Developing State-Amtrak Agreements

Stephen Gardner

Vice President, Policy and Development

March 8, 2010

2

PRIIA/ARRA: The blueprint

• PRIIA (October 2008)

– Reauthorized Amtrak ($2 billion annually)

– Federal matching grant program for intercity/HSR capital investments

– FRA, states and Amtrak work in partnership to establish new/improved passenger services

- Amtrak operates national network; partners with states to design and operate services and improve NEC

- States plan rail service role and provide operating/capital funding- FRA provides capital funding and integrates state planning into a national

system

– Collaboration among states, US DOT, Amtrak, transit agencies, host railroads, suppliers, and others key to success

• ARRA (February 2009)

– $8 billion for intercity/HSR capital grants to states

– No state match required

3

Existing Amtrak-State Collaboration

• State-supported corridor services: Partnerships with 15 states

• NEC Master Plan process underway since 2006

• 9 commuter services on Amtrak infrastructure

• Numerous Shared capital investments (examples)

– Infrastructure (Keystone Corridor)

– Maintenance Facilities (Seattle)

– NEC Joint Benefit Agreements

– Stations (Wilmington)

– Equipment (Pacific Surfliner)

4

PRIIA/ARRA: Amtrak’s role to-date

• Amtrak partnered with more than 25 states to support over 100 projects and corridor applications in the first round of grant requests

– Stakeholder agreements

– Service development plans

– Ridership/revenue estimates

– Project scope

– Planning assistance

– Application assistance

5

First Round Grant Announcements

• Announced projects will benefit at least 13 existing Amtrak routes– Higher speeds/reduced trip times

– Increased frequencies

– Improved stations

– Increased reliability

• Funds new/extended services – Downeaster extension (Portland – Brunswick, ME)

– Ohio “3C” Corridor (Cleveland – Columbus – Cincinnati)

– Hiawatha extension (Milwaukee – Madison, WI)

• $3.5 billion for “Greenfield” HSR projects in California & Florida

• Planning grants, funded with 2009 appropriations, to help develop future applications

• Additionally, several “TIGER” grants will benefit Amtrak stations and services

6

Amtrak Network and ARRA HSIPR Awards

7

Amtrak’s role for grant implementation

• To complete grant agreements and fully fund projects, FRA will likely want

- Concrete funding/spend plans - Fully developed of budgets/scope/schedules- Refined operating/investment plans and costs- Compliance with state and Federal requirements/laws- Completed agreements and contract negotiations

• Many different types of activities may require Amtrak-State collaboration and agreements

- Investments on Amtrak-owned/operated infrastructure- Investments on host railroad infrastructure- New/extended services- Additional services on existing routes- Station investments- Schedule changes- Facilities improvements- Fleet acquisition/assignment/utilization- Identifying Amtrak manpower and resource requirements

8

Amtrak Agreement Considerations

• Maintenance responsibility for equipment-related grants

• In general, existing agreements should satisfy Amtrak’s commitment to operate service until improvements are completed

• Use existing agreements when possible and use as model for new agreements

• Flow-downs

• Operating support

• Look for opportunities where other federal funds can supplement FRA grants

9

Amtrak/State/Host Collaboration for New and Expanded Routes

• For service-related grants, state, Amtrak and host railroad should agree up-front on service outcomes, in particular

– Amtrak train trips per day

– Amtrak train trip time

– Maximum delay minutes per Amtrak train trip

• Amtrak, state, and host then design an infrastructure to support these agreed-upon outcomes

– Avoid unreasonably impairing freight operations

– Practical improvements, not “gold plated”

• Public sector provides funding to “build it right” and host railroads make enforceable commitment to “run it right”

– Hosts commit to provide service, not just build infrastructure

• Grant-funded projects need to be coordinated with existing/on-going Amtrak and Host services, projects, initiatives, and priorities (e.g., Amtrak’s station ADA plan) and recognize regional impacts of simultaneous projects

10

Preparing for Future Funding Rounds

• States and Amtrak should again work together to identify/advance projects fundable under $2.5 billion FY2010 appropriation and in future funding rounds

– Early Amtrak/state engagement

– Clear identification of goals/needs

– Service planning (Sec. 207), preliminary ridership/rev #’s

– Amtrak participation in state discussions with host railroads

– Environmental guidance

– Equipment needs

– Application development and review

– Joint applications?

– Recognition of Amtrak resource needs

• Adapt organizational structures/processes to new environment – Amtrak

– FRA

– State DOTs

11

Amtrak-State Agreements: Equipment

• Whatever happens, we all need fleet!

• Average passenger car 24 years old, older than ever

• Comprehensive fleet plan for all Amtrak business lines

– Total fleet procurement over a 30-year period will include

2,500 cars and 700 locomotives = 100 cars annually

– Total anticipated cost (2009 dollars)- $11 billion through 2023, $23 billion through 2040- Not including needs for projected state-supported corridor frequency increases and new services

– Designed for baseline 2% ridership growth on existing services

– Procurement model scalable for higher growth (options and retirement rate)

– Fleet design to be coordinated with Sec. 305 process/specs as much as possible to create common designs/subsystems/parts/processes across entire system

– Creates sustainable domestic manufacturing capacity

12

Looking ahead: state activities

• Participation in PRIIA-initiated processes

– PRIIA 209 (state corridor pricing) – joint responsibility

– PRIIA 210 (long-distance trains) – work with Amtrak on opportunities to better integrate LD routes and corridor services

– PRIIA 212 (NEC Infrastructure & Operations Advisory Committee) – joint undertaking among DOT, NEC states, and Amtrak

– PRIIA 305 (equipment pool) - joint undertaking among DOT, NEC states, and Amtrak

• Future grant rounds will require

– State capital match (at least 20%) beginning in FY10

– Operating funds

– Completion of state rail plans

• Section 207 compliance

– Working together to meet standards and raise train performance

• Building support to sustain and grow HSIPR program and Amtrak

13

Looking ahead: Amtrak’s objectives

• Support the expansion, improvement and establishment of intercity and high-speed passenger rail service

• Rebuild planning and development capacity after years of neglect and turmoil

• Develop new business processes, resources and policies to support growth

• Improve service delivery

• Become a better, more nimble partner for state customers (customer surveys and interviews)

• Integrate new and improved services into a seamless national network with enhanced intermodal connectivity

• Provide leadership role in equipment acquisition/planning

• Facilitate partnerships among states, host/commuter railroads and Amtrak

All this requires people and $$

14

Policy considerations: implementation & next round• Long-term dedicated funding for HSIPR and Amtrak

• Defining relationships

– State-Amtrak, State-DOT, Amtrak-DOT

• PTC – costs and grant eligibility

• Pricing/cost allocation policies

– State corridor service costs (PRIIA 209)

– NEC shared infrastructure/services (PRIIA 212)

– Commuter/host railroad benefits vs. contributions

• Equipment - roles and responsibilities for funding/financing, acquisition, ownership

• Standards

– Application evaluations

– Ridership, cost, benefit, projections

– Sec. 207 Metrics and Standards

• Environmental process and requirements (Categorical Exclusion, etc)

• Flow-downs and tax implications – dealing with the hosts

15

Amtrak-State Agreements: National rail plan issues

• What will the National Plan mean for future grant projects?

• Should projects have to be in the plan? Will there be a map?

• When should compliance with state rail plan requirement return for grants?

• Sec. 207 Metrics and Standards and National Plan integration?

• Should differences among state perspectives/levels of commitment affect National Plan?

• How does the Amtrak system fit into the National Plan?

• What funds the National Plan?