Friends of Amtrak

Archived News 1995

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Letter from Tom Downs to Craig O'Connell -- 19 December 1995.

Dear Friends of Amtrak:

I received the attached letter today from Amtrak President Thomas Downs. I am passing it on to you. Please note that Downs projects a new Amtrak that, with continued capital investment, will be free of federal operating subsidies by the year 2002. I think that the phrase "with continued capital investment" is the key to his projection.

I draw your attention to the sixth paragraph of the letter in which he points to the importance of a "dedicated trust fund, derived from a half-cent of the existing 18-cent gas tax, to be used for capital improvement." The half penny gas tax is the source of the continued capital investment.

Once again this underscores the importance of S.1395, a bill that would create the dedicated trust fund by alloting one half penny of the existing gas tax for Amtrak capital investment. And once again I urge you to write to your representatives in both the House and Senate to urge passage of this very important piece of legislation.

I also urge you to write to:

The Honorable Newt Gingrich
Speaker of the House
2428 Rayburn House Office Building 
Washington, D.C. 20515

and to:

The Honorable Bill Archer
Chairman, House Ways and Means Committee
1236 Longworth House Office Building 
Washington, D.C. 20515
     
Thanks for your continuing support,

Craig O'Connell 

Dear Friend of Amtrak: December 15, 1995

As the calendar year closes, I am happy to report to you that Amtrak, the National Passenger Railroad Corporation, made steady progress in FY95 toward revitalizing passenger train service throughout the United States.

This was a tumultuous year for Amtrak. We began the beginning of the fiscal year, facing a cash shortfall of more than $240 million, structural and equipment deficiencies resulting from years of undercapitalization, and a new Congress considerably more adverse to federal subsidies for operating and capital costs. Some on Capitol Hill and in the transportation industry even predicted Amtrak's demise, suggesting that we wouldn't last the year.

While the challenge was daunting, we remained convinced of the importance of a national passenger rail system--one that provides an affordable, safe and environmentally-sound alternative to other travel, a system that relieves congestion in dense areas and extends to communities where train travel is the only available inter-city transportation. Under the guidance of the corporation's Board of Directors, we put in place a strategic business plan designed to restructure Amtrak and ensure its financial stability.

The plan called for dramatic changes. We revamped our route system, modernized trains and equipment, added attractive and innovative features on board, and entered into creative partnerships with state governments and private industry. The result has been a remarkable turnaround in our financial status. We ended the year with a cash balance and can now project, for the first time in our 24-year history, that with continued capital investment, Amtrak will no longer need federal operating subsidies by the year 2002.

The focus of the new Amtrak is its customers and last year we needed and welcomed their input. In a series of seven forums around the country, we asked interested citizens for their suggestions on how to improve our company. We listened to their views, acted on their advice, and we will continue to do that in 1996. Most of all, we are grateful for the loyalty of Amtrak riders. Even as budget constraints forced us to cut back annual route miles by 16 percent, our ridership remained virtually the same as in the previous year.

Unfortunately, we faced disappointments as well. The senseless sabotage of an Amtrak train in Arizona last October, resulting in the tragic loss of a crew member, was a heart-felt blow to all of us in the Amtrak family. On Capitol Hill, we have not yet been able to achieve two important legislative goals that will further strengthen the Amtrak of the future: legislation to allow all states the choice to use federal highway funds for Amtrak; and a dedicated trust fund, derived from a half-cent of existing 18-cent gas tax, to be used for capital improvement. We continue to advocate these important changes.

Nevertheless, the new Amtrak today is a vital and stable link in the national transportation system--one that Americans relied on to provide more than 55 million trips in 1995. In the coming years, we will continue to be customer-driven, focused on meeting the travel needs of contemporary America and committed to working with consumers, our partners in state and local government and our counterparts in the transportation industry.

We are proud of our record over the past year, and we are dedicated to continuing that progress. Passenger rail serves the national interest, in addition to the millions of Americans who ride our trains each year. I invite you, as someone concerned about access to and viability of public transportation, to add your comments and insights into how we can work together for a better Amtrak.

I thank you for your interest in the New Amtrak.

Sincerely,

Thomas M. Downs
President

AMTRAK releases FY95 annual report-- 13 December 1995

WASHINGTON, Dec. 13 -- The National Passenger Railroad Corporation, popularly known as Amtrak, today released data from its FY95 annual report showing an unprecedented turnaround after two years of severe financial difficulties.

Amtrak, which was predicted to face a $240 million cash shortfall by the end of 1995, ended the fiscal year with cash on hand. Guided by a Strategic Business Plan, Amtrak restructured the company, altered service routes and re-focused its efforts to attract more customers last year.

"A year ago the Board of Directors and Management were faced with some tough decisions," says Amtrak president, Thomas M. Downs. "We had to devise a plan to save the railroad from financial ruin, without cutting into our all-important customer base. We had to dramatically cut our costs, without cutting into the quality of our product or compromising passenger and employee safety. But we were determined and it now looks like our tough choices have worked out."

The company reached 101% of the financial goals it set for itself in the FY95 Plan. It cut $318 million in annualized expense while leaving its ridership and passenger revenue essentially intact. In just one year, from September 1994-September 1995, Amtrak improved its cash position by nearly $100 million and improved its bottom line by $171 million.

"Cash position speaks to solvency. Bottom line improvement tells you how a company is doing. By either yardstick, Amtrak is on a roll," says Downs. "We've adopted a plan for the coming year that improves on the changes we've already made. We are committed to maintaining the critical service we provide our customers. We heard from a lot of our passengers in the past year and they made it absolutely clear to us that they did not want to see us go away. We are just too important to their personal and economic well-being and to that of the communities in which they live. So we're determined to stay. Our results from our 1995 plan prove that."

Here are some of the changes Amtrak put in place this past year to improve the company's financial profile, as well as improve service and change the company to one that is customer-focused and entrepreneurial- minded. In 1995 Amtrak:
* Improved both on-time and safety performance;
* Restructured into three Strategic Business Units to become more customer focused;
* Adjusted service on economically poor-performing routes;
* Built partnerships with states to keep trains running;
*Reduced core business expenses by $161 million through such measures as eliminating management overhead, retiring non-essential equipment and improving productivity;
* Generated $152 million more revenue than anticipated by retaining ridership, increasing mail and express revenues, making ticket price changes, increasing food revenue and building new commuter business;
* Developed new menus reflecting regional tastes -- microbrewery beer, California wine and other local food specialties.
* Introduced specialty cars like the Coast Starlight's Pacific Parlor Car, a lounge for first-class passengers that offers a library, games, feature-length movies, fresh morning cinnamon rolls and afternoon wine tastings;
* Replaced more than 100,000 wooden rail ties with state-of-the-art concrete ties for smoother and faster train travel in the Northeast Corridor.

CO: Amtrak

IMPORTANT - S.1395 ("AmPenny") needs support 4 December 1995

Dear Friends of Amtrak:

An extremely important piece of legislation is still pending in Congress. It is S.1395. Approved by the Senate Finance and Senate Commerce Committees, this measure would allot one-half cent of the gas tax for Amtrak capital. This would provide Amtrak with the funds it desperately requires to address its severe needs for capital investment.

It is still unclear at this time what route this bill will take other than that it will have to be attached to a revenue bill originating in the House. It will definitely go through the House Ways and Means Committee, which will be its biggest challenge, as this committee is headed by Bill Archer of Texas, one of Amtrak's bitterest enemies.

Therefore, I strongly urge all Amtrak supporters to contact House Speaker Newt Gingrich and House Ways and Means Committee Chairman Bill Archer, as well as other members of this committee. Please urge them to support the half-penny gas tax for Amtrak.

Refer to the Congressional list that I have compiled of the addresses, phone numbers and e-mail addresses, where applicable, of these legislators. The House Office Building addresses have been abbreviated. Check the key at the end for the acronyms. I have also included the full listing as an attachment for those of you who are able to download and read it. Please call and write now.

Thank you for your continuing support,
Craig O'Connell

Some features of the AMTRAK Reform and Privatization Act of 1995 [H.R.1788] 1 December 1995

Passed the House of Representatives by a vote of 406-4. Among its provisions are:
 -repeal of the ban on Amtrak contracting out for services
 -exemption from the Freedom of Information Act
 -repeals statutory requirement to provide a "basic system"
 -lengthens notice to states for any discontinuane to 180 days
 -repeals statutory formula for determining whether a route should be 
   operated, discontinued or added
 -repeals formula for determining state matching funds
 -repeals formula for commuter agencies to compensate Amtrak
 -provides a schedule to negotiate contracting out and labor
   protection labor contract provisions with unions
 -limits punitive damages Amtrak is liable for in accidents
 -repeals current provisions dealing with Amtrak stock
 -extinguished DOT lien on rolling stock and Northeast Corridor
 -repeals current Board of Directors
 -creates a temporary 7 member Emergency Reform Board to adopt 
   new by-laws for selection of future board members
 -creates a Temporary Rail Advisory council to report to Congress
   on business plan and accounting methods
 -authorizes $772m for FY95, $712 for FY96-8, $403 for FY99 
   and $200m for NECIP for each year 1995-9, 
   and $10m for each year FY96-99 for the New York Farley Building.

 Amendments to remove the liability cap, and to allow Amtrak to negotiate
with other carriers other than Conrail for freight access to the Northeast
Corridor failed.
  
 The Senate version has distinct differences and has not reached the floor of
the Senate yet.

 The National Highway System Act of 1995 that was signed this week did not
include a provision that was proposed, allowing states to use highway funds
for passenger rail transportation projects at their option.  This is a
significant loss for us.   However the law does include language making grade
crossing elimination and improvement a requirement for state highway plans,
allows highway funding for the Alameda Corridor intermodal rail line in Los
Angeles and provides money to construct grade crossings on it.  It also
provides funds for Amtrak to raise bridge clearances in Rhode Island. 
--Craig O'Connell

Rail labor fought hard in the Transport and Infrastructure committee to put together an acceptable bill, after defeating a bill that would have hurt Amtrak employees. H.R. 1788 as passed by the House today is the compromise that was reached in the Committee and approved with virtually unanimous support.

The Shuster/Molinari compromise, contained in H.R. 1788, changes two things in current law:

+ labor protection of up to six years for employees who lose their jobs because an Amtrak route is discontinued;

+ a limitation on Amtrak's ability to contract out work if an employee would lose a job as a result of contracting out.

The Shuster/Molinari compromise would repeal these two provisions and turn them over to collective bargaining. There would be an expedited bargaining process on these two issues, at the end of which, if there was no agreement, the employees would be free to use self help.

Rail labor supported this bill because of the need to support passenger service and the future of Amtrak, its passengers, and employees.

Thanks to all that were able to help in this important endeavor. The project of helping Amtrak survive and grow is not over yet. --Craig O'Connell

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