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U M TA-M A-06-0049-83-3
DOT-TSC-U MTA-83-28
HEI 8.5. A37no
.
DOT-T SC-II MTA-83-28
J.S. DepartmentDf Transportation
Urban MassTransportationAdministration
Analysis of Commuter Rail
Costs and Cost Allocation
Methods
Final Report
July 1983
department oftransportation
OCT 1983
library
UMTA Technical Assistance Program
Office of Service and Management Demonstration
UMTA/TSC Project Evaluation Series
NOTICE
This document is disseminated under the sponsorshipof the Department of Transportation in the interestof information exchange. The United States Govern-ment assumes no liability for its contents or usethereof.
NOTICE
The United States Government does not endorse prod-ucts or manufacturers . Trade or manufacturers
'
names appear herein solely because they are con-sidered essential to the object of this report.
HThTechnical Report Documentation Page
I. Keport No.
UMTA-MA-06-0049-83-3
2. Government Accession No. 3. Recipient's Cotolog No.
4. Title and Subti tie
ANALYSIS OF COMMUTER RAIL COSTS AND COSTALLOCATION METHODS
”department of
5. Report Dote
July 1983
6. Performing Orgonizotion Code
DTS-648. Performing Orgonizotion Report No.
1
DOT-TSC-UMTA-83-28
7. Author's) I 1RANSPORTA i rON
Daniel L. Dornanj
noj9. Performing Organization Nome and Address
Peat, Marwick, Mitchell & Co.* S
10. Work Unit No. (TRAIS)
UM327/R3688
1990 K Street, N.W.Washington, DC 20006
j
LIBRARY 11. Contract or Gront No.
DOT-TSC-1758-1313. Type of Report ond Period Covered
Final Report
Jan. 1980-June 1982
12. Sponsoring Agency Nome ond Address
U.S. Department of TransportationUrban Mass Transportation AdministrationOffice of Technical AssistanceOffice of Service and Management DemonstrationWashington DC 20590
14. Sponsoring Agency Code
URT-30
15. Supplementary Notes U. S. Department of Transportation
*Under contract to:Re?earch and Special Programs AdministrationTransportation Systems CenterCambridge MA 02142
16. Abstract
The report addresses the issues of commuter rail service costs and thecompensation methods used to allocate railroad expenses to the commuterservice function. The report consists of six sections. Section 1 describesthe study purpose, scope, methodology, and assumptions. Section 2 detailsthe cost structure of rail services as reported by all major railroads to
the Interstate Commerce Commission and the primary factors influencingthese cost categories for commuter rail operators. Section 3 describes the
primary methods of allocating the costs of railroad operations between freightand commuter services. Section 4 presents case study analyses of seven selectedcommuter rail systems operating in the United States. Each system is describedbriefly in terms of route structure, service characteristics, labor arrangements,operating statistics, operating revenues and costs, and expense compensationmethods. This information provides a quantitative basis for Section 5, whichcompares the cost effectiveness of these seven commuter rail systems and
assesses the cost allocation methods used. Section 6 presents the report'sfindings and conclusions.
17. Key Word* 18. Distribution Statement
Commuter Rail Costs,Commuter Rail Cost Allocation Needs
DOCUMENT IS AVAILABLE THROUGHSUPERINTENDENT OF DOCUMENTSU.S. GOVERNMENT PRINTING OFFICEWASHINGTON DC 20402
19. Security Clossif. (of this report) 20. Security Clossif. (of this poge) 21. No. of Poges 22. Price
UNCLASSIFIED UNCLASSIFIED 142
Form DOT F 1700.7 (8-72) Reproduction of completed page authorized
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11
PREFACE
This document was prepared by Peat, Marwick, Mitchell &
Co., under Task Directive DOT-TSC-1758-13 , as part of theService and Management Demonstration (SMD) Program sponsored bythe Office of Transportation Management and Administration ofthe Urban Mass Transportation Administration ( UMTA ) . It repre-sents a study of commuter rail costs, factors which influencethese costs, and various cost allocation methods for assigningrailroad operating costs to commuter rail services. The studyincludes seven commuter rail system case studies which focus ontheir operations, costs, and compensation arrangements. Thisreport is based on 1980 cost and operating statistics for eachcommuter rail system which the operating railroads filed withthe Interstate Commerce Commission, and on 1982 system charac-teristics and operating agreements.
The principal author of the report was Daniel Dornan, PeatMarwick project manager. Mark Hallenbeck and ChristopherRandall provided technical assistance in developing and analyz-ing the case study data, and Raymond Ellis provided overallproject guidance and review.
Peat Marwick acknowledges and thanks the following organi-zations and individuals for their cooperation and supportthroughout the study:
. Boston and Maine Railroad : John Higgins, RobertRice, and James Stoetzel.
. Baltimore and Ohio Railroad : Jack Griffen andArthur Eszel
.
. Beaver County Transit Authority : Bruce Ahern.
. California Department of Transportation : CecilSmith
.
. Grand Trunk Western Railroad : Robert Gould.
. interstate Commerce Commission : James Wells andLuther Hall.
. Long Island Rail Road : Donald Eisele and StevenDrayzen
.
. Massachusetts Bay Transportation Authority : PatrickJordon and Charles England.
. Maryland Department of Transportation : JosephNessel and James Emery.
• Metropolitan Transportation Authority (New York) :
Margaret O'Donovan.
. Pittsburgh and Lake Erie Railroad : Henry Nagel andWilliam Ferris.
. Port Authority of Allegheny County : Henry Cusackand William Mattock.
. Pennsylvania Department of Transportation : WilliamUnderwood and John Dockendorf.
. Southeastern Michigan Transportation Authority ;
Julien Wolfe.
. Southern Pacific Railroad : Mary Gingell.
Valuable suggestions and directions were provided by CarlaHeaton, the Transportation Systems Center (TSC) EvaluationManager. Helpful suggestions for the report were also receivedfrom Joseph Goodman, UMTA Project Manager, and Jeffery Mora,also of UMTA.
The author wholeheartedly thanks Joanne Coffin, who editedand managed report production, and the Peat Marwick art, wordprocessing, and production staffs for their assistance.
IV
LIST OF ABBREVIATIONS
AAR Association of American Railroads
B&M Boston and Maine Railroad
B&O Baltimore and Ohio Railroad
BCTA Beaver County Transit Authority
Cal t rans California Department of Transportation
CFR Code of Federal Regulations
GMA General Managers Association
GTW Grand Trunk Western Railroad
ICC Interstate Commerce Commission
LI Long Island Rail Road
MBTA Massachusetts Bay Transportation Authority
MDOT Maryland Department of Transportation
MTA Metropolitan Transportation Authority (New York)
P&LE Pittsburgh and Lake Erie Railroad
PAT Port Authority of Allegheny County
PADOT Pennsylvania Department of Transportation
RDCs Self-propelled diesel passenger cars
RSPO Rail Services Planning Office
RTA Regional Transportation Authority
SEMTA Southeastern Michigan Transportation Authority
SMD Service and Management Demonstrations
UMTA Urban Mass Transportation Administration
USOA Uniform System of Accounts
v
TABLE OF CONTENTS
Section Pag e
1 INTRODUCTION 1
1.1 Purpose of the Report 2
1.2 Scope of the Report 2
1.3 Methodology 4
1.4 Overview of the Report 4
2 COMMUTER RAIL CAPITAL AND OPERATING COSTS 7
2.1 Commuter Rail Cost Categories 7
2.2 Factors Influencing CommuterRail Operating Costs 12
3 COMMUTER RAIL COST ALLOCATION METHODS 21
3.1 Variable Cost Allocation 23
3.2 Avoidable Cost Allocation 23
3.3 Attributable Cost Allocation 24
3.4 Priority of Use Cost Allocation 24
3.5 Other Cost Allocation Approaches 25
4 COMMUTER RAIL SYSTEM CASE STUDIES 29
4.1 Boston Area: Boston and MaineRailroad Commuter System 30
4.2 Long Island Area: Long IslandRail Road Commuter System 36
4.3 Washington, D.C., Area: Baltimoreand Ohio Railroad Commuter System 39
4.4 Pittsburgh Area: Baltimore and OhioRailroad Commuter System 46
VI
CONTENTS (Continued)
Section Page
4.5 Pittsburgh Area: Pittsburgh andLake Erie Railroad Commuter System 51
4.6 Detroit Area: Grand Trunk WesternRailroad Commuter System 56
4.7 San Francisco Area: Southern PacificRailroad Commuter System 62
5 COMPARISON OF COMMUTER RAIL SYSTEMS 69
5.1 Ridership and Operating Characteristics 69
5.2 Unit Operating Costs 72
5.3 Compensation Methods 78
6. FINDINGS AND CONCLUSIONS 83
Appendix
APPENDIX A ANNUAL REPORT FORM R-l:TABLE OF CONTENTS A . 1
APPENDIX B RAILROAD OPERATING EXPENSE ACCOUNTS B .1
APPENDIX C STANDARDS FOR DETERMINING COMMUTER RAILSERVICE CONTINUATION SUBSIDIES C. 1
APPENDIX D REPORT OF NEW TECHNOLOGY D.l
LIST OF ILLUSTRATIONS
Figure Page
1 Functional Breakdown of CommuterRail Operating Costs 11
2 Generic Breakdown of Commuter RailOperating Costs 19
Vll
CONTENTS ( Continued
)
Figure P a 9 e
3 B&M Commuter Rail System, Boston Area 31
4 LI Commuter Rail System, Long Island Area 37
5 B&O Commuter Rail System, Washington, D.C.Area 42
6 B&O Commuter Rail System, Pittsburgh Area 47
7 P&LE Commuter Rail System, Pittsburgh Area 53
8 GTW Commuter Rail System, Detroit Area 57
9 SP Commuter Rail System, San FranciscoArea 63
10A Comparison of Ridership and OperatingCharacteristics by System, 1980 70
10B Comparison of Ridership and OperatingCharacteristics by System, 1980 71
11 Comparison of Average Unit TransportationCosts by System, 1980 73
12 Comparison of Average Unit Maintenance-of-Equipment Costs by System, 1980 74
13 Comparison of Average Unit Maintenance-of-Way Costs by System, 1980 75
14 Comparison of Average Unit General andAdministrative Costs by System, 1980 76
15 Comparison of Average Unit Total OperatingCosts by System, 1980 77
LIST OF TABLES
Table Page
1 Case Study Commuter Rail Systems 3
2 Major Railroad Employee Unions 14
viii
CONTENTS (Continued)
Table Page
3 Comparison of Cost Allocation Methods 28
4 B&M Commuter Rail System Characteristics,1980, Boston Area 33
5 LI Commuter Rail System Characteristics,1980, Long Island Area 40
6 B&O Commuter Rail System Characteristics,1980, Washington, D.C. Area 44
7 B&O Commuter Rail System Characteristics,1980, Pittsburgh Area 50
8 P&LE Commuter Rail System Characteristics,1980, Pittsburgh Area 55
9 GTW Commuter Rail System Characteristics,1980, Detroit Area 60
10 SP Commuter Rail System Characteristics,1980, San Francisco Area 65
11 Cost Allocation Methods by Commuter RailSystem 79
IX
EXECUTIVE SUMMARY
The public transportation industry currently is faced withsignificant fiscal pressures due to the growing disparitybetween operating costs and the public sector's contribution topublic transportation. As a result of these fiscal pressures,state and local transportation agencies are becoming moreinterested in techniques for controlling the operating costs oftransit services.
Commuter rail services are defined as predominantly rush-hour passenger rail services provided within a metropolitan areaconnecting the central city to the suburbs and using standardrailroad right-of-way and equipment owned by either a railroador a local transportation agency. Commuter rail servicesusually require a public contribution of between 50 and 90 per-cent of total operating expenses. This level of public subsidyis causing certain systems to reduce services or to increasefares as public funds become more scarce.
Another motivation for state and local government attentionto the cost of commuter rail services is the growing trend byrailroads to dispose of their commuter rail operations by turn-ing them over to the local municipal transportation authority orsome third-party operator. Examples of this include:
. the Conrail commuter operations in Maryland,Philadelphia, New Jersey, New York, and Connecticut,which were authorized by the Northeast Rail Act of1981 to be turned over either to the local transpor-tation authority, Amtrak, or the newly establishedCommuter Services Corporation by January 1, 1983;
. the former Rock island Railroad's commuter opera-tions into Chicago, which have been taken over bythe Regional Transportation Authority ( RTA ) ; and
. the Milwaukee Railroad's commuter operations intoChicago, which have been taken over by the RTA.
As more regional transportation agencies begin to operateas well as support commuter rail services, they will developgreater interest in the costs and cost allocation methods assoc-iated with the commuter rail industry.
The Service and Management Demonstrations ( SMD ) Program ofthe Urban Mass Transportation Administration ( UMTA ) is respon-sible for developing, introducing, and disseminating techniquesfor efficient and effective urban transportation operations and
X
management. To satisfy this objective, the SMD Program spon-sored this study to:
. analyze the components of commuter rail cost for asample of commuter rail operations and provide a
comparative breakdown of the major operating costcategories for each commuter rail service; and
. evaluate the cost allocation methods employed byeach of the railroads to apportion costs betweenfreight and passenger operations.
This report is designed to provide general guidance totransit agencies concerning commuter rail service costs and costallocation strategies. The study investigates the cost struc-ture of railroad services (including commuter rail services) asreported by all major railroads to the Interstate Commerce Com-mission, and the primary factors influencing these cost cate-gories for commuter rail operators. The study also investigatesthe primary methods of allocating the cost of railroad opera-tions between freight and commuter services. Seven commuterrail systems are analyzed to identify the major characteristicsaffecting commuter rail service costs and the compensationarrangements contained in the various operating agreements. Theseven commuter systems and their contracting agencies includedin the study are listed in Table A:
TABLE A. CASE STUDY COMMUTER RAIL SYSTEMS
Region Operating Railroad Contracting Agency
Boston, MA Boston & Maine Massachusetts Bay Trans-portation Authority
Long Island, NY Long Island Metropolitan Transpor-tation Authority
Washington,D .C./Baltimore, MD
Baltimore & Ohio Maryland Department ofTransportation
Pittsburgh, PA Baltimore & Ohio Port Authority ofAllegheny County
Pittsburgh, PA Pittsburgh & LakeErie
Beaver County TransitAuthority
Detroit, MI Grand Trunk Western Southeastern MichiganTransportation Authority
San Francisco, CA Southern Pacific California Department ofTransportation
xi
These systems represent a broad cross-section of U.S. com-muter rail systems. They embody a variety of labor agreements,cost allocation techniques, locomotive power sources (diesel andelectric), and scales of operation.
The following pages summarize the major contents and find-ings of the study and include a set of the primary tables andfigures relating to the seven commuter rail systems studied.
COMMUTER RAIL COST CATEGORIES
The capital costs of commuter rail services consist of twocategories of expenses:
. depreciation; and
. return on investment.
The nature and applicability of these costs depend on theownership of the equipment and the private or public nature ofthe title holder.
The major operating cost categories by which railroadsrecord and report expenses for both freight and passengerservices include:
. maintenance-of-way and structures;
. maintenance-of-equipment
;
. transportation; and
. general and administrative costs.
Each of these functional operating cost categories can be brokendown into the following generic categories to identify the majorfactors which influence the level and nature of commuter railoperating costs:
. labor;
. fuel and power;
. materials and supplies; and
. other.
Labor costs represent the majority of commuter rail opera-ting expenses, comprising from 60 to 65 percent of the cost of
Xll
operation. This is primarily due to the level of railroademployee wage rates, the nature of work rules governing railroadwork assignments, and the methods of railroad passengerticketing.
The costs of diesel fuel and electric power used in thepropulsion of commuter rail equipment represent about 10 percentof the total operating expenses associated with commuter railservices. Although this is a far smaller percentage than thelabor component, fuel and power costs have been increasing at a
greater rate than any other railroad cost category.
Materials and supplies constitute the third general cate-gory of railroad operating expenses and include such items asoffice supplies, equipment and track repair supplies, tools,lubricants, and other material needed for daily operations ofrail service. Material and supply costs represent about 18 per-cent of total commuter rail operating expenses.
Other cost categories reflected in the railroads' operatingexpense reports include:
. equipment rental fees;
. purchased services;
. depreciation;
. interest;
. taxes;
. casualties and insurance; and
. general expenses.
These costs represent about 10 percent of total commuterrail operating expenses. Responsibility for these other expen-ses depends on the degree to which the operating railroad or
authorizing agency owns or leases the equipment, stations, or
right-of-way, and which group is responsible for general expen-ses associated with administrative functions such as marketing,legal services, public relations, and data processing.
Unit operating costs for the commuter rail industry haverisen by about 12 percent per year during much of the past
decade, reflecting a similar increase to that experienced by the
remaining segments of the transit industry. This compares to
Xlll
about a 10 percent annual increase in unit operating costs forthe railroad industry during the past decade.*
Figure A displays the relative composition of operatingcosts for commuter rail service in terms of their functional andgeneric categories, based on the commuter rail systems studiedusing 1980 data.
COST ALLOCATION METHODS
Commuter rail services are typically provided over a rail-road right-of-way serving both freight and commuter trains.Because this entails the joint use of equipment, supplies, fac-ilities, and other general overhead services, a methodology isrequired for allocating costs between freight and commuter ser-vices. Such an allocation is important for managing the cost-effectiveness of each service and for establishing the amount ofpublic funding which commuter rail services may be eligible forunder various government-sponsored funding programs.
Several methods are available for allocating indirect orcommon operating costs between freight and commuter railservices. These are:
. variable cost allocation;
. avoidable cost allocation;
. attributable cost allocation; and
. priority of use cost allocation.
Variable cost allocation distributes the cost of a serviceamong its beneficiaries in proportion to their use of the ser-vice. This cost allocation technique requires the total costsassociated with a service to be divided into variable and fixedcost elements. Variable costs include those expenses which varyin direct proportion to the amount of service provided, as mea-sured by such output statistics as train-miles or passenger-miles. Fixed costs represent those expenses which in the shortrun do not vary with the amount of service provided. Thesecosts are often allocated to the service beneficiaries in pro-portion to the variable costs associated with each beneficiary.
* As measured on the basis of total operating costs pervehicle-mile of travel, 1972-1980. Source: American PublicTransit Association data and Association of American Railroadsdata.
XIV
FUNCTIONAL CATEGORIES
GENERIC CATEGORIES
FIGURE A. COMMUTER RAIL OPERATING COST COMPONENTS
XV
Avoidable cost allocation assigns to a particular bene-ficiary only those expenses which could be avoided if the bene-ficiary were not served. Also known as the separable cost/remaining benefits method, this cost allocation techniqueseparates expenses into those which are incurred solely becauseof an individual beneficiary and those common costs which areshared among beneficiaries. The primary beneficiary of a ser-vice would be assigned the common costs associated with theservice which would be incurred without any other beneficiarybeing served. Only those additional costs which would be incur-red by serving secondary beneficiaries are allocated to theseother beneficiaries. The primary user thus bears a larger shareof the costs in this cost allocation method, relative to thevariable cost method.
Avoidable cost allocation is most appropriately used whenone beneficiary clearly dominates the use of services. In thesecases, the secondary service is actually a marginal operation interms of usage, and is thus a marginal cost producer.
Attributable cost allocation assigns to a particularbeneficiary both the avoidable costs associated with thatbeneficiary and a proportion of the common or shared costs ofthe service. These common costs are partially borne by allbeneficiaries being served. Their allocation among the bene-ficiaries can be made on the basis of the proportion of avoid-able costs associated with each beneficiary, or some common baseunit like train-miles, passenger-miles, or direct labor expen-ses. The basic distinction between avoidable cost allocationand attributable cost allocation is that the latter includeselements of common costs which are shared among the benefici-aries. Attributable costs are usually not defined as easily orapplied as simply as avoidable costs, due to the difficulty indetermining what proportion of nondirect expenses should beallocated to a beneficiary and what base units will acceptablyallocate those costs.
Priority of use cost allocation determines the common costsof serving the various beneficiaries and allocates these costsin relative proportion to the priority given to each benefi-ciary. The basis for this priority can be either the level ofservice provided or the importance of the beneficiary served.This method is a variation of the avoidable and attributablecost allocation methods, with the cost allocations to each func-tion being weighted by their relative priority.
In addition, several approaches used by railroads andauthorizing agencies represent variations or combinations ofthese methods. A primary example of this approach is the costallocation methodology developed by the Rail Services Planning
XVI
Office ( RSPO ) of the Interstate Commerce Commission, entitledStandards For Determining Commuter Rail Service ContinuationSubsidies (CFR 1127). These standards prescribe the methodologyto be used by railroads in estimating the required subsidy forproviding commuter rail services based upon the attributablerevenues, avoidable costs, and reasonable return on value forsuch services.
According to this methodology, both direct and common costsmay be assigned on the basis of agreed-to facilities and per-sonnel utilization plans which specify:
. the dominant and secondary users (i.e., priority ofuse cost allocation);
. variable operating and user statistics (i.e., vari-able cost allocation);
. actual costs incurred (i.e., avoidable cost alloca-tion ) ; and
. the prior allocation of direct cost accounts (i.e.,attributable cost allocation).
The RSPO methodology for estimating the revenuevalues may be changed, provided the negotiating partiesthe changes.
and costagree to
More than one method of cost allocation can be stipulatedin a commuter rail service contract. This usually occurs whenthe parties involved decide that no one approach is suitable forproperly assigning all categories of expenses, due to the natureof the cost items, the predominance of one type of service, orthe availability of data upon which to base the cost alloca-tion. Since each commuter rail system is unique, the choice ofcost allocation techniques by an individual system will dependon the nature of that system, its operations, its ridership lev-els, and its ownership. The effect of different cost allocationtechniques will depend on the proportion of noncommuter railservices using the railroad right-of-way; the ownership ofequipment, right-of-way, and stations involved in commuter railservices; and the degree to which the operating railroad candistinguish its costs by type of service.
COMMUTER RAIL SYSTEMS CASE STUDIES
The full report includes descriptions of the route struc-ture, operating characteristics, ridership levels, principallabor rules, major cost categories, and compensation methodsassociated with the seven commuter rail systems considered
XVII
by this study. Also included are comparative analyses of theseven commuter rail systems and their respective operatingagreements
.
Figures B, C, and D summarize the unit rideship, operating,revenue, and cost statistics for 1980 for each of the seven com-muter rail systems studied. These figures illustrate the highdegree of variability among the seven systems studied, whichprimarily reflect differences in labor agreements, system size,ridership levels, and equipment utilization. The operating coststatistics shown in Figure D are based on a consistent alloca-tion of costs, as reported by each operating railroad to theInterstate Commerce Commission. The actual costs charged to theauthorizing agencies may differ significantly from these totals,depending on the terms of the operating agreements between theauthorizing agencies and the operating railroads associated witheach system.
Table B describes the major characteristics of the currentoperating agreements for each of the case study commuter railsystems. Based on the seven operating agreements, the avoidablecost allocation method tends to be preferred when freight ser-vices are the predominant user of the right-of-way, while theattributable cost allocation method is preferred when commuterservices are significant users of the right-of-way.
FINDINGS
The findings of this study indicate that the cost to publicagencies of funding commuter rail service varies significantlyamong rail systems. These variations can be attributed to:
. the differences in railroad labor agreements cur-rently in effect;
. the scale of train operations and ridership demand;
. the age, condition, and capacity of equipment;
. the ownership of right-of-way and equipment; and
. the methods used to allocate common costs as stip-ulated in the operating agreements between railroadand authorizing agency.
Controlling these costs will depend on developing an under-standing of the characteristics of the system being operated andimplementing appropriate productivity enhancing strategies.Innovative operating agreements are being used to help controlthe cost of commuter rail services to public agencies and to
XVI 11
% REVENUE/COST
Ui
a
S*»
a
u2<Su.
2<CA
Ss
FIGURE B. COMPARISON OF RIDERSHIP AND OPERATINGCHARACTERISTICS BY SYSTEM, 1980.
XIX
FIGURE C. COMPARISON OF RIDERSHIP AND OPERATINGCHARACTERISTICS BY SYSTEM, 1980.
XX
S/VEHICLE-MILE
FIGURE D. COMPARISON OF AVERAGE UNIT TOTAL OPERATINGCOSTS BY SYSTEM, 1980.
TABLE B. COST ALLOCATION METHODS BY SYSTEM.
System Primary Compensation Methods
B&M/Boston - Attributable Cost Allocation- Fixed Percent General andAdministrative Overhead
- Fixed Management Fee and LiabilityFund
- Service Performance Incentives andOffsets
- Ridership Level Incentives
Ll/Long Island - RSPG Cost Allocation (primarilyattributable cost allocation)
B&O/Washington, D.C. - Avoidable Cost Allocation- Fixed General and Administrative Fee
B&O/Pittsburgh - Avoidable Cost Allocation- GMA Overhead Rates for Generaland Administrative Costs
- Service Performance Penalties- Equipment Maintenance Penalties
P&LE/Pittsburgh - Avoidable Cost Allocation- Fixed Percent Supervisor Overhead
GTW/De troi
t
- Variable Cost Allocation- GMA* Overhead Rates for Generaland Administrative Costs
- Fixed Liability Fee and Station UseCharge
SP/San Francisco - Attributable Cost Allocation- Fixed Percent General andAdministrative Costs
- Fixed Percent Common Costs- Fixed Percent Management Fee- Ridership Level Incentives- Fixed Maintenance-of-Way Fee- Below Value Equipment and Station
Rental Costs- Fixed Liability Fee
* GMA - General Managers Association
XXIX
ensure a high level of service quality. Other management, oper-ating, and marketing techniques are also being applied which aredesigned to reduce the cost burden of commuter rail services.By focusing on the operations, costs, and operating agreementsof seven commuter rail systems, this study provides transitagencies a comparative basis for assessing their own systems.
xxiii/xxiv
.
1 . INTRODUCTION
Ths ignif
i
betweenpubl icstateinterestransit
e public transportation industrycant fiscal pressures due tooperating costs and the publictransportation. As a result ofand local transportation agencies are becoming moreted in techniques for controlling the operating costs ofservices
.
currently is faced withthe growing disparity
sector's contribution tothese fiscal pressures,
Commuter rail services are defined as predominantly rush-hour passenger rail services provided within a metropolitan areaconnecting the central city to the suburbs and using standardrailroad right-of-way and equipment owned by either a railroador a local transportation agency. Commuter rail servicesusually require a public contribution of between 50 and 90 per-cent of total operating expenses. This level of community sub-sidy is causing certain systems to reduce services or increasefares as public funds become more scarce.
Another motivation for state and local government attentionto the cost of commuter rail services is the growing trend byrailroads to dispose of their commuter rail operations by turn-ing them over to the local municipal transportation authority orsome third-party operator. Examples of this include:
. the Conrail commuter operations in Maryland,Philadelphia, New Jersey, New York, and Connecticut,which were authorized by the Northeast Rail Act of1981 to be turned over either to the local transpor-tation authority, Amtrak, or the newly establishedCommuter Services Corporation by January 1, 1983;
. the former Rock Island Railroad's commuter opera-tions into Chicago, which have been taken over bythe Regional Transportation Authority (RTA) ; and
. the Milwaukee Railroad's commuter operations intoChicago, which have been taken over by the RTA.
As more regional transportation agencies begin to operateas well as support commuter rail services, they will developgreater interest in the costs and cost allocation methods assoc-iated with the commuter rail industry.
1
1.1 PURPOSE OF THE REPORT
The Service and Management Demonstrations (SMD) Program ofthe Urban Mass Transportation Administration (UMTA) is respon-sible for developing, introducing, and disseminating techniquesfor efficient and effective transit operations and management.To satisfy this objective, the SMD Program sponsored this studyt o
:
. analyze the components of commuter rail cost for a
sample of commuter rail operations and provide a
comparative breakdown of the major operating costcategories for each commuter rail service; and
. evaluate the cost allocation methods employed byeach of the railroads to apportion costs betweenfreight and passenger operations.
The results of this analysis and evaluation are presentedin this report.
1.2 SCOPE OF THE REPORT
This report is designed to provide general guidance totransit agencies concerning commuter rail service costs and costallocation strategies. The study investigates the cost struc-ture of railroad services (including commuter rail services) as
major railroads to the Interstate Commerceand the primary factors influencing these costcommuter rail operators. The study alsoprimary methods of allocating the cost of
railroad operations between freight and commuter services.Seven commuter rail systems are analyzed, to identify the majorcharacteristics affecting commuter rail service costs and thecompensation arrangements contained in the various operating
seven commuter systems and their contractingin the study are listed
reported by allCommission (ICC)categories forinvestigates the
agreements. Theagencies included in Table 1
2
TABLE 1. CASE STUDY COMMUTER RAIL SYSTEMS
Region Operating Railroad Contracting Agency
Massachusetts Bay Trans-portation Authority
Boston, MA Boston & Maine
Long Island, NY Long Island Metropolitan Transpor-tation Authority
Washing ton , D . C . / Baltimore St OhioBaltimore, MD
Maryland Department ofTransportation
Pittsburgh, PA Baltimore St Ohio Port Authority ofAllegheny County
Pittsburgh, PA Pittsburgh St LakeErie
Beaver County TransitAuthority
Detroit, MI Grand Trunk Western Southeastern MichiganTransportation Authority
San Francisco, CA Southern Pacific California Departmentof Transportation
These systems represent a broad cross-section of U.S. commuterrail systems. They embody a variety of labor agreements, costallocation techniques, locomotive power sources (electric versusdiesel), and scales of operation.
The analysis of the cost categories of each commuter railsystem is based on 1980 data filed by the operating railroadswith the ICC in their Annual Report Form R-l. Operatingstatistics for the same timeframe are based on the OS-A and OS-Breports of the railroads, which are also filed with the ICC.The 1980 timeframe represents the last full year in which eachof these reports were required by the ICC. Information notavailable from these reports is based on data obtained directlyfrom the operating railroads or authorizing agencies. None ofthis information has been independently verified by the authors.
The current status of each commuter rail system is based ondiscussions with the operating railroads and authorizing agen-cies. Information derived from these discussions includes thecurrent scope and level of service, operating schedule, equip-ment composition and ownership, ridership, crew levels and laborarrangements, and contract agreements specifying the basis foroperating cost reimbursement. This information reveals signifi-cant changes that have occurred in the service or contract pro-visions of the individual commuter rail systems since 1980 andprovides added insights into the compensation structure of eachsystem
.
3
1.3 METHODOLOGY
The methodology for this study involved contacting, bytelephone and letter, several railroads providing commuterservices and the public agencies contracting for these ser-vices. The cost and operating information collected from thiscorrespondence and other available public sources was used inthe comparative analysis of commuter rail systems. For thispurpose, the major cost categories were organized by certainoperating statistics to develop comparable unit costs. Theoperating statistics used included the annual number of pas-sengers, passenger-miles, and vehicle-miles. In addition, aver-age ridership and operating ratios were calculated, such as thepercent fare box revenues to total operating costs, average pas-senger fare, average trip length, average passenger loading pervehicle, and average service frequency. These units of outputprovided meaningful bases of comparison among the seven systemsstudied
.
The unit costs of operations were developed for this studybased on 1980 cost and operating data. Because the timeframe isa single year, special circumstances such as a major trackrehabilitation program, labor strike, or equipment acquisitioncould result in unit costs that do not reflect the long-termaverage costs for that system.
This report also investigated the current services andoperating agreements between the railroads and contractingagencies. Of particular note were the cost allocation methodsused by the railroads in billing the contracting agency forcommuter rail services. This information was listed by systemand compared to highlight the differences in the cost levelsincurred by the railroads and the compensation methods permittedby the service contracts. By recognizing the differences incosts, it was also possible to demonstrate the effect of variouslabor, equipment ownership, service level, and operatingarrangements on the efficiency with which commuter rail serviceswere provided.
1.4 OVERVIEW OF THE REPORT
The remainder of this report is organized into fivesections which address the following areas:
. Section 2 describes the major categories used byrailroads to report operating expenses for commuter
4
rail services. It also discusses several majorfactors which significantly influence the costs ofcommuter rail operations.
Section 3 describesmethods available forexpenses to freight and
the major cost allocationassigning railroad operatingcommuter services.
Section 4 describes the system, service, ridership,cost, and operating characteristics of the sevencommuter rail systems studied. Each case studyincludes a system map, a summary of system cost andoperating characteristics, and a description of thecost allocation methods prescribed by currentoperating agreements.
Section 5 provides a comparative analysis of theseven commuter rail systems studied, which high-lights the differences in the level of operations,labor arrangements, route structure, ridershipdensity, and compensation methods as they affect thecosts charged to the contracting agencies.
Section 6 presents the major findings and conclu-sions resulting from this study. These are intendedto assist metropolitan transportation agencies whoare considering initiating or revising commuter railservice contracts.
5/6
2 . COMMUTER RAIL CAPITAL AND OPERATING COSTS
This section describes the major capital and operating costcategories by which railroads record and report expenses forboth freight and passenger services. An understanding of thesecosts is essential to our later discussions of cost allocationmethodologies
.
2.1 COMMUTER RAIL COST CATEGORIES
The categories of capital and operating costs associatedwith railroad operations are prescribed by reporting require-ments established by the Interstate Commerce Commission (ICC).Major railroads in the United States are required by law( CFR 49 U.S.C. 11145) to submit to the ICC an annual reportwhich contains detailed financial and operating information.Railroads having annual operating revenues of $50 million ormore (called Class I railroads) must submit this information inthe Annual Report Form R-l . (Appendix A provides a copy of theForm R-l table of contents.) While the focus of this study is
the operating costs relating to commuter rail services, thissection also will address briefly the associated capital costs.
2.1.1 Capital Costs
The capital costs of commuter rail service refer to theannualized costs associated with tangible assets utilized in theprovision of commuter rail services. Typical capital assetsused by commuter rail operators include:
. equipment:
- locomotives;- coaches; and- self-propelled units.
. road property:
- track materials;- signals and communication equipment; and- stations.
7
Reporting capital costs may result in two categories ofexpenses: depreciation and return on investment.
Depreciation is an accounting practice whereby a prescribeddollar amount is charged against earnings to reflect the factthat certain capital assets are being used up. The amount ofdepreciation depends on the asset's book value, estimated ser-vice life, net salvage value, and method by which the deprecia-tion allowance is taken (straight-line, sum-of-the-year s-d igi ts
,
double declining balance). Depreciation can have a significanteffect on the tax liability of a private company, since thegreater the depreciation the lower the level of taxable income.Only the company owning the capital asset can claim thedepreciation
.
Certain railroads have not depreciated their track-relatedcapital expenses. Instead, they have used a technique called"betterment accounting," in which the costs of track capacityimprovements were capitalized and the costs of track repairswere charged entirely to expenses during the year in which theyoccurred. This accounting technique is being phased out by theICC, beginning with reports filed for 1983.
Return on investment provides a return to the company basedon the value of the capital asset. This return on capital iscomputed by multiplying the railroad's pre-tax composite cost ofcapital by the net book value of the relevant capital assets(both equipment and road property). While private companiesconsider the return on capital a cost of doing business, publicagencies which purchase such capital items using public fundsfor subsidized commuter rail service do not normally recognizethis cost.
The treatment of capital costs varies considerably amongcommuter rail systems. Certain metropolitan transportationagencies have purchased passenger locomotives, cars, and sta-tions, while others lease their equipment and facilities, andstill others do a combination of both. The trend seems to befor public agencies to purchase their own locomotives and carsand to contract with the operating railroad to maintain theequipment. This provides the agency with greater control overthe type of equipment utilized. When newer equipment isacquired by the public agency, equipment availability can beimproved and equipment maintenance costs can be lowered, result-ing in improved service quality.
Financing of capital expenses is also varied and includesfederal grants, bond issues, and various loans and lease agree-ments. The wide variety of methods used to acquire and accountfor capital assets, along with the fact that changes in capital
8
expenses are not significantly affected by operational decisionsshort of major service changes, places a comparison of commuterrail system capital costs beyond the scope of this project.
2.1.2 Operating Costs
Schedule 410 of the R-l report contains a detailed listingof the railroad's operating expenses for the calendar year forwhich the report is filed. The railroad's operating expensesare classified in accordance with the Uniform System of Accountsfor railroad companies. The schedule divides the operatingexpenses, including labor, materials, and energy costs, intofour functional categories.
. Maintenance-of-way and structures , which consists of84 separate line items relating to the repair andmaintenance of track, signals and communicationdevices, and buildings and structures.
. Ma in tenance-of-equipment , which consists of 58 sepa-rate line items relating to the repair and mainte-nance of locomotives, freight cars, and other equip-ment (including passenger equipment).
. Transportation , which consists of 57 separate lineitems relating to train, yard, train and yard com-mon, specialized service, and administrative supportoperations. Included are the costs of road crews,yard crews, station staff, train control, and gen-eral transportation staff. This category accountsfor the energy costs of both train equipment andstations. Transportation is normally the largest ofthe four categories for commuter rail services.Transportation costs are about 65 percent laborrelated, 20 percent energy related, 12 percent mate-rial related, and 3 percent other costs.
. General and administrative , which consists of 18separate line items relating to specialized manage-ment support functions such as finance and account-ing, data processing, marketing, legal services, andpersonnel and labor relations.
Appendix B lists the 217 railroad operating expense accountswhich make up these four general categories of costs.
Each of these expense categories and line items is subdi-vided into freight and passenger expenses by first assigning allexpenses that are directly attributable to either freight or
Q
passenger services. The remaining operating expenses, which arecommon to both freight and passenger services, are then allo-cated to each service in accordance with the ICC's rules govern-ing the separation of such expenses. The next section will dis-cuss these rules in more detail.
For all railroads, with the exception of the Denver and RioGrand Western Railroad, the "passenger expense" category refersto commuter rail services. Intercity passenger services havefor the most part been taken over by Amtrak, the National Rail-road Passenger Corporation. The expenses incurred by a railroadin operating Amtrak trains are listed separately on Form R-lSchedule 419, Renumerations from National Railroad PassengerCorporation, which is in the same format as Schedule 410. Onlythe Denver and Rio Grand Western Railroad continues to operateits own intercity passenger trains, whose expenses are reflectedin Schedule 410 of its Form R-l.
The freight expense category is further subdivided into:
. salaries and wages;
. materials, tools, supplies, fuels, and lubricants;
. purchased services; and
. general.
No such breakdown of the passenger expense category is requiredby the ICC in Form R-l.
Unit operating costs for the commuter rail industry in theUnited States have risen by about 12 percent per year duringmuch of the past decade, reflecting an increase similar to thatexperienced by the remaining segments of the transit industry.This compares to about a 10 percent annual increase in unitoperating costs for the railroad industry during the pastdecade.* The breakdown of commuter rail operating costs intothe four functional categories defined above is illustrated inFigure 1, based on 1980 data for a sample of seven commuter railsystems. This breakdown is comparable to the breakdown of oper-ating costs for the railroad industry as a whole.
* As measured on the basis of total operating cost per vehiclemile of travel, 1972-1980. Source: American Public TransitAssociation data and Association of American Railroads data.
10
FIGURE 1. FUNCTIONAL BREAKDOWN OF COMMUTER RAIL OPERATING COSTS
Based on 1980 data for seven commuter rail systems.
11
2.2 FACTORS INFLUENCING COMMUTER RAIL OPERATING COSTS
While railroad costs normally are reported by functionalcategory (transportation, maintenance of way, etc.), it is use-ful to examine commuter rail costs according to their genericstratification: labor, fuel and power, materials and supplies,and other expenses. An examination of costs within this strati-fication yields valuable information on the factors whichinfluence the level and nature of commuter rail operating costs.
2.2.1 Labor
Labor costs represent the majority of commuter rail oper-ating expenses, comprising from 60 to 65 percent of the cost ofoperation.* This is primarily due to the level of railroademployee wage rates, the nature of work rules governing railroadwork assignments, and the methods of railroad passenger ticket-ing. These provisions are derived from long-established prac-tices and habits, from collective bargaining agreements, fromdecisions of courts and tribunals, and from federal and statelegislation. The provisions are discussed below.
2. 2. 1.1 Wage Levels and Union Representation - The railroadindustry compensates its employees at a level which is higherthan most other industries. Out of 216 industries, railroadsrank fifteenth in terms of average hourly wages. Railroademployees receive higher total compensation than 95.7 percent ofthe workers in other industries. In addition, railroad laborhas received larger increases in wages and total compensationthan most other industries in the United States in recentyears .**
The higher level of employee compensation in the railroadindustry is due in part to the degree to which railroad employ-ees are represented by organized labor. According to recentDepartment of Labor and Department of Commerce statistics, the
* Northeast Corridor Commuter Rail Authorities CommitteeReport on Conrail Labor Issues , May 1981, p. 13.
** Harvey Levine, Clifford Eby, Craig Rockey, and John Dale,Small Railroads , Association of American Railroads.(Chelsea, Michigan: Book Crafters, Inc. 1982), p. 108.
12
railroad industry has the highest union representation of anymajor U.S. industry, with over 80 percent of all railroademployees belonging to a union. This compares to an average of26 percent for all U.S. industries.*
Railroad employees are represented by numerous laborunions. Table 2 lists the 14 major unions which represent mostrailroad employees. These unions use various craft or classlines as the basis for representation, many of which were drawnup in the early part of this century when steam locomotivespowered the nation's railroads.
2. 2. 1.2 Work Rules and Crew Laws - Railroad work rules and crewlaws significantly impact commuter rail operating costs, due totheir influence on the following:
. crew sizing;
. basis of pay for engine and train crews;
. craft distinctions; and
. district assignments.
While specific labor agreements can vary significantlyamong railroads, most commuter rail operations are subject totraditional railroad work rules and crew laws. The practicesoutlined below are not indicative of all commuter rail opera-tions, but they do represent a sampling of labor arrangementscommon to many railroads.
. Personnel Requirement . Crew consist agreements orcrewing laws specify the number and classificationof train and engine personnel required on a train.These crew consist rules often date back to theearly 1900s and typically take no account of currenttechnology, ridership levels, or safety require-ments. For example, some commuter trains stillcarry firemen (sometimes called "engineer'shelper"), although this function was largely elimi-nated with the advent of the diesel locomotive.Only in recent years has the fireman position becomeessentially an engineer training slot. Anotherexample is the requirement for three-man crews onsingle-car, off-peak trains of an East Coastcommuter operation.
* Ibid.
13
TABLE
2.
MAJOR
RAILROAD
EMPLOYEE
UNIONS
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14
• Basis of Pay Provisions . Due to the complex systemof work rules used to allocate work among railroademployees and to establish working conditions ofemployee assignments, a standard day's pay is oftenbased on both a time (8 to 9 hours) and a distance(100 to 150 miles) limit. An employee who exceedseither of these limits is usually entitled to over-time pay (sometimes as much as a second day's pay).Additionally, a crew's daily work hours are limitedto 12 hours.
Crew members may also receive wage guarantees, on adaily, weekly, or monthly basis, regardless of thenumber of hours actually worked. Such guaranteesare often in addition to the overtime paid.
Arbitraries and constructive allowances are addi-tional payments made to employees for special tasksperformed outside normal operations. Though notcommonplace among commuter rail operations, suchallowances may be paid for deadheading equipment,adding or changing motive power, performing braketests, operating between separate divisions, or per-forming short turnaround service.
The combined effect of these work rules is that mostcommuter rail employees are paid significantly morethan their platform time would indicate. When com-pared to transit operating employees, commuter railemployees have a significantly lower ratio of plat-form hours to pay hours. This fact was documentedin a recent study of Conrail's commuter rail opera-tions in New Jersey and Philadelphia. In bothcases, the commuter rail platform ratio was about50 percent, while the ratio for transit operators ofthe same systems was about 90 percent.*
. Craft Distinctions . The specific functions andduties of railroad employees are divided along craftlines. These so-called craft distinctions reflectthe functional duties originally required during thesteam era of railroading, and they largely form thebasis for union representation. For the most part,
* Northeast Corridor Commuter Rail Authorities CommitteeReport on Conrail Labor Issues , May 1981, p. 14.
15
railroad employees of one craft union are prohibitedfrom performing duties associated with another craftunion, unless no one is available to perform thework. For example, road and yard operating crewsare usually prohibited from operating a train beyondspecified yard limits. The maintenance-of-equipmentfunction is particularly fragmented, with up to sixdifferent craft unions being required to accomplishthe work that one "composite" mechanic could accom-plish. Employee classifications for this functioninclude electricians, sheet metal workers, black-smiths, pipefitters, boilermakers, and welders.Where an employee of one craft performs the func-tions of another craft, an arbitrary might be paidto the employee performing the work, or an employeefrom each craft might be paid for the work performed.
District Assignments . Railroad work rules alsostipulate the division of work performed by employ-ees of one railroad on the property of another rail-road. In addition, road crews of the same railroadare assigned seniority districts and are paid anadditional day's pay for performing work beyondthose districts. Trains crossing seniority districtboundaries generally change crews. These boundariesoften define the interfaces between the former sys-tems of merged railroads.
2. 2. 1.3 Railroad Passenger Ticketing - Current railroad passen-ger ticketing procedures typically require personnel to check,collect, and sometimes even issue passenger tickets on board thetrain. This system evolved from the operation of intercity pas-senger trains, where access to the train coaches was notrestricted at the station. With relatively long distancesbetween stations, long distance routes, and multiple car trains,intercity passenger trains fully utilized the services of thelabor force required by such a ticketing system. Commutertrains, however, usually run short-haul service during the peakcommuting hours, where the distance between stations is small,ridership density is high, and trains typically consist of fiveor fewer cars. Current crew consist rules require sufficientpersonnel to individually process passenger tickets.
2.2.2 Fuel and Power
The costs of diesel fuel and electric power used in thepropulsion of commuter rail equipment represent about 10 percent
16
of the total operating expenses associated with commuter railservices.* Although this is a far smaller percentage than thelabor component, fuel and power costs have been increasing at agreater rate than any other railroad cost category. Between1977 and 1981, fuel costs for railroads rose by 180 percent. Incontrast. labor expenses rose by 49 percent for the same
• j * *period.
2.2.3 Materials and Supplies
Materials and supplies constitute the third general cate-gory of railroad operating expenses and include such items asoffice supplies, equipment and track repair supplies, tools,lubricants, and other material needed for daily operations ofrail service. Material and supply costs represent about 18 per-cent of total commuter rail operating expenses. Materials andsupply costs increased by 45 percent between 1977 and 1981,***at a rate slightly less than the rise in labor costs during thesame period.
A significant portion of this cost category results fromthe materials needed in the maintenance-of-equipment and main-tenance-of-way functions for replacing or repairing failing andworn parts and structures. These costs are related primarily tothe condition, age, and use of the equipment and right-of-way.
2.2.4 Other Expenses
Other cost categories reflected in the railroads' operatingexpense reports include:
. equipment rental;
. purchased services;
* Based on the average of nine commuter rail systems in theUnited States in 1980, as reported in the operating railroads'Annual Report Form R-l
.
** AAR Railroad Cost Recovery Index , Series RCR-3, June 1982,Economics and Finance Department, Association of AmericanRailroads, Washington, D.C.
*** Ibid.
17
. depreciation;
. interest;
. taxes;
. casualties and insurance; and
. general expenses.
These costs represent about 10 percentrail operating expenses. The rate of growthbetween 1977 and 1981 was 47 percent for the
of totalin thesera i 1 road
or midway between the inflation rates describedlabor expenses and material and supply expenses.*
Figure 2 displays the relative proportioncosts for commuter rail services which fall intofour generic categories described above.
commuterexpensesindustry
,
earlier for
of operatingeach of the
* Ibid.
18
LABOR62%
FIGURE 2. GENERIC BREAKDOWN OF COMMUTER RAIL OPERATING COSTS
3 . COMMUTER RAIL COST ALLOCATION METHODS
This section describes the major cost allocationavailable for assigning railroad operating expenses toand commuter services.
methodsfreight
Commuter rail services are typically provided over a rail-road right-of-way serving both freight and commuter trains.Because this entails the joint use of equipment, supplies,facilities, and other general overhead services, a methodologyis required for allocating costs between freight and commuterservices. Such an allocation is important for managing thecost-effectiveness of each service and for establishing theamount of public funding which commuter rail services may beeligible for under various government-sponsored funding programs.
The public contribution to commuter rail service is oftenprovided via a service contract between an operating railroadand an authorizing transportation agency, whereby the agencyprovides a contribution equal to the difference between thetotal operating costs associated with the commuter rail opera-tion and the revenues derived from that service. In someinstances, the percentage of total commuter rail operating costswhich the agency will cover is limited by law.
In order to develop a basis for estimating the costs ofcommuter rail services, one must understand the nature of rail-road operating costs in terms of their causal and variablerelationships to the services being provided. This involvesidentifying whether the specific railroad operating costs are:
. direct costs , which are specifically identifiablewith provision of a particular class of service(i.e., freight versus commuter); or
. indirect or common costs , which are identifiablewith the provision of service in general but notwith any particular class of service.
It is also necessary to determine whether the costs are:
. variable costs , which change as the amount of ser-vice increases or decreases; or
. fixed costs , which do not vary with the amount ofservice in the short run.
Mostoperating
commuter rail service contracts stipulate that therailroad will be reimbursed for all operating costs
21
not covered by revenues that are directly related to the provi-sion of commuter rail services. An earlier study estimated thatalmost 40 percent of all commuter rail operating costs aredirect.* Such costs typically include:
. train and engine crew costs;
. equipment and station rentals;
. maintenance of equipment (assuming dedicated equip-ment ) ;
. train fuel and power; and
. train supplies.
Indirect or common costs which apply to the provision ofboth freight and commuter rail services must be apportioned insome manner between the two services. Such costs typicallyinclude
:
. shop overhead;
. maintenance of way and structures;
. signal and communication operations;
. station and yard operations;
. supervision and administration;
. insurance and casualty;
. joint facilities; and
property taxes
The degree to which railroad operating costs can be definedas direct or indirect depends primarily on the ability of theoperator or authorizing agency to account for the costs by spe-cific service and the degree to which resources (personnel,supervision, supplies, equipment, stations, shops, and right-of-way) are dedicated to a specific service.
Issues To Be Considered in Developing Rail Commuter Revenueand Cost Standards , by L. E. Peabody & Associates, Inc., forthe Rail Services Planning Office, Interstate CommerceCommission, May 17, 1976, p.6.
22
Several methods are available for allocating indirect orcommon operating costs between freight and commuter rail ser-vices. These are:
. variable cost allocation;
. avoidable cost allocation;
. attributable cost allocation; and
. priority of use cost allocation.
In addition, several approaches used by railroads and authoriz-ing agencies represent variations or combinations of thesemethods. Each of the basic allocation methods is briefly des-cribed below.
3.1 VARIABLE COST ALLOCATION
Variable cost allocation distributes the cost of a serviceamong its beneficiaries in proportion to their use of the ser-vice. In this study, "service" relates to railroad operatingservices, and "beneficiaries" consist of freight shippers andcommuters. This cost allocation technique requires the totalcosts associated with a service to be divided into variable andfixed cost elements.
"Variable costs" include those expenses that vary in directproportion to the amount of service provided, as measured bysuch output statistics as train-miles or passenger-miles."Fixed costs" represent those expenses which in the short run donot vary with the amount of service provided. These costs areoften allocated to the service beneficiaries in proportion tothe variable costs associated with each beneficiary.
3.2 AVOIDABLE COST ALLOCATION
Avoidable cost allocation assigns to a particular benefi-ciary only those expenses that could be avoided if the benefi-ciary were not served. Also known as the separable cost/remain-ing benefits method, this cost allocation technique separatesexpenses into those which are incurred solely because of anindividual beneficiary and those common costs which are sharedamong beneficiaries.
23
The primary beneficiary of a service would be assigned thecommon costs associated with the service which would be incurredwithout any other beneficiary being served. Only those addi-tional costs which would be incurred by serving secondary bene-ficiaries are allocated to these other beneficiaries. The pri-mary user thus bears a larger share of the costs, relative tothe variable cost method.
Avoidable cost allocation is often used when one bene-ficiary clearly dominates the use of services. In these cases,the secondary service is actually a marginal operation in termsof usage, and is thus a marginal cost producer. This method isless appropriate when no beneficiary is clearly dominant overall others, as the choice of a "dominant" beneficiary may assigna higher cost to that beneficiary and a correspondingly lowercost to the secondary beneficiary.
3.3 ATTRIBUTABLE COST ALLOCATION
Attributable cost allocation assigns to a particular bene-ficiary both the avoidable costs associated with that benefi-ciary and a proportion of the common or shared costs of theservice. These common costs are partially borne by all benefi-ciaries being served. Their allocation among the beneficiariescan be made on the basis of the proportion of avoidable costsassociated with each beneficiary, or some common base unit liketrain-miles, passenger-miles, or direct labor expenses.
The basic distinction between avoidable cost allocation andattributable cost allocation is that the latter includes ele-ments of common costs which are shared among the beneficiaries.Such costs include overhead or general expenses--such as super-vision, property taxes, and administrative expenses—which wouldnot be affected materially by the discontinuation of incrementalservices, but which would be affected by the complete discontin-uation of either commuter or freight operations. Attributablecosts are usually not defined as easily or applied as simply asavoidable costs, due to the difficultyproportion of nondirect expenses should beficiary and what base units will acceptably
in determining whatallocated to a bene-allocate those costs.
3.4 PRIORITY OF USE COST ALLOCATION
The priority of use cost allocation method determines thecommon costs of serving the various beneficiaries and allocates
24
these costs in relative proportion to the priority given to eachbeneficiary. The basis for this priority can be either thelevel of service provided or the importance of the beneficiaryserved. This method is a variation of the avoidable costallocation method, with the cost allocations to each functionbeing weighted by their relative priority. The priority of usecost allocation method is typically used when certain functionsclearly dominate the purpose for which service is provided.
3.5 OTHER COST ALLOCATION APPROACHES
Other cost allocation approaches are possible by combiningelements from each of the above methods. This allows separatecost accounts to be treated individually, thus tailoring themethodology to the way in which each activity relates to thefunctions being provided. The primary example of this approachis the cost allocation methodology developed by the Rail Ser-vices Planning Office (RSPO) of the ICC, entitled Standards ForDetermining Commuter Rail Service Continuation Subsidies( CFR 1127). These standards describe a suggested methodology tobe used by railroads in estimating the required subsidy for pro-viding commuter rail services based upon the attributable reve-nues, avoidable costs, and reasonable return on value for suchservices. A different methodology for estimating the revenueand cost values may be used, provided the negotiating partiesagree to the changes. Therefore, the actual cost allocationmethodology contained in the service contract between the rail-road and the authorizing agency may differ significantly fromthese standards, so long as the provisions are agreed to by bothparties and are found to be reasonable by the RSPO.
Section 1127.7 of the standards defines the allocationbasis for assigning railroad operating costs to commuter railservice. According to this methodology, both direct and commoncosts may be assigned on the basis of agreed-to facilities andpersonnel utilization plans which specify:
. the dominant and secondary users (i.e., priority ofuse cost allocation);
. variable operating and user statistics (i.e.,variable cost allocation);
. actual costs incurred (i.e., avoidable costallocation); and
. the prior allocation of direct cost accounts (i.e.,attributable cost allocation).
25
Appendix C reproduces the RSPO methodology as presented inthe Code of Federal Regulations. The RSPO standards are verydetailed in prescribing a suggested basis for determining com-muter rail operating costs. The standards provide considerablelatitude in the carrier's treatment of various expense areas andare most commonly used for internal cost allocation within arailroad's responsibility accounting system. Since the stan-dards are designed to conform to the Uniform System of Accountsfor railroad companies, revised by the ICC in 1978, they areused extensively by railroads in reporting commuter rail operat-ing expenses in the Annual Report Form R-l.
Additional methods of assigning railroad operating costs tocommuter rail services include the following:
Fixed allocation , whereby a set feecertain functions based upon specialThis may involve maintenance of wayand general and administrative costs.
is charged forcost studies,
and structures
. Zero allocation , whereby no charge is made for cer-tain costs, typically common or overhead. Thisoften involves maintenance of way and structures andcertain administrative costs.
. General Managers Association (GMA) rules , whichprovide a generally accepted basis for estimatingthe costs associated with the joint use of railroadfacilities. The rules contain information con-cerning surcharge rates to recover the costs ofsupervision, administration, inspection, and otheroverhead functions, and equipment rental rates amongrail carriers. The surcharge rates are applied tothe direct costs of labor, material, tools, sup-plies, and fuel to arrive at the costs of generaloverhead functions. So long as the direct costs ofcommuter rail services are known, the GMA surchargerates permit the reasonable calculation of the fullcosts of these services, not including profit.*
More than one method described in this section can bestipulated in a commuter rail service contract. This usuallyoccurs when the parties involved decide that no one approach is
*Rules Governing Preparation of Joint Facility and OtherBills Between Carriers , Circular No. GMA-2710-E, GeneralManagers Association of Chicago, revised July 8, 1982.
26
suitable for properly assigning all categories of expenses, dueto the nature of the cost items, the predominance of one type ofservice, or^the availability of data upon which to base the costallocation. For example, transportation and maintenance-of-equipment costs may be allocated on an avoidable cost basis,since many costs within these categories can be directly relatedto specific services. Maintenance-of-way costs might be allo-cated on a variable cost method, using the gross-ton miles ofservice as a base unit. Several administrative and capitalcosts might be paid as a negotiated lump sum (i.e., a managementfee in addition to negotiated capital improvements). The resultis a tailored approach to cost allocation.
Table 3 summarizes the cost assignment techniques assoc-iated with each of the cost allocation methods described in thischapter. Since each commuter rail system is unique, the choiceof cost allocation techniques by an individual system willdepend on the nature of that system, its operations, its rider-ship levels, and its ownership. The effect of different costallocation techniques will depend on the proportion of non-com-muter rail services using the railroad right-of-way; the owner-ship of equipment, right-of-way, and stations involved in com-muter rail services; and the degree to which the operatingrailroad can distinguish its costs by type of service.
* The sharing of expense categories among freight and passengeroperations may also be affected by the nature of the rail-road's basic accounting system. The institution of commutersubsidy contracts has at times brought about changes in therecording of expenses, so that separation between passengerand freight services is facilitated. For example, creation ofthe old Penn Central's Metropolitan Region, encompassing allformer New York Central and New Haven commuter lines extendingnorth from Grand Central Terminal in Manhattan, was at leastin part accomplished to meet the accounting and managerialrequirements of New York State MTA's assumption of responsi-bility for these operations.
27
TABLE 3. COMPARISON OF COST ALLOCATION METHODS.
Cost Allocation MethodBasis of Assigning Direct
and Common Costs
Variable Cost Allocation Use-Based ProportionalAssignment of Direct and/orCommon Costs
Avoidable Cost Allocation Incremental Assignment ofDirect and Common Costs
Attributable Cost Allocation Incremental Assignment ofDirect Costs and Propor-tional Assignment ofCommon Costs
Priority of Use Allocation Priority-Based ProportionalAssignment of Direct andCommon Costs
Fixed Allocation Fixed Assignment of Directand/or Common Costs
Zero Allocation Zero Assignment of Directand/or Common Costs
General Managers AssociationRules Direct Cost-Based Propor-
tional Assignment of CommonCosts
28
4 . COMMUTER RAIL SYSTEM CASE STUDIES
This section examines the route structure, operating char-acteristics, ridership levels, principal labor rules, major costcategories, and compensation methods associated with seven com-muter rail systems:
. the Boston and Maine Railroad's commuter system ser-ving the Boston region;
. the Long Island Rail Road's commuter system servingLong Island;
. the Baltimore and Ohio Railroad's commuter systemserving Baltimore, Maryland, Washington, D.C., andMartinsburg, West Virginia;
. the Baltimore and Ohio Railroad's commuter systemserving the southeastern suburbs of Pittsburgh;
. the Pittsburgh and Lake Erie Railroad's commutersystem serving the northwestern suburbs ofPittsburgh
;
. the Grand Trunk Western Railroad's commuter systemserving the northwestern suburbs of Detroit; and
. the Southern Pacific Railroad's commuter systemoperating between San Jose and San Francisco.
To ensure a consistent basis for comparison, the operatingstatistics and cost information contained in this chapter arebased on public reports submitted by the operating railroads tothe Interstate Commerce Commission. The cost information isbased on the Rail Services Planning Office (RSPO) methodology,rather than on the costs actually charged to the authorizingagencies according to the compensation rules prescribed by theoperating agreements. Differences among the compensation rulesof the operating agreements result in different levels of costassignment, thus precluding their use in comparing operatingefficiencies among commuter rail systems.
29
4.1 BOSTON AREA: BOSTON AND MAINE RAILROAD COMMUTER SYSTEM
The Boston and Maine Railroad ( B&M)
provides commuter railservice to the Boston metropolitan area for the MassachusettsBay Transportation Authority ( MBTA ) . The system comprises 242miles of right-of-way and 83 stations (see Figure 3) which areowned by the MBTA and maintained by the B&M.
Each weekday 330 one-way trains operate over the MBTA com-muter system which shares the right-of-way with B&M freighttrains. In addition, Amtrak intercity passenger trains operatebetween Attleboro and South Station. Most routes also haveweekend and holiday service on a reduced schedule. Service ismost concentrated during the morning and evening rush hours ofeach weekday. However, continuous service is also provided dur-ing non-rush hour periods and on weekends and holidays, withtypically one- to two-hour headways. Trains operate about 18hours per weekday, and from 10 to 16 hours per day on weekendsand holidays, depending on the route.
Boston's commuter service consists of two systems, dividedgeographically by the Charles River. The North Division repre-sents the original B&M commuter system, and the South Divisionrepresents the former Conrail commuter system. While a singleoperating agreement covers the entire system, the railroad'soperations, schedules, route structure, operating budget, andcost documentation are separately maintained. This is due bothto the geographic separation of the two divisions and to thedifferent operating and labor agreements originally associatedwith each division.
4.1.1 Equipment and Facilities
The B&M operation utilizes 37 diesel locomotives which areowned by the MBTA, and 177 passenger coaches, including 95 for-merly self-propelled diesel passenger cars (RDCs) and 82 stan-dard passenger cars, all MBTA owned. Thirty-two of the RDCshave already been converted to non-motor ized push-pull service,with the remaining 63 RDCS slated for eventual conversion.Fifty-two of the unconverted cars are still in service (primar-ily push-pull service), with the remaining 11 cars temporarilyout of service. The capacity of the MBTA equipment ranges from78 to 99 passengers per car. The B&M maintains the equipment in
its own repair shops and in the MBTA-owned Boston EngineTerminal. The B&M also maintains the MBTA ' s North Station andSouth Station, various layover and storage facilities, stationand headquarter facilities related to commuter services, com-muter rail lines (with the exception of the Northeast Corridor
30
Rowmont - 495
Gardner
Fitchburg
North Leominster
Shirley
Ayer
Littleton-495
South Acton
Wert Concord
ConcordLincoln
Hastings
Kendal Green
Brandeis-Roberts
Waltham
Waverley
Belmont Center
Porter Square
Rockport
Gloucester
HarborManchester-Bv-The-Sea
Beverly FarmsPrides Crossing
Montserrat
Beverly Depot
SalemSwamscort
Central Square-Lynn
River Works
North Station
BOSTON
Newtonville
West Newton
Auburndale
Wellesley Farms
Wellesley
Wellesley Square
Natick
West Natick
Framingham
M South Station
Endlcott
Islington
Norwood Depot
Norwood Central
Windsor Gardens0 Sharon
Plimptonville
Walpole
Norfolk^ Attleboro
Franklin
Fairmount
Readville
\ Route 128Junction
Canton Center
k Canton
\can
Stoughton
Stations: 83
Routs Miles: 242
System Trains Per Day (one-way): 330
Operating Railroad: Boston fit Maine Corporation
Sponsoring Authority: Massachusetts Bay Transportation Authority
N
Note: Map Not to Scale
FIGURE 3. B&M COMMUTER RAIL SYSTEM, BOSTON AREA.
31
segment south of Boston which is maintained by Amtrak), andma intenance-of-way material yards at Billerica and Boston.
4.1.2 Labor Agreements
Rolling stock, facilities, andby standard railroad craft unions,maintenance crafts have agreed to a
tasks to improve productivity.
right-of-way are maIn limited cases,
partial overlapping
inta inedseveralof work
The B&M determines crew pay on the basis of both time anddistance. A day's wages are based on limits of 8 hours or 100miles for the engine crew, and 9 hours or 150 miles for thetrain crew. Total hours of duty are limited to 12 hours a day.These combined limits have an effect on labor costs because B&Mcommuter crews have a 4-hour average layover between runs. As aresult, overtime is paid to commuter train crews at a rate of1.5 times the base rate. In the place of specific arbitraries,the railroad may pay its train personnel a fixed allowance perday, depending on the seniority and division of the employee.
The B&M uses a standard crew of only two people: an engi-neer and a conductor. An additional crew member is added forevery two cars, starting with the second passenger coach. Onthe 330 daily trains, almost 75 percent of the equipment con-sists are limited to two coaches. The minimum train size is twocoaches, and the maximum is nine coaches. Therefore, the crewsize ranges from three to six persons, with the three-personcrew predominant. The railroad may run longer trains than nec-essary and restrict seating to particular cars in order to avoiduncoupling costs. Crewing requirements in this case are basedon the number of cars open for seating, not the length of thetrain. While this reduces labor costs, fuel and maintenancecosts are increased somewhat.
4.1.3 Operating Characteristics
Table 4 lists the major ridership, operating,statistics for the B&M commuter rail system for 1980 .
cated, annual ridershipaverage fare of $1.24,almost 18 miles, and ansengers. The system waspassengers annually perwas 3.7 cars per train,to the RSPO methodologyexpenses representingMa intenance-of-equipment
and costAs indi-
was over 9 million persons, with anan average passenger trip length of
average vehicle loading of over 21 pas-moderately used, carrying almost 31,000route-mile. The average train consistThe total operating expenses according
were $52.7 million, with transportationthe largest portion at 45 percent,
expenses amounted to 31 percent.
3 2
TABLE 4. B&M COMMUTER RAIL SYSTEM CHARACTERISTICS, 1980
BOSTON AREA.
AGGREGATE SYSTEM STATISTICS
Route-MilesRider shipPassenger-MilesTotal Passenger RevenuesTrain-MilesVehicle-MilesTransportation CostsMaintenance of Equipment CostsMaintenance of Way CostsGeneral and Administrative CostsTotal Operating Costs
3029,339,015
166,485,000$ 11,553,737
2,125,7397,762,491
$ 23,537,000$ 16,293,000$ 9,669,000$ 3,214,000$ 52,713,000
AVERAGE RIDERSHIP AND OPERATING CHARACTERISTICS
Passenger Revenues/Total Operating CostsPassenger Trip Length (miles)Passenger FareRevenue Per Passenger-MilePassengers Per Route-Mile (000)Vehicle-Miles Per Route-Mile (000)Passenger-Miles Per Vehicle-Mile
21.92%17.83
$ 1.24$ 0.0730.9225.7021.45
AVERAGE UNIT OPERATING COSTS
$/Passenger-Operating Cost Categories $/Passenger Mile
S/Vehicle-Mile
Percentof Total
Transportation (TRANS) 2.52 0.14 3.03 45
Maintenance of Equipment (MOE) 1.74 0.10 2.10 31
Maintenance of Way (MOW) 1.04 0.06 1.25 18
General and Administrative ( G&A) 0.34 0.02 0.41 6
TOTAL $5.64 $0.32 $6.79 100%
OPERATING COST BREAKDOWN
33
maintenance-of-way expenses amounted to 18 percent, and generaland administrative expenses amounted to 6 percent of the totaloperating expenses. With an average operating cost of $5.64 perpassenger, the system produced an operating ratio of almost22 percent.
4.1.4 Basis for Compensation
The current operating agreement between the B&M and theMBTA provides for the B&M to be compensated for all directexpenses incurred in providing commuter rail services and forother supporting functions such as maintenance-to-way andmaintenance-to-equipment . Direct costs include items incurredby the Commuter Service Transportation, Mechanical, and Engi-neering departments of the B&M such as:
. direct payroll;
. fringe benefits and payroll taxes;
. personnel travel expenses;
. real estate rent;
. utilities;
. supplies;
. fuel;
. joint facility costs;
. equipment rental;
. professional services; and
. Conrail charges.
General overhead costs were reimbursed by including an addi-tional 12 percent of the direct costs listed above. This per-centage represents the costs attributable to commuter serviceoperations for such support services as:
. administration;
. finance and accounting;
. purchasing and stores;
. labor relations and personnel;
34
. security;
. law and claims processing; and
. systems analysis.
The B&M also receives an annual management fee of $500,000 asthe commuter service operator.
An innovative feature of the MBTA's operating agreementwith the B&M is the inclusion of financial incentives and off-sets based on performance criteria. According to the agreement,the MBTA will pay to the B&M monthly performance incentivesbased on the on-time performance of train operations, the per-centage of equipment consist compliance achieved, and the numberof passengers carried in excess of those carried in the samecalendar quarter of the previous year. The operating agreementalso provides for financial offsets or penalties for less thanexpected on-time and consist compliance performance. The levelof total performance-based incentives for which the railroad iseligible is limited to a fixed amount (up to $800,000 in thefirst year of the operating agreement). However, the railroadmay also receive 50 percent of the operating savings resultingfrom MBTA-approved capital improvements recommended by the B&Mduring the first 12 months that the improvement is in effect.From all of the incentive funds paid to the B&M, the operatingagreement calls for up to $200,000 annually to be set aside as aliability fund, for payment of damages for claims resulting fromthe provision of commuter rail services.
As the owner of the right-of-way, stations, and equipment,the MBTA is directly responsible for a significant portion ofthe capital expenses associated with the commuter rail system.As a result, the B&M costs associated with track, facilities,and equipment are primarily direct costs, particularly in regardto stations and equipment which are dedicated to the commuterrail service. Both B&M and Amtrak are charged maintenance-of-way fees for using MBTA-owned right-of-way for freight andintercity passenger operations, respectively. The B&M fees arebased on the gross ton-miles of freight traffic using a rateprescribed by the General Managers Association. The Amtrakremuneration is contained within their bill to MBTA for main-tenance performed by Amtrak on portions of the South Division.The MBTA thus picks up more than the avoidable costs of commuterrail maintenance-of-way costs as a result of owning the right-of-way. In return, the MBTA controls the facility and the ser-ces which can be provided using it.
35
The attributable cost-based compensation methodology pre-scribed by the current MBTA operating agreement with the B& M canbe summarized as follows:
. Direct costs of transportation / ma in tenance-of-equ ipmen
t
, and ma intenance-of-way functions :
100 percent assignment to MBTA:
. Overhead costs : 12 percent of direct costs;
. Management fee : Fixed rate of $500,000;
. On-time performance incentives/offsets : Rangingfrom a maximum monthly incentive of 175,000 to a
maximum monthly offset of $41,700;
. Consist compliance incentives/offsets : Ranging froma maximum monthly incentive of $50,000 to a maximummonthly offset of $41,700;
. Ridership incentives : 10 cents per incrementalpassenger
;
. Capital improvement savings : 50 percent of oneyear's operating savings from B&M-recommended cap-ital improvements; and
. Liability costs : Up to $200,000 for liability fundfrom performance incentives.
This agreement became effective on January 1, 1982, with a termof five years subject to annual approval of the budgetary pro-visions by the Advisory Board of the MBTA.
4.2 LONG ISLAND AREA: LONG ISLAND RAIL ROAD COMMUTER SYSTEM
The Long Island Rail Road (LI) provides commuter rail ser-vice from Long Island to New York City for the MetropolitanTransportation Authority (MTA) . The system comprises 319 milesof right-of-way and 144 stations (see Figure 4) which are ownedand maintained by the LI. The railroad is a wholly-owned subsi-diary of the MTA and is thus a "public benefit" corporation sub-sidized by the MTA. No formal operating agreement is thereforeneeded between LI and MTA. Each weekday 1,138 one-way trainsoperate over the LI rail system which also carries LI freightoperations
.
36
37
FIGURE
4.
LI
COMMUTER
RAIL
SYSTEM,
LONG
ISLAND
AREA.
The commuter operation represents the predominant use ofthe Long Island Rail Road's system, which terminates at PennCentral Station in New York City. Service is most concentratedin the morning and evening rush hours of each weekday. Signi-ficant service is also provioed during non-rush hours of eachweekday and on weekends and holidays. Service operates aroundthe clock on certain heavily-used routes, with two hour headwayscommon during the late night hours.
4.2.1 Equipment
The LI operation utilizes 67 diesel locomotives, 764 elec-tric multiple unit cars, and 250 passenger coaches, which areprimarily leased from the Port Authority of New York and NewJersey. The passenger capacity of this equipment is 120 for themultiple unit cars, and 115 to 118 for the coaches.
4.2.2 Labor Agreements
Because the LI operates a predominantly passenger-orientedsystem, it has negotiated labor agreements that differ substan-tially from the national agreements used by most railroads. TheLI management believes that the current agreement, negotiated inthe early 1970s, has resulted in considerable cost savings.
All equipment maintenance is performed by LI personnel,organized by standard railroad craft unions. As yet, "compo-site" mechanics cannot be utilized on the LI.
The LI labor agreement contains no mileage limitations on aday's work for operating personnel. A day's pay is based on 8
hours work, with overtime paid at 1.5 times the base rate.Total hours of duty are still limited to 12 hours a day, andemployees are guaranteed 40 hours pay per week. The railroaddoes not use split shifts. Crews work morning or evening peakperiods, but they make more than one trip, as they have no mile-age limitations.
The LI labor agreement does not set crewing requirementsfor trains. The railroad operates with a standard train crew ofthree: an engineer, a conductor, and a trainman. The railroaddoes not have firemen. Personnel previously holding thatposition are being retrained as engineers. Those who do notqualify as engineers at the end of three years are terminated.Additional crew members are added on the basis of riaership lev-els and ticketing requirements. With trains ranging in sizefrom two to twelve cars, the crew size ranges from four to ninepersons, with the six-person crew predominant.
38
Most arbitraries have been eliminated, but an extra day'swages is still paid to anyone who performs work under two dif-ferent classes of service. Freight and passenger trains aredifferent classes of service, as are locomotive-pulled passengercars and self-propelled passenger cars.
Table 5 lists the major ridership, operating, and cost sta-tistics for the LI commuter rail system for 1980. As indi-cated, annual ridership was almost 81 million persons, with anaverage fare of $1.84, an average passenger trip length ofalmost 28 miles, and an average vehicle loading of over 46 pas-sengers. The LI commuter rail system is very heavily used, withover a quarter million annual passengers per route-mile. Theaverage train consist was 6.2 cars per train.
The total operating expenses according to the RSPO method-ology were $335.1 million. This represents over 90 percent ofthe Li's total operating expenses for 1980 and reflects theoverwhelming predominance of the passenger operation. Trans-portation expenses amounted to 48 percent, maintenance-of-equipment expenses amounted to 22 percent, maintenance-of-wayexpenses amounted to 21 percent, and general and administrativeexpenses amounted to 9 percent of the total operating expensesfor the commuter service. With an average operating cost of$4.15 per passenger, the system produced an operating ratio ofover 44 percent. This relatively high operating ratio resultedfrom favorable labor agreements with operating personnel, amoderate fare policy, and the scale economies inherent in thehighly concentrated operation and patronage of the system.
4.2.3 Basis for Compensation
Due to the predominance of the Li's passenger operationsand its ownership by the MTA, the railroad uses the RSPO costallocation methodology for estimating the costs assignable tocommuter rail services (see Appendix C for details). Since theMTA is responsible for all costs of the LI, the RSPO cost allo-cation methodology provides an adequate basis for allocatingcosts between freight and passenger services and for meetingfederal reporting requirements of the ICC. Additional costallocation would serve little purpose under these conditions.
4.3 WASHINGTON, D.C., AREA: BALTIMORE AND OHIO RAILROADCOMMUTER SYSTEM
The Baltimore and Ohio Railroad (B&O), part of the CSX Cor-poration, provides commuter rail service via two routes into
39
TABLE 5. LI COMMUTER RAIL SYSTEM CHARACTERISTICS, 1980LONG ISLAND AREA.
AGGREGATE SYSTEM STATISTICS
Route-MilesRider shipPassenger -MilesTotal Passenger RevenuesTrain-MilesVehicle-MilesTransportation CostsMaintenance of Equipment CostsMaintenance of Way CostsGeneral and Administrative CostsTotal Operating Costs
31980,841,783
2,249,535,417$ 148,849,957
7,828,08548,759,000
$ 162,136,000$ 73,627,000$ 69,185,000$ 30,131,000$ 335,079,000
AVERAGE RIDERSHIP AND OPERATING CHARACTERISTICS
Passenger Revenues/Total Operating Costs 44.42%Passenger Trip Length (miles) 27.83Passenger Fare $ 1.84Revenue Per Passenger-Mile $ 0.07Passengers Per Route-Mile (000) 253.42Vehicle-Miles Per Route-Mile (000) 152.85Passenger-Miles Per Vehicle-Mile 46.14
AVERAGE UNIT OPERATING COSTS
Operating Cost Categories $/PassengerS/Passenger-
MileS/Vehicle-
MilePercentof Total
Transportation ( TRANS
)
2.01 0.07 3.32 48
Maintenance of Equipment (MOE) 0.91 0.03 1.51 22
Maintenance of Way (MOW) 0.86 0.03 1.42 21
General and Administrative ( G&A) 0.37 0.01 0.62 9
TOTAL $4.15 $0.14 $6.87 100%
OPERATING COST BREAKDOWN
40
Washington, D.C. The service between Baltimore, Maryland, andWashington, D.C., is funded by the Maryland Department of Trans-portation ( MDOT ) , through its State Railroad Administration.The service between Martinsburg, West Virginia, and Washington,D.C., is only partially funded. MDOT funds the operationbetween Brunswick, Maryland, and Washington, D.C. No publicfunding is currently being provided for the West Virginia por-tion of the route.
The combined system comprises 111.5 miles of right-of-wayand 26 stations (see Figure 5). The right-of-way and stationsare owned and maintained by the B&O. The stations in Marylandare leased to the state, which sublets them to the counties inwhich they are located. Capital improvements to the stationsare therefore the responsibility of the appropriate counties.Each weekday 18 one-way trains operate over the MDOT commutersystem which shares the right-of-way with freight trains andAmtrak intercity passenger trains via the Martinsburg route.Freight service is the predominant user of these routes. Tencommuter trains operate daily between Washington, D.C. andBaltimore. Eight commuter trains operate daily betweenWashington, D.C. and Brunswick. Only two commuter trains dailyoperate as far as Martinsburg.
Service is provided only in the rush hour periods of eachweekday. Scheduled headways between trains range from fifteenminutes to one hour. No service is provided on weekends orholidays
.
4.3.1 Equipment
The B&O operation utilizes 5 diesel locomotives, 10 RDCs of89-passenger capacity, and 22 coaches of 88- to 95-passengercapacity, all of which are owned by MDOT. The B&O also main-tains a diesel locomotive, a power control unit, and eight RDCsfor use on the West Virginia portion of the system and as sparesin case the MDOT equipment is being repaired or maintained. Allequipment, regardless of ownership, is maintained by the B&O.Likewise, all track and stations are maintained by the B&O (withthe exception of Washington's Union Station).
4.3.2 Labor Agreements
Both maintenance-of-equipment and maintenance-of-way areperformed by B&O's standard railroad craft union crews.
41
Martinsburg
Jessup
Washington, D.C.
N
Stations: 26Route Miles: 111.5
System Trains Per Day (one-way): 18Operating Railroad: TTie Baltimore & Ohio Railroad CompanySponsoring Authority: Maryland Department of Transportation ( Maryland portion only)
Note: Map Not to Scale
FIGURE 5. B&O COMMUTER RAIL SYSTEM, WASHINGTON, D.C. AREA.
42
Like the B&M, the B&O determines crew wages on the basis ofboth time and distance limits. A day's wages are based onlimits of 9 hours or 100 miles for the engine crew, and 9 hoursor 150 miles for the train crew. Overtime is paid on a time-and-one-half basis for members of the engine crew, whichincludes an engineer and a fireman. Overtime for members of thetrain crew (conductors and brakemen) are paid at straight time.Total hours of duty are limited to 12 hours a day for members ofthe operating crew. Due to the significant length of runsincurred on the B&O commuter rail system operated for MDOT,these limits result in significant overtime being paid. in somecases, the engine crew is paid two days' wages for each dayworked
.
Crew members are guaranteed at least a fixed amount per dayworked, and they receive a monthly guarantee as well. Overtimeis not included in computing wages earned against the monthlyguarantee. Arbitraries arecrew operates two differentbrakeman is needed to assisttickets, or the train crewservice run.
also provided in the event that a
types of equipment in a day,* a
a conductor in processing passengeris involved in a short turnaround
The standard crew consistsman, conductor, and brakeman.trains consisting of from twotrain consists of a single RDCcrew is used. For the largerto an assistant conductor to he.
of four people: engineer, fire-The standard crew is used on
to five passenger cars. If thecar, then a reduced three-persontrains, the brakeman is upgradedp process passenger tickets.
4.3.3 Operating Characteristics
Table 6 lists the major ridership, operating, and cost sta-tistics for the B&O commuter rail system in the Washington, D.C.area for 1980. As indicated, annual ridership was 823,000, withan average fare of $3.10, an average passenger trip length ofover 24 miles, and an average loading of over 34 passengers pervehicle. The passenger density was relatively light amountingto over 7,000 passengers annually per route-mile. The averagetrain consist was 1.8 cars per train. The total operatingexpenses according to the RSPO methodology were $5.5 million,
* The B&O uses two kinds of equipment on its commuterstandard locomotives pulling passenger coachespropelled diesel passenger cars.
service
:
and self-
43
TABLE 6. B&O COMMUTER RAIL SYSTEM CHARACTERISTICS, 1980,
WASHINGTON, D.C. AREA.
AGGREGATE SYSTEM STATISTICS
Route-MilesRidershipPassenger-MilesTotal Passenger RevenuesTrain-MilesVehicle-MilesTransportation CostsMaintenance of Equipment CostsMaintenance of Way CostsGeneral and Administrative CostsTotal Operating Costs
112823.000
19,866,000$ 2,548,000
204.000579.000
$ 3,448,000$ 1,568,000$ 310,000$ 174,000$ 5,500,000
AVERAGE RIDERSHIP AND OPERATING CHARACTERISTICS
Passenger Revenues/Total Operating Costs 46.33%Passenger Trip Length (miles) 24.14Passenger Fare $ 3.10Revenue Per Passenger-Mile $ 0.13Passengers Per Route-Mile (000) 7.35Vehicle-Miles per Route-Mile (000) 5.17Passenger-Miles Per Vehicle-Mile 34.31
AVERAGE UNIT OPERATING COSTS
Operating Cost Categories $/PassenqerS/Passenger-
MileS/Vehicle-
MilePercentof Total
Transportation (TRANS) 4.19 0.17 5.95 63
Maintenance of Equipment (MOE) 1.90 0.08 2.71 28
Maintenance of Way (MOW) 0.38 0.02 0.54 6
General and Administrative (G&A) 0.21 0.01 0.30 3
TOTAL $6.68 $0.28 $9.50 100%
OPERATING COST BREAKDOWN
44
with transportation expenses representing the largest portion at63 percent. Maintenance-of-equ ipmen t expenses amounted to28 percent, maintenance-of-way expenses amounted to only6 percent, and general and administrative expenses amounted toonly 3 percent of the total operating expenses. The low per-centages of these last two categories result from the predom-inance of the freight services operated over the B&O raillines. With an average operating cost of $6.68 per passenger,the system produced an operating ratio of over 46 percent. Thisrelatively high operating ratio resulted primarily from a moder-ate fare policy.
MDCT's fare structure was changed in 1981 when the statelegislature passed a bill requiring that commuter rail servicelevels be maintained to at least the levels of July 1981, andthat operating revenues derived from the service amount to atleast 50 percent of the total operating expenses. Subsequently,a 30-percent fare increase was instituted in 1981, with another9-percent increase slated for late 1982. These increases aredesigned to produce an operating ratio of 50 percent, despitethe resulting loss of fare-sensitive passengers. As a result,passenger ridership has been gradually declining since 1980.
4.3.4 Basis for Compensation
The current operating agreement between the B&O and MDOTprovides for the B&O to be compensated for all direct expensesincurred in providing commuter rail services and other support-ing functions such as maintenance-of-equipment . Direct costsinclude such major items as:
. direct payroll;
. fringe benefits and payroll taxes;
. personnel travel expenses;
Washington Terminal fee of $61direction for accessing Unionfacility costs )
;
per vehicle perStation (joint
direct billings from the Washington Terminal and theB&O shops for maintenance of commuter service equip-ment;
proportionate share of liability and property damageinsurance;
utilities;
45
. printed materials;
. supplies; and
. fuel.
Items which are not allocated to the commuter rail serviceinclude
:
. maintenance-of-way and structures;
. property taxes; and
. shop overhead.
The costs associated with these items are absorbed by the B&Ofreight service. General and administrative costs and stationoperations costs are reimbursed through a fixed monthly fee of$10,083. This accounts for station employees, administrativeservices, and other common costs associated with the commuterrail service.
When compared with the allocation of operating expenses bythe RSPO methodology, this approach reduces the costs burden onMDOT by eliminating the costs for maintenance-of-way and struc-tures and limiting recovery for general and administrativeexpenses to $120,000 per year. The fact that MDOT also pur-chased its own operating equipment and had it refurbished in1981 should further reduce this burden by reducing maintenance-of-equipment costs.
The B&O-MDOT operating agreement became effective onJanuary 1, 1979, and has a term of six and one-half years,ending on June 30, 1985.
4.4 PITTSBURGH AREA: BALTIMORE AND OHIO RAILROADCOMMUTER SYSTEM
The Baltimore and Ohio Railroad operates a second commuterrail service in the southeastern suburbs of Pittsburgh. Theservice is funded by the Port Authority of Allegheny County(PAT) and the Pennsylvania Department of Transportation(PADOT). The system comprises a single 18-mile right-of-way andfive stations between Versailles and Pittsburgh (see Figure 6).Of the 18-mile route, about 8 miles between Sims and Rankin areowned by the Pittsburgh and Lake Erie Railroad (P&LE) whichpermits the B&O operating authority to use the line through a
46
Pittsburgh
<5) Braddock (P&LE)
* ^X\ \
\
\
n
N
Stations: 5
Routt Miles: 18.2
System Trains Per Day (one-way): 16
Operating Railroad: The Baltimore and Ohio Railroad Company
Sponsoring Authority: Port Authority of Allegheny County
Note: Map Not to Scale
FIGURE 6. B&O COMMUTER RAIL SYSTEM, PITTSBURGH AREA.
47
trackage rights agreement. The remainder of the route andstations are owned and maintained by the B&O using their owncrews
.
Each weekday 16 one-way trains operate over this singleroute system which shares the right-of-way with both B&O andP&LE freight trains. Freight service is the predominant user ofthe right-of-way. Commuter rail service is limited to weekdays,with 35-minute minimum headways during the peak commutinghours. Limited service is provided during the midday off-peakperiod as well.
4.4.1 Egu ipment
The B&O operation utilizes two diesel locomotives, threecab control cars, and ten passenger coaches with a seating capa-city of 102 passengers each. Two train sets of four cars eachare used in push-pull operation. PAT owns the equipment, andthe B&O operates and maintains it.
4.4.2 Labor Agreements
Both maintenance-of-equipment and maintenance-of-wayperformed by B&O's standard railroad craft union crews.
are
The B&O commuter rail operation in Pittsburgh uses the samebasis of pay provisions for determining direct wages and over-time as the operation in the Washington, D.C., area. The B&Ooperating crew wages are determined on the basis of both timeand distance limits. A day's wages are based on limits of 9
hours or 100 miles for the engine crew, and 9 hours or 150 milesfor the train crew. Overtime is paid on a t ime-and-one-halfbasis for members of the engine crew, which includes an engineerand a fireman. Overtime for members of the train crew (conduc-tors and brakemen) are paid at straight time. Total hours ofduty are limited to 12 hours a day for members of the operatingcrew
.
The standard crew consists of four people: engineer, fire-man, conductor, and brakeman. In Pittsburgh, engine crew mem-bers receive a mileage guarantee, while trainmen receive a mon-thly guarantee (30 days). As in the Washington, D.C., system,overtime is not included when computing wages earned against themonthly guarantee. Arbitraries are limited to trainmen assignedto short turnaround service.
4.4.3 Operating Characteristics
Table 7 lists the major ridership, operating, and cost sta-tistics for the B&O commuter rail operation in the Pittsburgharea for 1980. As indicated, annual ridership was 352,257, withan average fare of $1.00, an average passenger trip length of15.5 miles, and an average loading of just over 8 passengers pervehicle. The system was moderately used carrying almost 20,000passengers annually per route-mile. The total operating expen-ses according to the RSPO methodology were $1.6 million, withtransportation expenses representing the largest portion at50 percent. Maintenance-of-equipment expenses amounted to46 percent, maintenance-of-way expenses amounted to only3 percent, and general and administrative expenses amounted toonly one percent. As with the B&O operation in the Washingtonarea, the low percentages of these last two categories of opera-ting expenses reflect the predominant use of the right-of-wayand administrative resources by the freight services. With anaverage operating cost of $4.57 per passenger, the systemprovided an operating ratio of less than 22 percent.
4.4.4 Basis for Compensation
The current operating agreement between the B&O and PATprovides for the B&O to be compensated for all direct expensesincurred in providing commuter rail services and other support-ing functions such as maintenance-of-equipment. Direct costsinclude such major items as:
. direct payroll;
. payroll taxes;
. personnel travel expenses;
. trackage rights charges for use of the Pittsburghand Lake Erie Railroad main line;
. direct billings from the B&O shop for maintenance ofcommuter service equipment;
. proportionate share of liability and property damageinsurance;
. utilities;
. printed materials;
. supplies; and
. fuel.
49
TABLE 7. B&O COMMUTER RAIL SYSTEM CHARACTERISTICS, 1980,
PITTSBURGH AREA.
AGGREGATE SYSTEM STATISTICS
Route-MilesRidershipPassenger-MilesTotal Passenger RevenuesTrain-MilesVehicle-MilesTransportation CostsMaintenance of Equipment CostsMaintenance of Way CostsGeneral and Administrative CostsTotal Operating Costs
18352,257
5,443,709$ 353,000
173.000666.000
$ 803,000$ 747,000$ 47,000$ 15,000$1,612,000
AVERAGE RIDERSHIP AND OPERATING CHARACTERISTICS
Passenger Revenues/Total Operating Costs 21.90%Passenger Trip Length (miles) 15.45Passenger Fare $ 1.00Revenue Per Passenger-Mile $ 0.06Passengers Per Route-Mile (000) 19.57Vehicle-Miles Per Route-Mile (000) 37.00Passenger-Miles Per Vehicle-Mile 8.17
AVERAGE UNIT OPERATING COSTS
Operating Cost Categories $/PassengerS/Passenger-
MileS/Vehicle-
MilePercentof Total
Transportation (TRANS) 2.28 0.15 1.21 50
Maintenance of Equipment (MOE) 2.12 0.14 1.12 46
Maintenance of Way (MOW) 0.13 0.01 0.07 3
General and Administrative ( G&A) 0.04 0.00 0.02 1
TOTAL $4.57 $0.30 $2.42 100%
OPERATING COST BREAKDOWN
50
Property taxes on the station in Pittsburgh are allocatedon the basis of square feet of space used by the commuter agentstationed there. The costs of maintenance-of-way and shop over-head for the commuter rail service are not billed to PAT by theB&O but are absorbed by the B&O freight service. However, thedirect costs for maintaining the stations are charged to PAT.
General and administrative costs (including employee fringebenefits) are reimbursed through the use of General ManagersAssociation (GMA) overhead rates applied to the direct laborcosts associated with the following expense categories:
. transportation (train and engine crews);
. maintenance-of-equipment
;
. maintenance-of-way and structures (stations only);and
. clerical services.
In the absence of more detailed records or special studies,these rates provide an approved basis for estimating the costsof various general and administrative services used in the pro-vision of commuter rail services.
The B&O-PAT operating agreement also prescribes bothequipment maintenance standards and service performance stan-dards. The equipment maintenance standards specify the minimumfrequencies of cleaning the interior and exterior of commuterservice equipment. The service and performance standards spe-cify minimum on-time service and equipment availability levels.Financial penalties are prescribed when the B&O fails to complywith these minimum standards.
The B&O-PAT operating agreement became effective on June 1,
1978, and has a term of five years ending May 31, 1983.
4.5 PITTSBURGH AREA: PITTSBURGH AND LAKE ERIERAILROAD COMMUTER SYSTEM
The Pittsburgh and Lake Erie Railroad (P&LE) providescommuter rail service to the northwestern suburbs ofPittsburgh. At present, there is no formal service contractbetween the P&LE and any public agency regarding this service.However, the Beaver County Transit Authority ( BCTA ) serves asthe local agent for limited funding by PADOT. The railroad has
51
submitted several applications for UMTA funding. These areawaiting the results of audits of the service now being per-formed by BCTA
.
The system comprises a single 31-mile right-of-way and 11stations between College and Pittsburgh (see Figure 7) which areowned and maintained by the P&LE. Each weekday a single four-car train operates into Pittsburgh during the morning rush hourand returns to College during the evening rush hour. Only oneround trip per day is provided, with no service on weekends orholidays. Freight service is the predominant user of the right-of-way over which by the commuter train operates.
4.5.1 Equipment
The P&LE maintains two general purpose diesel locomotivesand five passenger coaches with a seating capacity of 85 passen-gers per car. The locomotives can also be used for minorfreight switching service during the time in which they areidle
.
4.5.2 Labor Agreements
Maintenance of the equipment used in the P&LE commuter railservice is performed by the P&LE's standard union crews.
The standard operating crew consists of four persons: anengineer and a fireman make up the engine crew, while a conduc-tor and a brakeman make up the train crew. The P&LE determines
time and distance. A day's wagesor 100 miles for the engine crew,the train crew. Total hours ofa day. Overtime is paid on the
one-half the base rate. Because only a singlethis service involving over a 9-hour layoverruns, the engine crew normally receives 4.3day and the train crew normally receives 3.8
hours overtime per day. Arbitraries may be paid to the enginecrew for reporting early, depending on the season. This amountsto between 30 minutes and one hour straight time pay per day.The train crew typically receives a 30-minute arbitrary atstraight time per day. Only the train crew receives a guaran-tee, amounting to 30 days per month. In addition to the singleengine and train crew, a ticket clerk at the Pittsburgh Terminal
half time and a clerk typist spends quarter time involvedcommuter rail service.
crew pay on the basis of bothare based on limits of 8 hoursand 8 hours or 150 miles forduty are limited to 12 hoursbasis of time andcrew is used forper day betweenhours overtime per
spendsin the
52
College
a
N
Beaver Falls/New Brighton
Coraopolis
Montour Junction
McKees Rocks
Pittsburgh West End
Pittsburgh
Stations: 'll
Route Miles: 31.2
System Trains Per Day (one-way): 2
Operating Railroad: Pittsburgh & Lake Erie Railroad Company
Sponsoring Authority: Beaver County Transit Authority/ Pennsylvania
Department of Transportation
Note: Map Not to Scale
FIGURE 7. P&LE COMMUTER RAIL SYSTEM, PITTSBURGH AREA.
53
4.5.3 Operating Characteristics
Table 8 lists the major ridership, operating, and coststatistics for the P&LE commuter rail system for 1980. As indi-cated, annual ridership was almost 115,000, with an average fareof $1.13, an average passenger trip length of over 22 miles, andan average vehicle loading of almost 37 passengers. The farelevels have not changed since 1980, although a second morningtrain was eliminated in October 1980. The system was lightlyused, carrying almost 4,000 passengers annually per route-mile.The total operating expenses according to the RSPO methodologywere almost $1.3 million, with transportation expenses repre-senting the largest portion at 68 percent. Maintenance-of-equipment expenses amounted to 20 percent, maintenance-of-wayexpenses amounted to only 3 percent, and general and administra-tive expenses amounted to 9 percent. The low maintenance-of-wayexpense percentage reflects the predominant use of the right-of-way by freight services, which absorb most of these costs. Withan average operating cost of $10.97 per passenger, the systemproduced an operating ratio of only 10 percent. This representsthe highest cost per passenger and the lowest operating ratio ofthe systems studied in this report, and reflects the very lowdensity of operations and ridership demand. With operatingemployees being paid up to 16 hours a day for what amounts toonly two and one-half hours running time, the basis for thesehigh costs becomes readily apparent.
4.5.4 Basis for Compensation
The current funding agreement between the P&LE and PADOTprovides for the P&LE to be reimbursed for up to 70 percent ofapproved operating expenses. While this 70 percent figure is
not absolute, it does reflect a concern that revenues cover atleast 30 percent of the total operating costs of the service.The P&LE currently submits to BCTA and PADOT the followingdirect expense items for reimbursement:
. operating and station labor costs;
. maintenance-of-equipment costs;
. maintenance-of-way (shelters and coachwashingfacility only)
;
. utilities;
. supplies;
54
TABLE 8. P&LE COMMUTER RAIL SYSTEM CHARACTERISTICS, 1980,
PITTSBURGH AREA.
AGGREGATE SYSTEM STATISTICS
Route-MilesRidershipPassenger -MilesTotal passenger RevenuesTrain-MilesVehicle-MilesTransportation CostsMaintenance of Equipment CostsMaintenance of Way CostsGeneral and Administrative CostsTotal Operating Costs
31114,859
2,575,841$ 129,312
30,50470,000
$ 863,000$ 247,000$ 33,000$ 117,000$1,260,000
AVERAGE RIDERSHIP AND OPERATING CHARACTERISTICS
Passenger Revenues/Total Operating Costs 10.26%Passenger Trip Length (miles) 22.43Passenger Fare $ 1.13Revenue Per Passenger-Mile $ 0.05Passengers Per Route-Mile (000) 3.71Vehicle-Miles Per Route-Mile (000) 2.26Passenger-Miles Per Vehicle-Mile 36.80
AVERAGE UNIT OPERATING COSTS
Operating Cost Categories $/Passenger$/Passenger-
MileS/Vehicle-
Mile
Transportation (TRANS) 7.51 0.33 12.33
Maintenance of Equipment (MOE) 2.15 0.10 3.53
Maintenance of Way (MOW) 0.29 0.01 0.47
General and Administrative (G&A) 1.02 0.05 1.67
TOTAL $10.97 $0.49 $18.00
OPERATING COST BREAKDOWN
Percentof Total
68
20
3
9
100 %
55
. casualty and liability claims
. property taxes (shelters only
and insurance;
; and
. fuel.
maintenanceon
Not recovered areand property taxescosts are allocated onbased on a 1977 Amtrakto direct labor costsBeyond this, no othercharged to PADOT. P&LEannual increase in operatingresult of this restriction,
costs for the Pittsburgh Terminalthe right-of-way. Ma intenance-of-way
the basis of a unit cost per car-mile,study. A 15-percent rate is appliedto estimate the costs of supervision,general or administrative costs areis also required by PADOT to keep the
expenses below 12.5 percent. As a
the limitation on acceptable costitems by PADOT, and the treatment of ma intenance-of-way andgeneral and administrative expenses by P&LE, the total operatingexpenses actually submitted by P&LE to PADOT for reimbursementin 1980 amounted to two-thirds of the total operating expensesresulting from the RSPO methodology.
The cost allocation method used by the P&LE to estimate itsreimbursement for operating commuter rail services in Pittsburghsignificantly lowers the cost burden to PADOT for funding thisservice. However, the limited nature of the operation is quiteinefficient in terms of equipment and labor utilization. There-fore, despite the favorable cost allocation method used by P&LE,the service remains one of the most expensive commuter opera-tions in the country.
4.6 DETROIT AREA: GRAND TRUNK WESTERN RAILROADCOMMUTER SYSTEM
The Grand Trunk Western Railroad ( GTW )provides commuter
rail service to the northwestern suburbs of Detroit for theSoutheastern Michigan Transportation Authority (SEMTA). Thesystem comprises 27.8 miles of right-of-way, nine stations whichare owned and maintained by GTW, and one station (Birmingham)which is owned by SEMTA and maintained by GTW (see Figure 8).
* This study indicated a rate of 40 cents per car-mile forpassenger-related ma intenance-of-way costs. This rate is
inflated to current year dollars by using a cost index devel-oped by the Association of American Railroads.
56
Pontiac
Bloomfield Hills
Charing Cross
Birmingham
Royal Oak (12 Miles)
Royal Oak (11 Miles)
Femdale
iChrysler Center
Milwaukee Junction (New Center)
Detroit
Stations: 10
Route Miles: 27.8
System Trains Per Day (one-way): 6
Operating Railroad: Grand Trunk Western Railroad CompanySponsoring Authority: Southeastern Michigan Transportation Authority
Note: Map Not to Scale
FIGURE 8. GTW COMMUTER RAIL SYSTEM, DETROIT AREA.
57
Each weekday, six one-way trains operate over the single GTWroute between Pontiac and Detroit. Commuter trains share thetrack with GTW freight trains. Service is available in themorning and evening rush hours, with headways of 20 to 30 min-utes between trains. No service is provided during non-rushhours or on weekends or holidays.
4.6.1 Equipment
The GTW operation utilizes 5 general purpose diesel locomo-tives and 23 serviceable passenger coaches with an average seat-ing capacity of 82 passengers per car. Each train consists offive passengers cars and a locomotive. Due to the nature of theservice schedule, three separate train sets are required for theoperation, each with its own crew. SEMTA owns the commuterequipment as well as the Pontiac coach repair shop and theDetroit Terminal. GTW is responsible for maintaining SEMTA'scommuter rail equipment, under the supervision of a SEMTA-appointed superintendent of rail equipment. GTW also providesequipment in case of breakdown or maintenance of SEMTA'sequipment
.
SEMTA is responsible for keeping an adequate inventory ofmaterials and supplies needed to maintain and repair its com-muter rail equipment at its Pontiac facility. GTW is respon-sible for maintaining SEMTA's locomotive fleet and keeping anample inventory of materials and supplies not unique to thecommuter operation.
4.6.2 Labor Agreements
Equipment maintenance is provided by GTW's standard unioncrews, as is maintenance-of-way and stations (except snowremoval, which is performed by SEMTA).
A standard crew for the GTW commuter rail service consistsof five persons, including an engineer, a fireman, a conductor,and two brakemen. GTW determines crew pay on the basis of bothtime and distance. A day's wages are based on limits of 8 hoursor 100 miles for the engine crew and 9 hours or 150 miles forthe train crew. Total hours of duty are limited to 12 hours a
day. Overtime is paid on a time and one-half basis. No arbi-traries are paid to either engine or train crew members. Onlythe train crew receives a monthly guarantee.
The GTW commuter operation incurs high labor costs due tothe large size of the standard crew and the limited serviceschedule. Train and engine crews encounter a significantlayover between runs, since trains operate in only one direction
58
during each rush-hour period. Like the P&LE commuter operation,GTW crews work split shifts extending over 11 hours per day.Within this period, the actual train running time is only twoand one-half hours per round trip.
4.6.3 Operating Characteristics
Table 9 lists the major ridership, operating, and coststatistics for the GTW commuter rail system for 1980. Asindicated, annual ridership was 517,461, with an average fare of$1.00, an average passenger trip length of 15 miles, and anaverage vehicle loading of over 37 passengers. The system wasmoderately used, carrying overroute-mile. The total operatingmethodology were $2.1 million,representing the largest portionequipment expenses amounted toexpenses amounted to 5 percent,expenses amounted to 6 percent of the total operating expenses.With an average operating cost of $4.10 per passenger, the sys-
18,000 passengers annually perexpenses according to the RSPOwith transportation expenses
at 62 percent. Ma intenance-of-27 percent, maintenance-of-wayand general and administrative
of the totalof $4.10 per
tern produced an operating ratio of over 24 percent.
4.6.4 Basis for Compensation
The current operating agreement between GTW and SEMTA is a
customized contract that utilizes several cost allocation meth-odologies. The agreement provides for GTW to be compensated forall direct expenses incurred inand other supporting functionsand maintenance-of-way. Direct
providing commuter rail servicessuch as maintenance-of-equipmentcosts include such items as:
maintenance-of-equipment labor wages;
. train crew wages, including deadheading expenses;
. train crew expenses for meals, lodging, andtransportation;
. utilities, plus a 10-percent surcharge for certainrailroad-owned stations;
. supplies, plus a 15-percent surcharge if issued byGTW;
fuel and lubricants;
equipment rental; and
professional services.
59
TABLE 9. GTW COMMUTER RAIL SYSTEM CHARACTERISTICS, 1980,
DETROIT AREA.
AGGREGATE SYSTEM STATISTICS
Route-MilesRidecshipPassenger-MilesTotal Passenger RevenuesTrain-MilesVehicle-MilesTransportation CostsMaintenance of Equipment CostsMaintenance of Way CostsGeneral and Administrative CostsTotal Operating Costs
28517,461
7,761,915$ 517,313
53,040207,483
$1,310,000$ 572,000$ 114,000$ 125,000$ 2 , 121,000
AVERAGE RIDERSHIP AND OPERATING CHARACTERISTICS
Passenger Revenues/Total Operating Costs 24.39%Passenger Trip Length (miles) 15.00Passenger Fare $ 1.00Revenue Per Passenger-Mile $ 0.07Passengers Per Route-Mile (000) 18.48Vehicle-Miles Per Route-Mile (000) 7.41Passenger-Miles Per Vehicle-Mile 37.41
AVERAGE UNIT OPERATING COSTS
Operating Cost Categories $/Passeng
Transportation (TRANS) 2.53
Maintenance of Equipment (MOE) 1.11
Maintenance of Way (MOW) 0.22
General and Administrative (G&A) 0,24
TOTAL $4.10
$/Passenger-Mile
S/Vehicle-Mile
Percentof Total
0.17 6.31 62
0.07 2.76 27
0.01 0.55 5
0.02 0.60 6
$0.27 $10.22 100%
OPERATING COST BREAKDOWN
60
Employee fringe benefits, supervision, and administration aredetermined by applying a surcharge to all direct labor wagesbased on the latest General Managers Association (GMA) overheadrates. Track inspection costs attributable to the commuter railservice are determined on the basis of the estimated monthlylabor, materials, and related expenses incurred by the railroadfor this function. Ma intenance-of -way costs are determined onthe basis of the number of gross ton-miles from the movement ofcommuter rail service locomotives, passenger coaches, andpassengers. GTW is reimbursed through a fixed monthly fee forthe costs of each radio installed in SEMTA locomotives which iscompatible with GTW's operating frequencies. A surcharge toaccount for various shop overhead expenses associated with GTWequipment repair facilities is applied to the direct costs oflabor when such facilities are used for SEMTA equipment. Thesurcharge is based on the latest GMA overhead rates. Yardswitching costs are charged on a per-hour basis, accounting forcrew, fuel, locomotive ownership, and locomotive repair andservicing costs. SEMTA pays a fixed annual charge of $1,000 toGTW for use of commuter station facilities on the system.
The GTW-SEMTA agreement calls for SEMTA to pay GTW a
monthly management fee covering the costs of train dispatching,signal operations, and highway grade crossing protection. Thisfee is developed on a train-mile basis. SEMTA also pays GTW anannual fixed fee of $25,000 for investigation, settlement, anddefense of commuter service-related claims filed against therailroad for up to a maximum of 20 claims per year. Additionalclaims in a calendar year are reimbursed at the rate of $750 perclaim. Major incidents resulting in more than 24 claims orinquiries are handled on a direct time and cost basis. GTW is
reimbursed for costs associated with administrative personneland expenses on the basis of a fixed monthly charge, plus theactual travel and parking expenses of the Engineer, SpecialServices. This charge is adjusted for changes in the wage ratesof administrative personnel.
The GTW-SEMTA operating agreement is characterized by itsextensive use of GMA rates for estimating overhead costs, theuse of unit costs to estimate the attributable costs of specificfunctions, and the use of fixed costs to recover certain admin-istrative and joint facility costs. As a result, a limitedamount of operating and cost data is needed to develop the eli-gible costs for reimbursement by SEMTA. Due to its detail anduse of the GMA overhead rates, the methodology provides for sig-nificant recovery of GTW's expenses attributable to commuterrail services. This agreement became effective on March 1,
1982, and will continue for three years until February 28, 1985.
61
4 . 7 SAN FRANCISCO AREA: SOUTHERN PACIFICRAILROAD COMMUTER SYSTEM
The Southern Pacific Railroad (SP) provides commuter railservice to the suburban communities between San Francisco andSan Jose for the California Department of Transportation(Caltrans). The system comprises 47 miles of right-of-way and27 stations (see Figure 9) which are owned and maintained bySP. Each weekday 46 one-way trains operate over the singleroute system which shares the right-of-way with SP freighttrains. Recently, the level of passenger traffic has begun toexceed the level of freight traffic over the line. Service ismost concentrated in the morning and evening rush hours of eachweekday, with minimum headways of 20 minutes to most stations.Service is also provided during off-peak periods of each weekdayand on weekends and holidays, with one- to two-hour headwayscommon
.
The SP-Caltrans operating agreement restricts the commuterrail service schedule somewhat by limiting the number of east-bound trains to five between 6:31 p.m. and 5:30 a.m., and thenumber of westbound trains to four between 6:01 p.m. and5:00 a.m. In addition, no more than 16 commuter trains can bescheduled between 8:00 a.m. and 4:00 p.m. These restrictionsare intended to facilitate the movement of freight trains overthe line and limit the potential for conflicts between freightand passenger trains.
4.7.1 Equipment
The SP operation utilizes 24 diesel locomotives,gallery cars with seating capacities ranging frompassengers per car, and 27 suburban coaches withcapacity of 96 passengers per car. This equipment i
owned by SP and leased to Caltrans, with an option to
46 bilevel145 to 164a seating
s currentlypurchase
.
4.7.2 Labor Agreements
SP maintains the commuter rail equipment, as well as theright-of-way and stations, under contract to Caltrans, using itsstandard craft union workers.
SP determines operating crew pay on the basis of both timeand distance. A day's wages are based on limits of 8 hours or100 miles for the engine crew and 9 hours or 150 miles for thetrain crew. Total hours of duty are limited to 12 hours a day.
62
San Francisco
'* 23rd Street
i > Paul Avenue
4 > Bayshore
< > Butler Road
< > South San Francisco
{ > San Bruno
! (,Millbrae
1 1 Broadway
i (Burlingame
N
Stations: 27
Routs Miles: 46.9
System Trains Per Dsy (one-way): 46
Operating Railroad: Southern Pacific Transportation Company
Sponsoring Authority: California Department of Transportation
Nota: Map Not to Scale
FIGURE 9. SP COMMUTER RAIL SYSTEM, SAN FRANCISCO AREA.
63
The railroad is allowed to utilize split shifts and does sobecause of the peak nature of the service. Employees off dutyfor more than 4 hours are paid standard rates for their secondshift. Employees with spread time under 4 hours receive timeand a one-half for their second shift. Only extra board workersare guaranteed daily wages. No monthly guarantees are pro-vided. Passenger service crews are eligible to receive arbi-trages but seldom have the opportunity to earn them. Arbitrarypayments are made if an extra engine is picked up for a run, orif a train is required to deadhead the length of the route.Neither situation occurs frequently.
The SP uses a standard crew of four people: an engineer, afireman, a conductor, and a brakeman. The standard crew is usedon minimum three-car trains. An extra trainman is assigned tothe crew for each additional two cars. A second conductor isadded for four- and five-car trains, and a second brakeman isadded for six- and seven-car trains. A seven-person crew isused on eight-car trains which are the longest commuter trainsoperated by SP.
4.7.3 Operating Characer istics
Table 10 lists the major ridership, operating, and coststatistics for the SP commuter rail system for 1980 . As indi-cated, annual ridership was over 6 million persons, with anaverage fare of $1.20, an average passenger trip length of over23 miles, and an average vehicle loading of almost 59 passengers(due primarily to the use of bilevel gallery cars). The systemwas heavily used, carrying over 130,000 passengers annually perroute-mile. The average train consist was 3.8 cars per train.The total operating expenses according to the RSPO methodologywere $16.6 million, with transportation expenses representingthe largest portion at 68 percent. Maintenance-of-equipmentexpenses amounted to only 17 percent, maintenance-of -way expen-ses amounted to 5 percent, and general and administrative expen-ses amounted to 10 percent of the total operating expenses.With an average operating cost of only $2.71 per passenger, thesystem produced an operating ratio of over 44 percent. Thisrelatively high revenue-to-cost ratio reflects the high densityof the operation and passenger demand, resulting in high pas-senger loadings per car. At 44 percent, the ratio was above theminimum level of 40 percent set by state law.
4.7.4 Basis for Compensation
The SP-Caltrans operating agreementperformance standards and several costdologies. The agreement requires that at
incorporates basicallocation metho-
least 90 percent of
64
TABLE 10. SP COMMUTER RAIL SYSTEM CHARACTERISTICS, 1980,
SAN FRANCISCO AREA.
AGGREGATE SYSTEM STATISTICS
Route-MilesRidershipPassenger -MilesTotal passenger RevenuesTrain-MilesVehicle-MilesTransportation CostsMaintenance of Equipment CostsMaintenance of Way CostsGeneral and Administrative CostsTotal Operating Costs
476,112,890
142,681,323$ 7,360,000
634,7352,431,000
$ 11,228,000$ 2,854,000$ 774,000$ 1,707,000$ 16,563,000
AVERAGE RIDERSHIP AND OPERATING CHARACTERISTICS
Passenger Revenues/Total Operating Costs 44.44%Passenger Trip Length (miles) 23.34Passenger Fare $ 1.20Revenue Per Passenger-Mile $ 0.05Passengers Per Route-Mile (000) 130.06Vehicle-Miles Per Route-Mile (000) 51.72Passenger-Miles Per Vehicle-Mile 58.69
AVERAGE UNIT OPERATING COSTS
Operating Cost Categories $/PassenqerS/Passenger-
MileS/Vehicle-
MilePercentof Tota;
Transportation (TRANS) 1.83 0.08 4.62 68
Maintenance of Equipment (MOE) 0.47 0.02 1.17 17
Maintenance of Way (MOW) 0.13 0.01 0.32 5
General and Administrative ( G&A) 0.28 0.01 0.70 10
TOTAL $2.71 $0.12 $6.81 100%
OPERATING COST BREAKDOWN
65
all commuter trains complete their trips within five minutesafter their scheduled arrival times at the San Francisco depotor the San Jose depot. The agreement also specifies that allequipment used in commuter service be maintained at a level thatallows for at least 80 percent of the equipment to be availablefor service at any time.
The agreement specifies 22 categories of costs which aredirectly related to the operation of commuter rail services andare thus eligible for reimbursement by SP. These are summarizedas follows:
. direct payroll for operating and maintenance crews;
. employee health and welfare benefits, calculated onthe basis of total labor costs by service type;
. fuel, calculated on the basis of actual expenses forfuel used in commuter service operations and on thepercentage of yard switching hours devoted to com-muter trains while in the San Francisco, San Jose,and Oakland yards;
. commuter service advertising;
. publishing and printing of timetables, tariffs, andpassenger service tickets relating to commuterservices
;
. depreciation of passenger yard shop and power plantmachinery;
. locomotive maintenance, calculated on the basis oflocomotive unit miles and limited to the adjustedlevels of costs experienced by SP in 1979 for thefirst three years of the contract;
. equipment maintenance, calculated on a direct costbasis and limited to the adjusted levels of costsexperienced by SP in 1979 for the first three yearsof the contract;
. utilities;
. supplies; and
. professional services.
The general expenses incurred for administering the com-muter rail service by personnel within SP's general offices arecalculated on the basis of 6 percent of the sum of all directlydetermined operating expenses listed above. Common expenses
66
incurred by SP which cannot be readily assigned to eitherfreight or passenger services are calculated on the basis of12 percent of the sum of all directly determined operatingexpenses listed above. In addition, an operating margin isprovided which amounts to 4 percent of the sum of all directlydetermined operating expenses, general expenses, and commonexpenses. A fee of 8 cents per passenger is also provided as anincentive to attract ridership. To these expenses are added thecosts of applicable federal payroll, state sales, and local (SanFrancisco payroll tax) taxes, plus equipment and facilityrental, maintenance-of-way expenses, and liability costs.
The equipment used in the service is leased to Caltrans bySP, with an option to purchase. The equipment is dedicated tothe commuter operation under this arrangement. As a contribu-tion to the public good, SP foregoes the rental payments onlocomotives used in commuter service for the first five years ofthe agreement and the rental payments on passenger cars used incommuter service for the first three years of the agreement.
The agreement specifies a fixed cost of $559,000 per yearfor the use and routine maintenance of all fixed facilities,including track. This amount is acknowledged to be below actualcosts and reflects another contribution to the public good.
The agreement reimburses SP a fixed annual amount for thecosts associated with SP's assumption of the liability andresponsibility for commuter service-related injury and damageclaims. The amount begins at $400,000 per year for the firstfive years of the agreement and increases to $600,000 for eachof the second five years of the agreement. During the initialfive years of the agreement, SP contributes $400,000 annually tothe public good in the form of a deduction to its total operat-ing expenses incurred in providing commuter rail services.
The agreement also includes provisions for SP and Caltransto share equally the costs of all capital improvements to theright-of-way, with Caltrans being solely responsible for thecapital costs of commuter service equipment, stations, andfacilities
.
The SP-Caltrans agreement regarding reimbursable expensescan be summarized as follows:
. Direct costs of transportation and maintenance-of-equipment functions : 100 percent assignment toCaltrans
;
. General and administrative costs : 6 percent ofdirect operating costs;
. Common costs: 12 percent of direct operating costs;
67
. Operating margin : 4 percent of direct, general, andcommon costs;
. Incentive fee : 8 cents per passenger;
. Maintenance-of-way : Fixed rate of $559,000;
. Taxes : Attributable allocation;
. Equipment and station rental : Fixed cost pervehicle and station;
. Liability : Fixed rate of $400,000 ($600,000 inyears 6 to 10 of the agreement);
. Capital costs/track : 50 percent allocation toCaltrans; and
. Capital costs/commuter service equipment, stations,and facilities : 100 percent allocation to Caltrans.
These compensation provisions serve several purposes for both SPand Caltrans. The simplified reimbursement of common and gen-eral expenses and of maintenance-of-way costs eases the datarequirements on the accounting staff of the SP while providinginflow of subsidy money based on direct costs associated withthe transportation and maintenance-of-equipment functions.Caltrans benefits from the reduced cost charged for maintenance-of-way by the SP as well as the reduced accounting needs of thesimplified allocations. While the negotiations leading to thisagreement were lengthy, the approach eliminated the need toperform detailed analyses of common cost components, to esta-blish the cost and service relationships required for propor-tional costing, and to determine what costs are avoidable, giventhe cessation of service. The result is a simplified costingmethodology whose results closely compare with the costs iden-tified by the RSPO methodology, while permitting the SP todesignate certain expenses as a contribution to the publicgood. This agreement became effective on July 1, 1980, tocontinue for ten years.
68
5. COMPARISON OF COMMUTER RAIL SYSTEMS
This section presents a comparative analysis of the sevencommuter rail systems described in Section 4, based on their1980 system, operations, revenue and cost statistics.
5.1 RIDERSHIP AND OPERATING CHARACTERISTICS
Figures 10A and 10B compare the primary ridership and oper-ating characteristics of the seven commuter rail systems. Interms of operating ratio, the seven systems cluster into threedistinct groups according to the top left chart in Figure 10A.The Long Island, Washington, D.C., and San Francisco systemshave an average operating ratio of around 45 percent, while theBoston, Pittsburgh (B&O), and Detroit systems average around22 percent. The P&LE system in Pittsburgh displays the lowestoperating ratio at 10 percent. These differences reflect thehigh density operations and ridership of the Long Island andSan Francisco systems, the high fare struc- ture of theWashington, D.C. system, and the lower operations and passengerdensity of the Boston, Pittsburgh (B&O and P&LE), and Detroitsystems, as illustrated in the two charts at the top ofFigure 10B.
The average passenger trip length, shown in the top rightchart in Figure 10A, is essentially a function of system design,in terms of total route-miles and number of routes. TheLong Island, Washington, D.C., and San Francisco systems havethe longest trip lengths, while the Pittsburgh (B&O) and Detroitsystems have the shortest trip lengths.
The revenue intensity of each system is compared in the twocharts at the bottom of Figure 10A. As indicated, theWashington, D.C. system has the highest average fare. The othersix systems are relatively close in terms of passenger revenuesper passenger-mile.
The lower chart in Figure 10B indicates the average numberof passengers per vehicle for each commuter system. The chartindicates that the San Francisco system exhibits the highestdensity of passenger occupancy, due to the higher capacity ofthe equipment used and the greater ridership demand. ThePittsburgh system operated by the B&O Railroad displays the low-est level of vehicle occupancy.
69
% REVENUE/COST
FIGURE 10A. COMPARISON OF RIDERSHIP AND OPERATINGCHARACTERISTICS BY SYSTEM, 1980.
70
PASSENGER MILES/VEHICLE-MILES
FIGURE 10B. COMPARISON OF RIDERSHIP AND OPERATINGCHARACTERISTICS BY SYSTEM, 1980.
5.2 UNIT OPERATING COSTS
Figures 11 through 15 illustrate the average unit costs foreach system by major expense category. Figure 11 compares theaverage unit transportation costs by system. As indicated, thePittsburgh operation by the P&LE Railroad is the most costly ona unit basis, and the Washington, D.C., and Detroit systems arealso somewhat high. Since labor makes up the major portion ofthe transportation expenses, the four- and five-person crews andlong layover periods of these systems makes the unit transporta-tion costs disproportionately higher. The Long Island system,with its extensive operation and favorable labor arrangements,produces the lowest unit transportation costs. Transportationcosts exceed 44 percent of the total operating costs for each ofthe systems, representing the largest category of cost for eachsystem.
Figure 12 compares the average unit maintenance-of-equipment costs by system. The charts indicate that the Boston,Washington, D.C., and Pittsburgh (P&LE) systems are most costlyin terms of unit equipment maintenance. Since these data werecollected in 1980, the Boston and Washington, D.C., systems haveimproved the condition of their fleets by either acquiring newequipment or refurbishing existing equipment. This shouldimprove cost performance in terms of equipment maintenance. TheLong Island and San Francisco systems exhibit the lowest unitmaintenance-of-equipment costs, due in part to the LI RailRoad's use of cost-efficient electric equipment and the SP'smaintenance of its equipment at a normalized level. For most ofthe systems, maintenance-of-equipment costs represent from 20 to30 percent of total operating costs.
Figure 13 compares the average unit maintenance-of-waycosts by system. The Boston and Long Island systems incur thehighest level of unit maintenance-of-way costs, due to the pre-dominant use of their rights-of-way by passenger operations. Asthe major user of these systems, commuter operations are allo-cated a higher percentage of total maintenance-of-way costs thanthe commuter operations of other systems whose predominant ser-vice is freight. The high unit cost for the Long Island systemcould also result from the upkeep required by the electrifiedfacilities along its route structure. Also contributing to thehigh unit maintenance-of-way costs for the Boston andLong Island systems is the fact that the authorizing agency ownsthe right-of-way, either directly, as in the case of Boston, orindirectly, as in the case of Long Island. Whereas totaloperating expenses represented by maintenance-of-way costsaverage 20 percent for the Boston and Long Island systems, theyaverage about 5 percent for the remaining systems.
72
FIGURE 11. COMPARISON OF AVERAGE UNIT TRANSPORTATIONCOSTS BY SYSTEM, 1980.
73
FIGURE 12. COMPARISON OF AVERAGE UNITMAINTENANCE-OF-EQUIPMENT COSTS BY SYSTEM, 1980.
74
FIGURE 13. COMPARISON OF AVERAGE UNITMAINTENANCE-OF-WAY COSTS BY SYSTEM, 1980.
75
S/PASSENGER-MILE
FIGURE 14. COMPARISON OF AVERAGE UNIT GENERAL ANDADMINISTRATIVE COSTS BY SYSTEM, 1980.
76
FIGURE 15. COMPARISON OF AVERAGE UNIT TOTAL OPERATINGCOSTS BY SYSTEM, 1980.
77
Figure 14 compares the average unit general and administra-tive costs by system. The Pittsburgh operation by the P&LERailroad incurs the highest unit costs, due primarily to thevery low level of operations. The two commuter operations ofthe B&O Railroad in Washington, D.C., and Pittsburgh exhibit thelowest unit costs for general and administrative functions, andthe lowest percentage of total operating costs ranging from 1 to3 percent. The Long Island, Pittsburgh (P&LE), andSan Francisco systems devote the highest percentage of totaloperating costs to this category, averaging around 9 percent.The dispersion of percentages of total operating costs repre-sented by general and administrative costs reflects the dif-ferences in methods and assumptions used by individual railroadsin allocating these costs, which comprise the largest propor-tion of common costs of the four cost categories studied.
Figure 15 compares the average unit total operating costsby system. Once again, the P&LE operation in Pittsburgh incursthe highest unit costs due to its limited operations andrestrictive labor arrangements. The Long Island andSan Francisco systems are most cost effective, due to theirintensive operations and their ridership density. While the B&Ooperation in Pittsburgh exhibits the lowest total operatingcosts per vehicle-mile, the low vehicle occupancy leveldescribed earlier precludes the system from achieving comparableresults in terms of overall profitability (as measured by theoperating ratio and costs per passenger-mile).
5.3. COMPENSATION METHODS
Each of the seven commuter systems analyzed in this report,with the exception of the Long Island system, has a differentmethodology for reporting attributable costs of freight and pas-senger operations to the ICC and for estimating the reimburs-able costs of providing commuter rail services. The variouscompensation methods used for each system are summarized inTable 11. The differences among the methodologies reflect theresults of negotiations between the operating railroads and theauthorizing agencies, the ownership arrangements regarding therights-of-way and equipment, and the predominant services usingthe rights-of-way.
The major difference among systems involves the use ofavoidable versus attributable cost allocation methods. Theattributable cost allocation method is used primarily on systemswhere passenger service represents the significant user of theright-of-way. This includes such systems as Boston,Long Island, and San Francisco. This methodology tends to
78
TABLE 11. COST ALLOCATION METHODS BY COMMUTER RAIL SYSTEM.
System Primary Compensation Methods
B&M/Boston - Attributable Cost Allocation~ Fixed Percent General andAdministrative Overhead
- Fixed Management Fee and LiabilityFund
- Service Performance Incentives andOffsets
- Ridership Level Incentives
Ll/Long Island - RSPO Cost Allocation (primarilyattributable cost allocation)
B&O/Kashing ton, D.C. - Avoidable Cost Allocation- Fixed General and Administrative Fee
B&O/Pittsburgh - Avoidable Cost Allocation- GMA Overhead Rates for Generaland Administrative Costs
~ Service Performance Penalties- Equipment Maintenance Penalties
P&LE/Pittsburgh ~ Avoidable Cost Allocation- Fixed Percent Supervisor Overhead
GTto/Detroi t - Variable Cost Allocation~ GMA* Overhead Rates for Generaland Administrative Costs
~ Fixed Liability Fee and Station UseCharge
SP/San Francisco - Attributable Cost Allocation- Fixed Percent General andAdministrative Costs
- Fixed Percent Common Costs- Fixed Percent Management Fee- Ridership Level Incentives- Fixed Miaintenance-of -Kay Fee- Below Value Equipment and Station
Rental Costs- Fixed Liability Fee
GMiA - General Managers Association
79
assign more of the total operating costs to the commuter servicethan the avoidable cost method, since more expense categoriesare involved in the allocation. The commuter systems whichshare predominantly freight-carrying lines tend to use theavoidable cost allocation method. This method reouces the com-plexity of performing the cost allocation by assigning certaincategories of joint costs to the predominant user, similar tothe pr ior i ty-of-use cost allocation method. Systems using theavoidable cost method include Washington, D.C., Pittsburgh( B&O ) , and Pittsburgh (P&LE).
The only system which makes significant use of the variablecost allocation method is the Detroit system. The Detroit oper-ating agreement develops numerous unit costs to estimate thecommuter service costs associated with such functions as traindispatching, yard switching, maintenance-of-way , signal opera-tion, and grade crossing protection. Each unit cost relates a
set of operating expenses to a specific level of output as mea-sured by a particular operating statistic. The lack of morewidespread application of this method reflects the difficulty ofdeveloping meaningful proportional cost relationships which canbe agreed to by both operator and authorizing agency, and theapparent preference of authorizing agencies for cost documenta-tion that better reflects actual expenditures.
Another major difference among the compensation methodsinvolves the treatment of general and administrative costs.Several commuter service contracts rely on railroad overheadrates developed by the General Managers Association (GMA) . Thismethod eliminates the need for extensive data collection, spe-cial studies, and continuous updating to determine the actualcosts associated with employee fringe benefits, supervision, andother general and administrative expenses. Instead, industry-based percentage overhead rates are applied to direct laborexpenses by major function to estimate these costs. The ratesare provided by an independent third-party source and areupdated quarterly. Their use is evident in the operating con-tracts of the Pittsburgh (B&O) and Detroit systems. Othersystems use fixed overhead rates to recover general and admini-strative costs, supervision costs, common costs, or managementfees. These include Boston, Pittsburgh (P&LE), andSan Francisco. Like the GMA overhead rates, fixed overheadrates are simple to apply.
The use of fixed fees for certain cost categories is evi-dent in the operating agreements of the Boston, Washington,D.C., Detroit, and San Francisco systems. Fixed fees typicallyare used for cost categories which are not directly related tothe level or amount of service provided in the short term.These include management fees and liability costs associatedwith damage and injury claims. In several cases, minimal fixed
80
charges are used as a method of assigning token value to a cer-tain function which is provided for the public good. For exam-ple, the Detroit system compensates GTW in this fashion for theuse of railroad-owned stations, and the San Francisco systemcompensates SP in this fashion for maintaining the right-of-way.
Recent innovations in the development of compensation forcommuter rail operators are ridership and performance incen-tives. These are financial incentives provided to commuter railoperators for exceeding certain predetermined levels of rider-ship or service as measured by specific criteria. Both Bostonand San Francisco have ridership incentives calculated on thebasis of ridership above a certain historic level (Boston) oractual ridership (San Francisco). Boston also provides forfinancial incentives for exceeding certain service standardswhich measure on-time performance and equipment availability.In addition, the Boston agreement stipulates financial penaltiesor offsets for performance which is below certain service limitsfor on-time performance and equipment availability. The PATagreement with the B&O specifies only financial penalities fornoncompliance with prescribed minimum equipment maintenance andservice performance standards. The San Francisco agreementstipulates a minimum standard for on-time performance but failsto assign a financial reward or penalty for either exceeding ornot reaching the standard.
81/82
.
FINDINGS AND CONCLUSIONS6 .
The cost to public agencies of funding commuter rail ser-vice varies significantly among rail systems. These variationscan be attributed to:
. the differences in railroad labor agreements cur-rently in effect;
. the scale of train operations and ridership demand;
. the age, condition, and capacity of equipment;
. the ownership of right-of-way and equipment; and
. the methods used to allocate common costs as stipu-lated in the operating agreements between railroadand authorizing agency.
Some of these costs are beyond the immediate control ofauthorizing agencies sponsoring commuter rail services. How-ever, the cost of commuter rail services can be reduced by modi-fying labor arrangements, refurbishing existing equipment orbuying new equipment, instituting performance and ridershipincentives, and establishing more favorable cost allocationarrangements. In addition, many of the productivity improvementtechniques successfully developed under the SMD Program for con-ventional transit systems may be applicable to commuter rail.
Cost savings resulting from advantageous labor agreementsare apparent in the operating statistics presented in Section 4
of this report. Reductions in transportation cost per vehicle-mile are reported by the LI Rail Road due to the elimination ofmileage limits to a day's work and the extensive use of elec-tric power for train operation. The B&M also reports operatingcost savings by reducing manning requirements from a four-personbase crew to a two-person base crew and by negotiating therelaxation of some maintenance work rules. In contrast, theMBTA attributes its higher maintenance costs to the poor con-dition of equipment and right-of-way that existed when thesystem was originally purchased from the B&M and Conrail. Theproblem of previously deferred maintenance has kept these costshigher for several years despite improvements in labor produc-tivity and management controls.
The limited commuter operations provided by the P&LERailroad in Pittsburgh and the GTW Railroad in Detroit preventthese commuter systems from efficiently utilizing their oper-ating crews under traditional railroad work rules. These sys-tems, which operate commuter rail service strictly during the
83
rush-hour periods, pay significant overtime to their operatingcrews under these work rules. To reduce these costs, servicelevels would have to be expanded significantly or existing laboragreements would have to be modified by such methods as:
. reducing the size of the crew;
. instituting split shift arrangements for operatingcrews with wages based solely on time worked;
. eliminating arbitraries and constructive allowances;and/or
. adjusting commuter service wage rates to parallelmore closely the wages paid to transit workers withcomparable responsibilities.
The labor costs associated with the maintenance-of-equipment function might be reduced by consolidating theresponsibilities of several crafts under a single "composite"mechanic. Using "unit exchange" arrangements with equipmentmanufacturers or contracting for certain specialized maintenancefunctions might also help the operator control maintenancecosts, especially for smaller systems which cannot take advan-tage of certain economies of scale.
Deteriorated equipment can cost more to maintain thanequipment which is new or newly refurbished. Many authorizingagencies are purchasing their own commuter equipment, whethernew or refurbished, in order to try to control these costs andensure consistently reliable and amenable service. The use ofagency-owned equipment, particularly locomotives, ensures itsavailability for commuter service and simplifies the treatmentof cost responsibility when maintenance-of-equipment costs,equipment operating costs, and equipment capital costs are beingallocated between freight and passenger services.
Differences in maintenance-of-way costs result primarilyfrom the nature of right-of-way ownership. Both the Boston andLong Island commuter rail systems incur higher unit maintenance-of-way costs than the other systems studied because the autho-rizing agency owns the right-of-way in both cases, and passengerservices represent the predominant user of the right-of-way.The cost allocation methods used by these two systems assign ahigher percentage of maintenance-of-way costs to the commuterservice than to the freight service. The remaining systemsassign a lower percentage of the maintenance- of-way costs tothe commuter service, sometimes as low as zero.
The advent of performance and ridership incentives in com-muter rail service operating agreements is an attempt to relatethe railroad operator's compensation level to the quality ofservice provided. As the intermediary between the passenger
84
and the authorizing agency, the railroad operator influences thepassenger's perception of commuter service. Performance incen-tives encourage the railroad operator to improve the servicequality to the passenger so that more passengers will utilizethe service. If this occurs, the railroad may also receive aridership incentive. Performance offsets or penalties for less-than-acceptable service guard against the railroad's performingonly caretaker services, without regard for service quality andpassenger satisfaction.
The choice of cost allocation methodology is a major facetof the operating agreement negotiations. The outcome of thesenegotiations is highly dependent on the operating characteris-tics of the system and the strength of the bargaining positionsof those involved in the negotiations. It is thus imperativethat the authorizing agency entering into such negotiations befamiliar not only with the issues involved but also with thespecific characteristics of the commuter rail system, existingrailroad labor agreements, track and equipment conditions,ridership profile, operating constraints, and funding limita-tions. This information will allow the agency to negotiate witha better understanding of the potential costs, savings, andrisks involved in any course of action.
The selection of cost allocation techniques is influencedby the relative scope of the commuter rail service in comparisonto other rail services sharing the facilities. Avoidable costtechniques are usually the most advantageous to an authorizingagency, in that the commuter service is normally the secondaryuser of the facilities and thus is responsible for a smalleramount of common costs than if expenses were split with anattributable or variable cost allocation method. Contractsspecifying avoidable costs are more difficult to obtain and areusually acceptable to railroads only when the commuter rail por-tion of traffic is quite small in relation to other rail traffic.
Attributable and variable cost allocation methods are muchmore likely to be acceptable to operating railroads. Thisbecomes particularly true as the magnitude of commuter serviceapproaches that of other rail services. An authorizing agencyshould expect to pay a more equal share of common costs as thesemagnitudes equalize. Similarly, when commuter rail is thedominant user of a facility, an agency should be prepared to
deal with railroads desiring an avoidable cost allocationmethodology, with freight service as the secondary service.Such a methodology will cause the commuter system to absorb the
greater portion of common costs in such cases.
The choice between avoidable, attributable, or variablecost allocation methods, as well as fixed payments or othercompensation techniques, is often influenced by the availabilityof data. These cost allocation procedures, theoretically, can
85
result in similar final costs, although the outcome is dependenton the negotiation process. Therefore, if the negotiations donot reveal cost advantages for any particular method, theappropriate technique is whatever procedure requires the leastadditional effort to implement and maintain. For example, a
previously performed variable cost study may serve as an accept-able basis for a variable cost allocation procedure. Such anapproach would limit the need for new studies and simplify thecalculation of costs assigned to commuter rail services. Seldomis any one cost allocation methodology used exclusively in anoperating agreement. Most agreements use combinations of themajor cost allocation methodologies discussed in this report.
86
APPENDIX A
ANNUAL REPORT FORM R-l:
TABLE OF CONTENTS
A. 1/A.
2
,v
TABLE OF CONTENTS
SCHEDULE NO. PAGE SCHEDULE NO. PAGE
Schedules Omitted by Respondent _. AIdentity of Respondent BVoting Powers and Elections . CComparative Statement of Financial Position 200Comparative Results of Operations 210Retained Earnings Unappropriated 220Retained Earnings - Appropriated 221Transfers from Government Authorities 225Capital Stock 230Statement of Changes in Financial Position 240Changes in Working Capital 241Working Capital Information 245Items in Selected Current Asset Accounts 300Investments and Advances Affiliated Companies 310Investments in Common Stocks of Affiliated Companies 310ASpecial Funds and OtheT Investments 31
S
Securities. Advances, and Other Intangibles Owned or Con-trolled Through Nonreporting Subsidiaries 319
Property Used in Other Than Carrier Operations 325Other Assets and Other Deferred Debits 329Road and Equipment Property Owned 330Improvements on Leased Property 330ADepreciation Base and Rates-Rnad and Equipment Owned andUsed and Leased from Others 332
Accumulated Depreciation-Road and Equipment Owned andUs'd
Accrued Liability-Leased Property 339Depreciation Base and Rates-lmprovements to Road Equip-ment Leased from Others 340
Accumulated Depreciation-Improvements to Road and Equip-ment Leased from Others , 342
Depreciation Base and Ratcs-Road and Equipment Leasedto Others
Accumulated Depreciation-Road and Equipment Leased to
Others
Investment in Railroad Property Used in TransportationService (By Company) 352A
Investment in Railway Property Used in TransportationService (By Property Accounts) 352B
Other Elements of Investment 353
Capitalized Capital LeasesOperating Leases .363Lessee Disclosure .364Items in Selected Current Liability Accounts 370Other Long-Term Liabilities and Other Deferred Credits . .379Railway Operating ExpensesWay and StructuresRent for Leased Roads and Equipment 413Rents for Interchanged Freight Train Cars and Other Freight
Carrying Equipment
1
2
3
5
9
11
12
12
13
1417
18
19
21
25
27
29
3f
33
35
37
39
40
41
42
43
44
45
4b
47
48
50
5253545556
6364
65
Supporting Schedule: Equipment ......415Specialized Service Subschedule - Transportation 417Remunerations from National Railroad Passenger Corpora-
tion 419
Miscellaneous Rent Income 430Miscellaneous Rents (Expense) 440Separately Operated Properties - Profit or Loss 445
Analysis of Federal Income Taxes 450Railway Tax Accruals 4S1Items in Selected Income and Retained Earnings Accounts for
the Year 460Contingent Assets and Liabilities 500Guaranties and Suretyships SOICompensating Balances and Short-Term Borrowing Arrange-
ments 502_»bt holdings 510
Mileage Operated at Close of Year 700Mileage Owned but not Operated by Respondent at Close of
Year 701
Miles of Road at Close of Year - By States and Territories
(Single Track)(For Other Than Switching and Terminal
Companies) 702
Changes During the Year 70S
Inventory of Equipment 710Unit Cost of Equipment Installed During Year 71 OS
Highway Motor Vehicle Operations 715Highway Motor Vehicle Enterprises in Which the Respondent
had a Direct or Indirect Financial Interest During the
Year 716
Track and Traffic Conditions 720Ties Laid in Replacement 721Ties Laid in Additional Tracks and in New Lines and
Extensions 722Rails Laid in Replacement 723Rails Laid in Additional Tracks and in New Lines and
Extensions 724Weight of Rail 725Summary of Track Maintenance 726Ten-Year Summary of Track Maintenance 727Deferred Maintenance - Tracks 728Consumption of Fuel by Motive-Power Units 750Railroad Operating Statistics 755
Grade Crossings-A-Railroad With Railroad 760B-Railroad With Highway 760
Grade Separations 761Contracts, Agreements, Etc 800Competitive Bidding - Clayton Antitrust Act 850Compensation of Officers. Directors, Etc 900Verification -
Memoranda -
67
69
70
75
76
77
78
79
80
82
83
84
85
90
92
93
9497
103
105
107
108
109
110
111
112
112
113
113
114
122
12412a
126
127128
129
130
A. 3/A.
4
Railroad Annual Report R-l
.
APPENDIX B
RAILROAD OPERATING EXPENSE ACCOUNTS
B . 1/B .
2
Road Initials: 56Year 19
B. 3
57 Road Initials: Year 19
410.
RAILWAY
OPERATING
EXPENSE
-Continued
Total (h)
Passenger
(g)
WV
N/A
<z
N/A N/A Y/N
<z
Freight
Total
freight
expense (0
General (e)
V*
<z
<Z N/A V/N
1V/N
<z N/A V/N V/N
<Z
<z N/A
<z
V/N<Z N/A
Purchased
services (d)
<z
<z
V/N V/N N/A V/N
Materials,
tools,
supplies,
fuels,
and
lubricants
(0<z
<z N/A V/N N/A V/N
<z
<Z N/A V/N
<z N/A N/A V/N N/A V/N
<z
<z
<z
<z
<z
<Z
Salaries
and
wages (b)V/N
<z V/N V/N N/A V/N
<z
<Z N/A
<z
N/A<Z N/A N/A V/N
<z
V/N<z
<z
<z N/A N/A
Name
of
railway
operating
expense
account
(a)
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Terminals
I
11«*=
£U0
Other
Marine
Terminals
1
TOFC/COFC
-
Terminals
Motor
Vehicle
Loading
and
Distribution
Facilities
1
Facilities
for
Other
Specialized
Service
Operations
J
o£c£Uco
5>«0
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it
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Benefits
-
Other
Casualties
and
Insurance
-
Running
1
Casualties
and
Insurance
-
Switching
Casualties
and
Insurance
-
Other
Lease
Rentals
-
Debit
-
Running
1
CjE
5C/5
-C04
a
*
uCL
V«%>
Lease
Rentals
-
Debit
-
Other
Lease
Rentals
-
(Credit)
-
Running
Lease
Rentals
-
(Credit)
-
Switching
1
Lease
Rentals
-
(Credit)
-
Other
Joint
Facility
Rent
-
Debit
-
Running
Joint
Facility
Rent
-
Debit
•
Switching
1
Joint
Facility
Rent
-
Debit
-
Other
Joint
Facility
Rent
-
(Credit)
-
Running
Joint
Facility
Rent
-
(Credit)
-
Switching
Joint
Facility
Rent
-
(Credit)
-
Other
1Other
Rents
-
Debit
-
Running
Other
Rents
-
Debit
-
Switching
1
Other
Rents
-
Debit
-
Other
Other
Rents
-
(Credit)
-
Running
Line No. 101 102 103 104 105 106 107 108 109 110 111 112 113 114
115 116
117 118 119
120 121 122 123 124 125 126 127 128 129 130 131 132 133
Railroad Annual Report R-l
B . 4
410.
RAILWAY
OPERATING
EXPENSE
Continued
Road initials: Year 19 58
Total(ID
Passenger
<g)
**
Freight
Total
freight
expense
(0
General (e)
$
N/A
<—
.
z<z
<z N/A
<z
<z
<z N/A N/A
1
N/A
1
V/N<z<Z N/A
1
N/A
I
<z<z
Purchased
services (d) <z
<z V/N
<z<Z
<z
Material,
tools,
supplies,
fuels,
and
lubricants
(c)
J
N/A V/N V/N
<z V/N V/N N/A
<z N/A
<z V/N
<z<z<z<z V/N V/N
<Z<z<z V/N V/N N/A
Salaries
and
wages<b)
<z V/N V/N V/N N/A V/N N/A V/N V/N V/N V/N <
2<z<z<z<z V/N
<z<z<z<z<z N/A
Name
of
railway
operating
expense
account
(a)
WAY
AND
STRUCTURES
-
Continued
REPAIR
AND
MAINTENANCE
Continued
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EQUIPMENT:
LOCOMOTIVES:
Administration
j
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Lease
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-
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Rentals
-
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Joint
Facility
Rent
-
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Joint
Facility
Rent
-
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Other
Rents
-
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*5<u
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QJoint
Facility
-
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Joint
Facility
-
(Credit)
Repairs
Billed
to
Others
-
(Credit)
Line No.
^•wi'Cr^ooo'O — c4f'">^*nxOr~ao^©— -(N^rrto'OhoooNO ,- N cn \r «o \or-i r*“i <—i m ry ^y -»y *y -ey ry TT ^ ^ T, in OOOOOOOOO—< — — —< — —1
Railroad Annual Report R-l
B. 5
54 Road Initials: Year 19
B.6
410.
RAILWAY
OPERATING
EXPENSE
-
Continued
Road Initials: 60Year 19
Total<h>
Passenger
<g)
Freight
Total
freight
expense (0
General (e)
$
N/A N/A N/A V/N
1
N/A N/A N/A<z
Purchasedservices
(d)
<z <
z<z N/A
Material,
tools,
supplies,
fuels,
and
lubricants
(c)
$
N/A<Z N/A V/N N/A
<z
1 .
N/AN/A
<z
1_
N/A N/A<z
Salaries
and
wages (b)<Z
<z
<z N/A N/A N/A
1
N/A
1
N/A
1
N/A<z N/A
1
n/a
1
Name
pf
railway
operating
expense
account
(a)
OTHER
EQUIPMENT—
Continued:
Joint
Facility
Rent
•
Debit
Joint
Facility
Rent
-
(Credit)
Other
Rents
-
Debit
Other
Rents
-
(Credit)
c.2
.au
C
&Joint
Facility
-
Debit
Joint
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-
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Repairs
Billed
to
Others
-
(Credit)
>
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«
w
ie
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Other
1
coEQ3as£o3
Total
Equipment
Transportation
.
TRAIN
OPERATIONS:
Administration
Engine
Crews
Train
Crews
V
H22u«
&5
Operating
Signals
and
Interlockers
Operating
Drawbridges
Highway
Crossing
Protection
{
Train
Inspection
and
Lubrication
Locomotive
Fuel
Electric
Power
Purchased
or
Produced
for
Motive
Power
J
Servicing
Locomotives
Freight
Lost
or
Damaged
-
Solely
Related
Gearing
Wrecks
Fringe
Benefits
Other
Casualties
and
Insurance
Joint
Facility
-
Debit
Joint
Facility
-(Credit)
Other
Total
Train
Operations
tyi
Z0
5j£101
!>Switch
Crews
Line No. ^ oSooo8ooo2:-::"i!;22 ®j421Railroad Annual Report R-l
B . 7
61 Road Initials: Year 19
Road Initials: Year 19 62
o•oa
eoUuC/3
zUJ
5?IX)
WzH<asua.
1o><
<ec
©xr
Total (h)
Passenger (g) N/A
1
JS00
'Z
Total
freight
expense (0
General
<e)N/A N/A
N/A N/A
Purchasedservices <d)
«**>
N/A N/AN/A N/A N/A
i
m
i
N/A
1
Malcrial,
tools,
supplies,
fuels,
and
lubricants
(cl N/A N/A N/A N/AV/N
1
N/A N/A
I
N/A N/A N/A N/A
Salaries
and
wages
(b)
**
N/A N/A N/A<z V/N
<Z
<z N/A N/A N/A N/A
Name
of
railway
operating
expense
account
(a)
ADMINISTRATIVE
SUPPORT
OPERATIONS
-
Con
|
Employees
Performing
Clerical
and
Accounting
Functions
Communication
Systems
Operation
Ma'1
Q£
're
G01(0
ECO
OoeCO
a3
Fringe
Benefits
Casualties
and
Insurance
Joint
facility
-
Debit10
’3
a*5
Other
I
e.o
re
sQ0
1Q3CO4J»
re
'c
i*3
<"re
0H
Total
Transportation
GENERAL
AND
ADMINISTRATIVE:
Officers
-
General
Administration
Accounting.
Auditing
and
f
inance
Management
Services
and
Data
Processing
01_c
Z
re
2Sales
J
Industrial
Development
Personnel
and
Labor
Relations
Legal
and
Secretarial
Public
Relations
and
Advertising
Research
and
Development
fringe
Benefits
Casualties
and
Insurance
Writedown
of
Uncollectible
Accounts
Property
Taxes
Other
Taxes
Except
on
Corporate
Income
or
Payrolls
Joint
Facility
-
Debit
Joint
Facility
-
(Credit)
Other
Total
General
and
Administrative
Total
Carrier
Operating
Expenses
LineNo.
519 520 521 522 523 524 525 526 527 528 601 602 603 604 605 606 607 608 609 610 611 612 613 614 615 616 617 618 619 620
Railroad Annual Report R-l
B. 9/B.10
APPENDIX C
STANDARDS FOR DETERMINING COMMUTERRAIL SERVICE CONTINUATION SUBSIDIES
(Rail Services Planning Office Methodology)
C.l/C.
2
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Chapter
X
—
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Commission
§1127.7
§1127.7
Title
49
Transportation
C. 6
Chapter
X
—
Interstate
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Commission
§1127.7
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§1137.7
§1137.7
Title
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C.13/C.14
APPENDIX D
REPORT OF NEW TECHNOLOGY
D. 1/D.
2
REPORT OF NEW TECHNOLOGY
A thorough review of the work performed under this contracthas revealed no significant innovations, discoveries, orinventions at this time. In addition, all methodologiesemployed are available in the open literature. However, thefindings in this document do represent new information andshould prove useful throughout the United States in designingand evaluating future transportation demonstrations, in general,and commuter rail service in particular.
U. S. GOVERNMENT PRINTING OFFICE: 1983-602-026— 151
350 copies D.3/D.4
Official
Business
Penalty
for
Private
Use
$300
DOT LIBRARY
M
