FY2013 Budget Request

[afigg]

This has been a busy week at Amtrak for putting out budget and financial plan documents. Today, Amtrak put out a rather long 131 page news release stating their FY2013 budget request to Congress which has the FY13 budget document attached.

There is a lot of information in the FY2013 budget to digest and details on the current plans for the next several years, including a lot of details to the 2012-2020 plans for the NEC. Long letter to Congress describing Amtrak's needs and justification for the rather hefty capital grant request. Of course, Amtrak is not going to get everything they asked for, but then they never do. The major spin in the budget request is that Amtrak is asking for less operating subsidy and debt service funding than provided in FY12, but for more capital grant funding.

Highlights of the FY13 budget request:

$450 million for operating grant (down from $466 million in FY12 and $562 million in FY11)

$1,445 million for general capital grants

$35 million for NEC Gateway project

$25 million for NEC Stair Step programs

$212 million for debt service (down from $271 million in FY12)

NEC Stair Step Program: 4 step program for increasing Acela capacity and frequencies. Step 2 buys new Acela trainsets to augment the existing fleet to double Acela frequencies between NYP-WAS in peak periods. Planned procurement is for 11 Next Gen HSR trainsets before 2020 if I read it right. Gateway project with 2 new Hudson River tunnels is Step 3 and critical to capacity expansion.

The Chicago-Detroit, Chicago-St. Louis, NYP-Albany corridors are emphasized as the 110 mph "high" speed corridors for major increases in speed and trip time reductions in the next few years.

Information in Table 14 on Rolling Stock Count and Availability. The plan is for 25 CAF Viewliners to be in active service by the end of FY13. The number of active Viewliners/LDSL (LD Single Level) cars will increase from 51 at the end of FY12 to 76 at the end of FY13. Meanwhile, the number of active Heritage Diners decreases from 20 in FY12 to 12 by the end of FY13. The number of Heritage Baggage cars stays the same at 73.

Budget total ridership for FY13 is 32 million.

Lots more to pulled out of the long letter to Congress and the budget document.

 

[Anderson]

...51? I know of 50 Viewliners...where is the 51st coming from? Was there a prototype I'd never heard of? Or is there something else still in the mix that I missed somehow?

Edit: This has to be one of the longest news releases in the history of mankind.

Some thoughts:

-What is the "authorized level" versus the budget request?

-I like the "stair step" plan. It's certainly a damn slight more sensible than the bullet train nonsense.

-One thing that seems to be missing (IMHO at least) is any clear talk of joint Amtrak-state proposals.

-I can't tell what the timetable that they're hoping for on equipment is (listing over 1000 pieces of equipment but not giving any sort of timeline). Is that a 10-year wishlist? 25 years?

-41 Viewliners "in service"...is that (3 Meteor/2 Star)*4, 3 LSL*3, 2 Crescent*2, and 1 Cardinal*2 totals 39 plus 2 "protect" cars? I wonder what the deployment plans are for a net of 20 added.

 

[Hotblack Desiato]

...51? I know of 50 Viewliners...where is the 51st coming from? Was there a prototype I'd never heard of? Or is there something else still in the mix that I missed somehow?

50 sleepers, 1 diner. 51 total.

 

[Sky Pilot]

...51? I know of 50 Viewliners...where is the 51st coming from? Was there a prototype I'd never heard of? Or is there something else still in the mix that I missed somehow?

Edit: This has to be one of the longest news releases in the history of mankind.

Some thoughts:

-What is the "authorized level" versus the budget request?

-I like the "stair step" plan. It's certainly a damn slight more sensible than the bullet train nonsense.

-One thing that seems to be missing (IMHO at least) is any clear talk of joint Amtrak-state proposals.

-I can't tell what the timetable that they're hoping for on equipment is (listing over 1000 pieces of equipment but not giving any sort of timeline). Is that a 10-year wishlist? 25 years?

-41 Viewliners "in service"...is that (3 Meteor/2 Star)*4, 3 LSL*3, 2 Crescent*2, and 1 Cardinal*2 totals 39 plus 2 "protect" cars? I wonder what the deployment plans are for a net of 20 added.

That has to do with the legistive/Congressional budgeting process. Federal Programs (like the current, permanent FAA Authoriziation bill that is finally looking like it will be disgorged from Congress after 4 years of idiotic temporary extensions because of ideological considerations unrelated to aviation) are authorized (usually for several years, like three or four) to be funded at a certain, maximum level. This authorization doesn't actually provide the funding; instead that is done through a specific annual appropriation. Each year the Congress is supposed to pass something like 13 annual appropriation bills that cover the various Cabinet Departments (e.g. Defense, Transportation, HHS, etc., though some are combined) by October 1st. Authorizations go through the House or Senate committee having subject matter jurisdiction (e.g., Armed Services) whereas appropriations go through the Appropriations Committed (considered the most powerful other than the taxing committees like Ways and Means).

Alas, for the last several years things haven't operated that way due to the severe dysfunction up there in DC so instead they wind up passing Continuing Resolutions - short term, multi-departmental omnibus appropriations). The problem with a CR is it leaves funding at the previous years level and thus agencies don't undertake new programs and such, even if they are needed. The bigger problem, philosophically is it means that the Congress is really abdicating it's responsibility and setting aside it's only real tool (other than impeachment) for influencing the Executive Branch and that is the power of the purse.

Also the foregoing is for discretionary spending as contrasted with entitlements (a term I don't much care for ).

The below explains it better and this can be found here (note this is a PDF):

BUDGET 101: AUTHORIZATION VS APPROPRIATIONS

by George Krumbhaar, US Budget.com of Gallery Watch.com

 

Appropriations newcomers and veterans alike get confused over the difference between

authorizations and appropriations. Our brief summary here intends to clear the air.

The "bible" on appropriations law, Principles of Federal Appropriations Law, defines the

difference this way: Authorizing legislation is that "which authorizes the appropriation of funds to

implement" laws that create agencies, programs or government functions. It does not give a

government agency permission to cut a check or enter into a contract. Rather, its purpose is to set

parameters for government agencies/programs.

 

According to Principles..., there is no general requirement, either constitutional or statutory, that

an appropriation act be preceded by specific authorization. However, statutory requirements for

authorizations do exist in a number of specific situations. And both House and Senate rules allow

objections to lie against appropriations for programs not previously authorized.

 

An appropriations act, on the other hand, confers budget authority on federal agencies to incur

obligations. What makes the issue confusing is the common etymological stem, "authori.." In the

context of appropriations law, authorization and budget authority refer to two different things.

In brief: Authorizing legislation sets policies and funding limits for agencies/programs.

Appropriations legislation is what a department or agency needs before it can cut a check or sign a

contract.

 

There's more but this is enough to answer the question and tease those that are more curious about such arcana.

Blue skies ..

 

[afigg]

-I like the "stair step" plan. It's certainly a damn slight more sensible than the bullet train nonsense.

-One thing that seems to be missing (IMHO at least) is any clear talk of joint Amtrak-state proposals.

-I can't tell what the timetable that they're hoping for on equipment is (listing over 1000 pieces of equipment but not giving any sort of timeline). Is that a 10-year wishlist? 25 years?

-41 Viewliners "in service"...is that (3 Meteor/2 Star)*4, 3 LSL*3, 2 Crescent*2, and 1 Cardinal*2 totals 39 plus 2 "protect" cars? I wonder what the deployment plans are for a net of 20 added.

The just updated FY12-FY16 five year financial plan sheds some light on the longer term plans for equipment acquisition. That plan has $810 million total in RRIF loan financing by FY2016 and $508 million is general federal capital by FY2016 for equipment acquisitions. There is a disconnect in the text of the plan in how much funding they need to buy equipment, and Table 9 on the Fleet program. We will see a lot more when the next version of the Fleet Strategy Plan is released, but I suspect we will see a slowdown or delay in the planned equipment acquisition schedule from the V2 2011 Plan with a lot of pleading to Congress & the Administration to provide funds to purchase new equipment. I think Amtrak will have to accept that they will have to take out several billion in RRIF loans to buy much of what they need and then should ask Congress to provide $100 to $200 million a year to cover much of the annual loan cost.

Semi Random notes from the FY13 budget plan:

- $13.5 million to complete installation of WiFi system wide including the LD trains (nothing on WiFi in the FY12 final budget)

- Diesel fuel cost: projecting a $116 per barrel price for FY13; Diesel fuel costs have risen from $119.5 million in FY09 to $209 million in the FY12 budget to $221.6 million in the FY13 plan. Electrical population costs on the NEC and Keystone East have remained more steady at $100.6 million in FY09 to $106 million in FY11 to $111.9 million in the FY13 Plan. The five year financial plan, BTW, states that Amtrak used 1.2 million fewer gallons of diesel in FY11 than the average in FY07-FY10 due to efforts to reduce diesel fuel usage.

- Amtrak.com website accounts for over 53% of total ticket sales. Thought it would be higher.

- The FY13 projected ridership for WAS-NPN is 566K, little more than the FY12 projection of 549K. I don't think they have the Norfolk service extension in the projected revenue stream for FY13 at all. Makes some sense as the moving up of the expected start date to end of 2012 was a recent announcement.

- I'll post more on the NEC Stair Step plan later.

 

[afigg]

Here is an excerpt from the funding request letter to Congress summarizing the NEC Stair Step program, which I think is the first time I've seen the project name and approach in Amtrak public documents. So there are changes in the NEC upgrade strategy underway. Excerpt:

While the investments we have just outlined will help ensure that the NEC remains the vital transportation system it is today, the route itself has significant potential for further development as we proceed on a path towards our ultimate goal of developing a high-capacity, dedicated two-track, Next-Generation highspeed rail system (NextGen HSR) for the Northeast Corridor. The key to this is a realistic plan, one that sets attainable goals and establishes realistic timelines. There are opportunities for both fleet and infrastructure improvements, and Amtrak is developing plans to pursue the next round of improvements in four “Stair Steps”, which are designed to further transform the NEC into an optimum high-speed rail route:
 Step 1: Increase Acela Express capacity by 40% through the acquisition of additional coaches for existing trainsets.

 Step 2: Double Acela Express frequencies between Washington and New York in peak periods and acquire new high-speed trains to augment existing Acela fleet.

 Step 3: Complete the NEC “Gateway Project” to create substantial new capacity between the Newark, New Jersey area and New York City, including two new Hudson River tunnels, additional terminal capacity serving the new Moynihan Station and enhanced New York Penn

Station complex in Manhattan, expansion of trackage and a new Portal Bridge over the Hackensack River in New Jersey.

 Step 4: Expand Acela Express frequencies to up to 3 trips per hour in peak periods between Washington and New York and hourly service between New York and Boston, and continue acquisition of additional high-speed trainsets. Raise maximum Acela Express speeds on the

Corridor’s South End, permitting sustained 160 mph operation on select segments and reduce Acela Express travel times between DC and New York substantially.

Amtrak is presently advancing the planning and advancement, as appropriate, for each such Stair Step, with particular focus in FY 2013 on Stair Steps 1 and 2, which we anticipate will be completed in 2015 and 2020 respectively.

Sounds like a more realistic approach rather than spending the next 10-20 years on the Next Gen NEC project while doing not enough for the current NEC service. Still, the emphasis is on NYP-WAS while NYP-BOS does not see the service frequency increases and the love. Yes, Amtrak is restricted to 39 trains a day over the Shore Line Route, but Amtrak should step up and fight to increase those restrictions.

 

[Anderson]

Here is an excerpt from the funding request letter to Congress summarizing the NEC Stair Step program, which I think is the first time I've seen the project name and approach in Amtrak public documents. So there are changes in the NEC upgrade strategy underway. Excerpt:

While the investments we have just outlined will help ensure that the NEC remains the vital transportation system it is today, the route itself has significant potential for further development as we proceed on a path towards our ultimate goal of developing a high-capacity, dedicated two-track, Next-Generation highspeed rail system (NextGen HSR) for the Northeast Corridor. The key to this is a realistic plan, one that sets attainable goals and establishes realistic timelines. There are opportunities for both fleet and infrastructure improvements, and Amtrak is developing plans to pursue the next round of improvements in four "Stair Steps", which are designed to further transform the NEC into an optimum high-speed rail route:
 Step 1: Increase Acela Express capacity by 40% through the acquisition of additional coaches for existing trainsets.

 Step 2: Double Acela Express frequencies between Washington and New York in peak periods and acquire new high-speed trains to augment existing Acela fleet.

 Step 3: Complete the NEC "Gateway Project" to create substantial new capacity between the Newark, New Jersey area and New York City, including two new Hudson River tunnels, additional terminal capacity serving the new Moynihan Station and enhanced New York Penn

Station complex in Manhattan, expansion of trackage and a new Portal Bridge over the Hackensack River in New Jersey.

 Step 4: Expand Acela Express frequencies to up to 3 trips per hour in peak periods between Washington and New York and hourly service between New York and Boston, and continue acquisition of additional high-speed trainsets. Raise maximum Acela Express speeds on the

Corridor's South End, permitting sustained 160 mph operation on select segments and reduce Acela Express travel times between DC and New York substantially.

Amtrak is presently advancing the planning and advancement, as appropriate, for each such Stair Step, with particular focus in FY 2013 on Stair Steps 1 and 2, which we anticipate will be completed in 2015 and 2020 respectively.

Sounds like a more realistic approach rather than spending the next 10-20 years on the Next Gen NEC project while doing not enough for the current NEC service. Still, the emphasis is on NYP-WAS while NYP-BOS does not see the service frequency increases and the love. Yes, Amtrak is restricted to 39 trains a day over the Shore Line Route, but Amtrak should step up and fight to increase those restrictions.

First of all, thanks to Sky Pilot for clearing up the nuance there.

I think the NYP-BOS side of things is hamstrung not "just" by CT being intransigent, but also by the bridge situation (IIRC, the Coast Guard is involved there because of the nature of the bridges vs. the waterways). So Amtrak really can't do too much there. I'd like to see some city pair data, but the best we may be able to hope for is really long Regionals running to NYP and dropping cars there. Truth be told, it may end up being quicker and more effective for Amtrak to work at extending platforms at stations north of NYP (I'm thinking of aiming to be able to platform 10-12 cars at all regular stops) than for them to fight for extra train slots.

 

[Donctor]

I think the NYP-BOS side of things is hamstrung not "just" by CT being intransigent, but also by the bridge situation (IIRC, the Coast Guard is involved there because of the nature of the bridges vs. the waterways). So Amtrak really can't do too much there. I'd like to see some city pair data, but the best we may be able to hope for is really long Regionals running to NYP and dropping cars there. Truth be told, it may end up being quicker and more effective for Amtrak to work at extending platforms at stations north of NYP (I'm thinking of aiming to be able to platform 10-12 cars at all regular stops) than for them to fight for extra train slots.

Longer platforms could be nice. Old Saybrook's platform is 1 or 2 cars long.

 

[afigg]

I think the NYP-BOS side of things is hamstrung not "just" by CT being intransigent, but also by the bridge situation (IIRC, the Coast Guard is involved there because of the nature of the bridges vs. the waterways). So Amtrak really can't do too much there. I'd like to see some city pair data, but the best we may be able to hope for is really long Regionals running to NYP and dropping cars there. Truth be told, it may end up being quicker and more effective for Amtrak to work at extending platforms at stations north of NYP (I'm thinking of aiming to be able to platform 10-12 cars at all regular stops) than for them to fight for extra train slots.

The most significant limit is the 39 trains a day on the Shore Line East due to the 5 movable bridges in eastern CT from the CT River Bridge to the Mystic River Bridge. The US Coast Guard and CT set the restriction to satisfy the demands of the CT private boat owners and commercial ship operators in the early to mid 1990s (I could be wrong on the date or timeframe). The Niantic River Bridge is being replaced with a higher and wider clearance bridge which is supposed to reduce the number of times the bridge needs to open by 80%. When the Niantic River Bridge project is done, then 4 of the 5 movable bridges will have been replaced or rebuilt since the 1990s. The plan for the CT River Bridge is to replace it with a higher level bridge to provide more clearance to reduce openings, if they can't raise it enough for a fixed span bridge.

Another player is CT DOT which wants to increase SLE service frequency to New London and needs approval to run more daily trains east of Old Saybrook. The question is whether with 4 bridges improved or rebuilt, is that enough to raise the 39 train limit for Amtrak? Or will the CT River Bridge have to be replaced first and then raising the limit will be discussed? I gather it is and was a very political process with a lot of noise and political pressure from the private and commercial boat owners who were opposed to more train traffic and electrification of the line back in the 1990s. Somewhere I recall in one of the Amtrak NEC documents that they were planing to revisit getting the 39 train limit raised but it is a long and complex process.

 

[Anderson]

I think the NYP-BOS side of things is hamstrung not "just" by CT being intransigent, but also by the bridge situation (IIRC, the Coast Guard is involved there because of the nature of the bridges vs. the waterways). So Amtrak really can't do too much there. I'd like to see some city pair data, but the best we may be able to hope for is really long Regionals running to NYP and dropping cars there. Truth be told, it may end up being quicker and more effective for Amtrak to work at extending platforms at stations north of NYP (I'm thinking of aiming to be able to platform 10-12 cars at all regular stops) than for them to fight for extra train slots.

The most significant limit is the 39 trains a day on the Shore Line East due to the 5 movable bridges in eastern CT from the CT River Bridge to the Mystic River Bridge. The US Coast Guard and CT set the restriction to satisfy the demands of the CT private boat owners and commercial ship operators in the early to mid 1990s (I could be wrong on the date or timeframe). The Niantic River Bridge is being replaced with a higher and wider clearance bridge which is supposed to reduce the number of times the bridge needs to open by 80%. When the Niantic River Bridge project is done, then 4 of the 5 movable bridges will have been replaced or rebuilt since the 1990s. The plan for the CT River Bridge is to replace it with a higher level bridge to provide more clearance to reduce openings, if they can't raise it enough for a fixed span bridge.

Another player is CT DOT which wants to increase SLE service frequency to New London and needs approval to run more daily trains east of Old Saybrook. The question is whether with 4 bridges improved or rebuilt, is that enough to raise the 39 train limit for Amtrak? Or will the CT River Bridge have to be replaced first and then raising the limit will be discussed? I gather it is and was a very political process with a lot of noise and political pressure from the private and commercial boat owners who were opposed to more train traffic and electrification of the line back in the 1990s. Somewhere I recall in one of the Amtrak NEC documents that they were planing to revisit getting the 39 train limit raised but it is a long and complex process.

Just wondering, but if the jam is on SLE and not NHV-NYP, could Amtrak start up the Inland Route again? This isn't an ideal fix by any stretch of the imagination, but if they're stuck with a jam just on SLE and there's enough demand for trains BOS-NYP, re-routing a couple of Regionals there might be the cheapest shorter-term fix.

Longer-term, the easy fix would be longer trains...and after that, you've got the necessary bridge fixes. They need to happen ultimately, but the first two options would seem to be both cheaper and be justifiable on the revenue they'd generate.

 

[jis]

Just wondering, but if the jam is on SLE and not NHV-NYP, could Amtrak start up the Inland Route again? This isn't an ideal fix by any stretch of the imagination, but if they're stuck with a jam just on SLE and there's enough demand for trains BOS-NYP, re-routing a couple of Regionals there might be the cheapest shorter-term fix.

Unlikely, since it requires the agreement of CSX, which own part of the inland line.

 

[trainviews]

A few political thoughts on the budget request. Some of this is guesses and estimates - feel free to disagree.

- The request for operating grant is $450 million - down from $466 million in FY12 and $562 million in FY11. Amtrak has of course been touting this fact themselves. But they have been making much less noise about the fact that in reality the operating loss is up $107 million and that cost recovery is falling for the first time in several years. The request for a smaller operating grant is exclusively due to the grant actually just covering the loss and no more. In both 2011 and the budget for 2012 Amtrak's losses are more than $100 million lower than the grant, and the surplus is used for capital investments, most significantly the new viewliners.

There is probably political reasons for asking for as low an operating grant as possible and instead beefing up the request for capital spending. In the 2012 appropriations one of the cuts that congress did was to lower the grant to the level of the 2011 loss, and no matter how much Amtrak would be asking for for 2013, there is a good chance that that cut will be repeated this year anyway and the 2013 appropriations will be no bigger than the 2012 loss, or at least cut down to the budgeted loss for 2013. By actually making a smaller request than the approrpiations for 2012, they might hope to make the operating grant less of a target and getting what is needed to cover the projected loss or close to.

The rising operating loss might draw some fire though. It is due to both a relatively conservative estimate of revenue growth - at 2,2% much lower than the last couple of years - and rapidly rising costs up 4.4 %. The expense accounts rising most rapidly are employee benefits and advertising and sales and then a whopping 33% increase in "Other Non-labor Fees and Services". I have no idea what that actually covers, but the post is responsible for cost rises of almost $70 million alone. Also fuel and wages and salaries in general are up more than the revenue growth. While some of these posts (fuel, employee benefits) are hard to do anything about I foresee some pressure to rein in "out of control" spending.

As for the revenue and ridership growth the budget seems very conservative. I know that Amtrak has a history of that, and one of the qualities of Boardman's stewardship seems to have been to be very careful not to sell Congress anything Amtrak couldn't deliver (lex Warrington!!). So this is probably wise but still the 2013 budget is much more conservative than the already cautious 2012 budget revenue growth. Not only is ridership and ticket revenue growth lower than the trend of previous years. If you look at budgeted train miles zero growth is projected. That the new Norfolk service is not factored in is understandable, as the early starting date came out only a month or so ago, but nor is apparently the Downeaster extension. Of course this extension is not going to revolutionize neither train miles nor ridership numbers, but it should show up, and it certainly tells that Amtrak has done nothing to factor in it's effect. Likewise the rolling stock count, which projects that the first 25 of the new viewliners will come on line in 2013, and with only 8 heritage diners and no baggage cars being retired it looks like 15-17 of them might be sleepers or baggage dorms, which also frees up some revenue space. Still in their "summary of changes in operating revenue" no growth at all shows up from larger sleeper capacity (or from the Downeaster expansion). As a contrast additional revenue from the last of the Amfleet rebuilds has a line in the corresponding table in the 2012 budget.

Now I'm getting a little conspiratory here: One could get the thought that Amtrak has deliberately set the revenue growth very low in the hope to get a full funding of the operating grant request, and then expect to have a good chance of beating the revenue expectations with a decent margin, reaping both publicity gains and preserving a pot of money for capital investments to be spend at Amtraks own discretion (this was the money in 2011-2012 that enabled the Viewliner order).

If this is not the case I think the budget is somewhat troubling. Especially the fact that the Core Cost Recovery Ratio is supposed to fall from 83.1% 80.4%. This is a break off from a rising trend of several years and will be hard to fend off politically in an era of rising ridership.

Otherwise the budget request is pretty bold - at times even bordering on visionary. It is heavily touting NEC enhancements, and given committee chairman Mica's often repeated "HSR is only feasible in the North East Corridor", this is probably wise. The house is going to be the hard nut here, and even though Amtrak of course won't get all of it's wishes, this looks like a realistic strategy to get as much as possible. In relation to this I also see the small but separate requests for the Gateway project/Portal Bridge starting this year and the NEC stair step program for 2013 as very smart. These are mega projects, but the current requests are small and might very well sail through, Having already started to spend money on them makes it so much harder to kill the projects politically in the coming years when the big money has to be coughed up. Though not bullet proof this is probably the most realistic way to ever get these projects funded, and beyond them to start to construct segments of a true HSR system in the Northeast. At least in comparison the the previous approach of "let's spend XX billion on the current NEC and then XXX billion on top of that for a bullet train" which had a snowballs chance in hell on Capitol Hill.

 

[Anderson]

There's a complication in dealing with the FY11 CR numbers that is beyond Amtrak's control. Last year, the sheer scale of the disruptions out west substantially improved the loss picture by disrupting several of the LD trains for weeks at a time. Witness the double-digit drop in the Builder's ridership over the course of the year...and that the drop there includes relatively limited effects on the CHI-MSP end of things, IIRC (since the "cut" portion in North Dakota/Montana simply allowed the train to be turned on each end for a while). As I recall, the Chicago-end Builder was basically a CHI-MSP corridor train, and this cut the size of the Builder's impact on the budget accordingly.

With that said, Amtrak is well above their stated PPR target for October and November, and additionally hiked fares again in January. Travel next door to another thread on the next FY's budgeting and you can see some math I did. Mind you, those figures are from the budget request PR and not the business plan (one refers to 2012, one to 2013...something I only just noticed and will discuss elsewhere).

 

[trainviews]

There's a complication in dealing with the FY11 CR numbers that is beyond Amtrak's control. Last year, the sheer scale of the disruptions out west substantially improved the loss picture by disrupting several of the LD trains for weeks at a time. Witness the double-digit drop in the Builder's ridership over the course of the year...and that the drop there includes relatively limited effects on the CHI-MSP end of things, IIRC (since the "cut" portion in North Dakota/Montana simply allowed the train to be turned on each end for a while). As I recall, the Chicago-end Builder was basically a CHI-MSP corridor train, and this cut the size of the Builder's impact on the budget accordingly.

With that said, Amtrak is well above their stated PPR target for October and November, and additionally hiked fares again in January. Travel next door to another thread on the next FY's budgeting and you can see some math I did. Mind you, those figures are from the budget request PR and not the business plan (one refers to 2012, one to 2013...something I only just noticed and will discuss elsewhere).

You are right that the FY 2011 CR numbers might have been helped by the many cancelled LD's, though I think it has helped overall loss more (the loss ratio to the expenses of the stub trains running is probably as large or larger as for the normal train, just out of a much lower level of expenses meaning lower overall loss)

But the drop in CR happens from the 2012 budget to the 2013 request - not from the 2011 result to the 2012 budget, so it really doesn't explain why CR is falling anyway.

 

[Green Maned Lion]

I don't know how many of you are small business owners. However, I will assume the answer is in fact very few- in this Republo-Demo fustercluck we live in people just really can't do it anymore. But I have managed it, and I'll give you some pointers. Overperformance is highly valued by anyone, no matter who they are. Banks love it, customers love it, and I presume Congress loves it. Underperformance, however, is considered incompetence, no matter how unrealistic your numbers were.

Amtrak is intending to underpromise and overdeliver, so they can say "We consistently beat expectations!" This is intelligent marketing.

For example, I sell shirts rated to OSHA specifications, with retroreflective stripes. These shirts are rated for 25 wash cycles- after that, they can be sufficiently faded as to be out of compliance. I consistently tell my customers that if they take good care of them, they may even live up to that rating. Contrariwise, my person shirts I use as uniforms are up to over double that and counting. My customers love them- they outlast what they expect. If I tell customers they last for 50 washings, and one lasts 45, they will be disappointed.

Its the same thing as OTP ratings. If your trains run late, either change how they are measured, or lengthen the schedule until your desired metric is met. Joe Clift of RRWG once quoted to me a bus system who considers an on time bus one that leaves its garage within 3 minutes of scheduled departure. How late it arrives at its final destination is moot.

 

[Anderson]

GML: One suspects that claiming that sort of OTP when the bus is late further on down the line is likely to simply leave customers badly steamed when the "always on time" bus isn't.

And underperformance because of unrealistic numbers is incompetence...in accounting!

 

[afigg]

- The request for operating grant is $450 million - down from $466 million in FY12 and $562 million in FY11. Amtrak has of course been touting this fact themselves. But they have been making much less noise about the fact that in reality the operating loss is up $107 million and that cost recovery is falling for the first time in several years. The request for a smaller operating grant is exclusively due to the grant actually just covering the loss and no more. In both 2011 and the budget for 2012 Amtrak's losses are more than $100 million lower than the grant, and the surplus is used for capital investments, most significantly the new viewliners.

There is probably political reasons for asking for as low an operating grant as possible and instead beefing up the request for capital spending. In the 2012 appropriations one of the cuts that congress did was to lower the grant to the level of the 2011 loss, and no matter how much Amtrak would be asking for for 2013, there is a good chance that that cut will be repeated this year anyway and the 2013 appropriations will be no bigger than the 2012 loss, or at least cut down to the budgeted loss for 2013. By actually making a smaller request than the approrpiations for 2012, they might hope to make the operating grant less of a target and getting what is needed to cover the projected loss or close to.

The $450 million operating loss is the draft budget submitted to Congress in order to try to obtain that level of operating grant funding. It is a good political move on Boardman's part because the headline is that Amtrak is asking for a reduced operating grant and debt service while asking for more in capital grant funding which is a politically easier sell in the current political situation.

However, don't read the $450 million as an actual decrease in Cost Recovery Ratio. The original draft FY12 budget, which I have a copy of, projected a net operating loss of $616 million which is what Amtrak asked for in the operating grant. After Congress gave Amtrak $466 million in FY12 operating grant, the final FY12 budget projects a net operating loss of only $345.3 million. There were increases in the projected ticket revenue of ~$110 million, but a total operating revenue bump of ~$21 million, and cuts in salaries & wages of ~$109 million, advertising & sales, other non-labor fees & services, some other adjustments to get a net loss of $345.3 million.

Of course, if ticket revenue does not meet the projections, fuel costs go up more than expected, employee benefits come in higher than expected, Amtrak could lose more than $345 million and have to scramble.

If Congress provides $450 million in operating grant subsidy in FY13, the final budget may well come in at a net operating loss of $350 million it if is a realistic target, so the remainder can be spent on capital projects or paying for the CAF Viewliners. However, I expect FY13 appropriations will be a series of last minute continuing resolutions until after the election and a new Congress convenes in mid-January, 3 plus months into the fiscal year.

 

[Anderson]

A CR would presumably continue funding at $466m/year (or $38.83m/month), right?

 

[trainviews]

- The request for operating grant is $450 million - down from $466 million in FY12 and $562 million in FY11. Amtrak has of course been touting this fact themselves. But they have been making much less noise about the fact that in reality the operating loss is up $107 million and that cost recovery is falling for the first time in several years. The request for a smaller operating grant is exclusively due to the grant actually just covering the loss and no more. In both 2011 and the budget for 2012 Amtrak's losses are more than $100 million lower than the grant, and the surplus is used for capital investments, most significantly the new viewliners.

There is probably political reasons for asking for as low an operating grant as possible and instead beefing up the request for capital spending. In the 2012 appropriations one of the cuts that congress did was to lower the grant to the level of the 2011 loss, and no matter how much Amtrak would be asking for for 2013, there is a good chance that that cut will be repeated this year anyway and the 2013 appropriations will be no bigger than the 2012 loss, or at least cut down to the budgeted loss for 2013. By actually making a smaller request than the approrpiations for 2012, they might hope to make the operating grant less of a target and getting what is needed to cover the projected loss or close to.

The $450 million operating loss is the draft budget submitted to Congress in order to try to obtain that level of operating grant funding. It is a good political move on Boardman's part because the headline is that Amtrak is asking for a reduced operating grant and debt service while asking for more in capital grant funding which is a politically easier sell in the current political situation.

However, don't read the $450 million as an actual decrease in Cost Recovery Ratio. The original draft FY12 budget, which I have a copy of, projected a net operating loss of $616 million which is what Amtrak asked for in the operating grant. After Congress gave Amtrak $466 million in FY12 operating grant, the final FY12 budget projects a net operating loss of only $345.3 million. There were increases in the projected ticket revenue of ~$110 million, but a total operating revenue bump of ~$21 million, and cuts in salaries & wages of ~$109 million, advertising & sales, other non-labor fees & services, some other adjustments to get a net loss of $345.3 million.

Of course, if ticket revenue does not meet the projections, fuel costs go up more than expected, employee benefits come in higher than expected, Amtrak could lose more than $345 million and have to scramble.

If Congress provides $450 million in operating grant subsidy in FY13, the final budget may well come in at a net operating loss of $350 million it if is a realistic target, so the remainder can be spent on capital projects or paying for the CAF Viewliners. However, I expect FY13 appropriations will be a series of last minute continuing resolutions until after the election and a new Congress convenes in mid-January, 3 plus months into the fiscal year.

yeah, that is pretty much what I thought. Thanks for providing the numbers for the intial 2012 request for comparison.