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January 24, 2000
Amtrak Reform Council (the Council), an independent oversight
commission established by Congress, will release its first
Annual Report titled "A Preliminary Assessment of Amtrak"
at a Press Conference at 11:00 a.m. on Monday, January 24,
2000. The Press Conference will be held in the Bunker Hill
Room at the Hyatt Regency Capitol Hill at 400 New Jersey,
NW, Washington D.C.
Council's Chairman, Gil Carmichael states in the releasing
the Annual Report that "This year's report does not
reach any conclusions about Amtrak's long-term future. It
provides a picture of the Amtrak organization as it exists
today, it presents the Council's perspective on Amtrak's
performance to this juncture, and it raises questions and
issues that the Council believes should be addressed in
its future efforts and, ultimately, by the Congress. The
Council is a diverse body of eleven members from various
backgrounds, and while we made every effort to achieve unanimity
among the Council, this first Annual Report includes the
minority views of three of the eleven members who voted
not to approve the Report."
of the Report
The Council wishes to make clear that this is a statutorily
required Annual Report and is not in any sense a finding,
and, were the Council at some future date to make such a
finding, it would be the subject of a separate report.
Annual Report discusses among other items:
Broad Range of Complex Functions. (i) an intercity
rail passenger service provider (ii) an infrastructure
company for the Northeast Corridor; (iii) a rail equipment
manufacturing, maintenance and repair company; (iv)
a contractor or potential contractor for domestic rail
commuter services and foreign passenger services; (v)
a real estate development company; and (vi) an entity
that functions in certain respects as if it were a federal
of Amtrak's Performance. The Council believes, based
Section 203 of the Amtrak Reform and Accountability
Act, that Amtrak's ability to operate "without
federal operating grant funds" should be measured
by using Amtrak's financial statements, which are prepared
according to generally accepted accounting principles,
and which assume that Amtrak will remain in business
indefinitely at the same business volume and level of
technology. Amtrak proposes, instead, that federal appropriations
acts and historical practices in place in FY1997 result
in an implied test of operating self-sufficiency that
literally depends on Amtrak's not needing cash from
"federal operating grant funds" after FY2002,
but which excludes the funding of several expenses,
which are estimated to total $567 million in FY2002,
that have been (and Amtrak assumes will continue to
be) funded by "federal capital grant funds,"
even though they are included as operating expenses
in Amtrak's financial statements, which are prepared
according to generally accepted accounting principles.
Both approaches exclude federal funds authorized and
appropriated to reimburse Amtrak for excess mandatory
Railroad Retirement Taxes.
Three Statutorily-Assigned Tasks. The Council's
preliminary assessment of Amtrak's use of Taxpayer Relief
Act fund indicates that Amtrak has not yet used a significant
portion of the $2.2 billion for the high-priority, high-return
investments needed to help its financial performance.
On productivity improvement, Amtrak and the Council
are working together to agree on acceptable methodologies
for measuring cost savings achieved through work-rule
changes and for monitoring general labor productivity.
Regarding recommendations for route closures or realignments,
the Council is awaiting the release of Amtrak's network
analysis based on its new analytical and planning tool,
the Market- Based Network Analysis.
for Improvement that the Council has forwarded to Amtrak.
In November 1999, the Council made certain recommendations
to the Amtrak Board including (i) setting up Mail &
Express as a separate business unit or profit center;
(ii) setting up the operations of the NEC fixed plant
as a profit center within the NEC Business unit with
its own income statement, balance sheet, and capital
plan; (iii) developing contingency plans for corrective
actions as part of its strategic business plan; and
(iv) implementing a program for annual cost savings
in Amtrak's corporate overhead.
and Next Steps. The Report identified key issues
that the Council intends to address over the coming
year. These include: (i) possible changes in institutional
structure that might improve the quality of intercity
rail passenger service; (ii) Amtrak's capital structure;
(iii) potential improvements in providing financing
for the federal investment in Amtrak; (iv) options for
introducing competition into the provision of intercity
rail passenger service; and (v) measures to improve
the productivity of Amtrak's assets, employees, and
use of energy and materials.
In 1997, Congress enacted the Amtrak Reform and Accountability
Act (ARAA), reform legislation requiring that Amtrak operate
without "Federal operating grant funds" by the
end of FY2002. The Congress also established the Amtrak
Reform Council as a bipartisan oversight body of 11 members,
charged with, among other tasks, monitoring Amtrak's progress
in improving its financial performance to achieve the goals
of the Act.
Council's principal mandated tasks include: (1) reporting
to Congress annually with respect to its oversight role
in evaluating and making recommendations regarding Amtrak's
performance, and (2) should the Council find on or before
the end of FY2002, that Amtrak will not meet the financial
goals of the Act, developing an action plan to restructure
and rationalize the national system of intercity rail passenger
services and submitting the plan to the President and Congress.
Annual Report will be posted on the Council's website (www.amtrakreformcouncil.gov)
on Monday, January 24, 2000.