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Senate ok's Amtrak; new problems loom
WASHINGTON, D.C. – By a 93-6 vote, the Senate Nov. 2 approved the Passenger Rail Investment and Improvement Act.
Senior staff of both Democrat and Republican members advised UTU’s national legislative office that they had received scores of telephone calls and e-mails from UTU members asking that they support the legislation.
The bill, however, was incorporated into a larger spending bill that still must be approved by the entire Senate, which would then require House action.
“Nonetheless, this was a significant milestone in our attempts to preserve Amtrak,” said UTU National Legislative Director James Brunkenhoefer.
“We have serious problems with Amtrak’s labor relations strategy, but our situation would be even worse if we cannot secure long-term and reliable funding for Amtrak," Brunkenhoefer said. "The Passenger Rail Investment and Improvement Act will accomplish that long-term and reliable funding and that is why we are supporting it. There is no question that UTU’s bi-partisan efforts, by which we reach out equally to Republicans and Democrats, has helped us with our efforts to preserve Amtrak and its substantial contribution to Railroad Retirement.”
The bill passed Nov. 2 by the Senate would provide Amtrak with $11.4 billion for six years through 2011. This is enough money to maintain Amtrak’s current operations, upgrade its equipment and return Amtrak’s Northeast Corridor to a state of good repair.
Meanwhile, the U.S. General Accountability Office Nov. 2 released a report warning of even more severe financial problems ahead for Amtrak.
As reported by the Associated Press, the GAO said Amtrak needs to improve the way it monitors performance and oversees its finances to reach solid financial ground.
"Amtrak's management may be able to correct a number of these issues on its own, but the company is likely to need outside help in developing a comprehensive approach to address internal control weaknesses and improve the financial information for management and external stakeholders," the GAO report said. GAO is the auditing arm of Congress.
"While Amtrak has recently reduced costs, revenues are declining faster than costs, leading to operating losses exceeding $1 billion annually," the report said. "These losses are projected to grow by 40 percent within four years."
The GAO recommends that the transportation secretary direct the federal railroad administrator to require Amtrak to submit a plan laying out specifically how it will improve its financial operations; provide Amtrak with direction on how to do so, and; monitor the railroad's performance and report to Congress on Amtrak's progress.
Other highlights of the report include:
* Over $500,000 in performance bonuses were given to Amtrak managers, despite the lack of measurable performance goals. These awards were issued even though the company's financial picture had not been finalized.
* Amtrak President David Gunn received a substantial cash performance bonus, although the performance goals in his employment contract were never filled in.
* Amtrak procures $500-$600 million in goods and services per year, but was unable to provide GAO with detailed, comprehensive data on total spending.
* There is no company-wide strategic plan or cost containment strategy.
* No-bid contracts were awarded without justification even when Amtrak's own guidelines required justification.
* Initial contracts were expanded far beyond their original scope - a software contract was increased from $60,000 to over $500,000; a signal survey services contract went from $45,000 to over $764,000.
* Of $4.3 billion in costs for 2002-03, only $357 million (8 percent) was directly assigned to each train line. Amtrak allocated the other 92 percent of costs to the various lines using arbitrary formulas, for which GAO could not find supported.
* Purchase order arrangements designed for contracts under $5,000 were used for $100,000 purchases.
The GAO report, entitled, “Systemic Problems Require Actions to Improve Efficiency, Effectiveness and Accountability, may be accessed at www.gao.gov.
November 3, 2005
WASHINGTON, D.C. – By a 93-6 vote, the Senate Nov. 2 approved the Passenger Rail Investment and Improvement Act.
Senior staff of both Democrat and Republican members advised UTU’s national legislative office that they had received scores of telephone calls and e-mails from UTU members asking that they support the legislation.
The bill, however, was incorporated into a larger spending bill that still must be approved by the entire Senate, which would then require House action.
“Nonetheless, this was a significant milestone in our attempts to preserve Amtrak,” said UTU National Legislative Director James Brunkenhoefer.
“We have serious problems with Amtrak’s labor relations strategy, but our situation would be even worse if we cannot secure long-term and reliable funding for Amtrak," Brunkenhoefer said. "The Passenger Rail Investment and Improvement Act will accomplish that long-term and reliable funding and that is why we are supporting it. There is no question that UTU’s bi-partisan efforts, by which we reach out equally to Republicans and Democrats, has helped us with our efforts to preserve Amtrak and its substantial contribution to Railroad Retirement.”
The bill passed Nov. 2 by the Senate would provide Amtrak with $11.4 billion for six years through 2011. This is enough money to maintain Amtrak’s current operations, upgrade its equipment and return Amtrak’s Northeast Corridor to a state of good repair.
Meanwhile, the U.S. General Accountability Office Nov. 2 released a report warning of even more severe financial problems ahead for Amtrak.
As reported by the Associated Press, the GAO said Amtrak needs to improve the way it monitors performance and oversees its finances to reach solid financial ground.
"Amtrak's management may be able to correct a number of these issues on its own, but the company is likely to need outside help in developing a comprehensive approach to address internal control weaknesses and improve the financial information for management and external stakeholders," the GAO report said. GAO is the auditing arm of Congress.
"While Amtrak has recently reduced costs, revenues are declining faster than costs, leading to operating losses exceeding $1 billion annually," the report said. "These losses are projected to grow by 40 percent within four years."
The GAO recommends that the transportation secretary direct the federal railroad administrator to require Amtrak to submit a plan laying out specifically how it will improve its financial operations; provide Amtrak with direction on how to do so, and; monitor the railroad's performance and report to Congress on Amtrak's progress.
Other highlights of the report include:
* Over $500,000 in performance bonuses were given to Amtrak managers, despite the lack of measurable performance goals. These awards were issued even though the company's financial picture had not been finalized.
* Amtrak President David Gunn received a substantial cash performance bonus, although the performance goals in his employment contract were never filled in.
* Amtrak procures $500-$600 million in goods and services per year, but was unable to provide GAO with detailed, comprehensive data on total spending.
* There is no company-wide strategic plan or cost containment strategy.
* No-bid contracts were awarded without justification even when Amtrak's own guidelines required justification.
* Initial contracts were expanded far beyond their original scope - a software contract was increased from $60,000 to over $500,000; a signal survey services contract went from $45,000 to over $764,000.
* Of $4.3 billion in costs for 2002-03, only $357 million (8 percent) was directly assigned to each train line. Amtrak allocated the other 92 percent of costs to the various lines using arbitrary formulas, for which GAO could not find supported.
* Purchase order arrangements designed for contracts under $5,000 were used for $100,000 purchases.
The GAO report, entitled, “Systemic Problems Require Actions to Improve Efficiency, Effectiveness and Accountability, may be accessed at www.gao.gov.
November 3, 2005
