From Bloomberg. Please visit http://www.bloomberg.com/news/2013-11-14/amtrak-serving-free-wine-to-steak-loses-millions-on-food.html to comment on this story.

Amtrak, the U.S. taxpayer-supported passenger railroad, is losing tens of millions of dollars a year on food and beverage service even after years of cost cutting, its inspector general said.

Almost all of last year’s $72 million in food-service losses were from providing meals on long-distance trains, Inspector General Ted Alves said in testimony at a House Oversight and Government Reform Committee hearing today. Contracting out some functions has the greatest potential to stem losses, he said.

“Amtrak’s operating losses on food and beverage services have been a long-standing issue, and they contribute directly to the need for federal subsidies to support operations,” Alves said.

The hearing highlights the interest of the Government Operations Subcommittee’s chairman, Florida Republican John Mica, in exposing what he says are wasteful practices at Amtrak.

Alves in his testimony outlined a number of ways for the railroad to reduce waste and cut costs, from contracting out operations to reducing theft and food spoilage.

Amtrak’s Auto Train from Virginia to Florida offers passengers complimentary wine and cheese, and three long-distance routes provide complimentary wine and champagne to sleeper-car passengers, Alves said, costing Amtrak $428,000 in 2012.

Amtrak employees traveling on free passes consumed about $260,000 in complimentary meals on the Auto Train, Alves said.

Break Even

“Somehow some of this has to be revised,” Mica said.

The railroad is continuing to make improvements and expects to break even on food service within the next five years, Thomas Hall, the railroad’s customer service chief, said in his prepared testimony.

Changes have included cashless sales, staffing reductions and supply-chain improvements. Losses have been reduced by 30 percent since 2006, he said. The railroad has found that it would lose more revenue from ticket sales than it would save if it reduced food service on its high-speed Acela trains, he said.

The report’s conclusions are of “dubious value,” Representative Gerald Connolly, a Virginia Democrat, said at the hearing.

Most of the losses are on long-distance trains that Congress requires Amtrak to operate, Connolly said. The café cars on Amtrak’s Northeast corridor between Washington and Boston break even or make money, he said.

Rice Pilaf

The latest audit shows Amtrak’s reported improvements in food and beverage finances are the result of transferring a portion of increased ticket revenue to food service accounts, Mica said in a statement.

“The Amtrak Inspector General has confirmed that Amtrak cooked the books to cover up food service losses that now approach $1 billion,” Mica said.

Amtrak’s long-distance passengers have full menus on their dining cars for trips that can last several days. On the 43-hour Chicago-Los Angeles Southwest Chief, travelers can enjoy a $23.25 Mahi-Mahi dinner with a vegetable medley and three-grain rice pilaf.

Trains run by states in Maine and Alaska using private contractors have significantly lower labor costs than Amtrak does with its dining service employees, Alves said. The states pay $7.75 to $13 an hour with no benefits, compared with $41.19 including benefits for an on-board Amtrak employee.

Paul Worley, director of North Carolina’s rail division, said the state switched from money-losing café cars to snacks and vending machines to reduce unsustainable losses on its intrastate Piedmont service. Even so, vending machines wouldn’t be suitable for long-distance trains, he said.

An Amtrak food service worker, Dwayne Bateman, testified it was unfair to compare his salary to the wages paid to those serving food on state-run trains, some of whom are part-time workers.

Source: http://www.bloomberg.com/news/2013-11-14/amtrak-serving-free-wine-to-steak-loses-millions-on-food.html

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From the Detroit Free Press:

If the train has seemed crowded lately, you are right.

Amtrak’s U.S. ridership soared to a record 31.6 million passengers between Oct. 1, 2012, and Sept. 30, 2013. Its Michigan trains also did well, with 804,697 passengers on the Wolverine, Blue Water and Pere Marquette lines.

The popular Wolverine line between Pontiac and Chicago (stopping in Detroit, Dearborn, Ann Arbor and other southern Michigan cities) had 509,100 riders, up 5.2%. Its ticket revenue rose 9.2%.

The Blue Water Line from Port Huron to Chicago (stopping in East Lansing and other points) rose to 191,106 riders, up 1%. The smaller Pere Marquette line from Grand Rapids to Chicago saw ridership fall to 104,491, down 4.4%.

Ridership on Amtrak has soared about 41% in the past decade.

Source: http://www.freep.com/apps/pbcs.dll/article?AID=/201311100300/FEATURES07/311100008

From AnnArbor.com:

Ann Arbor officials are moving full steam ahead with a study that will look closely at options for building a new Amtrak station in the city.

The City Council voted 11-0 early Tuesday morning (Oct. 21, 2013) to approve an $824,875 contract with URS Corp. to undertake the so-called Ann Arbor Station Environmental Review, which includes public engagement, site selection and conceptual design.

It’s expected the consultant will engage the community while evaluating a number of possible sites for a new train station, including the existing Amtrak site on Depot Street and a site in front of the University of Michigan Hospital on Fuller Road.

A little less than $165,000 is coming from city funds that were already budgeted months ago, with the rest covered by a federal rail grant the city accepted last year. (Those budgeted funds are expected to cover the work the consultant is being asked to perform between November 2013 and October 2014, according to an earlier story published on AnnArbor.com.)

While the vote was unanimous, some debate led up to the decision. Some council members who have questioned the costs of a new train station for years asked several questions of Eli Cooper, the city’s transportation program manager.

“There are so many people in the community who have expressed zero confidence, to be quite honest, that this study will be open to proposals other than Fuller Road, because this process has been guided toward that site from the beginning,” said Council Member Jane Lumm, an Independent who represents the 2nd Ward.

After hearing from Cooper, Lumm expressed hopes for an open and honest evaluation of what’s possible at the existing Amtrak station site.

Council Member Stephen Kunselman, D-3rd Ward, said he’s still opposed to a train station on Fuller Road, but he could support the contract.

“A train station environmental review that looks at a lot of different sites, I think, is the direction we should have been going a long time ago,” he said.

Cooper said the study will explore not only the potential for improvements at the existing station on Depot Street, but also a no-build alternative.

“I’m delighted that this is moving forward,” said Council Member Christopher Taylor, D-3rd Ward. “The improvement of Ann Arbor’s train station infrastructure is deeply important to the expansion of rail service here in Ann Arbor.”

Taylor said high-speed rail is coming to Ann Arbor and Amtrak service is going to improve and expand. He expressed hopes for Ann Arbor-to-Detroit commuter rail service.

“These things will not happen tomorrow, but they will happen, and it is incumbent upon us to plan for the future, and this is planning for the future,” he said.

Mayor John Hieftje said he still believes the fact that tens of thousands of people visit the U-M hospital every day makes Fuller Road a strong site, but he said he’s happy to see the city move forward with a new station no matter where it’s located.

“We’re going to need a new train station,” he said, predicting “an explosion in ridership” in the coming years.

City officials noted the effort they’re now undertaking to investigate potential train station sites is an entirely different process and separate from the past effort the city went through in partnership with U-M to come up with a plan for a large parking garage and intermodal transit station on Fuller Road.

“This is dramatically different in that we are not starting with a preferred location,” Cooper said.

Council Member Mike Anglin, D-5th Ward, heavily criticized the city for the past effort to cooperate with U-M on plans that included a large parking garage, which the university has since decided to build on Wall Street.

“A lot of money has been spent already on a lot of foolishness, and that’s real disappointing to me,” Anglin said. “And I think it’s discrediting, too, to the idea of public transportation. I mean, look at how foolish we look.”

Commenting on the previous agreement with U-M, Anglin said it was “pretty sad and we fell right into that.”

“This is not public transportation. This is public fraud,” he said.

Hieftje took issue with Anglin over that statement. He said the university, as part of the previous agreement, was willing to cover 100 percent of the local match in the event of federal funding for a new train station.

“If that’s fraud, then I guess he’s right,” Hieftje said.

Responding to various comments made by other council members Monday night, Hieftje said it’s important “not to create myths” about what happened with the previous proposal and about the money that’s been spent so far.

Despite his criticisms, Anglin expressed hopes for the upcoming process and said he’s glad to see a focus on public engagement.

“This sounds different than what we’ve been hearing to date, which I’m really glad about,” he told Cooper. “You seem to be coming to us with an open mind as we’re exploring sites.”

Anglin added: “We should be filming these meetings. There should be no meetings behind closed doors. None.”

Source: http://www.mlive.com/news/ann-arbor/index.ssf/2013/10/ann_arbor_hires_consultant_to.html