems last year, the scoring, and also the mixed signals
with regard to the authorizers.
What if we just didn't do anything? What if we just gave
you $571 million? I mean, I think we either have to have
confidence in you, or we don't have confidence in you; and I
think to be kind of picking around, why don't we just say,
``Here's $571 million,'' or as Mr. Sabo knows much better than
I do how that works, having been Chairman of the Budget
Committee, that would probably score fairly high. The question
is, then, would it be better to take the $571 million with no
strings, you do as you see fit, we have confidence in you, and
then--if that were scored, and knowing that we're going to have
to live up here with what we have--would you then want to come
in and say, ``Well, I'll take $540 million'' or whatever the
figure is that we could fit into the overall numbers with no
restrictions.
Do you want to both comment on that?
Mr. Mead. I think you can make a textbook-type argument
that that is desirable. But this is a request for taxpayer
funds, and I think Amtrak can make a case that we find sound,
that the definition should be expanded to include maintenance
of way. Therefore it would include both maintenance of
equipment and maintenance of way.
Mr. Wolf. But if you just gave it to them, then you don't
even get into the definition. They could use it for whatever
they wanted to.
Mr. Mead. Well, you don't. But at the same time, Amtrak
knows that it is under the gun to focus this money on capital-
related items.
You can make the case, Mr. Chairman; I think what the facts
support right now is expanding it to include maintenance of
way. If you go all the way, it's basically an appropriation
that says, ``Here, go do with it what you want.''
Mr. Wolf. Right. That's true.
Mr. Warrington, what is your response?
Mr. Warrington. I would not have a problem with that, Mr.
Chairman. As a matter of fact, it would provide us with the
kind of flexibility that you're talking about. The level of
effort though, $571 million, is important.
Mr. Wolf. I know that. But you understand our problem here.
I don't think any committee has been more sympathetic, and,
obviously, I was raised a half a block from your line up in
Philadelphia and I'm very, very supportive. But I think we're
going to have to work with whatever we have here, and I'm just
wondering--it's just an idea that if you were to do it, and Mr.
Mead seems to have a little bit of a problem, but if you were
to do it, would you rather have $571 with no restrictions, or
since that's so good, you could go to $550 if we had to work
out something.
You should discuss this with your staff, but I'm just
trying to get some sense of how do you feel about that. I know
you're not backing off of that $571.
Mr. Warrington. Right.
Mr. Wolf. And I'm not trying to trick you. This is not a
game.
Mr. Warrington. I understand.
Mr. Wolf. We're trying to find out what would be the best
way to do it.
Mr. Warrington. I would need to understand technically, Mr.
Chairman, whether or not a number other than $571 million
without those kinds of constraints would work for us. I can't
tell you that it would work for us today. But we can certainly
have the staff take a look at it.
Mr. Wolf. Why don't you.
Mr. Mead. And a practical problem, as I listened to Mr.
Warrington speak here, a practical problem in saying ``No
strings attached, here's the money'' is the scoring. It goes
way up.
Mr. Wolf. Yes. We said subject to the scoring, all right. I
know that.
Ms. Molitoris. Mr. Chairman, just let me mention, I think
the idea that Amtrak would be on the level playing field with
transit and highways system is a reason for an expanded
definition that makes sense. You're going to have to deal with
scoring in any event, but at least we have some consistency
within the surface modes with the definition, the expanded one
that we're asking for. And we will go back and look at the
scoring and see if we can bring anything to the committee that
will help. But I think the Administration would like to have
this consistency, if possible.
Mr. Warrington. Mr. Chairman, my staff reminds me here that
one possible thing that we could explore is the $571 million
but with directed scoring or an obligation limit, that that
might be a reasonable outcome here for us and the committee as
well.
fra and amtrak budget request
Mr. Wolf. We'll be talking.
Ms. Molitoris, your Amtrak request is for $570,976,000. Mr.
Warrington, you use the figure of $571 million. The difference
is slight; is it just kind of a mathematical mistake or is it
just sort of----
Mr. Warrington. I think it's a rounding issue.
Mr. Wolf. You would rather round it up than down?
Mr. Warrington. Yes. But I can concede the $24,000 I think.
financial obstacles for amtrak
Mr. Wolf. Ms. Molitoris, what do you think are some of the
obstacles to improving Amtrak's financial health that they may
not be looking at?
Ms. Molitoris. I think the strategic plan is the blueprint
for the rehabilitation, renovation, and rejuvenation of Amtrak.
I think really talking about the culture of the railroad
probably would hit all of the elements that are barriers. There
are 24,000 employees who are very dedicated; they have taken
lower rates of pay foryears, they're dedicated to this
railroad, they're very important elements. But through the very, very
hard years, Mr. Chairman, there have been issues of service that have
become somewhat ingrained.
I think Mr. Warrington's stress on performance standards is
also going to include a high level of training for these
employees, because there are elements that make people want to
come back as passengers and a lot of that has to do with how
one is treated, how one is greeted, the body english, the
smiles or lack of. I think that whole cultural change is
somewhat underestimated, often very underestimated. It is
difficult to assure behavioral change in people who have been
doing something for a long time. So I think that's going to be
a challenge for Amtrak, but I think they're up to that
challenge.
I think that things like mail and express are also key, I
recall criticism last year because Amtrak's budget did not, in
fact, in the IG's report, did not produce the kind of revenue
that was at first anticipated. What was the reason for that?
The person in charge of that initiative, who is no longer at
Amtrak, did not get into the business of the operating changes
that were needed. George mentioned, that hasn't been their core
business for a long time, so you can't just have a conceptual
initiative without the operational training and changes that
were needed.
So I think all the nuts and bolts of the business, all the
detail of the business are crucially important. I'm very
encouraged by the business initiatives. For example, people are
actually trying to recruit Amtrak as a partner. Mr. Mead has
talked to me about Swift Trucking, one cadillac of trucking
companies, and they are very desirous of forming a business
partnership with Amtrak because, if you look at the Northeast
and the upcoming merger acquisition of Conrail, there's going
to be much more congestion on much fewer lines. We see it
across the country with the mega mergers. That means that these
kinds of express lanes that shippers need can occur through a
partnership with Amtrak.
I personally believe that as the percentage of revenues
from non-passenger revenue increases, Amtrak is going to become
more and more solid. Around the world, in Japan, for example,
there are business plans where they have as a goal 15 percent
non-passenger revenues.
So I think Amtrak is going in the right direction. I don't
think it's easy at all. I think that Mr. Mead is right, it is a
difficult challenge, but it's doable. And I am very excited
about the fact that they're $42 million ahead of the
projection. That says to me things are going better.
Obstacles in Improving Amtrak's Financial Condition
Mr. Wolf. Ms. Molitoris, what are some of the obstacles to
improving Amtrak's financial health and how does the
President's fiscal year 2000 budget request address these
obstacles?
[The information from FRA follows:]
To achieve operating self-sufficiency, Amtrak must
successfully initiate high-quality, high-speed service on the
Northeast Corridor; expand its transportation of mail and
express shipments; develop a consistent high standard of
quality service throughout the company; and continue to drive
out expenses form the Corporation. Amtrak needs capital to
implement these initiatives. Amtrak also needs flexibility in
its use of Federal funding, in the form of the eligibility of
maintenance for capital investment for the next four years, to
provide the opportunity for the initiatives identified above to
mature to the point that they are positively impacting Amtrak's
bottom line. The President's request for FY 2000 addresses
these needs by providing capital for investment in high-yield
projects which, when taken with the funds made available under
the Taxpayer Relief Act, will permit Amtrak to make the
investments identified for FY 2000 in the Strategic Business
Plan. The President's request also provides the funding
necessary to keep the Corporation operating while these
investments come on line.
possible improvements
Mr. Wolf. Have you hired a company to come in to look and
make recommendations as to other places you go, or do you feel
you have the skill and knowledge within the corporation now to
do that? For example, ads on trains, as you talked about, the
wrapping of the trains, the air rights. Someone to look and see
what is out there that is potentially possible. Do you feel you
have the knowledge within the corporation, or have you gone
outside to bring somebody in who has looked at that for an
airline or looked at that for another company?
Mr. Warrington. It's a combination of factors depending
upon the area and the opportunity. There are some places where
we've built over the past couple of years a very deep internal
expertise, particularly around real estate, real estate
development, real estate negotiation. And there are other
places where we need to supplement with outside forces,
particularly around advertising, promotion, and branding.
Mr. Wolf. Have you looked at what foreign rail corporations
are doing? They may not be doing any better, but have you
looked to see? You mentioned what they're doing in Great
Britain and Germany and places like that.
Mr. Warrington. Yes. We've spent a lot of time with senior
management of most of those outfits. As a matter of fact, just
yesterday I met with the chairman and president ofVia Rail
which is the Amtrak equivalent to the passenger rail system in Canada.
We have many similarities. As a matter of fact, we have lots of
partnering arrangements with them today from a marketing point of view,
joint ticketing and joint pass privileges. Beyond that, we're looking
at opportunities to share equipment design and specification
development, perhaps procurements around locomotives, such as FRA's new
high-horse-power diesel locomotive. We talked about their requirement
for them as well as some economies of scale around that.
We've spent a lot of time with SNCF, the French national
railroad, and the German national railroad around sharing of
opportunities. They've spent a lot of time here with us and we
have people who spend time over there with them, both from the
technological level and from an engineering and equipment point
of view. We also discussed marketing, design, transportation
planning, and management practices. We do a fair amount of that
with foreign carriers.
airline partnerships
Mr. Wolf. Have you teamed up with--this is going to sound a
little strange--but have you teamed up with any airlines with
regard to frequent flyer mileage, things like that?
Mr. Warrington. Yes. As a matter of fact, we do lots of
work with United Airlines partnerships around fly-train, like
fly-drive, we do fly-train deals with United.
Mr. Wolf. Do you do any frequent flyer miles?
Mr. Warrington. And we do some of that with Delta, yes. But
the real opportunity is around the high-speed service in the
Northeast and interline agreements with Continental, for
example. We've had discussions with Continental at Newark
Airport in New Jersey. That's their gateway--center of their
entire system, and partnering with them around bringing traffic
and distributing it in the Northeast along the Northeast
corridor is something we're working on.
We are having similar discussions with Southwest Air and
USAir down here and at BWI. And we are having very good
discussions in Providence where there will also be a rail
station that connects to the new airport there, Green Airport.
Mr. Wolf. Good.
amtrak image
Ms. Molitoris. Mr. Chairman, can I just mention one other
barrier because I think it's very real?
Mr. Wolf. Sure.
Ms. Molitoris. And that is, you mentioned a couple of years
ago all of the stories about potential bankruptcy and so on. I
would call it ``Amtrak bashing'' to coin a phrase. I think
people get concerned about Amtrak's viability and they wonder
whether they ought to be passengers. I think the whole feeling
among the workforce was a very depressed feeling at that time.
I think as we together with the governors and the mayors and
the new Amtrak leadership and the Congress and the
Administration continue to press the success and the growth in
the right direction, and if we can get some coverage about
those kinds of things in the press, I think it's an
encouragement to passengers that this is a viable 21st century
system. That's why high-speed is so important, because that's
going to be attractive and it will get some press.
Mr. Wolf. Well, I agree. With regard to the bashing, I
think Amtrak--and, again, I would stipulate that I've been a
good, strong supporter over the years--I think it was its own
worst enemy. Have you ever been in your repair facilities out
in Indiana in January? No wonder the employees had bad morale,
they had frostbite. [Laughter.]
Mr. Wolf. Everything was just going down. I take Amtrak a
lot; I have a daughter who lives in New York City. But the
trains were dirty, the stations were unclean. It was not a
pleasant experience. So I think a lot of the bashing was
because of Amtrak. People in the marketplace moved off to an
airline or they decided to drive. There were some members here
who were not overly enthused about Amtrak, but I don't think
there's any strong anti-Amtrak feeling as much as people were
concerned about, what I said earlier, subsidizing poor service
and subsidizing quality service.
net loss
At the end of last fiscal year, Amtrak's unaudited cash
loss was calculated at $823 million. However, your recently
released annual report calculates this cash loss at $930
million, a difference of $107 million. About $100 million of
this was due to retroactive wages and taxes due employees after
new labor contracts were signed.
What was the reason for the higher than planned net loss in
fiscal year 1998, besides the retroactive labor payments?
Mr. Warrington. I've been asked that question many times
about if you're doing better, why is your operating loss
growing. One of the reasons is the cost of the labor
agreements. We basically included two years of retroactive
labor settlements in fiscal year 1999.
Mr. Wolf. That was $100 million.
Mr. Warrington. Yes, $106 million, actually. But beyond
that, depreciation has grown significantly and that's a non-
cash item. But as the plant gets older and the accountants
assign depreciation, that's an added expense that looks like a
greater loss but it's not funded and it's not cash.
So in order to get a true picture of what the trend line
looks like, you need to subtract out depreciation, non-cash;
you have to subtract out that labor retroactive payment; and,
you also need to subtract out progressive overhauls, which
accountants expense as an operating cost. But these aremajor
capital overhauls that we transfer over to capital. So when you take
those expenses out, the numbers move in the right direction. But the
biggest share of that, Mr. Chairman, is depreciation.
[The information follows:]
Mr. Wolf. Why is Amtrak realizing the entire lump-sum labor
adjustment in 1998?
[The information from Amtrak follows:]
Generally accepted accounting principles required the
recognition of the entire retroactive portion of the labor
agreements in 1998.
Mr. Wolf. How would the operating results have looked in
prior years if the labor adjustment had been allocated to the
years (1995-1998) in which the cost had actually occurred?
[The information from Amtrak follows:]
Although related to agreements from 1995 the amount of the
labor adjustment is largely attributed to FY 1996 through FY
1998. For analytical purposes to review trends, an allocation
of one-third of the adjustment per year or $35 million per year
is reasonable.
----------------------------------------------------------------------------------------------------------------
FY94 FY95 FY96 FY97 FY98
----------------------------------------------------------------------------------------------------------------
Revenues...................................................... 1,413 1,497 1,555 1,674 1,708
Expenses...................................................... 2,246 2,305 2,318 2,436 2,638
-------------------------------------------------
Operating Loss................................................ (833) (808) (763) (762) (930)
Less Adjustment For Retroactive Labor Costs............... ........ ........ (35) (35) (70)
Less Depreciation......................................... 255 254 240 248 299
Less Capital For Progressive Overhauls.................... ........ ........ 36 37 63
-------------------------------------------------
Net Operating Loss............................................ (578) (554) (522) (512) (498)
Adjusted Operating Ratio...................................... 1.41 1.37 1.34 1.31 1.29
----------------------------------------------------------------------------------------------------------------
Note: FY98 revenues exclude Federal payments and TRA interest.
Mr. Wolf. Okay. The Inspector General, in its review of
your March 1998 Strategic Business Plan, stated that ``several
of Amtrak's financial projections are at risk of not being
achieved, and thus threaten to increase Amtrak's projected cash
loss.'' It appears that we could be seeing this.
In your current Strategic Business Plan, the Corporation
will incur a cash loss of $426 million at the end of fiscal
year 2002. This is an increase of $58 million above what was
anticipated in your March 1998 Strategic Business Plan. Why is
this greater loss projected?
Mr. Warrington. In fiscal year 2002?
Mr. Wolf. Yes.
Mr. Warrington. Frankly, Mr. Chairman, I don't know the
answer to that question and I'm not following those numbers.
Maybe I could supply that to you. I just don't know that off
the top of my head and I don't have the numbers arrayed that
way in front of me. We can certainly supply that to you.
Mr. Wolf. Okay. If you would, please.
[The information follows:]
The $426 million is the baseline net budget result in 2002
before plan actions and does not reflect a cash loss. In
Amtrak's 1999-2002 Strategic Business Plan, the net budget
result in 2002 after plan actions is zero.
Mr. Wolf. Mr. Mead, you are in the process of updating your
report on Amtrak's financial situation. Based on your work to
date, have you found any additional cash losses above those
projected in March 1998 that will make it difficult for Amtrak
to be free of a Federal operating subsidy by fiscal year 2003?
Mr. Mead. No, I don't think we've found any additional cash
losses, sir.
[Questions for the record to Amtrak follow:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Wolf. Mr. Warrington, how did the IG's projections
compare to your first quarter of 1999 performance?
Mr. Warrington. Actually, at the end of the first quarter,
we were doing about $25 million better.
Mr. Wolf. Better?
Mr. Warrington. Better than projections. And by January
30th, we're doing about $40 or $41 million better than that
forecast.
fy 1999 first quarter results
Mr. Wolf. In your testimony, you stated that Amtrak's first
quarter fiscal year 1999 results were $25 million ahead of what
the DOT Inspector General report projected. The IG's projection
was calculated with a retroactive lump sum labor payment
included in your fiscal year 1999 expenses. Is the $25 million
improvement you note the result of shifting a lump sum payment
to fiscal year 1998?
Mr. Warrington. No. The answer is, no.
Mr. Wolf. No.
projected revenues and self-sufficiency
Mr. Wolf. We have some other questions here. On the
Northeast corridor, one of the key restatements the IG made was
to adjust Amtrak's Northeast Corridor high-speed rail passenger
revenue projections by decreasing the anticipated revenue by
$219 million. The IG explained that it believed that Amtrak
would not likely achieve the levels projected during the first
few years of service. However, the revenue Amtrak earns from
high-speed rail is the keystone to achieving self-sufficiency.
If the revenues are less than Amtrak has projected, what
impact will this have on operating self-sufficiency?
Mr. Warrington. Well, if they are significantly less than
projected, that will be a problem for us. But we have
confidence and stand behind the modeling work that we have
done. We have some basic disagreements with some of the
baseline assumptions alone by the modeling folks under contract
with the IG. I think Ken agrees with some of those
disagreements and maybe doesn't agree with others.
But there were some basic differences in the inputs and the
assumptions and the variables that the firm that did the
modeling for Ken used compared to KPMG who did our modeling. A
couple of examples are: The original modeling assumed the use
of 18 trainsets, and we're using 20 new trainsets. That
original modeling assumed 12 months of expenses and 3 months of
revenue for the first year, and we believe that they need to be
equalized. There was a modeling assumption that any auto trips
travelling less than 75 miles would not divert to a high-speed
train, and our folks don't believe that's correct. There was an
assumption that because our conventional rail service has
significant travel time improvements as well, in addition to
the high-speed trainsets, that more of the traffic might divert
to the conventional train service and less to the high-speed
trains themselves, and, consequently, the revenue stream would
be less. Our response to that is, if the marketplace is going
there, we're going to adjust our prices on the conventional
trains.
ticket prices
Mr. Wolf. What will the ticket price difference be?
Mr. Warrington. Between the conventional trains and the
other trains, probably in the 20 to 30 percent range.
Mr. Wolf. So the ticket from Washington to New York this
December on the high-speed will be?
Mr. Warrington. Right now you're Metroliner fare from
Washington to New York is $114. Your airfare is $204, I
believe, on the shuttle. We expect that our fare between
Washington and New York will go to about somewhere between $135
and $145, that's up from today's $114.
airline competition
Mr. Wolf. How does the new service by USAir at Dulles
impact you?
Mr. Warrington. Very little. Our revenue projections around
high-speed rail modelled every origin and destination that all
those trains will serve. First of all, travel time matters a
lot, and Dulles really is not a competitive location for the
market that we have and the market we will attract from the air
shuttle. It's a downtown-to-downtown destination, number one.
Mr. Wolf. I completely agree with that. You're smarter
about this than I am, but I, myself as an example, I live near
Dulles and I usually take the train. Yet, when I saw USAir come
out with a $49 introductory fare shuttle out of Dulles, it kind
of gets your attention.
Mr. Warrington. We also believe firmly that this is about
quality as well the on-board experience and value. I will tell
you that for our price, which will be generally competitive,
the value one will achieve and the on-board service and
amenities that one will experience will be far superior than
anything anyone will experience on an airline these days. I can
virtually assure you of that.
Number two, the other thing we did was very carefully model
the fact that this is not just about endpoint destinations.
What we can do that even the most inexpensive discount airline
can't do is stop at every station along the Northeast corridor.
Most of our traffic, for example, intermediate traffic, New
York-Philadelphia, Philadelphia-Washington, Wilmington-
Baltimore. That is noncompetitive with air service. It is a
market that we can't lose, that we will only grow.
So the risk around our projections has to do with endpoint
markets, in particular. They're not the largest share of our
markets today but they do provide the highest yield because the
trip length is longer, so we like to get more of those. But
they're not the driving force behind our revenue projections.
start of high-speed service
Mr. Wolf. Okay. Is there any chance that the service will
slip, or can you pretty much guarantee that will start by the
end of this year? You were tentative about taking the train up
on New Year's Eve. Are you pretty confident that there will be
high-speed service before the end of the year?
Mr. Warrington. Yes. I'm confident that we'll begin
phasing-in that service by the end of the year. But I will tell
you, it is going to be very tight. The trainsets are in testing
and they're in good shape. The electrification contractor has
been slow and he has been somewhat unresponsive. Amtrak has had
to incur a larger share of cost. As a matter of fact, we've had
to involve ourselves much more deeply to push, prod, and, in
fact, do some of the work ourselves because the contractor has
not performed the way we would like. But we keep pushing and it
is one of our number one priority.
As a matter of fact, this past Monday, I spent the entire
day in Boston and made an inspection trip with the contractor,
Mass Electric Balfour Beatty. We got on an inspection car in
Boston and rode all the way down to New Haven and went over
every aspect of the job. What I've basically told them is we at
Amtrak will do anything we need to do around accommodating
construction in order to get this job done on time. If that
means we need to provide more outages, if it means we need to
supply them with more equipment, our own equipment, if we need
to supply them with catenary cars, anything and everything that
we have within our control to enable them to conclude this
project on time we will do. But there are no guarantees and
this is not entirely within our control. But to the extent it
is within our control, we're going to make it happen.
Mr. Mead, do you agree with this assessment?
[The information from the IG follows:]
We are not currently aware of any specific condition that will
cause high-speed rail service implementation to be delayed. The
schedule is very tight, however, and any delay will adversely affect
the overall project.
Mr. Wolf. Last year, the Surface Transportation Board ruled that
Amtrak could provide express service, with some limitations. Amtrak has
made claims that its mail and express line of business will enable it
to realize a profit that could be used to offset operating losses in
other areas. What increases in revenues has Amtrak realized from the
express service to date?
[The information from Amtrak follows:]
Through February, express revenues have increased by more than 500%
over FY1998. For the five months ended February 1999, express revenues
total $5.2 million, versus $785,000 for the same period last year.
Express revenues have experienced dramatic increases since the positive
Surface Transportation Board ruling last year.
Mr. Wolf. I read, with interest, that Amtrak has signed a contract
with UPS to transport part of their goods, and that anticipated revenue
is estimated at $2,900,000. What other firm commitments does Amtrak
have to increase revenue in this area?
[The information from Amtrak follows:]
Other commitments will include contracts with ExpressTrak, Triple
Crown, Swift, and Norfolk and Southern as well as the U.S. Postal
Service. In combination with the UPS contract, these new partnerships
are expected to generate over $20 million in additional annual revenue
and $28 million in long-term savings for the corporation.
Mr. Wolf. What impact will adding increased mail and express
business have on the passenger rail business, in terms of
infrastructure needs and train performance?
[The information from Amtrak follows:]
Additional terminal facilities will be needed to load or unload
mail and express. In many cases a partnership with a local warehouse
operation is most effective. With effective scheduling and motive
power, train performance impacts will be minimal.
Mr. Wolf. Amtrak's business plan indicates that it will have to
generate and additional $985,000,000 in revenues between 1999 and 2002.
These revenues are in addition to those expected from high-speed rail
and express. Mr. Warrington, what key initiatives are responsible for
the planned $985,000,000 revenue increases? How much certainty do you
have in their success?
[The information from Amtrak follows:]
Amtrak's FY1999-2002 Strategic Business Plan calls for increases in
gross revenues of $789,000,000 from FY1998 and FY2002, including
increases from high speed rail and express revenues.
The revenues include increases in gross revenues of $322 million
from high speed rail in the Northeast, $138 million from the expansion
of mail and express, $234 million in passenger related revenues related
to restructured and improved services, $20 million from increased
commuter services, $15 million from increased operating support from
states, and $60 million from reimbursable and other activities. While
Amtrak's plan will require significant attention and aggressive
management, we believe that this plan is achievable.
electrification
Mr. Wolf. The test schedule for Stars at FAA, there's a
very good parallel here between the amount of time that FAA had
to test the Stars this month and the test schedule for the
electrification and high-speed rail.
Mr. Warrington. Yes, I know.
Mr. Wolf. At least Amtrak's is not as software intensive as
the Stars acquisition to FAA.
Mr. Warrington. One of the differences is the testing is
really commissioning. The commissioning of the electrification
system will be done in sections. The testing is occurring
incrementally as sections are sectionalized and juiced up.
The other important test that needs to occur is, even with
the electrification system running itself, the trainsets and
the pantographs need to work and contact the wire. We need to
test the train operation on that electrical system. We're
working with the contractor for them to free up, as early as
possible, several blocks, probably Blocks 8, 9 and 10, or close
to 40 miles of fully energized electrical system early on, as
early as possible, so that while they're still doing the
balance of their construction work, we can be actually testing
trainsets.
So all of this is not sequential. Much of it is being done
currently.
contingency plans
Mr. Wolf. If all the major plan initiatives, high-speed
rail, mail/express, labor savings, don't meet the projected
levels, do you have any contingency plans? Everything sounds
good, but if something were to happen, do you have anything
else in the bag that you have thought about that you haven't
told us?
Mr. Warrington. No. [Laughter.]
Frankly, Mr. Chairman, I will tell you that we do our
business plan every year and there are literally dozens and
dozens, hundreds and hundreds of individual items that we focus
on in that plan. Every year, dozens of them don't materialize
or don't materialize on a timetable that we project. We are
regularly, on a monthly and a quarterly basis, making those
kinds of adjustments to accommodate for wins and losses in that
plan. And a lot of those actions that we have in our plan are
not entirely within our control; a lot of them depend upon
partners and other folks. We always have in our backpocket
fillers to help us accommodate for places where we're not
successful. And while we do have some of them, we don't have
hundreds of millions of dollars worth of fillers.
[The information follows:]
Mr. Wolf. Mr. Warrington, the Inspector General's
assessment indicated that Amtrak would need significant capital
resources in fiscal year 2001 and beyond, resources above those
already contemplated, to achieve future financial returns. What
do you expect your capital needs to be in the future?
[The information from Amtrak follows:]
Amtrak has consistently stated that it will require a
significant, stable source of capital funding if it is to
become and remain operationally self-sufficient. The planning
process for the FY2000 Strategic Business plan will identify
Amtrak's future capital funding needs and will incorporate the
results of the market-based network analysis which is currently
underway. The business plan will be completed by October 1999.
The Northeast Corridor has demonstrated that passengers, even
premium fare business travelers, will flock to trains when rail
service is trip time competitive, downtown-to-downtown, with
alternative highway and air modes. On the Northeast Corridor,
rail is generally competitive for trips that take less than
five hours for the discretionary traveler and less than 3' 15''
for the business traveler. Trip time competitiveness will vary
from corridor to corridor, depending on the convenience of
other travel modes to the passengers' actual destinations (not
just the airport). High-speed rail also offers passengers a
more productive means of travel--passengers can work, meet with
peers, use cell-phones and computers, or sleep while traveling
between corridors. This is rarely the case on airline flights
characterized by slow taxi rides and cramped airlines seats.
Mr. Wolf. We have a vote, so we will finish up here so we
don't keep you.
self-sufficiency by 2002
Mr. Mead, do you believe Amtrak will be operationally self-
sufficient by the year fiscal year 2002?
Mr. Mead. As I said in my testimony, I think it
isplausible, it is possible, there is a lot of potential--though
package, express mail, and high-speed rail service--but it will be
extremely difficult. So I would not say that it is a sure thing.
[The information follows:]
Mr. Wolf. Mr. Mead, if Amtrak reaches self-sufficiency by
2002, will it be able to sustain self-sufficiency beyond 2002?
[The information from the IG follows:]
There is a good chance that Amtrak will be able to sustain
operating self-sufficiency beyond 2002. We believe this
primarily because our projectons for Northeast Corridor
passenger revenues, while lower than Amtrak's during the 1999-
2003 time period, reach and exceed Amtrak's projections by
2006. In following years, we have no reason to expect that this
trend of increasing revenues will not continue, giving Amtrak a
substantial revenue source and contributing to operating self-
sufficiency.
A caveat to this statement, however, is our assessment of
Amtrak's capital needs. Even the minimum capital needs level
that we estimated for Amtrak, $2.7 billion, is $125 million
more per year than current projected federal appropriations.
This level would be enough to keep Amtrak operating in a steady
state through the end of 2003, but would make amtrak vulnerable
to equipment deterioration and schedule reliability problems
after that date. If Amtrak can not continue to invest in its
capital needs at a sustainable level, this could negatively
impact its reliability and its ability to maintain operational
self-sufficiency.
Mr. Wolf. Mr. Olver, is there anything you would like to
add?
Mr. Olver. Nothing at the moment, Mr. Chairman.
Non-Subsidized Passenger Rail Systems
Mr. Wolf. Ms. Molitoris, in your testimony, you stated that
few, if any, national passenger rail systems have achieved
independence from a federal operating subsidy. Who has been
able to do this, if any?
Ms. Molitoris. Probably the premier service would be East
Japan Railway.
Mr. Wolf. They have no subsidy?
Ms. Molitoris. No, they're private now. But it is important
to note that the government of Japan took over a huge debt from
them some ten years ago. So I suppose it's how you evaluate it.
It was their way of privatizing. Of course, they have literally
hundreds of millions of passengers each year which provides a
very good revenue stream, but they also have many of these
other sorts of business partnerships where they get revenues.
Mr. Wolf. We will have a number of other questions for the
record.
Mr. Olver, if you have something, just chime in.
High-Speed Rail Corridors
Mr. Wolf. TEA-21 allowed FRA to designate eleven high-speed
rail corridors. Eight corridors have been designated to date.
What are they?
Ms. Molitoris. Jim McQueen is our Associate Administrator
of Railroad Development. Do you have that list, Jim? We have
already mentioned the Chicago hub and we extended that into
Cincinnati. We were in New Orleans, the Gulf Coast corridor. We
have been in North Carolina making announcements on
designations.
The five original corridors, Mr. Chairman, Chicago hub;
California; Pacific Northwest, which is Washington and Oregon;
Southeast, North Carolina, and Virginia; three designated
corridors in TEA-21, the Gulf Coast, the Keystone, which is
Pennsylvania, and the Empire. We have also extended the
Southeast corridor which had been designated under ISTEA; we've
extended that to Atlanta, Macon, and Jacksonville. And we
announced, as I just mentioned, the extension from Chicago to
Cincinnati via Indianapolis.
Mr. Wolf. What about the Northeast corridor?
Ms. Molitoris. Well, that was not one of the ISTEA. That's
already established.
BENEFITS OF DESIGNATED CORRIDORS
Mr. Wolf. Are there benefits to being designated?
Ms. Molitoris. Well, there are benefits in two ways. One is
a financial benefit in terms of the hazard eliminationfunding
that is designated in ISTEA and then in TEA-21. But in addition, Mr.
Chairman, what we have heard from the constituents who request these
designations is that it gives them a platform on which to recruit
partnerships, whether it's around station development, whether it's
around going to their State legislature. For example, the State of New
York just allocated $185 million to improve Albany to New York. Part of
that is around the designation; they know that this is something that
is coming in the future. So it is a way of leveraging partnership
money, whether it is public money through the State and locals, whether
it's private investors. This designation helps these coalitions.
[The information follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Fox project
Mr. Wolf. What about the State of Florida? They recently
withdrew their support for the Florida Overland Express,
Governor Bush did. What have you learned is the reason for
that?
Ms. Molitoris. I really only learned from the news accounts
and from those from the Fox project, who I've talked about. It
seems that the decision was made that there was concern about
the cost and also environmental impacts were stated.
But I believe Amtrak actually has an opportunity now to
step into that State and really work with the Department of
Transportation about other ways of doing business. Mr.
Warrington mentioned the non-electric locomotive that FRA has a
business partnership with Bombardier, it will be able to go 150
miles a hour without electrification. We think there's an
opportunity there for the new Amtrak to step in and develop a
proposal. We don't know of another plan, Mr. Chairman, and the
fact is, with the numbers of people going into Florida, they
simply cannot do it with roads alone.
[Questions for the record to FRA follow:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Wolf. Mr. Olver, do you have anything?
Mr. Olver. Thank you, Mr. Chairman. My apology for only
arriving here recently, but my other committee was functioning.
Mr. Wolf. Excuse me. We have the vote. Would you want to
come back? Do you have questions? If you have things you would
like to ask, we only have one vote.
Mr. Olver. No, I don't really think we need to do that.
Mr. Wolf. Okay.
High-speed corridors
Mr. Olver. I would like to see a corridor map of these
corridors. Is it that several have not been designated and
they're not certain yet? I'm puzzling over your description of
some of the corridors as I've heard them come out here and what
they would represent.
It would seem to me, you're talking about a Gulf Coast
corridor, it would seem to me that there is exceptionally high
rationality for a corridor that would go from Atlanta to
Charlotte to Richmond to Washington and that would tie in with
the Northeast. If you look at a map, you've got thesebig cities
at the edge of the piedmont and all the big metropolitan areas along
the Eastern seaboard are virtually on a straight line, one of those
products of geology, I think, big cities and big metropolitan areas
surrounding them, big industrial areas and so forth, a corridor that
was comprehensive would make exceptionally good sense.
And I still don't understand the answer to why the
Northeast corridor is not one of the designated corridors. It
would seem to me that would be the first corridor and most
obvious corridor in any designation that was naming high-speed
rail corridors in this country.
Ms. Molitoris. Mr. Olver, two things. First of all, the
Northeast corridor from Washington to New York is a high-speed
corridor. ISTEA was trying to identify emerging high-speed
corridors and the money was used for hazard elimination, which
is the term for either closing, protecting, or using warning
devices at crossings. The Northeast corridor, owned by Amtrak,
which is the one area in the country where it owns its own
track, has virtually no crossings. So it is already a
designation. Certainly, it is included in any map where you
would talk about high-speed service. Before you arrived, I
menioned the Southeast corridor that you are really describing.
I talked about such kinds of investments as Virginia's, where
the Commonwealth Transportation Board just designated $370
million for the connections from Richmond over the next 15
years to partner with Amtrak to increase service. That's why I
think it's a good thing to call it the Southeast corridor,
because there's that Southeast connection to the Northeast
corridor.
Mr. Olver. I think it would be useful to have a map which
shows what has been designated. And numbered one through
whatever it is in your mapping, I would like to see what's left
and how many designations there are left since eleven were
authorized.
Ms. Molitoris. We will be happy to get that for the
committee.
[The information follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Ms. Molitoris. And could I just mention that the commitment
by the board is to have as part of the announcement for the
Northeast corridor high-speed service an announcement which
includes how high-speed rail can evolve around the rest of the
country, because I think it's a very important element for
members of the board. And if you look at the demographics of
the board members today, Mr. Olver, you will see that many of
them are from outside the Northeast.
Mr. Olver. Just lastly, Mr. Chairman, I don't want to
prolong this, but on the questions that you had, are you
offering these for their formal response? Because under the
high-speed rail section, your prepared questions have to do
with both the variability of the speeds for which these
corridors are being considered and the extreme variability of
the costs that are associated with these things, seem to me
very important questions.
Mr. Wolf. Yes, any questions not asked will be submitted
for the record.
Closing Remarks
Mr. Wolf. Thank you for your testimony. We appreciate very
much your appearance before the committee and wish you well.
Mr. Warrington. Thank you very much, Mr. Chairman. I want
to thank you and your staff for all of the support that you've
given us.
Ms. Molitoris. Thank you, Mr. Chairman.
Mr. Wolf. Thank you.
The hearing is adjourned.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
W I T N E S S E S
----------
Page
Dayton, Mark..................................................... 1
McQueen, J. T.................................................... 1
Mead, K. M....................................................... 1
Molitoris, J. M.................................................. 1
Warrington, G. D................................................. 1
I N D E X
----------
AMTRAK REFORM COUNCIL
Page
Accomplishments.................................................. 561
Biographies....................................................568, 584
Carmichael, Gilbert.......................................... 566
Chapman, Bruce............................................... 570
Cox, Wendell................................................. 571
Gleason, Christopher......................................... 572
Kling, S. Lee................................................ 573
Loftus, William.............................................. 585
Monin, Clarence.............................................. 576
Norquist, John............................................... 577
O'Sullivan, Deirdre.......................................... 586
Sweitzer, Donald............................................. 578
Till, Thomas................................................. 584
Vranich, Joseph.............................................. 579
Weyrich, Paul................................................ 580
Comparison with GAO/IG Assessments............................... 563
Federal Assistance............................................... 565
Meeting Minutes.................................................. 515
May 26, 1998................................................. 551
June 2, 1998................................................. 547
July 6, 1998................................................. 541
September 17, 1998........................................... 537
November 24, 1998............................................ 527
January 19, 1999............................................. 517
Membership....................................................... 566
Obligations...................................................... 564
Staff Salaries................................................... 583
Statutory Mandate................................................ 562
Work Plan........................................................ 563
FEDERAL RAILROAD ADMINISTRATION
Ability to Reach Self-Sufficiency................................ 43
Accident Rates:
Class I...................................................... 450
Class II..................................................... 451
Additional Safety Inspectors..................................... 285
Status of Hiring............................................. 286
Advisory & Assistance Services, Increase in...................... 290
Air Rights....................................................... 53
Airline:
Competition.................................................. 85
Partnerships................................................. 74
Alaska PTC Project:
FY 2000 Funding.............................................. 340
Status of.................................................... 339
Alaska Railroad:
Total Obligations............................................ 351
TRA Funded Projects.......................................... 351
Allocation of FY 1999 TEA-21 Grade Crossing Funds................ 364
ALPS Project:
Funding of................................................... 297
Integration of............................................... 296
Status of.................................................... 296
Amtrak:
Administration's Policy...................................21-22, 24
Amtrak's Future.............................................. 17-18
Budget Request............................................... 335
Business Plan........................................24, 25, 38, 57
Capital Needs................................................ 45
Closing Remarks.............................................. 6
Expanded Capital Definition...........................36, 54, 66-68
Financial Future............................................. 2
Financial Health, Obstacles to............................... 73
Fiscal Year 2000 Budget Request.............................. 30
FRA/Amtrak Partnership....................................... 17
FY 1999 Maintenance Costs.................................... 336
Image........................................................ 74
Labor's Role................................................. 4, 13
Management Improvements...................................... 4
Market-Based Network Analysis................................ 3
Net Loss..................................................... 75
New Board of Directors....................................... 1, 18
Northeast Corridor High-Speed Rail........................... 3, 35
Obstacles in Improving Financial Condition..................73, 337
Other Regional High-Speed Rail............................... 3, 12
On-Time Performance.......................................... 2
Opening Statement............................................ 1
Operating Results........................................34, 38, 40
Partnerships...................................3, 10-11, 23, 52, 74
Passenger Revenues........................................... 2
Reform and Accountability Act...............................1, 5, 8
Ridership.................................................... 2
Safety Statistics............................................ 18
Spending Flexibility......................................... 46
State Funding Flexibility.................................... 18
State Investments............................................17, 28
Subsidy...................................................... 66
Traditional Capital Projects for............................. 337
Use of Capital Funds......................................... 336
Will be a Better Deal Tomorrow Under the Clinton
Administration Rail Passenger Policy....................... 24
Working Relationships........................................ 6
Authorized FTEs/On Board Strength................................ 444
Barriers to Freight Shipments.................................... 64
Benefits of Designated Corridors................................. 89
Benefits of Restructuring S&E Accounts........................... 283
Biographical Summary--George Warrington.......................... 16
Biograpical Summary--Kenneth M. Mead............................. 48
Biographical Summary--Jolene Molitoris........................... 33
Bridges:
Aging Railroad............................................... 504
FY 1999 Earmark for.......................................... 504
Business Plan.................................................... 57
Business Projections............................................. 57
Canadian National Acquisition of Illinois Central................ 495
Capital Definition............................................... 58
In Bill Language............................................66, 334
In Taxpayer Relief Act....................................... 49
Capital Expenditures............................................. 67
Capital Investment............................................... 35
Capital for Maintenance of Equipment and Facilities.......5, 15, 36, 39
Capital Needs, Amtrak........................................39, 45, 68
Chart: Designated High-Speed Rail Corridors...................... 104
Civil Penalty Collections in Last Three Years.................... 496
Civil Penalty Trends............................................. 496
Class I Accident Rates........................................... 450
Class II Accident Rates.......................................... 451
Clinton Administration Amtrak Policy is Working...............21-22, 24
Closing Remarks.................................................. 105
Commercial Revenue............................................... 53
Contingency Plans................................................ 87
Consulting Services.............................................. 500
Corridor Risk Model, Results of.................................. 330
Corridors Furthest Along to HSR Service.......................... 97
Corridors with the Highest Benefit-to-Cost Ratios................ 93
Current Highway-Rail Crossing Staffing........................... 288
Designated HSR Corridors:
and Grade Crossing........................................... 362
Estimated Costs.............................................. 90
Electrification.................................................. 87
Employee Accident/Injuries....................................... 466
Employee Casualty Rates.......................................... 462
Employee on Duty Injuries/Casualties............................. 463
Enforcement Cases by Class of Railroad........................... 499
Enforcement Cases in Last Three Years............................ 499
Equipment Costs.................................................. 290
Expanded Capital Definition..............................36, 54, 67, 68
Expanded Definition.............................................. 66
Fatalities, Rail................................................. 479
Federal Capital Investment....................................... 55
Federal/State Inspection Resources............................... 452
Federal/State Partnerships....................................... 52
Filling Inspector Positions...................................... 286
Financial Obstacles for Amtrak................................... 72
Flexibility in TEA-21 Authorization.............................. 51
Fox Project...................................................... 101
Impact on Other HSR Projects................................. 102
FRA and Amtrak Budget Request.................................... 72
FRA Opening Statement............................................ 17
Amtrak Board of Directors.................................... 18
Amtrak's Future.............................................. 17
Amtrak Request............................................... 17
Amtrak Safety Statistics..................................... 18
FRA/Amtrak Partnership....................................... 17
High-Speed Rail Service...................................... 18
State Funding Flexibility.................................... 18
State Investments............................................ 17
Closing Remarks.............................................. 19
FRA's Participation in Valley Trains and Trails Project.......... 508
FRA's Role in HSR Corridors...................................... 92
FRA's Summary Statement.......................................... 267
Freight Railroads and High-Speed Rail............................ 100
FY 1998 Emergency Railroad Rehab and Repair Funding.............. 352
FY 1999 First Quarter Results.................................... 84
FY 2000 Budget Request (Amtrak)...............................5, 17, 30
FY 2000 Funding of Illinois Flexibility Block Project............ 345
FY 2000 Operation Respond Funding................................ 501
FY 2000 Staffing Increases....................................... 284
Funding Flexibility Within the States............................ 51
Funding Request, Amtrak.......................................5, 17, 30
Future Funding for Operation Respond............................. 502
Governors Statement on Flexibility............................... 52
Grade Crossing:
Accidents/Fatalities and Trespasser Fatalities............... 422
Accidents/Fatalities, 1999................................... 430
Accidents, Top 16 States with Most........................... 421
Activities................................................... 432
And Designated HSR Corridors................................. 362
Collisions by State.......................................... 426
Current Technologies......................................... 366
Evaluation of Action Plan.................................... 372
Fatalities, 50% Reduction in................................. 370
Fatalities, by State......................................... 423
Funding and TEA-21........................................... 364
Funding, FY 1999............................................. 412
Funding, FY 2000............................................. 419
Funding--HGHSR and Rail Initiative........................... 361
Planned Projects, FY 1999-2000............................... 372
Status of Recommendations.................................... 403
Trespasser Accidents/Fatalities.............................. 429
Hazmat:
Accidents.................................................... 461
Rail Transport of Radioactive Waste.......................... 506
High Speed Rail:
Corridors...................................................89, 103
Evaluation of Benefits/Costs of.............................. 94
Freight Railroads and........................................ 100
FRA's Role................................................... 92
Funding Priorities........................................... 95
Incremental Approach to...................................... 102
Midwest Initiatives..........................................58, 60
Service--Amtrak.............................................. 18
Test Track................................................... 486
Highway-Rail Crossing Staffing, Current.......................... 288
Illinois and Other Railroads Train Control Work.................. 345
Illinois Central, Canadian National Acquisition of............... 495
Illinois PTC Project:
FY 2000 Funding for.......................................... 344
Matching Funds for........................................... 344
Public Funding of............................................ 343
Status of.................................................... 343
Immediate Office Staffing........................................ 441
Impact of:
Fox Project on Other HSR Projects............................ 102
ITS Projects on Grade Crossing Safety........................ 369
RSAC on Regulatory Process................................... 507
Increase in Advisory & Assistance Services....................... 290
Increase in Travel............................................... 289
Incremental Approach to HSR...................................... 102
Information Technology Initiative, New........................... 290
Introduction..................................................... 1
Inspection Data.................................................. 453
Inspections:
FY 1998...................................................... 456
Level and Effect of Site-Specific............................ 493
New Track Technologies....................................... 511
Track Technologies........................................... 513
Inspector Attrition Rate......................................... 287
Inspector General:
Amtrak's Operating Results...................................34, 38
Assessment of Amtrak......................................... 34
Capital Investment........................................... 35
Expanded Capital Definition.................................. 36
Financial Status............................................. 34-35
Northesat Corridor High-Speed Rail........................... 35
Opening Statement............................................ 34
Prepared Statement........................................... 37
Report on Amtrak's Viability................................. 78
Inspector Resources.............................................. 494
Inspectors Authorized On-Board................................... 453
Inspector and Bridge Safety...................................... 503
Inspectors, State Participation.................................. 455
Installation of FRA's New IT System.............................. 294
Intruder Detection Funding in 2000............................... 437
ITCS:
Safety Benefits of........................................... 341
Status of Projects........................................... 342
IT System:
Total Cost and Completion Date of............................ 293
Installation of.............................................. 294
Level and Effect of Site-Specific Inspections.................... 493
Long Term Capital Needs.......................................... 55
MAGLEV:
Funding for Research......................................... 326
Program Status............................................... 327
Research vs. TEA-21 Funding.................................. 327
Mail:
Business..................................................... 65
Increasing Efficiency........................................ 65
Tracking System.............................................. 65
Mail and Freight Revenue......................................... 63
Maintenance of Way Definition.................................... 51
Mead, Kenneth M.:
Biographical Summary......................................... 48
Prepared Statement........................................... 37
Michigan Train Control Project:
FY 2000 Funding for.......................................... 341
Revenue Service.............................................. 341
Testing of................................................... 340
Midwest High-Speed Rail Initiatives..............................58, 60
Molitoris, Jolene:
Biographical Summary......................................... 33
Prepared Statement........................................... 20
NECIP, Status of................................................. 299
New Grade Crossing Request--No State Match....................... 365
New Information Technology Initiative............................ 290
New Positions--Field or Headquarters............................. 285
Net Loss......................................................... 75
Non-Compliance With Safety Plans................................. 490
Non-Electric High-Speed Locomotive:
Funding of................................................... 295
Status of.................................................... 295
Testing of................................................... 295
Non-Electric Locomotives:
Amtrak Funding of............................................ 298
Completion Date for.......................................... 298
Status of.................................................... 298
Non-Subsidized Passenger Rail Systems............................ 88
Northeast Corridor:
High-Speed Rail.............................................. 35
Improvements................................................. 44
Revised Trip Times........................................... 50
NTSB Voice Recorder Recommendation............................... 509
NTSB Hours of Service Recommendation............................. 510
OA:
Salaries and Expenses........................................ 438
Unobligated Balances......................................... 441
Ostacles in Improving Amtrak's Financial Condition............... 73
Opening Remarks:
Amtrak Board of Directors.................................... 18
Amtrak's Future.............................................. 17
Amtrak Safety Statistics..................................... 18
Capital Investment........................................... 35-36
Chairman..................................................... 49
Expanded Capital Definition.................................. 36
Fiscal Year 2000 Budget Request (Amtrak)..................... 17
FRA/Amtrak Partnership....................................... 17
FRA's Amtrak Request......................................... 17
High-Speed Rail Service...................................... 18
Inspector General............................................ 34
State Funding Flexibility.................................... 18
Operating Results................................................ 40
Operation Lifesaver:
FY 2000 Funding.............................................. 432
State Participation.......................................... 430
Operation Respond:
FY 2000 Funding.............................................. 501
Future Funding............................................... 502
Outlays.......................................................... 56
Partnership With Freight Railroads............................... 59
Perspective on Amtrak's Financial Goals.......................... 39
Planned Crossing Technologies in FY 2000......................... 368
Planning for High-Speed Rail Projects............................ 314
Political Appointees............................................. 442
Possible Improvements............................................ 73
Positive Train Control:
Funding...................................................... 346
Funding--Rail Initiative vs. NGHSR........................... 347
Projects Funded Under New Rail Initiative Account............ 346
Status of Regulations........................................ 347
Test Between Virginia--Pennsylvania.......................... 345
Prepared Statement:
George Warrington............................................ 7
Jolene Molitoris............................................. 20
Kenneth M. Mead.............................................. 37
Projected Revenues and Self-Sufficiency.......................... 84
Projected Unobligated Balances................................... 446
Rail Fatalities.................................................. 479
Rail Transportation of Radioactive Waste......................... 506
Research and Development:
Cost Sharing................................................. 316
FY 2000 Projects............................................. 319
MAGLEV Funding............................................... 326
Revenue and Operating Assistance................................. 56
Revised Trip Times on Northeast Corridor......................... 50
Rhode Island Rail Project:
FY 2000 Funding.............................................. 329
Funding Commitments.......................................... 329
Obligation of Funds.......................................... 328
Project Expenditures......................................... 329
Proposed Funding Levels...................................... 330
Unobligated Balance for...................................... 328
Role of the Inspector General.................................... 65
RRIF Program...................................................354, 359
Administration of............................................ 358
and Amtrak................................................... 358
Calculation of Premium Rates................................. 355
Credit Risk of Projects...................................... 355
Distribution of Funds........................................ 356
Interest in.................................................. 357
Preference in Awarding Funds................................. 357
Regulations.................................................. 355
Rulemakings:
Completed in FY 1998......................................... 498
FRA's Five Key Safety Key Safety............................. 497
Status of Last Year's Priority............................... 497
Running Signals.................................................. 360
Safety and Compliance Program:
Number of Railroads in Process............................... 492
Response to IG's Recommendations............................. 491
Strengthening................................................ 487
Safety:
Bridge, Shortline-Related.................................... 502
FRA's Five Key Rulemakings................................... 497
GAO's Table on Performance Goals............................. 459
Non-Compliance With Plans.................................... 490
Performance Goals, 1994-1999................................. 433
Revising Performance Goals................................... 435
Trends....................................................... 457
Workforce.................................................... 454
Scoring of Expanded Capital Definition........................... 49
Scoring of Expanded Definition................................... 70
Sealed Corridor Project:
Completion Date.............................................. 315
Impact on Other Corridors.................................... 316
Use of 2000 Funds............................................ 315
Self-Sufficiency By 2002......................................... 88
Shift Work Strategies............................................ 359
Shipment of Mail and Freight..................................... 62
Shortline-Related Bridge Safety.................................. 502
Spending Flexibility............................................. 46
Staffing:
Current Highway-Rail......................................... 288
FY 2000 Increases............................................ 284
Increase for Grade Crossing Work............................. 288
Start of High-Speed Service...................................... 85
State:
HSR Projects--Cost & Completion Date......................... 312
Investments in High Speed Rail...............................17, 28
Status of:
Illinois Train Control Project............................... 343
Intruder Detection........................................... 435
ITCS Projects................................................ 342
Last Year's Priority Rulemakings............................. 497
NECIP Project................................................ 299
Non-Electric High-Speed Locomotive........................... 295
Sealed Corridor Project...................................... 314
State HSR Initiatives........................................ 299
Upgrade of High-Speed Test Track............................. 486
Valley Trains and Trails Project............................. 508
TASC Costs....................................................... 485
Train Control, Different Technologies............................ 338
Train Control Projects:
Costs to Place on HSR Corridors.............................. 331
Funding of................................................... 326
Reporting on................................................. 348
Targareting Limited Funds to HSR Projects........................ 95
Testimony:
George D. Warrington......................................... 7
Jolene M. Molitoris.......................................... 20
Kenneth M. Mead.............................................. 37
Ticket Prices.................................................... 85
Tilt Trains...................................................... 62
Total Cost and Completion Date of IT System...................... 293
TRA:
Funds........................................................ 54
Funds, Use of................................................14, 30
Travel, Increase in.............................................. 289
Train Accidents................................................473, 483
Train Accident Rates-Chart....................................... 474
Train Control: Funding........................................... 346
Transportation Test Center:
Contracted Work With......................................... 486
FY 2000 Planned Work............................................. 487
Trespass Prevention.............................................. 400
Separate Action Plan for..................................... 402
Unobligated Balances:
Projected.................................................... 446
Spend Out of................................................. 448
Use of TRA Funds.................................................14, 30
User Fee:
Broadening Coverage.......................................... 348
Double Billing............................................... 350
Link to FRA's Services....................................... 350
Opposition to Proposal....................................... 349
Valley Trains and Trails Project, FRA's Participation in......... 508
Valley Trains and Trails Project, Status of...................... 508
Virginia/Pennsylvania PTC Project--FY 2000 Funding............... 346
Warrington, George:
Biographical Summary......................................... 16
Prepared Statement........................................... 7
Why Capital Flexibility is Needed................................ 334
Work of Technical Resolution Committees.......................... 287
Y2K:
and Amtrak................................................... 61
and Railroad Industry........................................ 61
NATIONAL RAILROAD PASSENGER CORPORATION (AMTRAK)
1994 Environmental Impact Statement........................158, 169-171
IVY City..................................................... 169
Southhampton................................................. 170
Sunnyside..................................................170, 222
Advanced Civil Speed Enforcement System (ACSES).................. 27
Airline Partnership.............................................. 74
Amtrak:
Budget Request............................................... 5
Financial Future............................................. 2
Opening Statement............................................ 1
Closing Remarks.............................................. 6
Amtrak Business Units (see Northeast Corridor Business Unit,
Amtrak West Business Unit, and Intercity Business Unit)
Amtrak Opening Statement......................................... 1
Amtrak Reform and Accountabilit1, 5, 8, 14, 38, 118, 122, 125, 144, 187
Amtrak Reform Board (see Board of Directors)
Amtrak Reform Council............................................ 6
Amtrak West Business Unit......35, 38, 43, 137, 199, 214, 215, 222, 223
Cascades....................................................162-165
Pacific NW................................................... 109
Board of Directors.................2, 8, 14, 17, 18, 22, 24, 25, 27, 28
Budget gap.................................................22, 144, 145
Business Plan.................................................... 4-5
Capitol needs proje4, 5, 10, 14, 45, 55, 68, 132-144, 155, 156, 177-180
FY 1999 Capital Plan..................................140, 141, 142
Cash................................................34, 75, 80, 181-182
Clinton Administration Amtrak Policy..........................21-22, 24
Commercial Service............................................... 114
Commuter Service...........................113, 114, 165, 168, 175, 176
Contracts...............................................10, 11, 23, 111
Burlington Northern Santa Fe...........10, 11, 23, 60, 63, 100, 173
Dobbs International....................................11, 174, 186
Dynamex.....................................................11, 174
Express TRAK................................................86, 174
Fort Worth Transportation Auth............................... 11
New Pacific Corridor......................................... 10
Norfolk South.......................................23, 63, 86, 111
UPS.......................................................... 173
Corporate.................................................138, 200, 223
Administrative costs......................................... 242
corporate salaries...............................200, 201, 239, 240
Staffing...............................................200-201, 242
DOT Inspector General..................................6, 25-26, 34, 61
Annual Assessment......................................2, 9, 78, 83
Depreciation Issues......................................43, 75-76, 242
Employees..................................................13, 239, 240
Equipment...................................11, 23, 35, 38, 50, 203-215
Expenditures per passenger mile................................182, 183
Federal Employers' Liability Act................................. 22
Federal Railroad Administration........17, 19, 20, 26-29, 60, 72, 90-99
Financial performance history...................................183-185
Fiscal Year:
1998: A Year of Tangible Progress............................ 8
1999: Building for the Future................................ 9
2000: The Resources Needed to Ensure Success................. 14
Fiscal Year 1999 First quarter results........................... 84
Fiscal Year 2000 Budget Request........................5, 14-15, 30, 72
Fox project.....................................................101-102
Freights..................................................100, 173, 186
Railroad incentive payments.................................. 186
George Warrington:
Biography.................................................... 16
Statement.................................................... 7-15
Gross Revenues......................108-110, 171, 173-177, 190, 197-199
Monthly revenues...........................................111, 112
General rev.............................................43, 84, 118
Commercial................................................... 53
Mail/freight revenues.....................................63-64, 86
Passenger..........................................2, 9, 23, 38, 40
Cost savings................................................. 11
Annual revenue............................................... 30
Non-passenger revenue....................................34, 41, 44
Hi9, 17, 18, 26-29, 35, 38, 43-44, 50, 60, 62, 77, 78, 84, 85, 89, 90,
104, 108, 109, 117, 145-149, 151, 158-161
Corridors...........................................90-99, 206, 207
Electrification.....................................35, 45, 147-154
Midwest Regional Rail Initiative...........................159, 160
Roxbury Sub. Station......................................... 154
Ticket prices................................................ 85
Tilt problems................................................ 62
Injury statistics..............................................246, 249
Insurance expenses............................................... 241
Intercity B3, 10, 29, 35, 38, 59, 60, 134, 135, 194, 197, 211, 212, 222
Labor's Role..................................................... 4
Labor/Unions.............................................4, 44, 122-125
C2 negotiations.............................................. 187
Long term investments.......................................14, 31, 156
Mail and Ex11, 35, 38, 43, 67, 68, 70, 108, 112, 113, 171-173, 175, 176
Express Operations..........................................86, 110
USPS.........................................12, 113, 171, 172, 174
Maintenance Expenses.................65, 86, 106-108, 120, 139, 210-238
Maintenance facilities.......................145, 211-215, 221, 222
Management Improvements.......................................... 4
Mandatory expenditures........................................... 141
3, 11, 116, 117Air vs. train travel....................................
3, 85, 194
Marketing expenses............................................... 241
Monthly cash flow....................................114, 115, 181, 182
New Board of Directors........................................... 1
No2, 3, 8, 9, 11, 26, 27, 35, 38, 43, 44, 50, 57, 59, 63, 73, 84, 103,
108, 109, 136, 152, 155-158, 161, 198, 213, 221
Northeast Corridor Improvement Project (see also High Speed Rail) 57
Northeast Corridor High-Speed Rail............................... 3
On board service expenses........................................ 240
On time performance................................29, 34, 68, 186, 187
Operating expenses..................42, 46, 139, 206, 207, 227, 240-243
Operating subsidies (see also Operating support)................118-121
Operating support.................................110, 178-181, 217-220
Federal..................................................5, 14, 121
State Funding....................................17, 18, 23, 51, 77
Operating results................................................34, 40
Other Regional High-Speed Rail................................... 3
Phase II express plan............................................ 172
Questions for the Record:
Accidents and Injuries....................................... 243
Actual Versus Budgeted Revenues.............................. 176
Administration and Staffing Costs............................ 242
Available Cash............................................... 181
Budget Gap................................................... 144
Capital Needs................................................ 132
Capital Plan Projects........................................ 140
Commuter Service Revenues.................................... 176
Contracts with Freight Railroads............................. 186
Electrification.............................................. 149
Employment................................................... 239
Environmental Mitigation..................................... 169
Equipment..................................................202, 209
Estimated Equipment Deliveries............................... 204
Expanded Capital Definition Impact on FY 2000................ 139
Expenditures................................................. 182
Expenses..................................................... 240
Express Mail................................................. 171
Financial History............................................ 183
Grade Crossing Accidents..................................... 247
High Speed Rail Trainsets.................................... 145
Injury Statistics............................................ 246
Maintenance.................................................. 210
Maintenance Facility Upgrades and Modernization Plans........ 221
Maintenance of Equipment Planned Expenditures................ 139
Mandatory Capital Expenses................................... 141
Market-Based Analysis........................................ 116
Market Share of Air-Rail Intercity Travel.................... 194
Negotiations................................................. 187
Northeast Corridor........................................... 155
NTSB Recommendations......................................... 250
Operating Subsidies.......................................... 118
Operating Statistics and Equipment Fleets.................... 206
Other High-Speed Rail Corridors.............................. 159
Passenger Cars and Locomotive Fleet Average Age.............. 208
Passsenger Cars and Locomotive Fleets........................ 207
Pennsylvania Station......................................... 166
Phase II Express Plan........................................ 172
Planned Spending for Maintenance of Equipment................ 133
Projected Federal Resources.................................. 141
Railroad Retirement System................................... 256
Revenues..................................................... 173
Rhode Island Rail............................................ 169
Ridership.................................................... 188
Ridership by State........................................... 192
Rolling Stock................................................ 206
Routes....................................................... 195
Staffing..................................................... 200
State-by-State Planned Maintenance of Way Expenses........... 215
State's Contribution for Passenger Rail Service.............. 178
Station Operating Costs...................................... 227
Station Renovation Costs..................................... 224
Strategic Business Plan, FY 1999-2002........................ 106
Strategic Capital Plan....................................... 142
Taxpayer Relief Act.......................................... 125
Trespasser Fatalities........................................ 249
Union Agreements............................................. 122
Year 2000 Problem............................................ 262
Real estate revenue.........................................58, 175-176
Renovations............................143, 144, 151, 152, 167, 223-227
Rhode Island Rail................................................ 169
Ridership..................................36, 40, 57, 189-194, 196-199
Routes..........................................................195-199
Railroad Retirement................................39, 47, 144, 256-261
Safety...................................................18-21, 31, 144
Accidents...................................................243-250
Grade Crossings.............................................247-250
Life Safety Program.........................................167-168
NTSB recommendations........................................250-255
Short term investments........................................... 166
Stations....................................................24, 224-238
Beech Grove, MD.............................................. 23
Penn Station...........................................53, 166, 167
23, 25, 29-30, 34, 26, 43, 47, 72, 73, 76, 78, 81, 82, 83, 99, 106-115,
116, 125
Strategic Partnerships (see Contracts)
Surface Transportation Board......................11, 23, 28, 62-63, 86
Taxpay14, 17, 30, 35, 38, 46, 49, 54, 56, 63, 73, 81, 106, 125-132, 139
TEA 21....................................................51-52, 89, 90
Testimony--George Warrington..................................... 7
Transportation Infrastructure Finance and Innovation Act (TIFIA). 77
Trespasser fatalities (see also Safety).......................... 249
Use of Additional FTEs........................................... 284
Warrington, George D.:
Biographical Summary......................................... 16
Prepared Statement........................................... 7
Wages................................................123, 124, 239, 240
Year 2000...................................................61, 262-265
RESEARCH AND SPECIAL PROGRAMS ADMINISTRATION (RSPA)
Advanced Vehicle Program......................................... 728
Emergency Preparedness Grants Administrative Costs............... 679
Emergency Preparedness Grants Awarded............................ 675
Emergency Preparedness Registration Fee.......................... 671
Emergency Transportation Response:
Crisis Management Center..................................... 769
Emergency Transportation Budget.............................. 770
Hazardous Material Safety:
Aircraft Cargo Compartments Study............................ 692
Hazard Materials Incidents................................... 702
Hazardous Materials Safety Staffing.......................... 691
Hazardous Materials User Fees................................ 688
Hazmat Incidents............................................. 716
Hazmat Inspections........................................... 713
Hazmat Rulemakings........................................... 704
Hazmat Training.............................................. 716
NTSB Recommendations--Hazmat................................. 693
Registration and Grant Fee Receipts.......................... 715
Morgan Program................................................... 742
NTSB Recommendations:
NTSB Recommendations......................................... 648
NTSB Recommendations--Hazmat................................. 693
Pipeline Safety:
High Risk Areas.............................................. 594
Natural Gas versus Liquid Pipelines.......................... 625
Non-Destructive Evaluation................................... 606
One-Call..................................................... 610
Pipeline Safety Authorized Funding Levels.................... 593
Pipeline Inspections......................................... 640
Pipeline Inspectors.......................................... 624
Pipeline Safety Grants....................................... 618
Pipeline Safety Rulemakings.................................. 655
Pipeline User Fees........................................... 628
Reserve Fund................................................. 609
Risk Management.............................................. 594
Research and Technology:
AVP.......................................................... 668
UTC Program.................................................. 667
RSPA Chief Information Officer................................... 725
RSPA Overview.................................................... 732
RSPA Position and FTE............................................ 732
RSPA Training Costs.............................................. 731
RSPA Travel per FTE.............................................. 729
RSPA Unobligated Balances........................................ 730
Transfers and Reprogramming...................................... 737
Transportation Safety Institute (TSI):
TSI Funding.................................................. 771
TSI Work..................................................... 775
Volpe Center:
FTE.......................................................... 767
New Obligational Authority................................... 755
Threat Assessment Study...................................... 766
Unobligated Balance.......................................... 762
Work Outside DOT............................................. 756
Workload..................................................... 744
Workload by Sponsor.......................................... 768
SURFACE TRANSPORTATION BOARD
Abandonments..................................................... 854
Accomplishments.................................................. 781
Acquisition Proposals............................................ 854
Availability of Data to the Public............................... 895
Background....................................................... 779
Board Members and Terms.......................................... 843
Board Reauthorization............................................ 851
Board's Top Priorities........................................... 876
Budget Request:
Comparison of Budget Requests................................ 790
President's Budget Request................................... 790
Canadian National/Illinois Central Merger:
Fees......................................................... 848
Merger Filing................................................ 845
Timetable.................................................... 847
FRA Safety Concerns.......................................... 849
Carryover:
FY 2000...................................................... 807
Language..................................................... 807
Caseload.......................................................862, 863
Case Processing Timeframe........................................ 864
Comparison of Board's and President's Budget Requests............ 790
Comparison of Recent User Fee Schedule Updates................... 809
Earnings:
Class I Railroads............................................ 871
FRA Safety Concerns.............................................. 849
Funding:
Feasibility of Funding by User Fees.......................... 792
FY 2000 User Fee collections................................. 806
Options Paper................................................ 795
Travel....................................................... 896
User Fee Funding Alternatives................................ 794
User Fee Legislation......................................... 801
Goals............................................................ 780
ICC Termination Act:
Railroad-Shipper Transportation Advisory Council............. 880
Rulemakings Imposed by....................................... 877
Working Withing DOT.......................................... 894
Inspector General's Report on User Fees.......................... 817
Board's Response............................................. 836
Remaining Board Activities................................... 837
Managerial and Supervisory Positions............................. 840
Mergers:
Canadian National/Illinois Central Merger.................... 845
Union Pacific/Southern Pacific merger........................ 850
Objectives....................................................... 780
President's Budget Request....................................... 790
Public Access:
Decisions and Pleadings...................................... 895
Railroad:
Acquisition Proposals........................................ 854
Abandonments...............................................854, 869
Earnings, Class I............................................ 871
Rate Complaints.............................................. 857
Rate Regulation.............................................. 865
Return on Investment......................................... 869
Revenue Adequate...........................................868, 869
Workload..................................................... 861
Railroad-Shipper Transportation Advisory Council:
Annual Report................................................ 883
Members...................................................... 880
Policy Recommendations....................................... 882
Renomination of Chairman Morgan.............................. 892
White Paper.................................................. 887
Rates:
Complaints................................................... 857
Workload and Staffing........................................ 861
Reauthorization of Board......................................... 851
Regulation:
Obsolete Commodities......................................... 880
Transferred Rate Regulation Caseload......................... 865
Retirement Eligibility........................................... 839
Revenue Adequate Railroads.....................................868, 869
Rulemakings:
Estimated Completion Dates................................... 874
Imposed by the ICC Termination Act........................... 877
Priorities................................................... 876
Salaries and Expenses............................................ 787
Staffing:
Current Level................................................ 839
By Function.................................................. 844
Managerial and Supervisory Positions......................... 840
Retirement Eligibility....................................... 839
Statement of Chairman Morgan:
Accomplishments.............................................. 781
Background................................................... 779
Budget Request.............................................779, 790
Fiscal Years 1999 and 2000................................... 783
Goals........................................................ 780
Salaries and Expenses........................................ 787
Summary...................................................... 786
Workload..................................................... 789
Travel........................................................... 896
Union Pacific/Southern Pacific Merger............................ 850
User Fees:
1999 Collections............................................. 806
Attributed to Canadian National/Illinois Central Merger...... 807
Attributed to Mergers......................................807, 848
Average Collections per Month................................ 807
Carryover.................................................... 807
Carryover Language........................................... 807
Collection Schedule.......................................... 808
Comparison of Recent User Fee Schedule Updates............... 809
Feasibility of Funding....................................... 792
Funding Alternatives......................................... 794
Inspector General's Report................................... 817
Board's Response......................................... 836
Remaining Board Activities............................... 837
Legislation................................................793, 801
Options Paper................................................ 795
Working Within DOT............................................... 894
Workload:
Caseload...................................................862, 863
FY 1998 and FY 1999.......................................... 783
Summary...................................................... 786