Amtrak Presentation to the California Transportation Commission
February 19, 2009 Anne Witt, Vice President Amtrak Strategic
Partnerships
Slide 2
Todays Discussion Amtraks California Partnership New Federal
Mandates Implications of Success / Issues Moving Forward
Slide 3
Amtraks National System Amtraks national system spans 21,000
route miles and serves 527 stations in 46 states
Slide 4
Amtrak Short Distance Corridors Includes 19* State-Supported
and 8* System Corridors *3 Corridors are partially state
funded
Slide 5
FY08 Ticket Revenue & Ridership Actuals
Slide 6
California: Amtraks Premier Partner Approximately 70 daily
intercity trains Three State Sponsored Corridors Four Long Distance
Trains Two Major Maintenance facilities Los Angeles Oakland In
Fiscal Year 08: More than 1 in 5 Amtrak riders in California
Corridors equal 19.3% of Amtrak system ridership 11,866,636 total
boardings/alightings 2,740 CA residents employed $127,700,783 spent
for goods and services Capitol Corridor San Joaquins Pacific
Surfliner
Slide 7
CorridorRidershipLengthChange from FY07Frequencies NEC
10,897,852 457 mi +8.6% 158 Surfliner2,898,859 128 mi +7.1% 25
(SD-SLO) Capitol1,693,580 133 mi +16.8% 32 (SJ-Sacramento)
Keystone1,183,821 104 mi +19.8% 29 Empire 994,391 141 mi +3.8% 24
San Joaquin 949,611 315 mi +18.0% 12 Cascades 760,323 467 mi +12.8%
12 Hiawatha 749,659 86 mi +25.9% 14 Chicago-St. Louis 476,427 284
mi +16.5% 8 Downeaster 474,492 116 mi +31.2% 10 Top Ten Corridors
by Ridership, FY 08 Green highlight indicates corridor is also one
of the ten fastest-growing corridors #2 #3 #6
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CorridorRidershipLengthChange from FY07Frequencies Downeaster
474,492 116 mi +31.2% 10 Piedmont 65,941 173 mi +30.4% 2 Kansas
City- 151,690 283 mi +30.2% 4 St. Louis Hiawatha 749,659 86 mi
+25.9% 14 Albany-Toronto 354,492 403 mi +22.9% 2 Hoosier State
31,774 196 mi +20.6% 2 Keystone 1,183,821 104 mi +19.8% 29
Chicago-Quincy 202,814 86 mi +19.8% 4 Chicago-Carbondale 271,082
284 mi +18.5% 4 Heartland Flyer 80,892 116 mi +18.5% 2 Ten Fastest
Growing Corridors, FY 08 This is a healthy cross-section of service
types, frequencies, regions, and services
Slide 9
Amtrak State Supported Services Revenue From States Legislation
authorizes States to buy service from Amtrak States Pay Amtrak
through combination of: State Supported Train Passenger Revenue
-Ticket sales -Food -Baggage charges State Support Payments -Gap
between Direct Costs and Revenue FY 08 Total State Supported
Passenger Ticket Revenue:$233.8 million* Total State Support
Payments:$165 million Average Fare Box Recovery Ratio for States in
FY 08:57%** *Includes fully and/or partially state supported routes
**Measured as Passenger Related Revenue/Direct Costs
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Amtrak California Corridors FY 08
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State Supported Services Costs Billed to States Direct Costs
billed: Direct Incremental Costs -Eliminated if trains eliminated
-e.g. host railroad payments, T&E and OBS crews, fuel, most
mechanical cost, dedicated route stations Other Direct Costs -Costs
shared with other trains/routes -directly shared e.g. shared
stations, mechanical overhead, insurance, yard ops, marketing and
advertising, -indirectly shared e.g. police and security,
environmental and safety, crew management Costs not currently
billed to States: Amtrak owned infrastructure fixed maintenance
(capital) Capital charges for equipment System overhead (indirect
office rent, data center, etc.) Interest Depreciation
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Major Drivers of Operating Expenses Labor Presidential
Emergency Board Ruling -Average 28% wage increase -7 years back pay
Fuel Expired Hedging Agreements Market volatility versus
demand-based variations Security New concerns and requirements
Initial growth versus steady-state operations On-Time Performance
Affects costs: fuel, overtime, accommodations Affects revenue &
ridership
Slide 13
Workforce: Continued Productivity Focus Fiscal Year Employee
headcount Double-digit ridership growth absorbed within current
workforce - Controlled Management Ratio - Technology Applications
Internet Sales Point of Sale/Fare Collection - Work Methods
Reliability Centered Maintenance
Slide 14
Amtrak Financial Transparency: Long-term and Growing Issue
Financial systems are complete and accurate But designed for other
applications/purposes Required to capture all costs in zero-sum
manner -Change in one place affects all other numbers -Not
policy-driven Financial systems do not meet State pricing needs
Backward-looking: FY 07 results just completed Based on national
network and then allocated to routes Unsuited for forecasting,
multi-year contracts, future service scenarios Requires protracted,
iterative (frustrating) negotiations
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2008 PASSENGER RAIL INVESTMENT & IMPROVEMENT ACT Recognized
Need for Improved Model: TITLE II AMTRAK REFORM AND OPERATIONAL
IMPROVEMENTS Sec. 201 National Railroad Passenger Transportation
System. (a) The national system is defined as: the segment of the
continuous NEC between Boston and Washington DC; other high-speed
corridors designated by the Secretary but only after regularly
scheduled intercity service has been established; long distance
routes for more than 750 miles operated by Amtrak on the date of
enactment hereof; short distance corridors of not more than 750
miles operated by Amtrak or another rail carrier that receives
funds under Sec. 301 (State Capital Grants). (b) and (d) Amtrak is
authorized to contract with a State, regional or local authority,
or another person to operate a route not included in the national
system, and to discontinue it on the failure of financial support
from such entity. (c) Amtrak is also authorized to continue to
develop non-high-speed intercity service. (e) Amtraks mission shall
be to provide high quality service that is trip-time competitive
with other intercity travel options, and its goals shall include
providing complementary intercity transportation in times of
national disaster. Sec. 209 State-Supported Routes. Within two
years of the date of enactment, Amtrak shall, in consultation with
the Secretary and Governors of affected States, establish a
standardized methodology for allocating capital and operating costs
between Amtrak and the States supporting Amtrak services. If such a
methodology is not adopted and implemented within 5 years of date
of enactment, the STB shall determine and require the
implementation of same.
Slide 16
New State Pricing Tool
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New Federal Mandates: Passenger Rail Investment and Improvement
Act (PRIIA) Gives lead on passenger rail growth to States State
Matching Capital Grant Programs (Total FY09-13 Authorizations)
-Capital Assistance For Intercity Passenger Rail ($1.9 Billion)
-High-speed Rail Corridors ($1.5 Billion) -Rail Corridor Congestion
Grants ($325 Million) Requirements -State rail plans -Standardized
methodology for allocating capital and operating costs of all
corridor trains among states and Amtrak -(adopt by Oct 2010 and
implement by Oct 2013 or STB does)
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New Federal Mandates: Passenger Rail Investment and Improvement
Act Next Generation Corridor Equipment Pool Committee ($5 million
FY10) Includes states, Amtrak and FRA, other stakeholders
Standardized/Interoperable types of corridor equipment -(California
Surfliner III as bi-level standard) Determine specifications,
procurement, ownership, etc. Other miscellaneous requirements New
Metrics and Measures OTP enforceable by Surface Transportation
Board Studies re service restoration including Pioneer, Sunset,
North Coast Hiawatha
Slide 19
A New Federal Mandate: Economic Recovery Act (Stimulus) $8
billion appropriation for three new Capital Grant Programs Capital
Assistance For Intercity Passenger Rail High-speed Rail Corridors
Rail Corridor Congestion Grants 100% Grant no match Specific
Priority to High Speed Rail State Rail Plans waived Federal DOT
Schedule: 60 days: Submit plan to Congress 120 days: Issue draft
regulations for each program Grants remain available through
September 30, 2012
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Financial Implications for Amtrak California Partnership FY2010
numbers provided with more understandable transparency Support
services linked to direct benefits Line-item costs enumerated and
explainable Cannot subsidize or absorb caps Quarterly
reconciliations Forecasts dependent on fuel price
assumptions/economic realities Define contingencies and/or
pass-though of actuals where necessary Final Amtrak pricing
policies subject to national process Potentially complicates
individual state schedules Costs will not go down commensurate with
PEB labor rate increases Costs will likely increase as additional
components charged re PRIIA e.g. Equipment capital charge
Concurrent with state matching fund availability
Slide 21
Implications for Amtrak California Partnership All tools to
reduce net costs will require examination Efficiencies -Mechanical
services/equipment availability -Point of sale -Automated fare
collection -New food service vendor/options Fare structures -Rail 2
Rail Impacts/Revisions -Revenue Management potential -Connection to
call center/Amtrak support system Non-passenger Revenues -e.g.
Advertising Service configurations -Schedule, consists, load
factors, etc.
Slide 22
Success Implications for Amtrak California Partnership The best
of times in the worst of times Expanded expectations out of line
with State/Amtrak resource and staffing capabilities New funding is
capital, not operating -Requires increased revenue, ridership,
and/or state support Waiver of state rail plans opens competition
for new federal funds Current financial systems/budgeting processes
currently inadequate Equipment Capacity : -Improved maintenance,
availability, reliability -Surfliner IIIs status: -Utilization and
load factors -in relationship to Next Generation Corridor Equipment
effort in PRIIA -per State bonding issues
Slide 23
Amtrak: Committed to a Successful California Partnership Proud
of Heritage and Success Committed to addressing Shortcomings
Financial Systems Mechanical Operations Open-minded in Emerging New
Environment Offering Important and Unique Advantages to State
Slide 24
California Corridor Growth: Amtraks Unique Added Value Access
to railroad expertise Operations/transportation Engineering
Mechanical Institutional/Legal Access to
equipment/expertise/interoperability Access to host railroads at
incremental cost Access to insurance/liability coverage Access to
IT systems support (reservations, train status, ticketing) National
visibility and voice in support of passenger rail
Slide 25
Amtrak Ridership: All-Time Highs FY 08 ridership was 28.7
million Up 11.1% from FY 07 Fuel Volatility Improved On-Time
Performance Improved Customer Service/Satisfaction
Slide 26
Amtrak Revenue Exceeding Ridership Growth FY 08 ticket revenues
were $1.734 billion Up 14.2% from FY 07 Grew 21.8% faster than
ridership - Market pricing actions - Revenue management Revenue
Yield Per Passenger Mile*
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Safety: Primary Focus now combined with Security NOTE: Based on
the FRA standard of reportable injuries per 200,000 hours worked.
Fiscal Year Injuries per 200,000 hours worked
Slide 28
Corporate Debt: Managing within our Means Fiscal Year
Slide 29
Federal Support for Operations Responsible Stewardship Fiscal
Year NOTE: Financial adjustments in FY01 included losses which
should have been included in FY00. FY 09 funded at a continuing
resolution level through March Federal government spent $400
million to support Amtrak operations in FY 08 -About $1.31 per
American -Covers about 14 percent of Amtraks operating expense