ARC Testimony before Congress

Congressional Reporting Requirements

Amtrak Reform Council

Minutes
May 19, 2000

  The Amtrak Reform Council (the Council) held its business meeting at the Hilton Sacramento Arden West, 2200 Harvard Street, Sacramento, CA on Friday, May 19, 2000. The Meeting started at 8:30 a.m. and adjourned around 10:45 a.m.

Council Members present: Gil Carmichael, Chair; Paul Weyrich, Vice-chair; James Coston, Wendell Cox; Lee Kling, Clarence Monin, and Jack Wells representing the Federal Railroad Administrator. Participating via conference call was: Mayor John Norquist.

Mr. Carmichael chaired the meeting and Deirdre O’Sullivan served as secretary.  

I. Opening Remarks by Gil Carmichael and Executive Director’s Report

Mr. Carmichael called the meeting to order and announced that the Council would be approving the minutes from the previous meetings by notation and, once approved, the minutes would then be posted on the Council’s website. Mr. Carmichael then invited the Executive Director, Tom Till, to make his report. Mr. Till stated that the Appropriations process for the Council’s budget was proceeding, but there was not a definite number yet. Also, he stated that a candidate has been found for the remaining authorized position of a Transportation Analyst. He hoped that the position would be filled soon. Also, he reported that the Council had hired Ms. Dee Gray as the new Administrative Specialist to replace Ms. Stacy Murphy, who left the Council in April. In addition, he stated that a law clerk and a financial intern had been hired for the summer months and would be starting soon. He also gave updates on the various reports that the Council staff was currently working on, including: (1) the Northeast Corridor Paper (NEC Paper) that the Council had just received a revised copy of; (2) the Options paper that Mr. Chapman had requested, on which work was getting underway; (3) a summary of legislation affecting Amtrak, on which work was nearing completion, and which would be sent to Amtrak and FRA for feedback; and (4) a report on the Council’s Outreach hearings, which would be presented to the Council in the fall.

Mr. Carmichael then instructed the staff to improve the organization of the Council’s financial records and its files. Mr. Till replied that the staff would address the problem and the Chairman would be getting an updated report on the staff’s progress at the next meeting in July.  

II. Discussion of the Executive Committee

Mr. Carmichael asked for a vote of approval on the creation of an Executive Committee made up of himself, Mr. Weyrich, Vice Chair, Mr. Kling, and Mr. Till as the ex officio. Mr. Cox motioned for approval and Mr. Weyrich seconded the motion. Mr. Coston inquired as to the purpose of the Committee. Mr. Carmichael stated that an example of how the Executive Committee would be helpful was in the releasing of the staff NEC working paper, which was cleared through Messrs. Kling and Weyrich before being released to the Council because Mr. Carmichael did not want the paper to be just "a Carmichael paper." Mr. Kling noted that the Committee is not intended to usurp the Council. Mr. Monin further noted that any Council member could attend any meeting of the Committee and that the Committee could not decide policy for the whole Council. Mr. Wells then proposed to change the name of the Committee so there would not be any confusion over its role. The name "Chairman’s Advisory Committee" was proposed and the motion, as modified by the name change, was moved, seconded, and adopted by unanimous consent.

III. The Staff Working Paper on the Northeast Corridor

Mr. Carmichael noted that the staff NEC working paper is still in draft form and has not been voted on by the Council. Mr. Kling stated that the proposal is only a recommendation that will be presented to Amtrak for its consideration. Mr. Weyrich stated that the paper is one of many recommendations that will be sent to Amtrak. Mr. Wells noted that it was an interesting proposal, but only if coupled with the funding necessary for the NEC. Mr. Weyrich agreed that the funding issue was important. Mr. Cox noted that there are studies that show that the outcome of dedicated funding in the absence of a competitive market is bad for the taxpayer. Mr. Cox stated that the best interests of taxpayers should also be considered by the staff.

Mr. Monin stated that the paper should also consider how the changes proposed would affect Amtrak workers on the Northeast Corridor. Mr. Weyrich replied that the Council has always intended to include Labor in all of its deliberations and has repeatedly asked Labor to make presentations at its meetings, but that Labor has turned the Council down. Mr. Monin stated that when ARC was created, the Labor movement (including himself) believed that ARC’s purpose was to dismantle Amtrak. Now, however, he is convinced that the Council has adopted a bipartisan, "pragmatic approach" and that Labor’s interest will be protected even though "tough love" is part of the process. He also stated that he hopes that his constituents would likewise see the Council as it has evolved. Mr. Carmichael stated that formal invitations should be sent to Labor and to Amtrak employees inviting them to a meeting of the Council to present their views on how to improve Amtrak operations and funding. Mr. Weyrich so moved, Mr. Cox seconded the motion, and the motion was approved unanimously. Mr. Monin stated that the invitation would be responded to.

Mayor Norquist stated that he would like to focus on Amtrak’s Customer Service. He suggested that the Council hire a consultant to look into its marketing, how it can be more customer responsive, and how to improve employee/customer interaction with improved employee training. Mr. Carmichael stated that there is a better culture for customer service within Amtrak West. Mr. Till stated that Mr. Mallery, President of Amtrak West, testified the day before that Amtrak West employees encouraged Amtrak’s management to pursue a service guarantee and, by all accounts, this program has been very successful. In addition, Mr. Till stated that Amtrak is going to introduce this same program throughout Amtrak in July 2000.

Mr. Carmichael then returned to the discussion of the staff NEC working paper. Mr. Weyrich moved that this staff working paper on the NEC (as well as other working papers that may be prepared by the staff on financing mechanisms for intercity passenger service, on how to change Amtrak’s culture of customer service, and on any other issues) be scheduled for an up or down vote at the Council’s meeting in November. Mr. Kling seconded the motion. Mr. Weyrich also introduced a motion, which was seconded, that the staff working paper be released outside the Council at this time to allow public discussion. Both motions were approved by the Council.

Mr. Kling stated that there must be a way to get the politics out of Amtrak. Mr. Weyrich stated that as long as there are federal subsidies, there will be politics. Mayor Norquist requested the staff to look into the structure of federal subsidies for airlines and highways, including the role of the tax code in such subsidies. Mr. Cox said that there are models that work effectively in other countries to get politics out of the administration of government subsidies to the transportation industry. Mr. Carmichael stated that an attempt to fund these new high-speed rail corridors through bonds in S. 1900 has some interesting aspects that the staff should investigate and report on to the Council.

Mr. Wells stated that he believed that the issues that the Federal Railroad Administration raised regarding the paper have not been adequately addressed in the current draft. These include:

1. The fact that outside the NEC, where Amtrak operates as a tenant carrier on the freight railroads, its on-time performance is about 20 percent less than on the NEC.

2. The issue of keeping the right-of-way in a state of good repair. As the owner, Amtrak can ensure that this is done, but, as a tenant, it is not sure how this can be guaranteed. Some of this problem, according to Mr. Wells, is evident in the United Kingdom with Railtrack.

3. The freight railroads place a high priority on owning their own right-of-way, which permits them to optimize maintenance and capital investment. Commuter agencies operate many more trains on the NEC than Amtrak, but Amtrak’s higher speed trains require a higher level of maintenance than the commuter operators. This higher level of required maintenance could cause problems for Amtrak, whose interests need to be protected.

Mr. Weyrich suggested that as soon as the staff receives any formal written comments from Council members on the working paper, the staff should release the comments to all Council members. Mr. Till agreed.  

IV. Senator Cleland’s Questions

The next item discussed was the set of draft answers to the questions for the record posed to Mr. Carmichael after his testimony before the hearing by Senator Hutchison’s subcommittee on February 23, 2000. The Council discussed in detail the first of the questions, which asked whether, if Amtrak received "the same financial support" from the government as the aviation and highway industries receive, would it have the same market share. The discussion included: (1) the extent to which the Council could address the question, since it had not taken a position on this issue; (2) the extent to which the Chairman could express his own opinion on the issue; (3) the difficulty of the question, given the fact that the structure and funding for the aviation and highway industries is completely different from the industry and funding structure for Amtrak; (4) the need to be as responsive as possible to questions from the Congress; (5) the extent to which the answers to all of the questions, not just the first, were of a policy nature; and (6) the need to send the answers to the Committee as soon as possible.

The Chairman directed that the staff redraft the answers as necessary in accordance with the tenor of the discussion. Copies would then be sent to all Council members for approval as early as possible so that the completed answers could be transmitted to the Committee.  

V. Letter from Council Member Monin

Mr. Carmichael advised the Council that Mr. Monin had sent a letter to the Executive Committee addressing a number of issues concerning the role of labor on the Council, including issues of importance to the Productivity Committee, which Mr. Monin chairs. Mr. Carmichael asked Mr. Monin if he would like the letter to be distributed to the Council. Mr. Monin indicated that he would, and the Chairman instructed the Council staff to forward the letter to all members of the Council.  

VI. Motion by Mr. Weyrich

Based on the premise that the Council needs a full year of operation of the entire Acela Express 20-trainset fleet in order to make a judgment about Amtrak’s ability to become self-sufficient, Mr. Weyrich reintroduced his motion to extend the deadline in the ARAA by which Amtrak is required to become self-sufficient, and correspondingly extend the Council’s life by one year. Mr. Monin mentioned that DOT Inspector General Kenneth Mead testified at Senator Hutchinson’s February 23^rd hearing that an extension was not yet in order. Mr. Monin’s view was confirmed by Mark Dayton of the Inspector General’s office, who was present at the Council’s meeting. Views supporting Mr. Monin’s opinion were expressed by Messrs. Carmichael and Coston. Mr. Cox spoke in support of the motion. Though Mr. Weyrich’s motion was defeated, he indicated his intention to bring up the motion at future Council meetings.  

VII. New Business And Public Comment

Mr. Carmichael asked whether the Council had any new business and comments from the audience on any or all of these issues. There was no new business.

Joe McHugh of Amtrak expressed appreciation to the Council for coming out a day early to see some of Amtrak’s operations in California.

Mr. Carmichael expressed appreciation for Amtrak’s hospitality and said that he was impressed by the scope and intensity of California’s state rail program.  

VIII. Adjournment

The Council then adjourned at approximately 10:45 a.m.