January 31, 2006
The Honorable Norman Y. Mineta
Secretary
U.S. Department of Transportation
400 Seventh Street, S.W.
Washington, DC 20590
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Dear Secretary Mineta:
I write to express concern about how the U.S. Department of Transportation (U.S. DOT) intends to implement language in the Fiscal Year 2006 Transportation Appropriations Act that directs the department to assess commuter railroads using Amtrak-owned Northeast Corridor assets a higher portion of corridor capital and maintenance costs. Language accompanying the bill indicated that the department should establish these fees in an open and transparent process that seeks, to the maximum extent possible, to yield a consensus on the part of all stakeholders as to the appropriate distribution of costs among these stakeholders. Though such a process has not occurred, the American Public Transportation Association (APTA) has heard that the department may send out invoices as early as March 1, 2006.
APTA's commuter rail members have considered how the impending reform and restructuring of Amtrak might affect current commuter rail operations and have developed the enclosed set of principles to identify the areas of concern. I hope these principles can be useful to you as U.S. DOT seeks to enhance the long term stability of both intercity rail and commuter rail. It would be ironic if one of the first steps toward Amtrak reform would be at the expense of commuter railroads, possibly undermining the stability of commuter rail services used by nearly eight hundred thousand daily riders on the Northeast Corridor alone. The solution to Amtrak's funding problems cannot come from transit funding sources - including the Mass Transit Account of the federal Highway Trust Fund - which are not adequate to sustain the commuter rail and other transit organizations that our nation requires.
The Northeast Corridor commuter railroads reimburse Amtrak for capital and maintenance costs based on contracts negotiated pursuant to federal law and based on the attached principles. The new law unilaterally changes this business relationship by imposing new financial payments on the state and local governments which finance the commuter rail investments. These state and local governments do not have the resources and cannot be expected to pay more than what has been negotiated. Moreover, each commuter railroad would fare differently under these provisions. Portions of Amtrak's service on the Northeast Corridor operate on lines owned by the Metro-North Railroad, the Massachusetts Bay Transportation Authority, and the State of Connecticut.
Meanwhile, portions of Amtrak's services outside the Northeast Corridor, operating on lines owned by state and local authorities, are successors to the private railroads' obligations. Consequently, any review of cost sharing should extend to the amounts Amtrak pays as a tenant on these now publicly-owned lines.
I request a meeting, at your earliest convenience, with you and appropriate staff to discuss this matter further. If you have any questions or concerns, please have your staff contact Art Guzzetti of APTA's Government Affairs Department at (202) 496-4814 or email aguzzetti@apta.com. I appreciate your ongoing support for public transportation, and look forward to meeting with you.
Sincerely yours,
William
W. Millar
President
WWM/tjj
APTA Principles on Amtrak Reform/Amtrak Restructuring
1/31/06
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Background
As Congress and the Administration consider various proposals for Amtrak reform and restructuring, it is important that the impact of such proposals on critical commuter rail services across the country are understood, and that the interests of commuter railroads are protected.
There are 18 commuter railroads in the United States providing approximately 1.5 million weekday passenger trips. This compares with approximately 25,000 daily passengers carried by Amtrak.
Three recent proposals to reform Amtrak have included provisions that would directly impact commuter railroads.
APTA believes that any proposals for Amtrak reform and restructuring, to the extent that such proposals have an effect on commuter rail services, should be the result of an open and collaborative dialogue.
APTA Principles
Following are principles in support of commuter rail interests during transition to any new Amtrak/inter-city rail business model:
Existing Contractual Obligations Must Be Respected: All Amtrak reform and restructuring proposals must honor current contractual obligations with commuter rail agencies across the United States. This includes contracts for operations and access, and also commitments for joint funding of capital improvements. The need to fulfill such contractual obligations in a competent and orderly standard must be a prerequisite for any changes to Amtrak.
Ongoing Financial Support Separate from the Federal Highway Trust Fund: Any direct federal funding for the capital improvement, maintenance and operation of the Northeast Corridor and other Amtrak-owned assets used in intercity rail passenger operations should be new revenue, separate and apart from the federal Highway Trust Fund and Mass Transit Account.
Public Ownership of Northeast Corridor (NEC) Assets: NEC assets currently owned by Amtrak should remain under public ownership and control with the responsibilities of the Federal government and respective state governments to be determined. Such public ownership and control should include oversight on short-term and long-term capital investment needs; operational services and improvements; capacity expansions; safety and security enhancements; and a neutral and balanced forum for fair and equitable access for all NEC users. Shared ownership of assets and the agreements associated with shared assets must be taken into consideration with any proposed change in asset ownership. NEC assets currently owned by the states and/or commuter agencies should continue to be owned and controlled by such states and commuter agencies.
Amtrak-owned Assets Outside the Northeast Corridor should also be under public ownership and control: Amtrak-owned assets outside of the Northeast Corridor, such as Chicago Union Station, and Amtrak maintenance/operations facilities across the United States, should be retained under public ownership and control, and consideration should be given to transferring such ownership and control to the respective state government or local authority. Shared ownership of assets and their associated agreements must be taken into consideration with any proposed change in ownership.
Federally Funded Capital Improvements to Achieve a State-of-Good-Repair: As part of any transition to a new business model, the Federal government should provide 100 percent funding over a reasonable period to bring the Northeast Corridor (both Amtrak and state and commuter rail agency owned) and other Amtrak infrastructure assets to a state of good repair or better. Subsequent funding to maintain the NEC and other assets at a state of good repair should be provided by the federal government on a match basis.
Cost Sharing Determined through Mutual Cooperation and Planning: Amtrak, the Federal government, and representatives of the affected states and commuter rail properties should mutually and cooperatively develop a formula for determining and allocating costs and compensation for Northeast Corridor rail passenger transportation and for shared-track operations on other rail corridors around the country. Revenues from shared service arrangements should be assigned to each service on a proportionate basis. Any cost allocation methodology should recognize prior capital investments in the Northeast Corridor and other Amtrak facilities as well as current contracts for future investments. Consistent with prior Congressional directives, this formula should ensure that there is no cross-subsidization of commuter rail passenger, intercity rail passenger, or freight rail transportation. The formula should ensure that all services are operated efficiently and effectively and each service is assigned costs based on appropriate factors that reasonably reflect relative use and accounts for costs incurred for the common benefit of more than one service. The method of cost allocation must be carefully negotiated based on the circumstances at each party. Liability should be shared on a proportionate basis. The principles and criteria for the cost sharing formula should be the same for both Amtrak operations on the commuter rail owned segments of the NEC. These cost-sharing principles would apply to any shared-track relationship outside of the Northeast Corridor as well.
Additional Control and Authority Must Accompany Additional Payments: Any consideration for dividing costs in direct accordance with an operations criteria must also consider the priority of dispatch and the premium level of service afforded to some operations over others. For instance, Amtrak trains have long enjoyed dispatch priority over commuter trains and operate over higher speeds. Thus, Amtrak should be expected to absorb a higher percentage of operations and maintenance costs. Any movement toward a more even cost of access should be accompanied with a more even priority of access. There should be no interference, however, with existing dispatching agreements that are agreeable to both parties. Similarly, greater contributions to capital must be accompanied with a greater say in how capital expenditures are prioritized.
Intercity Rail Services should Integrate into National and Regional Rail Networks: The Northeast Corridor and other intercity rail services should be integrated into networks of regional passenger rail operations, including common facilities and connecting inter-city rail and local commuter rail services.
Transition to New Ownership and Service Models Must Not Interrupt Commuter and Regional Rail Services: In any transition to new service arrangements careful planning will be essential to assure there is no interference, unintentionally or otherwise, with commuter and regional rail passenger services. A repeat of the 2002 service shut down scenario, and its resultant struggle to commuter railroads to continue Amtrak contract services on and off the Northeast Corridor, must be avoided. Further, any interruption in Amtrak intercity service should not be allowed to interrupt the services of other users.
Amtrak Reform Provisions should not affect the Marketing and Pricing Policies of Commuter and Regional Rail Operations: Recent legislation prohibits Amtrak from offering ticket discount of more that 50 percent. Some commuter and regional rail agencies have ticket sharing arrangements with Amtrak. These commuter and regional rail agencies should not be prohibited from offering marketing and ticket pricing programs that they determine to be appropriate for their markets.
No Increases in Railroad Retirement Costs: Any legislation proposing changes to the railroad retirement system must consider how such proposals might affect publicly supported commuter rail operations that also are part of that system. Any changes regarding Amtrak's payment into the railroad retirement system should also consider the payments of commuter railroads which face similar issues with respect to paying taxes for retirees who did not serve in commuter rail service.
Increased Levels of Investment are Necessary to Support the Growth of Passenger Rail in America: APTA supports investment in the growth of the rail passenger industry overall, including commuter rail, intercity rail, regional high-speed rail, and rail transit. APTA urges Congress and the Administration to develop and implement a national transportation vision, policy and strategy that balances future investments in transportation systems based on economic, social and environmental criteria.
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