amtrak state partnerships priia section 209 pricing discussion scort national meeting jacksonville,...
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Amtrak State PartnershipsPRIIA Section 209 Pricing Discussion
SCORT National Meeting
Jacksonville, FLSeptember 21, 2010
John Bennett
AVP, Policy, Standards and Integration
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• Summary of Requirement and Updates
• Capital Charge
• Next steps
Today’s Discussion
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Section 209 text: (a) General
• Passed Oct 16, 2008: 2 years = Oct 16, 2010
• Amtrak Board of Directors’ responsibility
• “in consultation with”: collaborative process
• Single, nationwide, standardized methodology: all corridors treated equitably
(a) IN GENERAL.—Within 2 years after the date
of enactment of this Act, the Amtrak Board of
Directors, in consultation with the Secretary, the
governors of each relevant State, and the Mayor of
the District of Columbia, or entities representing
those officials, shall develop and implement a
single, nationwide standardized methodology for
establishing and allocating the operating and
capital costs among the States and Amtrak
associated with trains operated on each of the
routes described in section 24102(5)(B) and (D) and
section 24702 that—
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Section 209 text: (a) (1) & (2)
• Passed Oct 16, 2008: 5 years = Oct 16, 2013
– Transition period
• “allocates” – Amtrak Performance Tracking (APT)
• “costs incurred only for the benefit of that route” = Direct Costs
• “costs incurred for the common benefit of more than 1 route” = Shared Costs
(1) ensures, within 5 years after the
date of enactment of this Act, equal treatment in
the provision of like services of all States and
groups of States (including the District of
Columbia); and
(2) allocates to each route the costs
incurred only for the benefit of that route and a
proportionate share, based upon factors that
reasonably reflect relative use, of costs incurred for
the common benefit of more than 1 route.
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Section 209 text: (b) Revisions
• This will be a “living” policy
– Changes due to continuing refinements of Amtrak accounting system
(b) REVISIONS.—The Amtrak Board of Directors,
in consultation with the Secretary, the governors of
each relevant State, and the Mayor of the District
of Columbia, or entities representing those
officials, may revise or amend the methodology
established under subsection (a) as necessary,
consistent with the intent of this section,
including revisions or modifications based on
Amtrak’s financial accounting system developed
pursuant to section 203 of this division.
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Section 209 text: (c) Review
• Failure results in the development and imposition of a formula by the Surface Transportation Board (STB)
• §24904(c) of Title 49:
– “…the costs Amtrak incurs only for the benefit of the carrier, plus a proportionate share of all other costs of providing transportation”
• If Oct 16, 2010 voluntary deadline missed, then 1 year to implementation after STB ruling
(c) REVIEW.—If Amtrak and the States (including the District of Columbia) in which Amtrak operates such routes do not voluntarily adopt and implement the methodology developed under subsection(a) in allocating costs and determining compensation for the provision of service in accordance with the date establishedtherein, the Surface Transportation Board shall determine the appropriate methodology required under subsection (a) for such services in accordance with the procedures and procedural schedule applicable to a proceeding under section 24904(c) of title 49, United States Code, and require the full implementation of this methodology with regards to the provision of such service within 1 year after the Board’s determination of the appropriate methodology.
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Section 209 text: (d) Chapter 244 Funds
• Chapter 244, Title 49:
– Capital grants can be used to pay capital charges
(d) USE OF CHAPTER 244 FUNDS.—Funds
provided to a State under chapter 244 of title 49,
United States Code, may be used, as provided in
that chapter, to pay capital costs determined in
accordance with this section.
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Segmentation of Amtrak’s National Train ServiceAmtrak National
Train Service
Total State Supported Routes
NationalSystem Routes
Northeast CorridorRoutes
Single StateNEC Base Increment
(single and multi-state)Multi-State (non NEC)
Empire Service
Lincoln Service(Chi-St. Louis)
Illini/Saluki
Ethan Allen Express
Cascades
Downeaster Adirondack
Hiawatha Blue Water
Vermonter
New Haven - Springfield
Boston/New Haven –Lynchburg
Washington –Richmond
Heartland Flyer
IL Zephyr/Carl Sandburg
Pacific Surfliner
Capitols
Keystone Service
San Joaquins
Maple Leaf
Wolverines
Pennsylvanian
River Runner(KC-St. Louis)
Piedmont
Hoosier State
Pere Marquette
Carolinian
Some service not currently paid by statesNo service currently paid by states
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Corridor Services – Impacted Routes NEC Spine: Excluded from Section 209
State Supported Routes: Require consistent agreements under Section 209
System Corridor Routes: Require new agreements, no state support in place
Mixed State/System Routes: Requires conversion of system trains to state support
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Schedule of Meetings with State PartnersMeeting Attendees Location, Dates
National Meeting #1 13 current/potential State partners, FRA, AASHTO, States for Passenger Rail
Chicago, IL April 20-21
New England Regional Meeting
MA, NH, ME, RI, VT, FRA, NH Rail Transit Authority
Portsmouth, NH May 10-11
Pacific NW Regional Meeting
OR, WA Portland, OR May 26-27
California Regional Meeting CA (CalTrans, CCJPA) Sacramento, CA June 2-3
Midwest Regional Meeting IL, MI, MO, OK, TX, WI Chicago, IL June 9-10 (WI June 24)
Southeast Regional Meeting #1
NC, SC, VA Raleigh, NC June 22
Southeast Regional Meeting #2
GA, LA, MS (AL, FL invited) New Orleans, LA July 14 (Intercity Passenger Rail Transportation Summit)
Mid-Atlantic/NE Meetings NY, PA July 19-20
CT August 10
National Meeting #2 All States invited in person or via webinar
Chicago, IL August 17
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PRIIA Section 209 – Where We Are Now
• 25 days until October 16
• Outstanding questions from many States
– Allocations in Amtrak Performance Tracking (APT)
– Capital Charge—calculation and allocation
• Amtrak recognizes that there is still work to be done
–If no agreement, what happens on October 17?
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Current Challenges
• August 18 Letter from SCORT / S4PR to Senator Rockefeller and Representative Oberstar, from Secretaries Busalacchi and Conti
– “APT system has significant progress to make before states have confidence in the numbers being generated”
– “Amtrak has not yet shared its capital cost allocation with the states”
– “process was started too late to… be completed by the October 16, 2010 deadline”
• Other issues:
– Continued slow economic recovery creating difficult budget environment
– Upcoming elections of many State Governors creates climate of uncertainty
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Amtrak’s Plan
• After October 16, continue with the current process
– Round of discussions with States to explain/discuss capital and other cost information
– Seek a set of counterproposals from the States or their designated negotiating team on policy options within the framework of Sec 209
• STB involvement would only be triggered only by a petition for relief from an involved party
– It is neither party’s best interest to invoke STB involvement
– Amtrak and the States need to continue working on this
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Amtrak Performance Tracking (APT) System
• APT is working as designed
• More robust, more transparent than predecessor RPS
• As a new system, APT has a “punch list”
• APT will always require maintenance as operations continue to evolve
• Where we know there are potential adjustments on routes, we have and will continue to inform affected States
• In most cases, we believe the “confidence interval” around the APT estimate is small enough for planning purposes
Accomplishments Challenges
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• Updates – Where We Are, Proposed Plan
• Capital Charge
• Next steps
Today’s Discussion
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Capital Charge Background
• Three types of capital assets in Amtrak capital asset register
– Equipment (Rolling Stock):- By type (Amfleet, Superliner, road & switch locos, MoW equip, etc.)- Passenger equipment allocated in APT by units used / route- Some States own some/all of their own equipment, are charged less
– Track: Rails, ties, ballast, interlockings- Includes yard and shop track to be allocated nationally- Original entries in fixed asset register likely did not foresee detailed allocation
– Road & Land: Buildings, bridges, computers, offices, stations, etc.- Includes headquarters, overhead expense to be allocated nationally- Original entries in fixed asset register likely did not foresee detailed allocation
• Due to periodic overhauls and capitalization, most assets have some value – few fully-depreciated assets
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Capital Charge Strengths & Challenges
• Equipment - Strength
– Captured in detail by financial and operating systems
– Train consists are widely known, easily auditable
– Depreciation is proxy for a lease payment
– APT charges appear competitive with other suppliers
• Track, Road & Land - Challenges
– Depreciation is non-cash expense – funds were generally spent when asset was placed in service
– Some assets lack detailed descriptions necessary for allocation – questions about asset detail will require manual research
– If capital charge from States treated as revenue, funds will be commingled with operating cash, not set aside for future capital expenditure
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Capital Charge Draft Proposal
• Set aside capital charge payments in State-specific Capital Reserve Funds, with future expenditures to be determined jointly between Amtrak and the individual States
– Similar joint-benefit model in place with NEC commuter operations
– Gives States voice, visibility into capital expenditures
• Exclude APT interest component, equipment in storage, MoW equipment
• State-specific Capital Charge reports e-mailed September 10
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• Updates – Where We Are, Proposed Plan
• Capital Charge
• Next steps
Today’s Discussion
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Next Steps
• Further discussions with States to refine operating data, explain details of capital charge and seek consensus
– State-specific meetings to discuss individual State questions
– National meeting to suggest further policy refinements – leading to an agreement
• Meet with designated state negotiating team on policy options
• Continue to seek counter-offers from States