Posts Tagged ‘Saving the Hoosier State’

Divorcing Amtrak is Hard to Do

February 6, 2017

The great Hoosier State privatization experiment is about to end. It started in July 2015 when Iowa Pacific Holdings began “operating” the quad-weekly Chicago-Indianapolis train.

On TransportationI put the word “operating” in quotation marks because, technically, IP did not “operate” the Hoosier State.

In practice, it was a partnership with Amtrak. IP provided the equipment and marketing support, and was in charge of on-board service.

But the operating crews were Amtrak employees and the nation’s passenger carrier handled the relationships with the host railroads, primarily CSX.

As it turned out, Amtrak has received most of the money paid by INDOT and its partner communities that fund the service.

For a while, Iowa Pacific received many kudos because of what it wasn’t, which is Amtrak.

Under Amtrak auspices, the Hoosier State was a bare-bone operation used to shuttle equipment between Chicago and the Beech Grove Shops in suburban Indianapolis.

By comparison, the IP operation of the Hoosier State was a luxury train, with business class, meals freshly prepared on board, and a full-length dome car for those willing to pay extra fare.

IP head Ed Ellis – who once worked at Amtrak – talked about expanding service and the need to cut the travel time.

He said IP would aggressively market the service, seeking to build markets that Amtrak had ignored.

One marketing gambit IP talked about was running a bus between the Crawfordsville station and Bloomington, the home of Indiana University.

IP correctly recognized the college market is a good source of passengers, but apparently the Bloomington shuttle never got on the road.

Iowa Pacific had a lot of people rooting for it to succeed with the Hoosier State, many of whom believe that a private operator can provide better service than Amtrak.

Some also want to believe that a private operator can make money on passenger service by providing better and more economical service than Amtrak. Ellis and IP apparently believed that, too, but the Hoosier State didn’t yield the expected financial returns for IP.

Ellis always knew the daily service and faster trains he desired hinged upon the willingness of government entities within Indiana to provide the capital funding needed to upgrade the slow meandering route used by the Hoosier State and Amtrak’s tri-weekly Chicago-New York Cardinal.

If IP could demonstrate that the Hoosier State was a success despite its route limitations, then perhaps Indiana officials would be amendable to funding track work in the same manner that the departments of transportation in neighboring Michigan and Illinois have.

But that has always been a long shot. Indiana has never been as supportive of intercity passenger rail as its neighbors.

Amtrak will take back the Hoosier State in Toto on March 1. Although INDOT said it has a verbal agreement that some of IP’s services will be retained, that is not a sure thing.

It remains to be seen if INDOT will seek an operator other than Amtrak and, for that, matter, how much longer the state and on-line communities are willing to pony up money to underwrite the operating losses.

One key take away from the IP Hoosier State experiment is that divorcing Amtrak is more difficult than it might seem.

Marketing Seen as Key to Hoosier State Succcess

May 13, 2015

Ed Ellis has a simple idea how to boost ridership on the Hoosier State. It begins with a marketing effort that is rooted in giving people a reason to ride the train.

He expects to offer highly-marketed travel packages that will take passengers to sporting events and cultural attractions.

Ellis, who heads Iowa Pacific Holdings, told the Journal & Courier of Lafayette, Indiana, that travelers can be sorted into three groups: Those who need to get somewhere in a hurry, those who just need to get somewhere and those who are looking for a reason to go. The latter are much on Ellis’ mind these days.

“The way they ran trains back in the day, they spent a lot of time thinking about events and reasons people need to ride the train,” he said. “Substantial costs of running trains were paid for by people who didn’t have to go but wanted to go.”

Iowa Pacific is in the process of hiring employees to support the Hoosier State, including a marketing manager who will plan trips.

It won’t be just Hoosiers traveling to Chicago for the day. “You can be sure we’ll be selling Purdue football packages,” Ellis said.

Iowa Pacific will provide and maintain the passenger cars for the quad-weekly Chicago-Indianapolis train that will continue to be operated by Amtrak and funded by the Indiana Department of Transportation and the online communities that it serves.

The same route and communities are also served by Amtrak’s Chicago-New York Cardinal, which operates on the three days a week that the Hoosier State does not run.

Iowa Pacific also will provide food and beverage service, something that has had scant availability in recent years. Amtrak will provide engineers and conductors, and sell tickets.

Ellis said that he saw an opportunity throughout months of sometimes contentious negotiations among INDOT, Amtrak and the Federal Railroad Administration over operating the Hoosier State.

He is optimistic that the Chicago-Indianapolis route can become a self-supporting enterprise.

That vision is rooted in a railroad career that included a five-year tenure as a vice president at Amtrak between 996 to 2000.

As an example of what he meant by creating demand, Ellis said his company, which is also in the business of hauling freight, built an outdoor concert venue on top of a mountain near Alamosa, Colorado. The only way to get there was to ride an excursion train that Iowa Pacific operates.

“We created that (concert venue) to give people a reason to ride the train,” he said.

Ellis understand what he is up against marketing a train that doesn’t get anywhere in a hurry.

“What has to happen when you have a train that doesn’t provide fast frequent on-time service is you have to figure out how to get more people on the train,” he said.

Increasing service on the route is going to take about $500 million to be used for rebuilding the tracks. Finding that money will be tough going.

Yet such work is necessary if Ellis is going to reach his goal of 12 passenger trains a day.

Brian Farkas is a locomotive engineer and chairman of the Indiana legislative board of the Brotherhood of Locomotive Engineers and Trainmen.

“Some of his ideas are good, but I’m curious to see how he’s going to get $500 million when our legislators are reluctant to fund $3 million for the train,” Farkas said.

Some have pointed toward federal grants, including the Transportation Investment Generating Economic Recovery program.

“There is a renewed willingness on the part of Amtrak, CSX and INDOT to pursue economic development funding, including TIGER grants, to improve the rail infrastructure,” said Greater Lafayette Commerce member Arvid Olson.

“We do have a history of cooperation with railroads in this community,” added Liz Solberg, who oversaw Lafayette’s relocation of Norfolk Southern and CSX tracks to create a rail corridor adjacent to the Wabash River.

Douglas Yerkeson, a rail supporter and partner at Faegre Baker Daniels law firm in Indianapolis, is impressed with Ellis’ approach.

“Having a balanced transportation system is critical to economic development for the state,” he said. “And given the government of Indiana’s interest in partnering with a private company, this may be the impetus for culture change.”

Dana Smith, retired head of Greater Lafayette Chamber of Commerce, agreed. “If Iowa Pacific can pull this off, it’s going to be an absolute positive for this community,” he said.

Last year, Vicki Burch, a West Lafayette city councilwoman, criticized the prospect of state-subsidized rail transit.

But now she wants to give Ellis and his ideas a chance. “We won’t know until we try,” she said.

Hoosier State Funding Plan Worked Out

May 7, 2015

A funding plan for the Chicago-Indianapolis Hoosier State will provide state support, but also required local communities along the route to pony up some money.

The Indiana General Assembly is considered a plan to provide a $6 million operating grant for the quad-weekly train for two years with money from a tax amnesty program that is expected to generate at least $90 million. The first $84 million would be deposited in a regional cities development fund.

“On-line communities will (also) be asked to support a small portion of long-term service costs,” Indiana Department of Transportation spokesman Will Wingfield said. “INDOT met with city representatives last week to discuss this.”

The Hoosier State will continue to operate with Amtrak equipment through June 30 or  “until long-term agreements can be finalized with Amtrak and Iowa Pacific Holdings.”

Iowa Pacific continues to modify equipment that it owns and it is expected to be inspected by Federal Railroad Administration, Amtrak, and Food and Drug Administration personnel in late May.

“July 1 is our target date for Iowa Pacific to begin work as INDOT’s contractor, but there are many aspects outside of (our) control,” Wingfield said.

INDOT, FRA Reach Pact on Passenger Safety Rules

April 7, 2015

The efforts of the Indiana Department of Transportation to improve the Hoosier State have cleared another hurdle.

The agency and the Federal Railroad Administration reached an agreement on “clear lines of accountability for passenger rail safety and accessibility.”

Meeting in Indianapolis with FRA staff, INDOT Commissioner Karl Browning said that the two sides discussed the roles and responsibilities of each party connected with the Chicago-Indianapolis train.

Indiana wants to contract with Amtrak and Iowa Pacific Holdings to operate the service and both will be expected to meet FRA requirements.

INDOT will designate a staff member responsible for overseeing contract compliance. “INDOT and the FRA share the guiding principles of access to safe mobility,” Browning said in a statement. “Based on these guiding principles, we are both committed to a path toward continuing the Hoosier State service.”

Talks are continuing to reach agreements between INDOT and Amtrak and Iowa Pacific. Amtrak, FRA, and U.S. Food and Drug Administration are continuing to inspect the Iowa Pacific equipment that is expected to be assigned to the Hoosier State.

The Hoosier State operates four times weekly, running on days that the tri-weekly Chicago-New York Cardinal does not operate.

Currently, the Hoosier State is being underwritten by INDOT and many of the communities that it serves.

Amtrak is expected to serve as the primary operator, working with host railroads, providing train and engine crews, and managing reservation and ticketing. Aside from rolling stock and locomotives, Iowa Pacific would provide equipment maintenance, on-board services and marketing.

Amtrak Inspects Proposed Hoosier State Cars

March 31, 2015

The three passenger cars and two locomotives that might be used on the Hoosier State got an inspection by Amtrak officials recently.

The equipment is owned by Iowa Pacific Holdings and stored in Bensenville, Ill.

Under a proposal being discussed by Amtrak and the Indiana Department of Transportation, Iowa Pacific would provide equipment and onboard services while Amtrak would continue to provide the operating crews.

Also joining in the inspection were officials of the Federal Railroad Administration.

The quad-weekly Chicago-Indianapolis train is underwritten by INDOT and many of the communities that it serves.

The Iowa Pacific equipment, which includes two coaches and a dome car, would provide enhanced business class and food service.

Currently, the Hoosier State typically operates with two Horizon fleet coaches and does not have food service.

About a dozen FRA and Amtrak inspectors were joined by a similar number of Iowa Pacific operations and mechanical personnel in making the inspection of the IP equipment.

The locomotives are GP40FH-2 Nos. 4135 and 4144, which formerly served New Jersey Transit. They are geared for a top speed of 102 mph, although no segment of the Hoosier State route has track maintained to that standard.

One of the two 44-seat coaches was built by Budd in the 1950s for Southern Pacific’s Sunset Limited. The other was built by St. Louis Car Co. in 1964 for Union Pacific.

Both are of former Amtrak heritage and during that time they were converted to head-end power and received accessible bathrooms

Iowa Pacific has used the cars on its Saratoga & North Creek subsidiary and reupholstered the Amtrak seats. The cars will have 110-volt at-seat outlets installed and be equipped for Wi-Fi.

The full-with dome car was built for the Santa Fe and later ran on the original Auto-Train and Holland America Westours.

The car would provide upper level business class with hot meals prepared in a lower level galley and serve as a café car for coach passengers on the lower level.

INDOT, FRA Reportedly Reach Agreement

March 16, 2015

Trains magazine columnist Fred Frailey reported that the Indiana Department of Transportation and the Federal Railroad Administration have reached an agreement that will end the standoff over whether the state should be treated as a “railroad” that must ensure adherence to federal passenger safety standards.

Frailey wrote that the two sides have agreed to create a memorandum of understanding that will spell out each party’s role in safely operating the Chicago-Indianapolis Hoosier State.

The FRA wants an impermeable chain of responsibility for its rail-safety regulations — someone to ultimately answer for all the bits and pieces of a train’s operation. INDOT doesn’t want to be ruled to be a railroad.

The dispute has threatened to derail the quad-weekly Hoosier State, which INDOT and several communities served by the train have been funding since Oct. 1, 2013.

The Hoosier State operates on days that the Chicago-New York Cardinal does not operate and has intermediate stops in Indiana at Crawfordsville, Lafayette, Rensselaer and Dyer.

News reports have indicated that Amtrak will continue to provide operating personnel for the Hoosier State, but Iowa Pacific Holdings will provide equipment and marketing support.

INDOT had earlier said the Hoosier State would makes its last trips on April 1, then extended that to April 30, saying that the FRA would review its regulations and how they affect the state.

Hoosier State to Continue Through April 30

March 14, 2015

The beleaguered Hoosier State, the quad-weekly Amtrak train between Chicago and Indianapolis, has survived yet another brush with the grim reaper for another 30 days.

The Indiana Department of Transportation said on Friday that the train will continue operating through April 30 while the Federal Railroad Administration reviews a policy that it had said it would impose on Indiana that would have made the state a “railroad.”

A week earlier, INDOT Commission Karl Browning had issued a news release saying the Hoosier State would make its last trips on April 1. He cited an FRA policy that an entity funding rail passenger service would be responsible for the FRA passenger safety standards.

INDOT said that acting FRA Administrator Sarah Feinberg told Browning during a telephone call that her agency would reconsider that policy.

“It is not clear that the FRA will change its mind,” Browning says. “Because Ms. Feinberg committed to reviewing this, we want to give the FRA another opportunity to consider the problems Indiana has been airing.”

INDOT doesn’t own any tracks or railroad equipment and Browning said the FRA’s position would increase costs and paperwork for INDOT.

The department along with most of the communities served by the train have funded it during the past year. INDOT had been negotiating with Amtrak and Iowa Pacific Holdings on a long-term contract to operate the train.

In the meantime, Indiana U.S. Sen. Dan Coats has written to the FRA asking it to reconsider its position that if INDOT continues to fund the Hoosier State that that would make it a “railroad.”

Coats wrote that “INDOT does not fit any common-sense definition of a ‘railroad,’ so the communities along the HSL are rightly puzzled by the FRA’s decision.”

INDOT was close to a deal in which Amtrak would operate the trains and Iowa Pacific would supply the cars. But INDOT officials said if the state has to act as the railroad, it would have to carry expensive liability insurance and hire new staff.

“INDOT is not in a position to assume either the additional liability or the regulatory burdens that a designation of ‘railroad carrier’ would impose,” Coats wrote.

In 2008, Congress voted to end funding for Amtrak routes of less than 750 miles. That left states to fund intercity rail on their own.

The FRA has said that states that oversee rail passenger service are required to act as rail carriers to ensure that safety standards are followed.

Another public official who has also assailed the FRA position is State Rep. Randy Truitt of West Lafayette, who represents several portions of Tippecanoe County.

“The Hoosier State Line provides a vital service for Hoosiers in the Greater Lafayette area and across Indiana. I was disheartened to learn about the new rules imposed by the Federal Railway Administration that could potentially end this service in April, which would be devastating to our local economy,” Truitt said in a statement.

Truitt has been an active supporter of the Hoosier State and has sponsored House Bill 1217, which would appropriate $3 million annually to fund the train.

Truitt hopes that INDOT, by working with the Federal Railway Administration, will eventually be able to find a solution that allows the Hoosier State to continue running.

“The preservation of Indiana’s transportation infrastructure is vital to economic growth, and I will continue to work with state and local leaders as well as INDOT to find ways to keep the Hoosier State Line functioning,” Truitt said.

The Hoosier State makes intermediate stops in Indiana in Crawfordsville, Lafayette, Rensselaer and Dyer. The route is served by the tri-weekly Chicago-New York Cardinal on days that the Hoosier State does not operate.

INDOT Open to Continuing the Hoosier State

March 12, 2015

The Hoosier State may not be doomed after all. An Indiana Department of Transportation spokesman told Trains magazine that the state would consider continuing its support of the Chicago-Indianapolis train provided that Indiana gets relief from a Federal Railroad Administration decree that in supporting the train the state is a new railroad.

“The state would consider another short-term extension of the existing service if the FRA changed its position,” INDOT spokesman Will Winfield told the magazine. “The state and local communities are working together to get the maximum value for the taxpayer dollars being invested.” INDOT had been negotiating with Amtrak to continue operating the train and with Iowa Pacific Holdings to provide equipment and marketing support.

Then last week INDOT said that Hoosier State would makes its last trips on April 1, citing what INDOT termed the imposition of “burdensome” FRA regulations.

INDOT Commissioner Karl Browning has written to Federal DOT Secretary Anthony Foxx to protest the FRA regulations.

In his letter, Browing said the insistence by the FRA that INDOT serve as the principal entity of record for the purposes of ensuring compliance with federal railroad safety requirements had prompted Indiana’s termination notice for the quad-weekly Hoosier State.

“INDOT cannot agree to become a railroad or a railroad carrier as that would require a significantly higher commitment of resources, the assumption of additional liability, and uncertainty over employment practices,” Browning wrote.

Trains noted that Foxx was mayor of Charlotte, N.C., when the FRA tried to impose similar regulations on the North Carolina Department of Transportation, which funds Amtrak service between Charlotte and Raleigh, N.C. After North Carolina threatened to sue, the FRA backed off.

“We are experiencing the same regulatory impediments that the North Carolina Department of Transportation faced in 2008 in its discussions with the FRA,” Browning wrote to Foxx. “As you may recall, the FRA insisted that NCDOT serve as the railroad carrier. That matter was ultimately resolved when NCDOT contested that FRA determination.”

Some observers have described the FRA’s latest ploy to make Indiana a “railroad” because it funds Amtrak service as the opening act in decreeing that all states that fund rail passenger service are “railroads.”

In response to INDOT’s Hoosier State termination notice, Amtrak President Joseph Boardman issued a statement saying that continued operation of the Hoosier State can be done on a month by month basis.

Wingfield told Trains that Amtrak, FRA, and U.S. Food and Drug Administration officials made an initial inspection of Iowa Pacific equipment on Jan. 27 in Chicago with additional inspections scheduled this month.

Indiana’s fight with the FRA has also begun to attract support from officials with other agencies that fund rail passenger service. Among them is Patricia Quinn, chair of the States for Passenger Rail Coalition Inc., and Executive Director of the Northern New England Passenger Rail Authority,  sponsors Amtrak’s Downeaster between Boston and Maine

“It is a sad day when the federal agency which administers federal funding for Amtrak, and who has played such a critical role in providing grants to states to develop and improve intercity passenger rail services, also is determined to require states and intercity service sponsors who contract with Amtrak to become railroads,” Quinn said in a statement. “We trust that this conflict between federal and state governments can be worked out.”

 

INDOT May Sue FRA Over ‘New Railroad’ Ruling

March 7, 2015

Despite announcing that Amtrak’s Hoosier State would make its final trips on April 1, the Indiana Department of Transportation is saying that it hasn’t given up on the train.

INDOT may take the Federal Railroad Administration to court to prevent it from enforcing demands that the state act as a “new start” railroad because it funds the quad-weekly Chicago-Indianapolis train.

INDOT has been negotiating with Amtrak and Iowa Pacific Holdings to operate the service. Those entities plus CSX, over whose tracks the Hoosier State operates for much of its route, are railroads certified by the FRA and perform the functions that the FRA is seeking to force INDOT to perform.

“We’re not going to close off any options (for continuing the service), INDOT Commissioner Karl Browning told Trains magazine. But “the notion of the state having to become a railroad (to operate the Hoosier State) is insane.” The state’s correspondence is available online at www.in.gov/indot.

In a statement, the FRA said that is merely seeking to ensure the safety of passengers.

“As states assume a more active role in the management of these services, including in some instances contracting with multiple service providers, they must more closely ensure their services are safe for the passengers, train crews, and communities in which they serve,” the FRA said in the statement. “States ultimately have oversight responsibility for their contractors and service providers. We are fully supportive of states finding the best, most cost-effective way to safely deliver their intercity passenger rail services and will continue to work with INDOT to keep the Hoosier[State] service running safely.”

The FRA statement noted that state-supported trains carry nearly half of Amtrak’s 31 million passengers.

Ed Ellis, president of Iowa Pacific Holdings, told Trains that if the Chicago-Indianapolis service does continue it will use former Santa Fe dome car Summit View, providing sit-down meals in Indiana’s version of business class, along with two lightweight coaches.

The locomotives tentatively chosen for the service are three GP40FH-2s, which formerly ran on Amtrak’s Northeast Corridor for New Jersey Transit.

INDOT said that the FRA has “partially inspected” the equipment and another inspection is scheduled.

“Our goal is to handle more people, selling the fact that you can increase ridership with better service. Because business class passengers will pay more for the service, we can increase the Hoosier State’s financial performance,” Ellis said. “We hope the FRA issue can be resolved to INDOT’s satisfaction.”

In a related development, the Indiana Passenger Rail Alliance reported that legislation in the Indiana legislature designed to ensure funding for the Hoosier State has been attracting support.

“All those interested in seeing a modern passenger rail system in our state are smiling a bit more, after learning that the Indiana House of Representatives has included an annual appropriation, which can be used for the Hoosier State, in House Bill 1001, the budget bill,” the Alliance wrote in its newsletter.

House Bill 1001 will now be considered by the Senate Appropriations Committee.

“If this committee holds to form, it will invite budget presentations from various state agencies, including the Indiana Department of Transportation, before it adopts its own version of the budget,” said Tim Maloney, a board member of the Alliance.

Hoosier State to Make Last Trips on April 1

March 6, 2015

Faced with a decree from the Federal Railroad Administration that supporting an Amtrak train makes the state a railroad, the Indiana Department of Transportation has decided to get out of the passenger train business.

The department said Friday that it will end its support of the quad-weekly Chicago-Indianapolis Hoosier State and the train will be discontinued. The last day of operation will be Wednesday, April 1.

Discontinuance of the Hoosier State will leave only the tri-weekly Chicago-New York Cardinal left on the route.

INDOT said in a news release that the FRA is using Indiana as a test of its policy that an entity involved with a rail operation is a railroad despite the fact that it owns no tracks or passenger equipment.

“Passenger rail providers and the host railroads are already required to comply with FRA rules,” INDOT Commissioner Karl Browning says. “Requiring a redundant layer of bureaucracy would not create improvements in passenger rail service or safety, it would only increase taxpayer costs.”

INDOT had been working with Amtrak and at least two private service providers during the past year to save the Hoosier State service.

The news release said the agency had been making progress in negotiating long-term agreements with Amtrak and Iowa Pacific Holdings.

Amtrak would have served as the primary operator of the train and worked with the host railroads as well as provided train and engine crews, and managed reservation and ticketing.

Iowa Pacific would have provided the train equipment, train maintenance, on-board services and marketing.

INDOT said it was modeling its vision for the Hoosier State after Amtrak’s Piedmont service, which operates between Charlotte and Raleigh, N.C.

The North Carolina Department of Transportation owns the track over which the Piedmont operates and contracted with Amtrak and private contractors.

NCDOT sued the FRA in 2008 when it attempted to place the same impediments on the Piedmont service.

INDOT said it was unsuccessful in convincing the FRA to formally reconsider its decision. Copies of INDOT’s correspondence with FRA and letter of intent with Iowa Pacific are available at http://www.in.gov/indot/3200.htm.

Until fall 2013, the Hoosier State had been part of Amtrak’s basic route network. However, Congress voted in 2008 to end federal funding for certain Amtrak routes of less than 750 miles.

Local governments in most communities served by the Hoosier State in tandem with INDOT agreed to fund the Hoosier State for a year.

That agreement was later extended until April to give the parties time to negotiate a longer-term contract.

Six years later, the FRA is developing rules governing states that now support the cost of passenger rail services.

Under new rules that the FRA sought to test with Indiana, all states that support passenger rail services would be considered railroad carriers.

Calling this a “burdensome interpretation,” INDOT said it will exposes states to significant increases in cost, paperwork and liability, including:

• Liability for the actions of passenger rail providers up to $200 million for each occurrence of injury, death or property damage,

• Hiring new staff to monitor plans and programs in compliance with federal rules, and

• Interpretation that state employees are rail employees, subject to retirement and employer liability rules and limits.

In Indiana, the Hoosier State as well as the Cardinal serve Indianapolis, Crawfordsville, Lafayette, Rensselaer and Dyer. The Cardinal also serves Connorsville, Ind.