Hoosier State/Iowa Pacific Transition Thread

[jis]

The FRA issue is apparently quite serious, and it is not limited to affecting INDOT. Sources independent of INDOT now say that FRA intends to apply the same rules that it is trying on INDOT to all other state rail operators. The claim made by some is that FRA is circumventing normal rule making processes and using an ad hoc process to conjure up new rules on the fly, which is not a good omen. FRA tried to impose similar egregious rules on NCDOT several years back. NCDOT sued and won. Now FRA is giving it another try, both times without following proper procedures. So this might actually go to court with several states eventually suing FRA, if what I am hearing is accurate. We have not heard from other states yet apparently because FRA has not told them that they have to abide by these new rules yet. There is something quite fishy going on possibly.

 

[CombRidge]

A classic case of where ideology trumps common sense: INDOT was so convinced that privatization was the solution (forgetting that Amtrak exists because of the failure of privitization) that they dug themselves into a deep hole where the only losers are the travelling public. Also one wonders about conflict of interest because INDOT already subsizes bus service along the same route.

 

[MattW]

The FRA issue is apparently quite serious, and it is not limited to affecting INDOT. Sources independent of INDOT now say that FRA intends to apply the same rules that it is trying on INDOT to all other state rail operators. The claim made by some is that FRA is circumventing normal rule making processes and using an ad hoc process to conjure up new rules on the fly, which is not a good omen. FRA tried to impose similar egregious rules on NCDOT several years back. NCDOT sued and won. Now FRA is giving it another try, both times without following proper procedures. So this might actually go to court with several states eventually suing FRA, if what I am hearing is accurate. We have not heard from other states yet apparently because FRA has not told them that they have to abide by these new rules yet. There is something quite fishy going on possibly.

Jis, are you able to/do you have more detail on what exactly it is the FRA is forcing on INDOT in what seem to be a "pilot" for other states.

 

[afigg]

The plot thickens. Trains Magazine has a news wire which is behind a paywall, but those with Trains mag subscriptions may want to read it: Indiana may challenge FRA decision; Iowa Pacific reveals planned ‘Hoosier State’ equipment. I'm posting what I hope is a fair use excerpt with most of it quoting a statement from the FRA that I can't find on the FRA website. Probably a statement that was sent directly to the press that will be on the FRA website later.

“We’re not going to close off any options (for continuing the service), Commissioner Karl Browning says, 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.

“Ensuring the safety of all of our Nation’s intercity passenger rail services is the top priority for the FRA. State-supported intercity passenger rail services are a key element of our rail network, carrying nearly half of Amtrak’s 31 million passengers. The states that sponsor these services have played a large part in their success,” the FRA says in a statement. “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. 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 service running safely.”

Busy Friday afternoon for return fire press statements.

 

[jis]

Jis, are you able to/do you have more detail on what exactly it is the FRA is forcing on INDOT in what seem to be a "pilot" for other states.

On this page:
http://www.trainorders.com/discussion/read.php?4,3681883,page=2

Read the messages from "eee" - that is Ed Ellis of Iowa Pacific, and you will see the sort of things that FRA is demanding, just because INDOT wants to contract out the equipment and operations. As it appears they demanded the same of NCDOT several years back. NCDOT sued and won. So thanks to our friendly FRA we will go through the same song and dance again probably, this time with INDOT, and then when FRA in its infinite wisdom tries to do this with everyone else then every other state involved too. Who knows. This is a bit bizarre. Of course the fact that FRA currently does not have a real Administrator, just an Acting one, is probably adding to the non-decision making at FRA too, not that they are too good even with a full scale Administrator mind you.

Unfortunately, you have to be a member of trainroders to see the specific messages since they are on page 2, and since it is a pay site, I am reluctant to copy messages whoesale since that would certainly be contrary to copyrights.

 

[looshi]

This ruling by the FRA really opens up an amazing can of worms. It goes beyond the Hoosier State to the Downeaster and even beyond the public sector. If I'm reading these interpretations correct, my hometown which contracts with a tourist railroad for passenger and freight service on a 4-mile branchline is now considered to be a railroad.

 

[XHRTSP]

If this train goes away as planned, where does its equipment go?

 

[afigg]

If this train goes away as planned, where does its equipment go?

There are only a few Horizon coach cars that would get freed up by the termination of the HS. Which would presumably stay in the Midwest pool until the new corridor bi-level cars arrive.

 

[Anderson]

The FRA issue is apparently quite serious, and it is not limited to affecting INDOT. Sources independent of INDOT now say that FRA intends to apply the same rules that it is trying on INDOT to all other state rail operators. The claim made by some is that FRA is circumventing normal rule making processes and using an ad hoc process to conjure up new rules on the fly, which is not a good omen. FRA tried to impose similar egregious rules on NCDOT several years back. NCDOT sued and won. Now FRA is giving it another try, both times without following proper procedures. So this might actually go to court with several states eventually suing FRA, if what I am hearing is accurate. We have not heard from other states yet apparently because FRA has not told them that they have to abide by these new rules yet. There is something quite fishy going on possibly.

Yeah, I'm putting the blame for this squarely on the FRA. I can't see the post over on TO, but this is an FRA problem (and a rather horrid one at that given the potential impacts). I think there's also something to be said for the concept that the states, given their size, ought not to have to get the insurance policies.

If/when this policy is challenged, I do hope that whomever challenges it manages to get a permanent injunction on the FRA doing this again.

 

[Guest]

So the other shoe drops. Pretty clear that IN DOT was looking for an excuse to not fund the Hoosier State all along. IN DOT press release with more info on their justifications (well, whining excuses). Excerpt:

Under new rules that the FRA is testing with Indiana, all states that support passenger rail services would be considered railroad carriers. This burdensome interpretation 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.

Over 20 other states are doing this, it should be not that difficult for IN to do so as well. This INDOT move clears the way - eventually - for a daily Cardinal. I think Amtrak management has not discussed or made any official plans for a daily Cardinal since the PIP report because they wanted to give IN every opportunity to fund the HS with both operating subsidies and capital investments. Any public discussion of a daily Cardinal in IN would have given IN DOT a reason to not support the HS at all, right from the October 1, 2013 changeover.

The roadblocks for a daily Cardinal are not just equipment, but the condition of and lack of long sidings on the Buckingham Branch in VA. Indiana could observe that Virginia is providing tens of millions of state funds to the BBRR as a Class 3 short line railroad to get the tracks and signal systems to a state of good repair as an example of how a state government sees value in having a viable and maintained freight rail system. VA is funding $4.9 million towards building a long siding on the BBRR so the 8000' long empty coal trains have a place to pull over on the single track line. Don't know the timeframe for construction of the siding but the second installment is in the FY16 state budget. I think Virginia would be happy to see a daily Cardinal by 2017 - would go nicely with a train to Roanoke and a second Lynchburger.

Uh, you have to remember how long it took most of those states to even reach agreements on those Section 209 metrics with Amtrak, which the October 2013 Trains Magazine article pretty much laid out--not to mention huge price increases for those state agencies since none of them opted to select other operators at the time. CA paid an extra $19 million to keep its three routes under Amtrak control and the much heralded profit VA made on the Lynchburg service evaporated and became a substantial subsidy after October 1, 2013.

While Indiana has seriously wet the bed in many areas, I don't blame some of the officials who really want better train service and aren't getting it with the current operator. After all, the Hoosier is still the only one of the 19 state-sponsored services that is less than daily--a major blow to anyone's ego.

It could be that the problem is not the state but the federal government. As the press release states, the FRA is testing new rules that require the states to be considered railroads. If so, look out. An earlier statement from Indiana quoted by the Lafayette Journal and Courier : "Gov. Mike Pence’s spending recommendation contains language similar to Truitt’s bill, but goes one step further. In addition to funding the service, Pence’s plan authorizes INDOT to purchase rail equipment."

Here is some more on the Indiana story:

http://www.indianahighspeedrail.org/docs/2015/201503aai.pdf

Incidentally insurance underwriting for passenger service has been a problem in the past too. Remember the delay in getting the Texas Eagle to move over to the non-UP route between Dallas and Fort Worth?

We really need to get more detail on what FRA is asking and how it differs from all other states to get a better understanding of this. Since Ed Ellis says there is a problem, there likely is a problem, since he knows his stuff. But we have not gotten enough detail yet to know what it really is all about.

This is more than likely a salvo being fired against TX, OK, WA & OR--especially the two Northwestern states since they are more likely than the two Southern states to dump Amtrak in favor of another operator for their Cascades service. This potential scare tactic with IN could serve to discourage states from exploring other options.

Maybe, Congress needs to reorganize the FRA before it damages intercity rail. The challengers to Amtrak are there, it's a matter of whether any of them will get a fair shake from Washington.

Boardman needs to figure out which routes would be better off in the hands of other companies and Congress needs to figure out how to make competitive bidding for intercity routes actually work so we don't have this brouhaha erupting in other states if they also get dissatisfied with Amtrak.

 

[Guest]

PRIIA '08 was basically an imploding time bomb whose effects are only now being felt. Talk about unintended (or intended by some very clever nefarious individual) consequences,

 

[PRR 60]

This FRA move smells like a cooperative effort between Amtrak and FRA to prevent states from exercising their right to contract rail service as set forth by PRIIA. It sure seems like Joe Boardman's "we can run the train" press release was in the can and ready to go. Let's see: Joe Boardman is the CEO of Amtrak. Joe's job immediately prior to joining Amtrak to become CEO: Administrator of the FRA.

For less subsidy than Amtrak was charging, Iowa Pacific was going to provide much better equipment, including a full-length dome for Business Class including a meal and beverages. Now, Amtrak's solution is, effectively, "pay us more for less." In this case, much less. Those who support the growth of passenger rail should be very troubled by this action. If I'm North Caroline, Maine, California, and even the midwest states soon to own their own cars and power, I'd be very, very concerned. FRA is effectively saying to use Amtrak or else we'll bury you under so many regulations that you will never again see the light of day.

I hope Indiana stands firm. Were I Indiana DOT, I would go straight to federal court and argue the North Carolina precedent, and that the FRA (with or without Amtrak's collusion) is overriding the rights of the states to operate rail service as set forth by PRIIA. These multitude of requirements are already being met by the railroads contracted for the service (in this case, including Amtrak) and requiring the state to become a "railroad" and per FRA is duplicitous and is a not very well disguised way to prevent the state from exercising its right to contract for rail service as permitted by law.

 

[MikefromCrete]

I must add my views on the FRA requirement, which is ludicrous. There's no need for a state to become a "railroad" when services are contracted with an already accredited "railroad" such as Iowa Pacific. It looks like Amtrak and FRA are working together to stop any other operator from stepping forward, which I'm sure was not the intended effects of PRIIA.

 

[jis]

I agree with PRR and Mike's analysis and position in broad terms. Indeed I already mentioned on trainorders in response to Ed's message the absurdity of what FRA is asked BF for. It sure does smell like the FRA and Amtrak are colluding at least implicitly. Amtrak is playing both sides to some extent since they did join INDOT in protesting FRA's position apparently, according to some in the know. There might be some minor disagreement in the details in the weeds.

What worries me is that this will blow up politically during the Surface Transportation appropriation process. The consequences potentially could be painful. For that reason I think it would be good to find a way to get FRA to behave more reasonably. Otherwise Congress might micro manage them some, and with good justification unfortunately, as it seems at present!

 

[tootootrain]

There has been a strong resistance to passenger rail development for decades in Indiana. The magnificent train station in Indianapolis has turned into a shopping mall while politicians are trying to bury the reminesence of rail travel as deep as they can. This is consistent with the culture in Indiana - one that is either afraid of or right out hate progress or progressive thinking.

 

[dlagrua]

I am sorry to hear of the Hoosier State's discontinuance but all is not lost. The Cardinal still runs from Indianapolis to Chicago three days per week. A daily Cardinal is necessary but when will it happen? Will it ever happen? Don't believe it to be in Amtrak's plans.

I must agree that Indiana is an anti-rail state. At one time the Monon Railroad (Indiana's own) served the state passenger service well at one time the Monon (Later L &N) served 6 colleges along it route:

Perdue University in West Layayette

Wabash College In Crawfordsvile

DePauw University in Greencastle

Indiana University in Bloomington

Butler University in Indianapolis

St Josephs College in Rensselaer

The college traffic was so important that the railroad used college colors to paint its locomotives. You would think that after the Monon/L&N went out of business that Indiana would consider the student passenger traffic. They just walked away and late reluctantly funded the Hoosier state.

At this time there may be a little hope for a private company top step in and re-establish the service but who knows. According to the news report meeting the mandatory requirements imposed by the federal government for keeping the service going (by contracting with Iowa Pacific) would be cost prohibitive.

.

 

[Riverviewer]

Purdue University, West Lafayette.

 

[jis]

Incidentally the proposed contracting involves Amtrak providing the T&E crew, Iowa Pacific providing equipment, OBS crew and marketing. Just so people don't misunderstand what is being proposed. Given this situation FRA is so far insisting that it is not good enough for trained personnel at Amtrak and IP to carry out the railroad operations related regulatory functions, but that INDOT must set up an entire railroad department.

 

[Bob Dylan]

Thanks for the clarification jis, hopefully the Indiana AG will expedite a law suit and win an injunction against the FRA before the Hoosier vanishes!

 

[AmtrakBlue]

I am sorry to hear of the Hoosier State's discontinuance but all is not lost. The Cardinal still runs from Indianapolis to Chicago three days per week.

Somehow I don't think that helps people who use the train for their daily commute.

 

[CHamilton]

States for Passenger Rail Coalition Comments on Indiana’s Decision to Stop Sponsoring the Hoosier State

 

[tootootrain]

About a decade ago, the town of Lafayette and West Lafayette made a lot of efforts to revive the rail culture by spending a lot of money to relocate the old train station. It was a major event for the locals with formal ceremony and all. But a few months later, Amtrak reduced the station down to an unmanned station. Only an automated ticket kiosh was in operation. The trains traveling through this university town were sluggish and furstrating to ride on. It looks like somebody were trying to KILL the entire train service system in the US - or at least in this part of the country! Quite pathetic!

 

[neroden]

Perhaps there is a split between the staff at INDOT and what the political appointees & the Governor's office want.

There's a lot of evidence of this dating back several years.

The FRA issue is apparently quite serious, and it is not limited to affecting INDOT. Sources independent of INDOT now say that FRA intends to apply the same rules that it is trying on INDOT to all other state rail operators. The claim made by some is that FRA is circumventing normal rule making processes and using an ad hoc process to conjure up new rules on the fly, which is not a good omen. FRA tried to impose similar egregious rules on NCDOT several years back. NCDOT sued and won. Now FRA is giving it another try, both times without following proper procedures. So this might actually go to court with several states eventually suing FRA, if what I am hearing is accurate.

I don't think that would even make it to the appeals court level, since there's precedent; the FRA would get slapped down very fast. I mostly know STB caselaw, but I believe there's a huge line of cases which make it very clear that the state can do pretty much everything without being regulated as a railroad, as long as there is a "responsible railroad" somewhere in the contracting sequence, which there is.
This is "State of Maine" precedent. It's not going to be overturned by a rogue Acting Administrator. Indiana could probably get a restraining order against the FRA in a week.

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

The FRA has zero authority to do this. The rulings of the Surface Transportation Board are very, very clear on this matter.
Indiana could probably get an emergency injunction overnight, either from a court or from the STB. Actually, Indiana could probably get the acting FRA administrator personally fined. If I were the Indiana AG, I'd ask for a writ of mandamus, ordering the FRA to follow the established caselaw and stop issuing illegal orders. (I see that the federal courts have renamed the writ of mandamus, but there's still some equivalent order.)

It has been noted on Trainorders that this is a violation of the Administrative Procedure Act,

The worrisome aspect is that Indiana may use this as an excuse to discontinue the line. If the FRA tries to pull this nonsense on North Carolina, Virginia, Maine, Massachusetts, Connecticut, Vermont, New York, Michigan, Illinois, Missouri, (deep breath), California, Oregon, or Washington, I don't think they're going to get very far.

But Indiana may use this as an excuse to not try.

----

Quoting Andrew Selden from the coments to the "Trains" article:

The FRA's action is also illegal, as it violates existing federal law. FRA has no authority to modify or extend the jurisdiction or scope of the Railway Labor Act, FELA or the railroad retirement laws to apply to a state government. Only the RRB and NMB (or the Federal courts) have jurisdiction to determine the scope of those laws. Nothing in existing federal law authorizes FRA to decree that a sovereign state is a "railroad" merely because it sponsors an intercity train service operated by a qualified non-Amtrak carrier over a Class 1 railroad. (As I recall, NRPC itself wasn't even a formal "railroad" when it was first chartered and assumed legal and financial ownership of the surviving trains as they continued to be operated by the various host railroads.)

In addition, the FRA action is illegal because it violates the federal Administrative Procedures Act, which mandates public notice, drafts of a proposed regulatory action, and public comment before an agency can impose new regulations. FRA has done none of that.

As far as I can tell from what I know of railroad law, he's completely correct. The STB has some authority as well. The FRA has none, N-O-N-E, none. Basically, the only authority possessed by the FRA is the ability to determine whether railway safety equipment is adequate. (And they've done a crap job at that, by the way.)

 

[neroden]

What worries me is that this will blow up politically during the Surface Transportation appropriation process. The consequences potentially could be painful. For that reason I think it would be good to find a way to get FRA to behave more reasonably. Otherwise Congress might micro manage them some, and with good justification unfortunately, as it seems at present!

Congress could simply abolish the FRA and transfer its residual regulatory responsibilities to the Surface Transportation Board. This should, in fact, be actively suggested. The FRA has been a hindrance to rail service nationwide for a very long time.

 

[Riverviewer]

Rail service to/from Lafayette was lousy way back when, when I was at Purdue. The L&N did little to no maintenance on the ex-Monon tracks north of town, which led to slow orders, delays, derailments, and eventually no more train service for some time.