Contracting Commuter Rail Services, Volume 1: Guidebook (2018)

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84 A P P E N D I X A Case Studies

Case Studies 85 Altamont Corridor Express San Joaquin Regional Rail Commission Stockton–San Jose, CA Figure A1. ACE commuter rail. Timeline for Public Commuter Rail: 1998 Governance and Timeline 1995 The San Joaquin Regional Rail Commission (SJRRC) created a joint powers authority (JPA) with San Joaquin County and seven cities. 1997 SJRRC entered into a JPA with the Alameda County Transportation Commission and Santa Clara Valley Transportation Authority. 1998 Altamont Commuter Express began providing service. SJRRC later rebranded the service as Altamont Corridor Express (ACE). 2003 SJRRC changed from a JPA to a cooperative services agreement. 2015 Effective June 2015, SJRRC also oversees state-supported intercity rail for Oakland– Sacramento–Stockton–Bakersfield, called San Joaquins. A Measure K sales tax and state and federal funds from member agencies fund ACE commuter rail (Figure A1). Level of Service The ACE level of service is four trains running weekdays at 1-hour headways during peak commuting periods—westbound in the morning and eastbound in the evening.

86 Contracting Commuter Rail Services, Volume 1: Guidebook Ownership Track and Rail Infrastructure • Union Pacific Railroad (UPRR) owns the rail line from Stockton to Santa Clara. – 1997—A trackage rights agreement for 5 years was secured with an initial payment of $15.1 million for capital improvements. – 2003—The original TRA was amended and extended for 10 years for an upfront capital payment of $5 million and $1.8 annual payments thereafter. – 2014—The TRA was amended to extend the agreement through 2023 for annual TRA pay- ments of $3.2 million (no upfront payment). • The Peninsula Corridor Joint Powers Board (Caltrain) owns 4 miles from the UPRR Santa Clara junction to San Jose. Caltrain is responsible for track maintenance. Rail Maintenance Facility • SJRRC constructed a $70 million rail maintenance facility on 64 acres in 2011. • Offices include SJRRC staff and contractor personnel. Stations • SJRRC owns Cabral Station in downtown Stockton and two other stations in San Joaquin County. SJRRC administrative offices are in Cabral Station. • SJRRC owns the platforms at other stations in Alameda and Santa Clara counties. • Local governments own and maintain station facilities in Alameda and Santa Clara counties. Equipment • SJRRC owns 21 coach cars, 9 cab cars, and 6 locomotives. Role of the Host Railroad • UPRR owns, maintains, and dispatches most of the ACE commuter-rail route. • Caltrain owns, maintains, and dispatches the 4 miles from the UPRR Santa Clara junction to San Jose. Role of Amtrak • ACE service shares station facilities and connects with Amtrak at San Jose, Great America, Fremont, and Stockton stations. • Amtrak does not have a role in the operations or maintenance of ACE. Decision to Contract for Service Freight Railroad UPRR owns, maintains, and dispatches the entire commuter rail corridor, except 4 miles owned, maintained, and dispatched by the Peninsula Corridor Joint Powers Board. In early discussions of commuter rail operations, SJRRC discussed an operating agreement with UPRR by which the private railroad would operate the commuter rail service. UPRR declined to operate the service. Direct Operation or Contracted Two major factors affected SJRRC’s decision to contract operations rather than directly operate: • The agency had little railroad operations experience. It would have been a challenge to take on day-to-day railroad operations and maintenance functions.

Case Studies 87 • SJRRC recognized that hiring employees to operate and maintain commuter rail would likely mean adding an obligation for railroad retirement and railroad workers compensation (Fed- eral Employers Liability Act). If SJRRC contracted for ACE service, the agency would not have to take on this additional obligation directly. SJRRC was an agency newly created for a specific purpose: to develop and implement com- muter rail service in a particular corridor, funded by a mix of resources from local, state, and federal funds. Separating administrative and operational functions was an effective way to limit overall costs and allow a framework for incrementally increasing rail service as ridership increased and funding was available. Bundled or Unbundled Contract UPRR’s control limited the range of contracted services that SJRRC might have considered. In 1997, SJRRC issued a request for proposals (RFP) for operations and maintenance of ACE service, and respondents could propose providing train crews for train operations, maintenance of rolling stock and locomotives, or both. One contractor proposed for both services, and one other contractor proposed for equipment maintenance only. The decision was made to award one contract for train operations and maintenance of equipment to Herzog Transit Services, Inc. (HTSI). HTSI provides train crews (train operator and train attendant) and personnel for main- tenance of equipment for the ACE service. SJRRC has contracted with HTSI since the inception of the service in October 1998. Bundling operations and maintenance of equipment into one contract accomplishes two objectives: • Effectively leverages SJRRC staff. SJRRC has a modest staff, and a combined operations and equipment maintenance contract allows the agency to limit the number of staff with contrac- tor oversight responsibility. • Clarifies operational responsibilities. Combining train crews and equipment maintenance responsibilities keeps either party from blaming the other for poor on-time performance. Decision to Continue Contracting The cooperative services agreement between the three counties (that replaced the previous JPA) specified that SJRRC had the authority to continue providing baseline commuter rail services at the time of the 2003 agreement, which included continuation of the operations and maintenance contract already in place. SJRRC believes the single contract for operations and maintenance of equipment permits the contractor to maximize the ACE customer experience: The contractor is responsible for the availability and functionality of SJRRC-owned equipment and train operations that opti- mize on-time performance. Contractor train crews are responsible for train operations, station departures, and maintenance of ridership information (boarding and alighting at each station). SJRRC staff is responsible for revenue-related functions, including ticket sales and revenue enforcement on the trains. SJRRC signed the initial agreement with HTSI in 1998 and negotiated a new sole-source agree- ment in 2009. The 2009 agreement had a 5-year base term and a 5-year option. SJRRC extended and exercised its contract renewals with the private contractor in part due to the agency’s overall satisfaction with performance and in part due to the substantial transactional costs of soliciting and negotiating a new contract. SJRRC expects to issue a new procurement for train operations and maintenance of equip- ment before the current contract expires in 2019. New commuter rail and intercity passenger rail operations added since 1997 expand the universe of contracting customers. As a result, more

88 Contracting Commuter Rail Services, Volume 1: Guidebook competitors are interested in proposing on commuter-rail contracted services. SJRRC expects to find a number of contractors interested in the new RFP. Oversight for Contract Compliance The SJRRC director of operations is responsible for the performance of ACE services on a daily basis. The director of operations works with the HTSI general manager. Two SJRRC staff report to the director of operations and share responsibility for contract compliance. The SJRRC manager of operations assists with contract compliance responsibilities for train operations. The SJRRC maintenance facility superintendent assists with all aspects of contract compliance for maintenance performed at the RMF. SJRRC hired additional staff to manage San Joaquins and coordinate planning with the California High Speed Rail Authority. SJRRC now shares its administrative overhead between oversight of the ACE commuter rail service, San Joaquins intercity rail service, and related planning for connections of both services to the initial operating segment of the California High Speed Rail Authority, with its northern terminus in Merced. Basis for Cost SJRRC manages its costs through the annual budget that matches available resources (includ- ing limited contributions from the other two counties) and capital improvement plans tied to available grant funding. SJRRC reimburses the contractor for operating and maintenance of equipment expenses on a cost-plus basis. The contractor develops an annual budget, SJRRC staff reviews the budget, and the SJRRC board adopts the budget before the beginning of the fiscal year. SJRRC pays for direct costs plus an additive fee, which includes a 13% general, administra- tive, and overhead charge for direct labor and a 5% general, administrative, and overhead charge for certain designated non-labor charges. After each month, HTSI submits an invoice showing actual costs incurred for labor, direct costs, and allowable additive charges. SJRRC purchases fuel for ACE service. The con- tractor is reimbursed for fueling services as part of its monthly administrative fee. SJRRC either purchases spare parts, repair parts, and consumables directly or reimburses the con- tractor for such purchases. SJRRC only authorizes extra work by written authorization and approval. The responsibility for state of good repair and asset management for infrastructure is shared. SJRRC is responsible for certain stations and platforms, and UPRR and Caltrain maintain rail infrastructure. SJRRC approves capital improvements as funding becomes available either from local funding sources (Measure K as allocated by the San Joaquin Coun- cil of Governments) or from state and federal grant funding. Infrastructure owners execute capital improvements under capital improvement project agreements (UPRR reserves the right to administer contracts for capital improvements to its infrastructure, reimbursed by SJRRC). The SJRRC contractor is responsible for asset management for rolling stock and locomo- tives that is part of the annual budget process. Major investments to improve the reliability and availability of equipment, including locomotive overhauls, are included in a 5-year capital improvement plan (part of SJRRC’s capital improvement plan) apart from the regular annual operating budget. Unexpected costs require mutual agreement between SJRRC and the contractor. The con- tractor estimates unexpected costs, subject to SJRRC approval and amendment of the annual budget. Special train costs are estimated and paid by mutual agreement.

Case Studies 89 Contract Performance Measures The contractor is accountable for the availability and functionality of SJRRC-owned equip- ment and train operations that optimize on-time performance. The contractor is subject to penalties to cover certain events and assessed against the next month’s management fee. The following events are subject to penalties: • Unavailable equipment; • Train delays for unexcused reasons, assessed on a per-delay basis; and • Failure to remove contractor employees who failed to meet SJRRC standards or are removed pending an investigation. Fare Collection SJRRC is responsible for revenue-related functions, including ticket sales and fare enforce- ment on trains. Notable Practices and Lessons Learned Over nearly 18 years of ACE service, SJRRC has developed a number of notable practices and learned lessons about contracting for operations and maintenance of commuter rail, including the following: • SJRRC developed a recurring audit procedure for all contract and regulatory compliance plans and programs. This audit procedure ensures adherence to established standards for safety-critical functions and Federal Railroad Administration regulatory requirements. • SJRRC employees perform a number of daily tasks and activities (e.g., onboard fare collection, station ticket sales, and customer service). These shared responsibilities for daily operations promote a closer working relationship between the public agency and the private contractor, and between SJRRC and ACE customers. • SJRRC effectively manages contractor compliance. A small SJRRC staff works in day-to-day service delivery to monitor contractor performance. • SJRRC successfully shifted its regional governance structure from a JPA to a cooperative services agreement, allowing Alameda and Santa Clara counties to gain predictability in the expectations for funding and allowing San Joaquin County to apply its Measure K proceeds to enhancing service levels and improving stations and equipment. ACE Operating and Performance Statistics Table A1 provides operating and performance statistics for ACE. Peer Performance Comparisons The ACE peer group comprises similar commuter rail systems based on directional route miles and annual passenger trips, as shown in Table A2. ACE, Sounder, and VRE operate peak-direction, peak-period commuter-rail service. Rail Runner operates two directions during peak periods, and Tri-Rail operates limited or hourly midday trains. FrontRunner and the South Shore Line operate all-day service in two directions. Table A3 provides a comparison of ACE performance metrics with the peer group average and peer group median.

90 Contracting Commuter Rail Services, Volume 1: Guidebook 2016 National Transit Database Operating Data Directional Route Miles 172 Unlinked Passenger Trips 1,290,085 Annual Total Passenger Miles 55,471,664 Passenger Car Revenue Miles 1,078,543 Annual Operating Cost $17,380,023 2016 National Transit Database Performance Metrics Operating Cost per Passenger Car Revenue Mile $16.11 Operating Cost per Passenger Trip $13.47 Passenger Trips per Passenger Car Revenue Mile 1.20 Passenger Miles per Passenger Trip 43.00 Table A1. ACE operating and performance statistics. Commuter Raila Directional Route Miles Annual Passenger Trips Annual Passenger Miles Annual Passenger Car Revenue Miles Annual Operating Costs Rail Runner 193 886,386 39,741,454 1,406,934 $29,944,982 South Shore Line 180 3,504,080 113,035,111 4,233,598 $48,080,595 FrontRunner 175 4,545,849 125,131,274 5,401,304 $45,231,732 VRE 174 4,352,814 145,777,038 2,289,083 $69,874,827 ACE 172 1,290,085 55,471,664 1,078,543 $17,380,023 Sounder 164 4,312,113 106,687,816 1,794,741 $44,414,515 Tri-Rail 142 4,241,486 117,303,700 3,595,531 $89,987,616 Source: National Transit Database 2016. aCaltrain has similar directional miles (178 miles) but 19 million annual passenger trips. Table A2. Operating statistics for ACE and peer commuter rail systems. Commuter Rail Service Delivery Model Operating Cost/ Passenger Car Revenue Mile Operating Cost/ Passenger Trip Passenger Trips/ Passenger Car Revenue Mile Passenger Miles/ Passenger Trip Operating Cost/ Passenger Mile Rail Runner Contracted–Bundled $21.28 $33.78 0.63 44.84 $0.75 South Shore Line Agency Operated $11.36 $13.72 0.83 32.26 $0.43 FrontRunner Agency Operated $8.37 $9.95 0.84 27.53 $0.36 VRE Contracted–Unbundled $30.53 $16.05 1.90 33.49 $0.48 Sounder Contracted–Unbundled $24.75 $10.30 2.40 24.74 $0.42 Tri-Rail Contracted–Unbundled $25.03 $21.22 1.18 27.66 $0.77 Average of Peers $20.22 $17.50 1.30 31.75 $0.53 Median for Peers $23.02 $14.89 1.01 29.96 $0.45 ACE Contracted–Bundled $16.11 $13.47 1.20 43.00 $0.31 Source: National Transit Database 2016. Table A3. Performance metrics for ACE and peer commuter rail systems.

Case Studies 91 Sources Alameda County Congestion Management Agency, San Joaquin Regional Rail Commission, Santa Clara Valley Transportation Authority. Cooperative Services Agreement for Altamont Commuter Express (ACE) Service. June 2003. Provided by SJRRC during site visit, February 16–17, 2016. Altamont Commuter Express Operations and Maintenance of Equipment Agreement by and between Herzog Transit Services, Inc., and San Joaquin Regional Rail Commission, Contract No. 10-R-06-01. Effective July 1, 2009. Provided by SJRRC during site visit, February 16–17, 2016. Federal Employers Liability Act (FELA). 45 USC 51 § et seq. (1908). Federal Railroad Administration. FRA Safety Database reports. http://safetydata.fra.dot.gov/OfficeofSafety/ default.aspx. Accessed May 5, 2016. Herzog Transit Services, Inc. (Jan. 2016). ACE Service Contract “Exhibit D” Monthly Reports. Provided by SJRRC during site visit, February 16–17, 2016. Interviews with SJRRC staff during site visit, February 16–17, 2016, and e-mail communication from SJRRC staff, June 23, 2016. PMC Consultants. (May 2014). FY 2010–2012 Triennial Performance Audit of San Joaquin Regional Rail Com- mission. Submitted to the San Joaquin Council of Governments. http://www.sjcog.org/DocumentCenter/ View/890. Accessed May 5, 2016. San Joaquin Joint Powers Authority. 2015 Business Plan. http://www.sjjpa.com/Documents. Accessed May 5, 2016. San Joaquin Regional Rail Commission. 2015/16 Work Program and Budget. June 2015. Provided by SJRRC during site visit, February 16–17, 2016.

92 Contracting Commuter Rail Services, Volume 1: Guidebook COASTER North County Transit District San Diego County, CA Timeline for Public Commuter Rail: 1995 Governance North County Transit District (NCTD) is a public transit agency in San Diego County, Cali- fornia. NCTD contracts with private operators for the provision of all modes of public tran- sit service. Through these contracts, NCTD provides the following transit services: commuter rail (COASTER, see Figure A2), hybrid rail (SPRINTER), bus fixed route (BREEZE), demand response and route deviation (FLEX), and complementary paratransit (LIFT). The California Legislature created the North San Diego County Transit Development Board (NSDCTDB) in September 1975. The board was created to plan, construct, and operate—directly or through a contractor—public transit systems in its area of jurisdiction. On January 1, 2003, a new state law was enacted (SB 1703) that transferred future transit planning, programming, development, and construction to the San Diego Association of Governments (SANDAG), San Diego’s regional planning agency. NSDCTDB continued to operate transit services. Effective January 1, 2006, the district name changed to the North County Transit District. In 1987, voters approved the TransNet Ordinance, which provided funding for future trans- portation projects, including improvements to the existing transit systems in San Diego County. In November 2004, voters approved a 40-year extension of the TransNet sales tax. SANDAG allocates funds from Federal Transit Administration (FTA) grants, California state funds for transit, and the proceeds from the TransNet sales tax to regional transportation agencies, including NCTD. Figure A2. COASTER commuter rail.

Case Studies 93 Timeline 1982–1992 Planning studies conducted for a coastal commuter rail. 1992 NSDCTDB acquired rail lines from Atchison, Topeka, and Santa Fe Railway (ATSF) and signed a shared-use agreement. 1994 NSDCTDB received the initial COASTER fleet and selected Amtrak Commuter Contract Services as the COASTER contractor. 1995 COASTER commuter rail service began. 2006 The name changed to the North County Transit District. 2006 NCTD awarded the COASTER operations and maintenance contract to Transit America Services, Inc. (TASI), a subsidiary of Herzog Transit Services, Inc. 2008 SPRINTER light-rail (hybrid) service began with Veolia (now TransDev) as the contract operator. SPRINTER operates on the 22-mile east–west rail corridor between Oceanside and Escondido. 2013 NCTD and Amtrak partnered to provide Rail 2 Rail service, increasing Amtrak stops for selected state-sponsored Pacific Surfliner intercity trains at COASTER stations. 2016 NCTD awarded a new 10-year contract to Bombardier for a fully bundled operations and maintenance contract for the COASTER commuter rail and the SPRINTER hybrid rail. Level of Service COASTER provides commuter rail service seven days a week, north and south along the San Diego County coast between Oceanside and San Diego. More than 20 trains operate on week- days, with additional trains on Friday evening. Saturday/Sunday service includes 12 and 8 trains, respectively. One-way trip time is about 1 hour. Eight stations provide service points along the route, and passengers can make connections to San Diego Metropolitan Transit System (MTS) buses and light rail at the Old Town and Santa Fe Depot Stations in San Diego. Passengers can connect with Metrolink commuter rail service north to Orange County and Los Angeles at NCTD’s northernmost stop on the railroad, the Oceanside Transit Center. During fiscal year 2014, NCTD entered into an agreement with Amtrak to allow COASTER ticketed passengers to ride selected Amtrak trains at no additional charge. This agreement increased by six the number of trains (three in each direction) available to riders throughout the day every day of the week. Ownership Track and Rail Infrastructure • NCTD owns 41 miles of COASTER track along the main north–south line between the Orange County/San Diego County border and the northern city limits of San Diego. MTS owns the remaining 21 miles of track between Del Mar and downtown San Diego. NCTD is responsible for maintaining these rights-of-way, including the portion of the San Diego sub- division owned by MTS. NCTD responsibility includes maintenance of track, signal systems, bridges, sidings, grade crossings, turnouts, road beds, culverts, drainage, and the right-of- way alongside the track. • The coastal rail line supports the operations of two commuter rail operators, as well as intercity service and a freight rail operator. In addition to COASTER from San Diego to

94 Contracting Commuter Rail Services, Volume 1: Guidebook Oceanside, Metrolink commuter rail trains use the northern portion of the rail line for the Metrolink Orange County Line from Orange County to the terminus at Oceanside. The state-sponsored, Amtrak-operated Pacific Surfliner trains use the entire length of the rail corridor from Los Angeles to San Diego. In addition, BNSF Railway, formerly the Burling- ton Northern Railroad, has a shared-use agreement to operate freight trains, including a short-line operator, in the corridor. Operations and Maintenance Facility • NCTD owns the dedicated COASTER commuter rail equipment Stuart Mesa Maintenance Facility located north of Oceanside on the U.S. Marine Corps Camp Pendleton military base. • NCTD also has an agreement with MTS for limited midday storage and turn-around servic- ing at the MTS light-rail facility about 2 miles south of the Santa Fe Depot Station in San Diego. Stations • With the primary exceptions of the Amtrak-owned Santa Fe Depot Station and the Solana Beach Station, NCTD owns most of the remaining COASTER commuter rail stations. • The Old Town Station is a joint, shared operation with the San Diego MTS light rail (Trolley). • NCTD contracts with Bombardier for station cleaning and routine maintenance. Equipment • NCTD owns the COASTER fleet of seven diesel locomotives (F-40 PH and F59-PH) and 28 Bombardier-built coach cars (10 cab cars and 18 coaches). Role of the Host Railroad • NCTD and MTS own the track. • BNSF Railway continues to operate freight service on the COASTER rail corridor under a shared-use agreement with NCTD and MTS. Role of Amtrak • Amtrak owns and operates the Santa Fe Depot Station in San Diego. • Amtrak operates the intercity Pacific Surfliner trains running between Los Angeles and San Diego, and therefore shares the COASTER corridor. These trains originally stopped at Oceanside Transit Center, Solana Beach, and stations in San Diego. • NCTD and Amtrak participate in a Rail 2 Rail program, where COASTER passengers may ride Amtrak trains at no additional charge by presenting valid COASTER fare media. Effective October 2013, under an agreement between NCTD, the California Department of Transpor- tation, and Amtrak, designated Pacific Surfliner trains serve COASTER stations. Four north- bound and four southbound Pacific Surfliner trains stop at six COASTER stations every day of the week. Decision to Contract for Service Freight Railroad NSDCTDB (later NCTD) acquired rail lines from ATSF and signed a shared-use agree- ment. Today, NCTD, MTS, and BNSF Railway (ATSF’s successor) are signatories to a shared- use agreement that supports the operations of passenger and freight service in San Diego County.

Case Studies 95 Direct Operation or Contracted Since the initial planning for COASTER, the objective was to contract the primary functions to a qualified third-party contractor. NCTD contracts with private operators for the provision of all modes of public transit service. Bundled or Unbundled Contract COASTER service began in February 1995 with Amtrak Commuter Contract Services as the contractor. The contract with Amtrak expired June 30, 2006. A new contract was awarded to TASI (a company owned by Herzog Corporation) effective July 1, 2006. The contract with TASI expired June 30, 2016. TASI subcontracted the mainte- nance of equipment and maintenance of way to Kabler Construction Services, Inc. In August 2011, after a competitive procurement, NCTD awarded a contract to Herzog Tech- nologies, Inc., (HTI) for installation of positive train control (PTC). The contract with HTI expired on December 31, 2016, requiring an extension to support the full installation of PTC, approval by the Federal Railroad Administration (FRA), and closeout. NCTD assumed dispatching from Metrolink in March 2012. Through a competitive procure- ment, NCTD selected HTSI to support the installation of a new centralized train control system and to provide train dispatch services. The contract with HTSI expires December 31, 2021. The NCTD SPRINTER hybrid rail (non-FRA-compliant diesel multiple unit railcars) began in March 2008. NCTD contracted with Veolia (now TransDev) as the contractor operator for SPRINTER. TransDev contracted with Bombardier for vehicle maintenance for the SPRINTER fleet. The contract was to expire December 31, 2014, but NCTD extended the term to June 30, 2016, to end the same time as the COASTER contract with TASI. Decision to Continue Contracting In 2011, NCTD started exploring consolidation of COASTER and SPRINTER operations and maintenance. To that end, NCTD hired a consultant to explore alternative business models to gain efficiencies in integration of systems and operations and to improve communications and oversight. At the time, NCTD had several prime contractors and subcontractors responsible for various trades under the two main contracts for COASTER and SPRINTER. Ultimately, NCTD decided to bundle all service for both COASTER and SPRINTER into one contract. NCTD’s goal in fully bundling the previously separately contracted services is to achieve greater efficiency, improve management control, eliminate gaps and overlaps of respon- sibility, and achieve a more cost-effective operation. A request for proposals was issued in July 2015. The scope of services included administration, transportation (train operations), vehicle maintenance, signal and right-of-way maintenance, PTC maintenance (once installation by HTI is complete), and an option for dispatch. The primary contractor is required to perform at least 60% of the services directly. The competitive procurement was awarded to Bombardier. The new contract mobilization started in January 2016, and the new contractor assumed responsibility for both COASTER and SPRINTER in June 2016. The contract with Bombardier is a 7-year base contract, set to expire June 30, 2023, with one 3-year option available at that time. Oversight for Contract Compliance In preparation for the implementation of the fully bundled service for both NCTD rail ser- vices, the transit agency realigned its internal organizational structure to assign staff, function

96 Contracting Commuter Rail Services, Volume 1: Guidebook by function, for the major services provided by the contractor: rail operations, maintenance of way, rail systems, information technology, safety oversight, etc. NCTD will maintain policy control of all aspects of COASTER and SPRINTER services and operations and has an active oversight role in order to ensure contractual and regulatory com- pliance and customer satisfaction. The contractor’s responsibility is to perform in accordance with contractual and regulatory requirements. The contractor is required to comply with FTA and FRA regulations, as applicable for each rail mode. NCTD holds the contractor accountable for meeting regulatory obligations for the contractor’s actions and employee qualifications. If a violation results from the contractor’s failure to perform as required by the contract, the con- tractor pays all penalties and fines imposed regarding the violation of state and federal codes, regulations, and laws. Basis for Cost The contract for COASTER and SPRINTER service is a firm fixed-price contract for the base scope of work with pre-specified escalation for each of the 10 years (7 base years with one 3-year option). The primary responsibility for assumption of unexpected cost or financial risk is borne by the contractor. However, there are provisions for mutually agreed upon, optional additional work that was competitively bid and priced during the procurement process. The contractor submits an annual capital program plan, which provides prioritization recommendations for state-of-good-repair projects related to infrastructure and rolling stock for which NCTD is responsible. All major capital infrastructure improvements, such as double tracking or adding a third station/turn-around track, are not the responsibility of the contractor. As with other fixed facility infrastructure in San Diego County (including that for MTS), SANDAG takes the lead. SANDAG is responsible for the prioritization, planning, and funding of capital improvement projects for NCTD. Capital projects are subject to funding availability and subject to change at the discretion of NCTD or SANDAG. NCTD pays for the fuel for the COASTER commuter rail locomotives with a separate con- tract; Bombardier is not responsible for the purchase of fuel. Contract Performance Measures NCTD’s RFP for COASTER and SPRINTER does not include specific performance measures or provisions for incentives or penalties. The new contract does include provisions for liquidated damages for failure to meet performance requirements and for violations of FRA’s schedule of civil fines and fees discovered by NCTD oversight. Fare Collection COASTER has a proof-of-payment fare system. Individual tickets (or passes) are available through a ticket vending machine provided by NCTD at COASTER stations. The fares are based on three zones, with a higher fare if the passenger will pass through two or three zones. As with other systems deploying proof of payment, NCTD COASTER fare inspectors are on random trains. The contractor is responsible for fare validation for both COASTER and SPRINTER. NCTD also has ongoing arrangements with multiple local law enforcement jurisdictions for safety/ security on COASTER trains.

Case Studies 97 Notable Practices and Lessons Learned • NCTD believes that a fully bundled contract combining both the conventional FRA- compliant COASTER commuter rail and the non-FRA-compliant, time-separated SPRINTER diesel hybrid transit rail will result in a more efficient and cost-effective operation for NCTD by ensuring consistent procedures and more efficient management and oversight. • In preparation for the implementation of the fully bundled contract, NCTD realigned its internal organizational structure and organizational chart to match each of the major service functions provided by the new rail contractor. • As a multimodal transit agency, NCTD may have more of an advantage for providing emergency bus–bridge substitute service during a temporary COASTER commuter rail (or SPRINTER) disruption than a rail-only agency. NCTD has implemented a new consolidated operations control center, which covers the two rail systems and the network of fixed-route buses. The consolidated operations control center allows NCTD to mobilize replacement bus service quickly using its bus contractor (MV Transportation, Inc.). • NCTD believes that having an overarching, unified safety plan with 70 standard operating procedures applicable to all services helps ensure safety management and increases the ability to successfully meet all system safety plan objectives. NCTD contract operators (rail and bus modes) are required to follow these procedures and meet NCTD safety requirements. • NCTD is pleased with the Rail 2 Rail program for Amtrak-operated Pacific Surfliner trains and the addition of key COASTER station stops to selected Pacific Surfliner train schedules. The combined effect for NCTD rail customers is a greater range of schedule options at lower cost to NCTD than adding COASTER trains for these slots. COASTER Operating and Performance Statistics Table A4 provides COASTER operating and performance statistics. Peer Performance Comparisons The COASTER peer group comprises similar commuter rail systems based on directional route miles and annual passenger trips, as shown in Table A5. Northstar operates peak-direction, peak-period commuter rail service. MetroRail operates two directions during peak periods and hourly midday trains. COASTER and TRE operate two directions in peak periods with regular midday service. SLE operates all-day service in two direc- tions. Table A6 provides a comparison of COASTER performance metrics with the peer group average and median. 2016 National Transit Database Operating Data Directional Route Miles 82 Unlinked Passenger Trips 1,556,056 Annual Total Passenger Miles 43,722,519 Passenger Car Revenue Miles 1,372,271 Annual Operating Cost $16,745,495 2016 National Transit Database Performance Metrics Operating Cost per Passenger Car Revenue Mile $12.20 Operating Cost per Passenger Trip $10.76 Passenger Trips per Passenger Car Revenue Mile 1.13 Passenger Miles per Passenger Trip 28.10 Table A4. COASTER operating and performance statistics.

98 Contracting Commuter Rail Services, Volume 1: Guidebook Sources Bombardier Transportation. North County Transit District (NCTD) Rail Contract Cost Forms (spreadsheet), Bombardier Operations and Maintenance Detailed Costing Sheets from Final Proposal. IBI Group and ICF International. (April 2013). Assessment of NCTD Program Management Framework for Positive Train Control (PTC) Program. NCTD. (Feb. 12, 2016, revised). NCTD Integrated Safety Management System Plan. NCTD. NCTD Trackage Rights Agreement for Amtrak/Caltrans Surfliner and Los Angeles Metrolink Commuter Trains. Viewed with permission during site visit at NCTD week of Feb. 22, 2016. NCTD. North County Transit District Request for Proposals 24617 Rail Operations and Maintenance. Special Board Meeting Presentation Seeking Single Bundled Operations and Maintenance Contract for COASTER Commuter Rail and SPRINTER Diesel Light Rail Transit, Sept. 3, 2015. NCTD. (Oct. 2015). North County Transit District Revised Agency Management Organization Chart. NCTD. (Aug. 1, 2014, adoption date) (July 24, 2015, revised). North County Transit District COASTER Passen- ger Train Emergency Preparedness Plan. NCTD. (Jan. 2016). North County Transit District Quarterly Performance Report for the Period October 1– December 31, 2015 (Quarter 2 of FY 2016). NCTD. Revised North County Transit District (NCTD) Award RFP 24617 Rail Operations and Maintenance. North County Transit District Board Meeting Presentation on Awarding O&M Contract to Bombardier, Dec. 17, 2015. NCTD. Transformation of Business Model. North County Transit District Board Meeting Presentation, May 2013. Table A5. Operating statistics for COASTER and peer commuter rail systems. Commuter Rail Directional Route Miles Annual Passenger Trips Annual Passenger Miles Annual Passenger Car Revenue Miles Annual Operating Costs SLE 101 849,942 21,215,208 1,823,515 $32,042,356 COASTER 82 1,556,056 43,722,519 1,372,271 $16,745,495 Northstar 78 711,167 17,608,093 538,172 $16,677,279 TRE 72 2,054,001 40,270,227 1,164,706 $27,968,775 MetroRail 64 806,331 13,241,488 298,379 $23,076,368 Source: National Transit Database 2016. Commuter Rail Service Delivery Model Operating Cost/ Passenger Car Revenue Mile Operating Cost/ Passenger Trip Passenger Trips/ Passenger Car Revenue Mile Passenger Miles/ Passenger Trip Operating Cost/ Passenger Mile SLE Contracted–Bundled $17.57 $37.70 0.47 24.96 $1.51 Northstar Mixed Agency Operated and Contracted $30.99 $23.45 1.32 24.76 $0.95 TRE Contracted–Bundled $24.01 $13.62 1.76 19.61 $0.69 MetroRail Contracted–Bundled $77.34 $28.62 2.70 16.42 $1.74 Average of Peers $37.48 $25.85 1.56 21.44 $1.22 Median for Peers $27.50 $26.03 1.54 22.18 $1.23 COASTER Contracted–Bundled $12.20 $10.76 1.13 28.10 $0.38 Source: National Transit Database 2016. Table A6. Performance metrics for COASTER and peer commuter rail systems.

Case Studies 99 Metrolink Southern California Regional Rail Authority Southern CA–Los Angeles, CA Figure A3. Metrolink commuter rail. Timeline for Public Commuter Rail: 1992 Governance Metrolink (Figure A3) is the regional commuter rail system operated by Southern California Regional Rail Authority (SCRRA). Formed in 1991, SCRRA is a joint powers authority com- posed of the transit agencies responsible for the counties of Los Angeles, Orange, Riverside, San Bernardino, and Ventura: • Los Angeles County Metropolitan Transportation Authority (Los Angeles Metro) for Los Angeles County; • Orange County Transportation Authority (OCTA) for Orange County; • Riverside County Transportation Commission (RCTC) for Riverside County; • San Bernardino Associated Governments (SANBAG) for San Bernardino; and • Ventura County Transportation Commission (VCTC) for Ventura County. The five member agencies are also members of another joint powers authority, the Los Angeles–San Diego–San Luis Obispo (LOSSAN) Rail Corridor Agency, formed in 1989 to

100 Contracting Commuter Rail Services, Volume 1: Guidebook coordinate intercity passenger rail service between Los Angeles and San Diego. The LOSSAN Rail Corridor Agency coordinates planning for the Pacific Surfliner state-supported corridor service and also cooperates with the California High-Speed Rail Authority for high-speed rail integration. In 2015, the LOSSAN Rail Corridor Agency executed a transfer agreement with the California Depart- ment of Transportation (Caltrans) to assume administrative and oversight responsibility for the Pacific Surfliner service, which operates on Metrolink’s Orange County and Ventura county lines. OCTA is the designated administrative agency that manages the LOSSAN Rail Corridor Agency. Timeline 1990–1991 Agreements for purchase of rights-of-way and trackage rights were completed with Southern Pacific Railroad; Atchison, Topeka, and Santa Fe; and Union Pacific Railroad (UPRR). 1991 Los Angeles, Orange, Riverside, San Bernardino, and Ventura counties formed SCRRA through a joint powers agreement. 1992 SCRRA opened commuter rail service on the original three lines: Santa Clarita Line (now the Antelope Valley Line), Ventura County Line, and San Bernardino Line. 1992 SCRRA branded the new rail service Metrolink and contracted with Amtrak to provide bundled services to dispatch, operate trains, maintain the infrastructure and signals, and maintain train equipment. 1993–2002 Metrolink added four new lines: Riverside Line, Orange County Line, Inland Empire–Orange County Line, and 91 Line (now the 91/Perris Valley Line). 1993–2003 SCRRA unbundled the contracted services and negotiated agreements with dif- ferent contractors. Amtrak continued to dispatch and operate trains. 2005 SCRRA awarded the train operations contract to Connex Railroad (now Transdev North America). SCRRA brought Metrolink dispatching in house. 2010 SCRRA changed operations contractors and negotiated a new agreement with Amtrak for train operations. 2016 The Metrolink 91 Line was extended to South Perris and renamed the 91/Perris Valley Line. Article XIIIC of the California Constitution provides the authority and requirements for local sales tax measures subject to voter approval. Voters approved the following: • In 1988, voters in Riverside County approved Measure A, a half-cent sales tax for transporta- tion for 20 years (in 2002, Riverside County voters extended Measure A through 2039). • In 1989, San Bernardino County adopted Measure I, a 20-year, half-cent sales tax for trans- portation (in 2004, San Bernardino County voters approved a 30-year extension, which began in 2010). • In 1990, Los Angeles County voters adopted Proposition C, a half-cent sales tax for transit. • Also in 1990, Orange County voters approved Measure M, a half-cent sales tax for transporta- tion improvements (in 2006, voters renewed the sales tax for transportation improvements for another 30 years). • In 1990, California voters supported State Propositions 108, 111, and 116, which authorized $3 billion in general obligation bonds for commuter and intercity rail, light-rail transit, and heavy-rail transit. As the public sector adopted new transportation funding mechanisms, the cash-strapped private freight railroads were interested in selling active and abandoned rail lines to the county trans- portation agencies. In June 1990, the California Legislature enacted Senate Bill 1402, requiring Los Angeles, Orange, Riverside, and San Bernardino counties to jointly develop a plan for regional transit services in the multiple-county region. In August 1991, SCRRA was created as a joint powers

Case Studies 101 authority between Metro, OCTA, RCTC, SANBAG, and VCTC. SCRRA chose Metrolink as the name of the commuter rail service. Member agencies contribute to the capital improvements within the Metrolink system and provide operating subsidies. Level of Service Metrolink service operates Monday through Friday during the morning and afternoon peak commuting hours and provides midday service on all lines. Limited weekend service is available on all lines except the Riverside and Ventura county lines. Ownership Table A7 provides track and rail infrastructure information. Operations and Maintenance Facility • SCRRA owns the Metrolink Central Maintenance Facility in Los Angeles, located directly north of Los Angeles Union Station, where the contractor currently performs equipment maintenance. • The contractor also performs some maintenance services (servicing, inspecting, and cleaning) for four daily trains each weekday at the North County Transit District’s Stuart Mesa Main- tenance Facility in San Diego County. • SCRRA owns two centralized train control facilities (the Metrolink Operations Center and the Dispatch and Operations Center). • SCRRA also provides small trailers for crew layovers at layover storage sidings at Lancaster, Montalvo, Moorpark, San Bernardino, and Riverside. Stations • Metrolink’s 59 stations are owned and operated by local governments, Caltrans, and some mem- ber agencies. The station owners are responsible for infrastructure maintenance and security. • SCRRA provides Metrolink ticket vending equipment and communications and messaging equipment at stations. Line Owner by Segment Antelope Valley Line Los Angeles Metro Inland Empire–Orange County Line BNSF Railway (Riverside to Atwood) OCTA (Atwood to Orange) Orange County Line BNSF Railway (Los Angeles to Fullerton) OCTA (Fullerton to San Clemente) North County Transit District (San Clemente to Oceanside) Riverside Linea BNSF Railway (Riverside Terminal trackage rights with RCTC) UPRR (Los Angeles Metro has commuter rail easement rights) San Bernardino Line Los Angeles Metro (Los Angeles County) SANBAG (San Bernardino County) Ventura County Line Los Angeles Metro and UPRR (Los Angeles County) VCTC and UPRR (Ventura County) 91/Perris Valley Line BNSF Railway (to Riverside) RCTC (Riverside to Perris) aLos Angeles Metro has commuter rail easement rights with UPRR on the Riverside Line, and RCTC has commuter rail easement rights with BNSF Railway. Table A7. Metro track and rail infrastructure.

102 Contracting Commuter Rail Services, Volume 1: Guidebook Equipment • SCRRA owns 52 locomotives: 40 new F125 Electro-Motive Diesel Tier 4 locomotives deliv- ered and placed in service in 2018 and 12 older F-59PH locomotives that will be retired or converted for alternate fuel testing when the new fleet completes the break-in period. • SCRRA owns an active fleet of 233 passenger rail cars, including 166 trailer cars, 57 cab control cars, and 10 cab control cars used as trailers. • After a serious crash in 2005 (Glendale), SCRRA moved to replace its cab control cars with cars that manage crash energy more efficiently. SCRRA worked with the FRA to develop new specifications for cars that would absorb crash forces and protect the integrity of the passenger compartment. New Hyundai-Rotem cars (80 trailer cars and 57 cab control cars) were built in 2011–2012 to meet these new specifications. Role of the Host Railroad • Each member agency owns the rights-of-way within its respective county over which Metro- link commuter rail operates, with the exception of the freight railroad lines owned by BNSF and UPRR. These railroads also operate freight service on the lines owned by SCRRA members. • Each member agency negotiates its own contractual arrangements for the lines, whether agency or freight railroad owned, within its geographical jurisdiction. • SCRRA provides track and right-of-way maintenance through a contractor on the lines mem- ber agencies own. • The freight railroads provide track and right-of-way maintenance on the lines they own. Role of Amtrak • SCRRA contracts with Amtrak for train operations. Amtrak’s current operations contract began June 26, 2010, with a 4-year base contract and two potential 3-year extension options. The first extension option was exercised in 2014, and a second extension option was executed in June 2016. • Amtrak long-distance trains and the state-sponsored Pacific Surfliner intercity trains serve some Metrolink stations in Orange and Ventura counties. • Through the Rail 2 Rail program, Metrolink monthly pass holders may ride specified Amtrak trains, and Amtrak Pacific Surfliner monthly pass holders may ride Metrolink trains that serve the station pairs at no additional charge. Safety Since service inception, Metrolink has experienced three high-profile crashes involving pas- senger (and other) fatalities. One of those crashes, occurring in Chatsworth, California, in 2008, had a significant implication for SCRRA and the provision of Metrolink service. On Friday, September 12, 2008, at 4:22 p.m., the engineer of westbound Metrolink Ventura County Line Train 111, operating with a leading locomotive, failed to observe the wayside sig- nals. The wayside signals directed the train to stop just past the Chatsworth Station to allow a 17-car local UPRR freight train to move through a switch at Control Point Topanga onto a track siding. The Metrolink train engineer employed by Connex Railroad (a contract train operator at the time) was distracted by texting and failed to notice the signal indications, moved past the switch, and ran head-on into the UPRR freight train at high speed. The collision derailed both freight train locomotives and 10 of the 17 freight cars. The Metrolink locomotive telescoped into the lead passenger car by 52 feet, completely crushing the passenger compartment. The crash resulted in 25 fatalities and 102 injuries, making it the nation’s deadliest passenger train crash.

Case Studies 103 Violating its operating authority by proceeding past a signal and switch, Metrolink Train 111 was a textbook case of a train crash that PTC could have prevented. Congress swiftly took action a month later by enacting the Passenger Rail Improvement and Investment Act of 2008 (see https:// www.congress.gov/bill/110th-congress/house-bill/6003), which mandated the implementation of PTC technology on all passenger rail lines, freight rail lines with certain high volumes of gross vehicle ton-miles, and freight rail lines that carry poison-by-inhalation hazardous materials. Metrolink is one of the first railroads to implement an operational, FRA-approved PTC sys- tem, which has increased capital and operating costs for the agency. Metrolink took a number of subsequent steps to improve safety: the agency conducted independent background checks on contract train crews, implemented hours-of-service controls, and installed in-cab cameras. This tragedy led SCRRA to choose not to exercise the extension option in the contract with the operations contractor Connex Railroad in 2010. Instead, SCRRA entered into a 10-year, negotiated train operations contract with Amtrak. This agreement, still in effect, reaches full term on June 30, 2020. Decision to Contract for Service Freight Railroad SCRRA member agencies own the majority of the Metrolink directional route miles. The freight railroads provide track and right-of-way maintenance on the lines they own. Direct Operation or Contracted SCRRA was created for the specific purpose of developing and implementing commuter rail service on behalf of the five county transit agencies, funded by a mix of resources from local, state, and federal funds. Separating administrative and operational functions was an effective framework for incrementally increasing rail service as ridership increased and funding was avail- able. SCRRA has chosen to retain a relatively small staff and contract most railroad services. Because direct railroad services are contracted, Metrolink employees are not covered by or subject to the Railroad Retirement Tax Act (RRTA) and the Railroad Unemployment Insurance Act (RUIA). In its original bundled contract with Amtrak, all employees providing contracted services to Metrolink were subject to the RRTA and RUIA provisions. Since unbundling, differ- ent contractors have their own independent union relationships, some of which involve stan- dard railroad employment labor agreements and some of which do not. Bundled or Unbundled Contract Originally, SCRRA began Metrolink services in 1992 with a bundled contract with Amtrak to dispatch and operate commuter trains and maintain the infrastructure, signals, and train equip- ment. Amtrak already operated a major railroad equipment facility in Los Angeles to maintain trains operating long-distance and intercity rail service. Within 3 years, SCRRA had opened three additional Metrolink lines, expanding the number of trains operating in southern California. SCRRA was then operating more passenger car rev- enue miles than Amtrak was in its intercity services. SCRRA began to consider unbundling its services into discrete contracts and enacted the following: • In 2001, SCRRA contracted with Mass Electric Construction Company (MEC) to perform communications and signal system maintenance and project management services for the publicly owned rail lines. This included wayside signal systems and grade-crossing signal and control systems. Metrolink re-competed this contract in 2009 and awarded it to MEC.

104 Contracting Commuter Rail Services, Volume 1: Guidebook • In 2003, SCRRA awarded Bombardier the contract for maintenance of equipment. Amtrak continued to dispatch and operate trains. • In 2005, SCRRA awarded the train operations contract to Connex Railroad (now TransDev North America). The same year, SCRRA brought Metrolink dispatching in-house. • In 2010, in the aftermath of the Chatsworth accident, SCRRA chose not to exercise its option to extend the Connex contract at the expiration of the base term. SCRRA subse- quently changed operations contractors, negotiating a new agreement with Amtrak for train operations. Decision to Continue Contracting Amtrak is responsible for train operations under an unbundled contract. Bombardier is the current contractor for maintenance of Metrolink’s rolling stock. Bombardier also provides light maintenance and servicing of equipment at all layover points. SCRRA outsources main- tenance of infrastructure to two separate contractors. Veolia Transportation and Maintenance Infrastructure, Inc., (VTMI) handles maintenance of tracks and structures, and MEC handles communications, signal systems, and the two centralized train control facilities (the Metrolink Operations Center and the Dispatch and Operations Center). In June 2018, the SCRRA Board received a report from staff recommending a contract bun- dling initiative to combine signal and communication maintenance with track, structure, and right-of-way maintenance to realize greater efficiencies and potential cost savings. The staff will need time to prepare a solicitation and call for proposals. Accordingly, the SCRRA Board extended the term of the VTMI contract to June 30, 2020, to align with the MEC contract. Both the VTMI and MEC contracts were modified to include an option for an additional 1-year extension should unforeseen circumstances require the current contractors to provide services beyond June 30, 2020. Table A8 provides the current contracts with these primary contractors. Contractor, Scope Origin and Extension Dates Current Expiration Amtrak, Train Operations Amtrak’s current operations contract began June 26, 2010, with a 4-year base contract and two potential 3-year options. Total is 10 years. June 30, 2020 Bombardier, Maintenance of Equipment Bombardier signed a new contract with SCRRA that took effect on January 1, 2017. The contract is for 8 years (December 31, 2024) with one 4-year option. December 31, 2024 VTMI, Maintenance of Infrastructure VTMI was awarded a 6-year contract that began January 1, 2009. A 4-year extension was exercised in February 2014. Total is 10 years. In June 2018, SCRRA extended the term of the contract to June 30, 2020, with an option to extend the term an additional year. June 30, 2020 MEC, Maintenance of Communications and Signals The original 6-year contract was awarded in 2009, and a 4.5-year option was exercised in 2015. In June 2018, SCRRA included an option to extend the term an additional year. June 30, 2020 Los Angeles County Sherriff’s Department, Security SCRRA contracts with the Los Angeles County Sheriff’s Department for Metrolink security and law enforcement services, and the Sheriff’s Department coordinates such services across the total six-county service area. Year to year Table A8. Current contracts.

Case Studies 105 SCRRA outsources much of its commuter-rail-related functions and typically has up to 260 active contracts and a large number of purchase orders. The lengths of major contracts vary from a minimum of 4 years to a maximum of 12 years, depending on the type of contract. Renewal options also vary by contract, but typical lengths are 2 to 4 years. Contracts may be renewed when reaching the year of option/expiration based on mutual agreement/negotiation. SCRRA follows federal and state procurement laws in public solicitations for contracted services. Oversight for Contract Compliance According to fiscal year 2017–2018 budget documents, SCRRA employed 273 full-time equiv- alents to manage the commuter rail agency and supervise the contractors. SCRRA staff works closely with the five member agencies in planning and implementing the annual operating and capital programs. The staff falls into the following divisions: • Executive, including customer engagement/relations (38) • Internal audit (4) • General counsel (4) • Purchasing and information technology (25) • Finance (26) • Administration (17) • Operations (159) SCRRA is ultimately responsible for regulatory compliance with FRA and the California Public Utilities Commission. SCRRA holds its contractors accountable for their respective regu- latory obligations for their actions and employee qualifications. Given the high-profile fatal crashes, SCRRA has worked closely with FRA to develop crash energy management standards for passenger rail vehicles, implement PTC, and improve grade-crossing protection. Basis for Cost SCRRA member agencies share in the operating costs not covered by fares and freight and dispatching revenues. Operating costs are based on an allocation formula associated with train miles and riders associated with each commuter rail line in each county. SCRRA has a two-part capital program for Metrolink: rehabilitation and new capital proj- ects. Member agencies are responsible for 90% of the rehabilitation program and fund these costs through local option revenues or member-agency Federal Transit Administration program funding. UPRR, Amtrak, or Caltrans funds the remaining 10% of the rehabilitation program. Seventy-five percent of new capital costs are covered by state transit funding, and the remaining costs are shared by member agencies based on a funding formula that takes into account rail miles, stations, and passenger counts. The primary responsibility for assumption of unexpected cost or financial risk is borne by SCRRA and, therefore, the member agencies. Train Operations—Amtrak Amtrak’s current contract is a cost-plus contract with direct labor billed plus a percentage for ben- efits and injury costs; a general and administrative overhead percentage is added to certain costs, and a management fee is added to direct labor costs. Labor rates, general and administrative overhead, and management fees are adjusted over the life of the contract by amounts defined in the contract. Amtrak also received a $2 million contingency fee to cover costs the contractor may incur during the term of the contract that could not be quantified with precision at the time the contract was

106 Contracting Commuter Rail Services, Volume 1: Guidebook executed. In the recent option extension, SCRRA and Amtrak agreed that the contingency fees would be removed during the final 3-year option period and retroactively for fiscal years 2015 and 2016, and the management fee was reduced for the 3-year option period and retroactively for 2015 and 2016. Each year the contractor provides an annual service plan for provision of contracted services, the expected costs of such services, and the service assumptions that inform the annual service plan. After SCRRA adopts that annual budget for Metrolink, the contractor submits monthly invoices for actual direct labor costs plus allowable general and administrative overhead and fees, minus liquidated damages, if any. Liquidated damages are assessed for train delays due to unavailable or unqualified operators. If SCRRA decides to expand train services beyond the annual service plan, if costs increase due to unforeseen events, or if SCRRA decides to add additional costs, the contractor provides a cost estimate for such additional costs, and the parties work through a process for an amend- ment to the annual budget. Maintenance of Equipment—Bombardier Bombardier’s current contract is a cost-plus contract, with direct labor billed plus a percentage for benefits and injury costs; a general and administrative overhead percentage is added to certain costs and a profit is added to direct labor costs. Labor rates, general and administrative overhead, and profits are adjusted over the life of the contract by amounts defined in the contract. Each year the contractor provides an annual service plan for provision of contracted services, which includes a maintenance-of-equipment services operating plan, the expected costs of such services, and the service assumptions that inform the annual service plan. After SCRRA adopts that annual budget, the contractor submits monthly invoices for actual direct labor costs plus allowable general and administrative overhead and profit, minus liquidated damages, if any. If service expansion or a service change is desired, the parties work through the same type of budget amendment process as described for the train operations contract. If services are provided for less than the annual budgeted amount, the contractor receives up to $75,000. If the budget is exceeded by more than 101%, then SCRRA is only obligated to pay 50% of the added amount (and no general and administrative overhead or profit). Liquidated damages are assessed for train delays due to unavailability of equipment on a sliding scale based on the time delayed and assessed for certain specified equipment condition failures. Liquidated damages are subtracted from each monthly invoice’s profit calculation. SCRRA directly purchases the fuel used by its locomotives in revenue service to prevent the equipment maintenance contractor from pricing the risks of fuel costs in its contract. Maintenance of Infrastructure—VTMI VTMI’s current contract is a fully burdened labor cost contract based on time and materials used for the services with direct labor billed plus a percentage for benefits and injury costs; a general and administrative overhead percentage is added to certain costs and a profit is added to direct labor costs. Labor rates, general and administrative overhead, and profit are adjusted over the life of the contract by amounts defined in the contract. Use of contractor equipment is billed on a monthly basis according to specified rates, including fuel costs. Supplies, tools, and materials are also billed on a monthly basis, as are fees paid by the contractor for permits associ- ated with maintenance services (the contractor is also allowed to assess a materials procurement overhead fee for materials management). SCRRA annually provides the contractor with a proposed service plan, including a copy of the track charts indicating the change (expansion or decrease in the physical plant and compo- nents), outlining the services the contractor is expected to provide during the upcoming year.

Case Studies 107 The contractor replies with a proposed annual budget for providing those services, and the budget adopted by the SCRRA Board serves as the basis for monthly invoicing. The contract also calls for an additional 20% of the annual budget for special supplemen- tary maintenance, track maintenance associated with train operations or other construction contractors, and work that is performed on a contract task order basis. The contractor also has authority to spend up to $50,000 without advance approval for extraordinary work needed to maintain or restore railroad operations after accidents or natural disasters. Work beyond the $50,000 amount requires SCRRA’s verbal approval. SCRRA contributes up to 3% of the previous year’s direct costs (less general and adminis- trative overhead, profit, and liquidated damages) for an employee incentive pool if the agency believes the services were performed with sufficient quality. The incentive pool is reduced by half the amount of liquidated damages assessed during the previous year. Maintenance of Communications and Signals—MEC The SCRRA contract with MEC for maintenance of communications and signals ensures the railroad infrastructure is inspected and maintained in accordance with FRA rules and regulations, California Public Utilities Commission requirements, and SCRRA standards. In addition, the MEC contract scope includes support for capital and third-party projects, support for track maintenance, and response support for emergencies or other incidents occurring on the railroad right-of-way. The contract specifies that MEC submit an annual budget to be reviewed, negotiated, and approved by SCRRA. The budget adopted by the SCRRA Board serves as the basis for monthly invoicing. In addition to the operating maintenance tasks that are funded annually through SCRRA’s operating budget, the MEC contract includes provisions to perform and support other project work through the contract task order process. Task order work is funded by capital and rehabili- tation project funds and is not part of the annual operating budget. Fare Collection • Fares are set by driving distance between stations, with different rider categories and weekday and weekend prices, all leading to more than 50,000 distinct fares. Metrolink has instituted a fare reduction on trips of 20 miles or less to encourage shorter-distance travel. Vending machines at stations issue tickets, and customers can use a new mobile ticketing app. • Metrolink has relationships with 163 corporate partners that purchase multiple tickets and passes each month for distribution to employees (as part of a pre-tax transit benefit program). • Metrolink has delegated fare collection and enforcement to its contracted train operations onboard crews, supplemented by the agency’s security and law enforcement contract with the Los Angeles County Sheriff’s Department. Notable Practices and Lessons Learned The five member agencies of SCRRA are seeking to manage and anticipate their financial obligations more carefully. SCRRA seeks to mitigate the rise in contract costs year to year. In the next round of procurements, SCRRA will be working to define more carefully contractor perfor- mance and costs, particularly the distinction between operating expenses for regular operations, capitalized maintenance expenses, and capital expenses for expanded services. Metrolink’s 2015–2025 Strategic Plan identifies a number of strategies to employ in reducing contractor costs as contracts are renewed, competitively rebid, and/or renegotiated, including: • Develop documentation defining how annual labor rates are negotiated and include it in contract procurement packages for contractor compliance;

108 Contracting Commuter Rail Services, Volume 1: Guidebook • Focus on upcoming renewal of Big Five contracts (train operations, maintenance of equip- ment, maintenance of infrastructure, maintenance of communications and signals, and security) and automatic annual increases; • Improve benchmarking of costs to better understand where Metrolink underperforms; • Eliminate contingency fees on operating contracts that do not reflect actual expenditures in the performance of the services; and • Rigorously enforce the liquidated damages associated with not meeting the performance elements outlined within each contract to help improve overall system performance. The Big Five contracts include the security contract held by the Los Angeles County Sheriff’s Department. Labor rates for infrastructure maintenance (track and signals) are established under prevailing wage statutes, federal regulations, and state laws, which may limit the flexibil- ity SCRRA has in renegotiating labor rates under new contracts. The train operations contract was recently extended under terms more favorable for SCRRA, which may offer a glimpse into the opportunities for cost savings when contracts are up for competition. Other concerns for Metrolink are staff turnover for both the public agency and major contrac- tors, material management, and better definition of performance expectations so that incentives and penalties can be assigned more easily and effectively. Metrolink Operating and Performance Statistics Table A9 provides Metrolink operating and performance statistics. Peer Performance Comparisons In Metrolink’s fiscal year 2016–2017 budget, the agency benchmarked itself against a specific set of commuter rail agencies. Table A10 identifies the peer group with directional route miles and annual unlinked passenger trips. The commuter rail systems in this peer group vary by size in directional route miles and in the number of passenger trips. Metra is considerably larger than Metrolink in terms of directional route miles and passenger trips. MBTA is comparable in directional route miles but larger in terms of passenger trips. SEPTA is smaller in directional route miles but larger in terms of passenger trips. Commuter rail systems MARC, Caltrain, and VRE are smaller in scale than Metrolink, each consisting of one to three rail lines. VRE and the MARC Brunswick Line operate peak-direction, 2016 National Transit Database Operating Data Directional Route Miles 824 Unlinked Passenger Trips 13,758,419 Annual Total Passenger Miles 425,150,283 Passenger Car Revenue Miles 13,089,698 Annual Operating Cost $218,012,890 2016 National Transit Database Performance Metrics Operating Cost per Passenger Car Revenue Mile $16.66 Operating Cost per Passenger Trip $15.85 Passenger Trips per Passenger Car Revenue Mile 1.05 Passenger Miles per Passenger Trip 30.90 Table A9. Metrolink operating and performance statistics.

Case Studies 109 Commuter Rail Directional Route Miles Annual Passenger Trips Annual Passenger Miles Annual Passenger Car Revenue Miles Annual Operating Costs Metra 975 72,289,606 1,616,847,589 43,521,315 $722,591,592 Metrolink 824 13,758,419 425,150,283 13,089,698 $218,012,890 MBTA 776 33,830,904 697,963,284 23,532,668 $403,654,786 SEPTA 447 36,187,570 455,691,636 19,334,288 $267,844,193 MARC 400 8,961,892 266,288,367 6,386,294 $139,558,116 VRE 174 4,352,814 145,777,038 2,289,083 $69,874,827 Caltrain 154 18,355,641 488,208,148 7,215,731 $112,219,456 Source: National Transit Database 2016. Table A10. Operating statistics for Metrolink and peer commuter rail systems. Commuter Rail Service Delivery Model Operating Cost/ Passenger Car Revenue Mile Operating Cost/ Passenger Trip Passenger Trips/ Passenger Car Revenue Mile Passenger Miles/ Passenger Trip Operating Cost/ Passenger Mile Metra Mixed Agency Operated and Contracted $16.60 $10.00 1.66 22.37 $0.45 MBTA Contracted–Bundled $17.15 $11.93 1.44 20.63 $0.58 SEPTA Agency Operated $13.85 $7.40 1.87 12.59 $0.59 MARC Contracted–Bundled $21.85 $15.57 1.40 29.71 $0.52 VRE Contracted–Unbundled $30.53 $16.05 1.90 33.49 $0.48 Caltrain Contracted–Bundled $15.55 $6.11 2.54 26.60 $0.23 Average of Peers $19.26 $11.18 1.80 24.23 $0.47 Median for Peers $16.88 $10.96 1.77 24.48 $0.50 Metrolink Contracted–Unbundled $16.66 $15.85 1.05 30.90 $0.51 Source: National Transit Database 2016. Table A11. Performance metrics for Metrolink and peer commuter rail systems. peak-period commuter rail service. The MARC Camden Line operates two directions during peak periods. Caltrain and the MARC Penn Line operate all-day service in two directions. Table A11 provides a comparison of Metrolink performance metrics to the peer average and peer median. Sources Bazilio Cobb Associates. (Jan. 2016). Southern California Regional Rail Authority: Report on Triennial Perfor- mance Audit for the Period July 1, 2012 through June 30, 2015. Final Report. Provided by Metrolink staff via e-mail June 12, 2016. Federal Transit Administration. National Transit Database. https://www.transit.dot.gov/ntd/. Accessed April 2017. Metrolink. Annual Risk Management Report and Insurance for FY 2016–17 Budget Year. Southern Califor- nia Regional Rail Authority Board of Directors Regular Meeting Agenda, June 10, 2016. http://metrolink. granicus.com/DocumentViewer.php?file=metrolink_6770af0be42d6e267211f2c73ad5fe9b.pdf&view=1. Accessed May 21, 2018. Metrolink. Contracting History. Sourced during case study site visit, April 13–15, 2016.

110 Contracting Commuter Rail Services, Volume 1: Guidebook Metrolink. Contract OP136-10—Operator Services Contract—Exercise Final Three-Year Option—National Railroad Passenger Corporation (AMTRAK). Southern California Regional Rail Authority Board Regular Meeting, June 24, 2016. http://metrolink.granicus.com/DocumentViewer.php?file=metrolink_15a7dc3db2 2e7336f3cfaa505645289f.pdf&view=1. Accessed May 21, 2018. Metrolink. Estimates. Conveyed by Metrolink staff via e-mail, June 12, 2016. Metrolink. (June 24, 2016). Fiscal Year 2016–17 Operating Budget. https://www.metrolinktrains.com/ globalassets/about/financial-reports/scrra_fy16-17_adopted_budget_fy17-19_projected.pdf. Accessed May 21, 2018. Metrolink. Metrolink Annual Contract Budget Adoption. Southern California Regional Rail Authority Board Regular Meeting, June 10, 2016. http://metrolink.granicus.com/DocumentViewer.php?file=metrolink_ 6770af0be42d6e267211f2c73ad5fe9b.pdf&view=1. Accessed May 21, 2018. Metrolink. (Oct. 2015). Metrolink Fleet Management Plan, FY 2015–FY 2025. Southern California Regional Rail Authority Board Regular Meeting, Feb. 12, 2016. http://metrolink.granicus.com/DocumentViewer. php?file=metrolink_dc41b75f5d4a18d72606c87a6e9857cd.pdf&view=1. Accessed May 21, 2018. Metrolink. Metrolink 20th Anniversary Report. October 2012. https://www.metrolinktrains.com/globalassets/ about/20thanniversery.pdf. Accessed May 21, 2018. Metrolink. 10-Year Strategic Plan, 2015–2025 and Technical Appendices. No date. https://www.metrolinktrains. com/globalassets/about/metrolink_10-year_strategic_plan_2015-2025.pdf, Accessed May 21, 2018. National Transportation Safety Board. Collision of Metrolink Train 111 with Union Pacific Train LOF65-12. National Transportation Safety Board Investigations and Accident Reports, Accident ID DCA08MR009, Accident Report NTSB/RAR-10/01. http://www.ntsb.gov/investigations/AccidentReports/Pages/RAR1001. aspx. Accessed June 15, 2016. National Transportation Safety Board. Collision between Commuter Train and Pickup Truck, Oxnard, California. National Transportation Safety Board Investigations, Accident No. HWY15MH006. http:// www.ntsb.gov/investigations/pages/2015_oxnard_ca.aspx. Accessed June 15, 2016. Orange County Transportation Authority. LOSSAN Corridorwide Strategic Implementation Plan. Final Report, April 2012. http://www.octa.net/LOSSAN-Rail-Corridor-Agency/Plans-and-Documents/. Accessed June 15, 2016. Parent, D., D. Tyrell, K. Jacobsen, and K. Severson. Crashworthiness Analysis of the January 26, 2005 Glendale, California Rail Collision. Paper No. JRC2011-56132. In Proceedings of the ASME/ASCE/IEEE 2011 Joint Rail Conference, March 16–18, 2011, Pueblo, Colo. http://proceedings.asmedigitalcollection.asme.org/ proceeding.aspx?articleid=1631150. Accessed May 21, 2018. SCRRA. Southern California Regional Rail Authority Conformed Contract MS214-09. Awarded Aug. 22, 2008. Provided by Metrolink staff at case study site visit, April 14, 2016. SCRRA. Southern California Regional Rail Authority Conformed Contract MS222-09R. Awarded Dec. 11, 2009. Provided by Metrolink staff at case study site visit, April 14, 2016. SCRRA. Southern California Regional Rail Authority Conformed Contract OP120-03, Equipment (Rolling Stock) Maintenance Services. Awarded Feb. 28, 2003. Provided by Metrolink staff at case study site visit, April 14, 2016. SCRRA. Southern California Regional Rail Authority Conformed Contract OP136-10, Metrolink Operator Services. Awarded March 26, 2010. Provided by Metrolink staff at case study site visit, April 14, 2016.

Case Studies 111 Tri-Rail South Florida Regional Transportation Authority Palm Beach, Broward, and Miami–Dade Counties, FL Timeline for Public Commuter Rail: 1989. This is the first new start commuter rail in the United States. Governance South Florida Regional Transportation Authority (SFRTA) is an agency of the State of Florida, established pursuant to Chapter 343 of the Florida Statutes. The SFRTA service area is defined by statute as Palm Beach, Broward, and Miami–Dade counties (Figure A4). SFRTA was established in 2003, when the Florida Legislature passed legislation to transform the Tri-County Commuter Rail Authority (TCRA) to SFRTA. A 10-member board governs SFRTA. Each county appoints one county commissioner and one citizen to represent the respective county. The governor appoints three board members, one from each county, and the Florida Department of Trans- portation (Florida DOT) appoints one member, who is the secretary or designee from one of the two Florida DOT districts within the SFRTA service area. Timeline 1983–1984 Florida DOT initiated a feasibility study to investigate commuter rail from West Palm Beach to Miami as an alternative for commuters during recon- struction of Interstate 95. Florida DOT evaluated various alignments, focusing Figure A4. Tri-Rail commuter rail.

112 Contracting Commuter Rail Services, Volume 1: Guidebook on the South Florida Rail Corridor (SFRC) and the Florida East Coast Rail- way (FECR) corridor. FECR would not agree to make the alignment available for a commuter rail service, in part due to extensive use of the corridor for freight trains. Florida DOT selected the SFRC alignment for commuter rail. 1986 The three metropolitan planning organizations representing the counties of Palm Beach, Broward, and Miami–Dade entered into an interlocal agreement to create the Tri-County Commuter Rail Organization (TCRO). 1986–1989 Florida DOT authorized contracts for consultants to conduct studies for a regional commuter rail service. Florida DOT coordinated the planning stud- ies with TCRO. 1988 On behalf of the State of Florida, Florida DOT purchased the SFRC from CSX Transportation, Inc. (CSX). The parties entered into the Operations and Maintenance Agreement Phase A (OMAPA). Under this agreement, CSX dis- patched and maintained the SFRC for Florida DOT, including maintenance of way, tracks, signals, and communications systems. 1989 The Florida Legislature enacted Chapter 343 of the Florida Statutes, which created TCRA. TCRA inherited all rights, assets, agreements, appropriations, privileges, and obligations of TCRO. TCRA also had expanded powers and duties to own, operate, maintain, and manage a commuter rail system in the three-county area. January 1989 TCRA began Tri-Rail commuter rail service from West Palm Beach Station to Hialeah Market Station. 1991 The State of Florida invested $85 million in a corridor capital improvements program. Delray Beach Station opened. 1995 TCRA began a double-track improvement project and signal system replacement. 1996 TCRA opened Sheridan Street Station and Opa-locka Station and extended the line north to Mangonia Park Station. 1998 Tri-Rail service extends south to Miami Airport Station. 2000 TCRA received a $327 million full-funding grant agreement from the Federal Transit Administration to assist in corridor improvements. TCRA opened Fort Lauderdale Airport Station. 2003 The Florida Legislature passed legislation modifying Chapter 343 of the Florida Statutes to transform TCRA into SFRTA. 2004 SFRTA opened Boynton Beach Station. 2009 The Florida Legislature amended Chapter 343 of the Florida Statutes to pro- vide dedicated funding for Tri-Rail. 2014–2015 Florida DOT and CSX transferred responsibility for dispatching and infra- structure maintenance from CSX to the State of Florida according to the South Florida Operating and Management Agreement. Florida DOT and SFRTA entered into an operating agreement to transfer dispatching and maintenance of infrastructure to SFRTA. SFRTA plans to extend Tri-Rail service to downtown Miami on the Tri-Rail Downtown Miami Link. Tri-Rail will diverge from the SFRC and onto the FECR corridor via the Iris Connection and terminate at MiamiCentral Station, located in downtown Miami. MiamiCentral Station will also be the southern terminus of All Aboard Florida’s Brightline intercity passenger rail service. All Aboard Florida is a privately owned and operated intercity passenger rail system, part of Florida East Coast Industries, LLC. All Aboard Florida operates Brightline, an express train ser- vice that uses the existing FECR corridor between Miami and Cocoa and new track along State Road 528 between Cocoa and Orlando.

Case Studies 113 Level of Service The Tri-Rail commuter rail service operates along a 71-mile double-track rail line (142 direc- tional route miles) in the SFRC. Fifty Tri-Rail trains operate during weekdays (25 train trips in each direction) between 4:00 a.m. and 11:35 p.m., and 30 Tri-Rail trains operate during week- ends and holidays (15 train trips in each direction) between 5:17 a.m. and 11:45 p.m. Tri-Rail serves 18 stations from Mangonia Park in Palm Beach County to Miami Airport Station in Miami–Dade County. Train frequency on weekdays is between 20 and 40 minutes during peak hours and 1 hour during midday. On weekends and holidays, Tri-Rail operates at 1-hour fre- quency in each direction. SFRTA, Palm Tran, Broward County Transit, and Miami–Dade Transit coordinate to provide public transportation in the south Florida area. SFRTA contracts with Keolis Transit Services, LLC, for operation of free-fare bus service to and from selected Tri-Rail stations, providing con- necting service for Tri-Rail riders to numerous destinations in the service area. Ownership Track and Rail Infrastructure The State of Florida purchased the SFRC in 1988 from the private freight railroad CSX. The SFRC is the right-of-way from Dyer, north of Mangonia Park Station, to the Oleander Branch, and south to Miami Airport Station, including branch and spur tracks. CSX retained a perma- nent, exclusive freight easement on the SFRC. In March 2015, pursuant to an agreement between Florida DOT and SFRTA, SFRTA assumed responsibility from CSX for managing, operating, maintaining, and dispatching all railroad operations on the SFRC. SFRTA is responsible for maintenance and repair of the rights-of-way, layover facilities and yards, state-owned buildings and facilities, tracks, bridges, communica- tions, signals, and all appurtenances on the corridor. Operations and Maintenance Facility Florida DOT owns and SFRTA manages the following operations and layover facilities on the SFRC: • Hialeah Yard—a multi-user area where the rolling stock storage, shop, and SFRTA mainte- nance yard are located on the SFRC in Hialeah, Florida; • West Palm Beach Layover Facility—the location used by SFRTA for the layover, staging, fueling, and minor maintenance of the fleet; and • Northern Layover Light Maintenance Facility (NLLMF)—the maintenance, layover, and stag- ing facility for rolling stock planned north of Mangonia Park Station. The NLLMF will replace the West Palm Beach Layover Facility. SFRTA opened the new Pompano Beach Operations Center in 2016. The operations center is where dispatching and some operating services functions are located. The Pompano Beach build- ing is also the location for the SFRTA administrative office space. The backup operations center is the dispatch location at West Palm Beach Station, on the second floor of the SFRTA building. Stations • Tri-Rail serves 18 stations on the SFRC. SFRTA is responsible for station operations and maintenance. In addition to the stations within the SFRC, SFRTA owns or leases additional property for station facilities and/or parking areas. • Amtrak provides intercity passenger rail service to several Tri-Rail stations.

114 Contracting Commuter Rail Services, Volume 1: Guidebook • SFRTA shares station access with the respective local transit agencies Palm Tran, Broward County Transit, and Miami–Dade Transit. • SFRTA is extending Tri-Rail service to downtown Miami, where service will terminate at the MiamiCentral Station on the FECR. Equipment • SFRTA owns the Tri-Rail rolling stock, including 23 diesel electric locomotives, 6 diesel mul- tiple units, 21 cab cars (control trailer cars), and 29 coaches (blind trailer cars). Role of the Freight Railroad • CSX owns and operates the tracks on either end of the SFRC (north of Dyer Interlocking and south/west of Oleander Junction). • CSX retains a permanent, exclusive freight easement on the SFRC. • SFRTA is responsible for providing dispatching services for CSX freight trains in the SFRC. Role of Amtrak • Amtrak operates the intercity passenger rail Silver Service on the SFRC, providing service to Tri-Rail stations at the West Palm Beach, Delray Beach, Deerfield Beach, Fort Lauderdale, and Hollywood Stations. Four Amtrak trains operate daily, two southbound and two northbound. • SFRTA is responsible for providing dispatching services for Amtrak trains on the SFRC. Decision to Contract for Service Freight Railroad Florida DOT purchased the SFRC from CSX in 1988. Under the OMAPA, CSX continued to provide maintenance of way, tracks, signals, and communications systems. CSX also continued dispatching until 2015 with one exception, control of the New River Bridge, which Florida DOT had reconstructed. SFRTA has been responsible for operational con- trol at this location since 2007. SFRTA expanded the function to include the train dispatching of the entire corridor in 2015. SFRTA contracted with Amtrak to staff the dispatch center for both the New River Bridge carve-out and the full corridor. Direct Operation or Contracted In the beginning, commuter rail in the SFRC was thought to be temporary, to provide another corridor for commuter transportation between West Palm Beach and Miami while Florida DOT was reconstructing Interstate 95. The intent was not to create a large agency that would directly operate the commuter rail service. Accordingly, Florida DOT and TCRA contracted with a pri- vate company to operate train services and maintain the rolling stock for Tri-Rail. Public policy in Florida supported the use of private businesses to provide public services. Decision to Continue Contracting From 2007 through mid-2017, SFRTA contracted with four separate entities to operate Tri-Rail: 1. Transdev is responsible for Tri-Rail train operations. 2. Bombardier provides maintenance of equipment. 3. Meridian is responsible for all station maintenance. 4. Amtrak staffs the SFRTA dispatch center to provide train dispatching services for Tri-Rail, Amtrak, CSX, and other trains along the SFRC.

Case Studies 115 In 2015, Florida DOT and SFRTA agreed that SFRTA would assume dispatching and mainte- nance of infrastructure for SFRC from CSX. SFRTA contracted with VTMI for maintenance of infrastructure and assigned dispatching to Amtrak. Decision to Bundle Operating Services In September 2016, SFRTA issued a request for proposals for bundled operating services, which include train operations, maintenance of equipment, station maintenance, and dispatch- ing. SFRTA decided a bundled contract for operating services would result in more consistent procedures and efficient management. One bundled contract is expected to limit layers of sub- contractors. SFRTA’s decision to bundle operating services is expected to define a direct line of responsibility for all functions included in the scope of services. Finally, SFRTA determined there was opportunity for competition from multiple contractors. Other Contracts/Unbundled SFRTA has a separate contract with VTMI for inspection and maintenance of tracks, signals, and bridges. In other SFRTA-contracted services, G4S Secure Solutions provides armed secu- rity, fare enforcement, and revenue collection services; CB&I Environmental and Infrastructure provides environmental services on the SFRC, including the Hialeah Maintenance Yard; and Xorail is the engineer of record for the railroad signal system on the SFRC and is responsible for installation of the PTC system. Oversight for Contract Compliance SFRTA maintains an active oversight role to ensure contractual and regulatory compliance and quality of service. Each contractor’s responsibility is to perform in accordance with contrac- tual and regulatory requirements. The contractor is required to comply with the U.S. Depart- ment of Transportation, FRA, FTA, U.S. Environmental Protection Agency, Florida DOT, SFRTA, and other state and federal agency regulations, as applicable. SFRTA holds the contractor accountable for meeting regulatory obligations for the contrac- tor’s actions and employee qualifications. In the event any regulatory authority imposes a fine or penalty on SFRTA because of the contractor’s work, SFRTA will deduct the value of such fine or penalty from the contractor’s next invoice. This is in addition to any liquidated damages or actual damages assessed. SFRTA will require the contractor for bundled operating services to employ a compliance/ quality control manager. The compliance/quality control manager is responsible for implement- ing and managing the Tri-Rail compliance and quality programs. Bundled or Unbundled Contracts—A Chronological History for Tri-Rail 1988–1989 TCRA bundled services and contracted with the Urban Transportation Development Corporation to provide services for train operations, mainte- nance of equipment, and station maintenance. 1994 At the conclusion of the initial service contract, TCRA continued to bundle train operations and maintenance of equipment but separated station maintenance: • TCRA contracted with HTSI for train operations and maintenance of equipment in three successive contracts from January 1994 through June 2007. • TCRA awarded two separate contracts for station maintenance through October 2002. The two contractors were N&K Enterprises and Colonna Construction, Inc. 2002 TCRA re-bundled station maintenance with the existing train operations and maintenance of equipment contractor, HTSI, effective November 1, 2002.

116 Contracting Commuter Rail Services, Volume 1: Guidebook 2005 SFRTA removed station maintenance from the bundled contract and separately procured the services in 2005. A contract for station maintenance services was awarded to Meridian Management Corporation, commencing August 1, 2005. 2007 SFRTA entered into an agreement with Amtrak to provide train dispatching services for Tri-Rail, Amtrak, CSX, and other trains along the SFRC. The term of the agreement was 5 years plus five 1-year options. The initial scope of services was limited to passenger trains on the bridge over the New River (the New River Bridge carve-out). 2007 SFRTA unbundled train operations and maintenance of equipment to increase competition and obtain better pricing. SFRTA awarded two sepa- rate contracts, both with a service start date of July 1, 2007, and an end date of June 30, 2017 (with all options exercised): • SFRTA awarded a contract for train operations to Transdev Services, Inc. (formerly known as Veolia Transportation Services, Inc.). • SFRTA named Bombardier Mass Transit Corporation as the contractor for maintenance of equipment. 2010 SFRTA conducted a competitive procurement for station maintenance and awarded the contract to the incumbent contractor, Meridian. 2014 Florida DOT and CSX agreed to transfer responsibility for dispatching and infrastructure maintenance from CSX to SFRTA. 2015 SFRTA completed transitioning infrastructure maintenance and dispatch operations from CSX to SFRTA: • SFRTA authorized the full scope of the dispatching agreement with Amtrak to include all trains operating on the SFRC. • SFRTA awarded a contract to VTMI for inspection and maintenance of tracks, signals, and bridges. The contract has a 7-year term with three 1-year options. 2016 SFRTA issued an RFP in September 2016 for bundled operating services, which includes train operations, maintenance of equipment, station main- tenance, and dispatching. SFRTA received six proposals in December 2016. One proposer was found to be responsible and responsive. January 2017 The SFRTA Board awarded a contract for bundled operating services to HTSI with an effective date of July 1, 2017. Figure A5 illustrates the role of CSX in the SFRC from 1989 through 2014 and shows SFRTA contracted services for Tri-Rail from 1989 and projected through 2027. Additional major contracted services in 2016 include the following: • G4S Secure Solutions provides armed security, fare enforcement, and revenue collection services. • CB&I Environmental and Infrastructure provides environmental services on the SFRC. • Wabtec Corporation is the contractor for installation of the PTC system. • Keolis Transit Services, LLC, is the contractor for SFRTA’s commuter bus system. Basis for Cost Contract for Maintenance of Tracks, Signals, and Bridges The price for inspection and maintenance of tracks, signals, and bridges by VTMI is a lump sum price for all of the scope of services. The only exemption is if the scope of services explicitly states that a service is considered extra work and therefore not included in the lump sum price. Programmed improvements are part of the scope of services and therefore included in the lump sum price.

Case Studies 117 VTMI or other contractors may provide extra work activities at SFRTA’s sole discretion. Extra work may include the following: • Installation and maintenance of wayside PTC equipment and back-office server; • Heavy station maintenance; • Maintenance of the public information system; • Flagging, except for those provided for the services; • Capital improvements; and • Grade crossing replacements. VTMI is generally entitled to charge for extra work that consists of labor and materials not contemplated by or subsumed within the agreement, subject to prior written approval by SFRTA Figure A5. History of the role of CSX and contracted services for Tri-Rail.

118 Contracting Commuter Rail Services, Volume 1: Guidebook and the terms of the agreement. The contractor prepares a scope, budget, and schedule for the work to be performed that is requested by SFRTA for each item of extra work, and submits them for approval by SFRTA before the work can be performed. SFRTA may alternatively procure any and all extra work from a third party or directly perform the extra work. Tri-Rail Operating Services The RFP for bundled operating services requires the contractor to provide a price for each of 10 years (a base term of 7 years and three option years). The price proposal calls for unit prices for the following functions: • Mobilization phase services—a one-time price, • Train operations—the cost per train mile, • Station maintenance—the unit price per station, • Facility maintenance—the unit price per facility, • Maintenance of equipment—the unit price per vehicle by category and manufacturer, and • Dispatching—the unit price per month. SFRTA pays for the fuel for the Tri-Rail commuter rail locomotives under a separate contract. The train operations contractor is not or will not be responsible for the purchase of fuel. Contract Performance Measures Contract for Maintenance of Tracks, Signals, and Bridges All activities undertaken in the performance of the maintenance-of-way services by VTMI must comply with the safety standards of FRA Class IV for mainline track and FRA Class I for maintenance yards, branch lines (except for the Homestead Branch), spurs, and state sidetracks. The Homestead Branch track must be maintained to FRA Class II. Tri-Rail could sustain significant damages due to passenger train delays because of the con- tractor’s (VTMI’s) failure to maintain the track and signal system or failure to release the track for service at agreed-upon times. Because of the difficulty in computing the actual material loss and damages, the contract between SFRTA and VTMI provides that the contractor will pay SFRTA liquidated damages specified in the contract. The liquidated damages are assessed if any passenger train is delayed more than 6 minutes (station to station) due to the contractor’s fail- ure to perform under several categories. Payment is made by a deduction in SFRTA’s monthly contract payment to the contractor. The sum of liquidated damages detailed in no event should exceed 5% of the total annual contract amount. Tri-Rail Operating Services SFRTA lists primary and secondary key performance indicators (KPIs) (Tables A12a and b) for the bundled operating services contract. SFRTA uses these KPIs as an indicator of contractor performance. SFRTA pays incentive payments to the contractor for successful achievement of the primary KPIs. Table A13 provides a summary of the liquidated damages, period of assessment by SFRTA, and the amount assessed. Fare Collection Tri-Rail has a proof-of-payment fare system. Passengers must have an EASY Card loaded with the appropriate fare product, or a valid paper ticket, prior to boarding the train. Passes and tickets are available at all Tri-Rail stations and are not sold on board the train. Fare inspectors

Case Studies 119 are on random Tri-Rail trains. G4S Secure Solutions provides armed security, fare enforcement, and revenue collection services. Notable Practices and Lessons Learned • The freight railroad played a significant role during the first 26 years of Tri-Rail operations, from 1989 through 2014. The Florida Legislature enacted Chapter 343 of the Florida Statutes to create TCRA in 1989 and gave the agency powers and duties to own, operate, maintain, and manage the Tri-Rail commuter rail system. When Florida DOT purchased the SFRC from CSX in 1988, the OMAPA provided that CSX dispatch and maintain the infrastructure on the SFRC. However, as of 2014, CSX was no longer interested in continuing to provide these service functions. Florida DOT, CSX, and SFRTA agreed to transfer responsibility for dispatching and maintenance of infrastructure from CSX to SFRTA. • When Tri-Rail service began in 1989, Florida DOT/TCRA bundled station maintenance with train operations and maintenance of equipment. TCRA unbundled station mainte- nance in 1994 and then bundled station maintenance with train operations and mainte- nance of equipment again in 2002. SFRTA unbundled station maintenance in 2005 and KPI Period Amount ($) Safety Quarterly 21,250 On-time performance (end to end) Quarterly 20,000 On-time performance (station to station) Quarterly 20,000 Customer satisfaction per complaints and survey Quarterly 20,000 Employee availability to perform operating services Quarterly 20,000 Vehicle availability as required per daily operating plan Quarterly 20,000 Vehicle cleanliness per daily cleaning requirements Quarterly 20,000 Total 141,250 Table A12a. Primary key performance indicators. • Response time for station and facility maintenance must be minimized. • Repeat failures at the same Tri-Rail station or on the same rolling stock (vehicle) during each calendar month must be zero. • Availability for stations and facilities must be 100% during operating hours. • Heating, ventilation, and air-conditioning performance. One hundred percent of all cars in all trains must maintain a temperature of 72°. • Vehicle door failures. No more than two doors may be inoperative in any dispatched train. • Stock failure. Trains must be stocked with 100% of passenger amenities. • Communications systems on the rolling stock (trains) and at stations must be operational at all times. • Employee efficiency checks. The contractor is responsible for federally mandated efficiency checks for employees, including all contractor employees covered by hours-of-service employees per FRA. Table A12b. Secondary key performance indicators. Liquidated Damage Period Amount ($) Failure to achieve any primary KPI Monthly 3,500 Failure to achieve any secondary KPI Monthly 1,750 Failure to provide accurate or correct data for any KPI Each instance 5,000 Operating rules violations or FRA reportable injury Each instance 5,000 Table A13. Categories of liquidated damages.

120 Contracting Commuter Rail Services, Volume 1: Guidebook reprocured the independent contract in 2010. The current scope of work for operating ser- vices bundles the station maintenance function again with train operations, maintenance of equipment, and train dispatching. Contracting station maintenance independently provided an opportunity for smaller, local firms to compete and win contracts with Tri- Rail, hopefully at a lower price. However, station maintenance is an integral part of train operations and key to customer service. SFRTA found the agency was required to invest more time in contract oversight to ensure quality of service when station maintenance was unbundled from train operations. • When train operations and maintenance of equipment were reprocured in 2007, SFRTA determined that the marketplace did not have sufficient competition (i.e., there were not a lot of vendors able to provide these bundled services) to support a bundled procurement. SFRTA unbundled train operations and maintenance of equipment and awarded two sepa- rate contracts. In 2016, SFRTA reviewed other commuter rail services and determined the marketplace had changed and there were multiple contractors capable of providing bundled services. • SFRTA decided bundled services reduce the risk of one contractor pointing to another con- tractor for accountability when there are failures in performance. SFRTA believes that a bun- dled contract results in more efficient and cost-effective operations for Tri-Rail. SFRTA staff are better able to focus on strategy rather than having the responsibility to coordinate day-to- day operations through multiple contractors. • One of SFRTA’s concerns is the commitment of key contractor staff on the Tri-Rail assign- ment. For the new contract for operating services, the successful contractor must agree not to reassign the approved individuals occupying these positions for a period of 5 years for the general manager and 1 year for the other key management personnel. • The contract for operating services requires that the train operations, dispatching, and main- tenance of equipment portions of the operating services not be subcontracted or performed by employees of any subcontractors. Specifically, train operations and dispatching employees shall be employees of the prime contractor. Tri-Rail Operating and Performance Statistics Table A14 provides Tri-Rail operating and performance statistics. Peer Performance Comparisons The Tri-Rail peer group comprises similar commuter rail systems based on directional route miles and annual passenger trips, as shown in Table A15. ACE, Sounder, and VRE operate peak-direction, peak-period commuter rail service. Rail Runner operates two directions during peak periods, and Tri-Rail operates limited or hourly midday trains. FrontRunner and South Shore Line operate all-day service in two directions. Table A16 provides a comparison of Tri-Rail performance metrics to the peer average and peer median.

Case Studies 121 2016 National Transit Database Operating Data Directional Route Miles 142 Unlinked Passenger Trips 4,241,486 Annual Total Passenger Miles 117,303,700 Passenger Car Revenue Miles 3,595,531 Annual Operating Cost $89,987,616 2016 National Transit Database Performance Metrics Operating Cost per Passenger Car Revenue Mile $25.03 Operating Cost per Passenger Trip $21.22 Passenger Trips per Passenger Car Revenue Mile 1.18 Passenger Miles per Passenger Trip 27.66 Table A14. Tri-Rail operating and performance statistics. Commuter Raila Directional Route Miles Annual Passenger Trips Annual Passenger Miles Annual Passenger Car Revenue Miles Annual Operating Costs Rail Runner 193 886,386 39,741,454 1,406,934 $29,944,982 South Shore Line 180 3,504,080 113,035,111 4,233,598 $48,080,595 FrontRunner 175 4,545,849 125,131,274 5,401,304 $45,231,732 VRE 174 4,352,814 145,777,038 2,289,083 $69,874,827 ACE 172 1,290,085 55,471,664 1,078,543 $17,380,023 Sounder 164 4,312,113 106,687,816 1,794,741 $44,414,515 Tri-Rail 142 4,241,486 117,303,700 3,595,531 $89,987,616 Source: National Transit Database 2016. aCaltrain has similar directional miles (178 miles) but 19 million annual passenger trips. Table A15. Operating statistics for Tri-Rail and peer commuter rail systems. Commuter Rail Service Delivery Model Operating Cost/ Passenger Car Revenue Mile Operating Cost/ Passenger Trip Passenger Trips/ Passenger Car Revenue Mile Passenger Miles/ Passenger Trip Operating Cost/ Passenger Mile Rail Runner Contracted–Bundled $21.28 $33.78 0.63 44.84 $0.75 South Shore Line Agency Operated $11.36 $13.72 0.83 32.26 $0.43 FrontRunner Agency Operated $8.37 $9.95 0.84 27.53 $0.36 VRE Contracted–Unbundled $30.53 $16.05 1.90 33.49 $0.48 ACE Contracted–Bundled $16.11 $13.47 1.20 43.00 $0.31 Sounder Contracted–Unbundled $24.75 $10.30 2.40 24.74 $0.42 Average of Peers $18.73 $16.21 1.30 34.31 $0.46 Median for Peers $18.70 $13.60 1.02 32.87 $0.42 Tri-Rail Contracted–Unbundled $25.03 $21.22 1.18 27.66 $0.77 Source: National Transit Database 2016. Table A16. Performance metrics for Tri-Rail and peer commuter rail systems.

122 Contracting Commuter Rail Services, Volume 1: Guidebook Sources Moore, T. (Feb. 26, 2013). General Counsel, South Florida Regional Transportation Authority. A Year in the Life of a Commuter Rail General Counsel (presentation). Rankin, J. M. (July 1990). Evolution of a Commuter Rail System in South Florida. Florida Department of Trans- portation, Tallahassee. South Florida Regional Transportation Authority. (Feb. 26, 2016). Governing Board Meeting, Agenda Item No. I-5, Information Item—Contracting Commuter Rail Services. South Florida Regional Transportation Authority. (Sept. 6, 2016). Request for Proposals for Operating Services, RFP No. 16-010. South Florida Regional Transportation Authority. Solicitations Advertisements, Notices. http://www.sfrta.fl.gov/ Procurement/Solicitations-Advertisements.aspx. Accessed Sept. 2016. South Florida Regional Transportation Authority agreements with the following contractors for Tri-Rail com- muter rail services include the following: • Agreement No. 06-101 between South Florida Regional Transportation Authority and National Railroad Passenger Corporation (Amtrak) for Transition, Dispatching, Train Control, and Yard Services. • Agreement No. 06-112 between South Florida Regional Transportation Authority and Veolia Transporta- tion Services (Transdev, Inc.) for Commuter Rail Operations for SFRTA’s Commuter Rail System. • Agreement No. 06-113 between South Florida Regional Transportation Authority and Bombardier Mass Transit Corporation for Commuter Rail Fleet Maintenance for SFRTA’s Commuter Rail System. • Agreement No. 10-001 between South Florida Regional Transportation Authority and Meridian Manage- ment Corporation for Station Maintenance Services for Tri-Rail Train Stations. • Agreement No. 14-012 between South Florida Regional Transportation Authority and Veolia Transporta- tion Maintenance and Infrastructure, Inc., for Maintenance of Way Services.

Case Studies 123 MBTA Commuter Rail Massachusetts Bay Transportation Authority Boston, MA Timeline for Public Commuter Rail: 1964 Governance Commuter rail is one of several modes operated by Massachusetts Bay Transportation Authority (MBTA) (Figure A6). MBTA commuter rail service is provided on 14 lines serving the greater Boston metropolitan area. Until 2009, a discrete board of directors appointed by the governor of the Commonwealth governed MBTA. In 2009, new governance for transportation agencies in Massachusetts was implemented with the creation of the Massachusetts Department of Transportation (MassDOT). The governor appoints 11 members to the MassDOT Board to oversee MassDOT and MBTA. Each member fills criteria for expertise in transportation, finance, or engineering. The secretary of transportation also serves on the board. The legislature expanded the MassDOT Board from seven to its current 11 members in 2016. In 2015, after serious service problems during the record-breaking snowfall in winter 2014– 2015 and continuing service and financial concerns, the new governor created an additional gov- ernance body for MBTA. The governor named a five-member Fiscal and Management Control Board (FMCB) to address structural, financial, and management issues plaguing MBTA and to Figure A6. MBTA commuter rail.

124 Contracting Commuter Rail Services, Volume 1: Guidebook develop 1-, 5-, and 20-year fiscal plans. By statute, FMCB consists of five members: one member with experience in transportation finance, one member with experience in mass transit opera- tions, and three members of the MassDOT Board. The FMCB mandate is to strengthen oversight of MBTA, enhance management support, and increase accountability within 3 to 5 years. During this period, the MBTA general manager reports to FMCB rather than reporting to MassDOT. Timeline 1964 MBTA signed an agreement with Boston and Maine Railroad (B&M) to operate com- muter rail lines north and west of Boston (north service). 1972 MBTA purchased south rail lines from the Penn Central Transportation Company. 1976 MBTA purchased north rail lines from B&M; B&M continued operating the service. Consolidated Rail Corporation (Conrail), the successor to Penn Central, became the operator of the south service. 1977 MBTA terminated Conrail. B&M became the single operator for north and south service. 1982 MBTA entered into a single 5-year agreement with B&M to operate all service. 1987 The National Railroad Passenger Corporation (Amtrak) became the single commuter rail service provider. 2003 The Massachusetts Bay Commuter Railroad (MBCR) won a competitive procurement to become the single commuter rail service provider effective July 1, 2003. The 10-year contract included a 5-year base term plus five option years. The contract was extended an eleventh year to accommodate the extended procurement schedule for the next contract. 2014 Keolis Commuter Service (KCS) won a competitive procurement to become the single commuter rail service provider effective July 1, 2014. The term of the contract is an 8-year base term plus a total of 48 months of available options, in increments of not less than 24 months. Level of Service Through the bundled contract with KCS, MBTA operates approximately 500 weekday com- muter rail trains, of which 200 operate to and from North Station and 300 operate to and from South Station. All lines operate on reduced service (approximately 150 to 200 trains each day) on Saturdays and Sundays. Both major terminals also have Amtrak intercity service. South Sta- tion is the northerly end of Amtrak’s Northeast Corridor, and both the Acela and the Northeast Regional services begin and end there, as well as one daily long-distance round trip, Amtrak’s Boston–Chicago Lake Shore Limited. North Station is the beginning and terminating point for the five daily round trips that make up the state-supported Downeaster regional service between Boston and Portland–Brunswick, Maine. Ownership Track and Rail Infrastructure MBTA owns and maintains all track and rail infrastructure over which its trains operate, with the exception of the 30-mile rail line within Rhode Island, which is owned by Amtrak as part of the Northeast Corridor. Operations and Maintenance Facility • MBTA owns three maintenance facilities for revenue vehicles in Boston, Somerville, and Readville, Massachusetts.

Case Studies 125 • MBTA owns 11 overnight layover facilities for revenue vehicles in Massachusetts and Rhode Island. • MBTA also owns maintenance facilities for non-revenue vehicles. Stations • MBTA commuter rail serves 134 passenger stations, several of which are shared with Amtrak. • MBTA owns most of the stations. • B&M and Penn Central sold some stations during the 1960s and 1970s as part of ongoing efforts to raise funds for the fiscally strapped railroads. These station sales universally included covenants requiring the new owners to provide station facilities (e.g., clean and maintained platforms, enclosed heated and lighted waiting areas, and parking spaces) for commuter rail passengers in perpetuity. Equipment • MBTA owns the fleet of diesel-electric locomotives, single-level and multi-level passenger coaches, and control cars, totaling more than 600 units. All trains operate in the push-pull mode and have one locomotive on the outbound end of the train and one control car on the inbound end. Average train length is five to six coaches in the north service and seven to eight coaches in the south service. Maximum train length is nine coaches. • MBTA owns the non-revenue equipment. • MBTA owns all information technology systems. Role of the Host Railroad • MBTA owns and the contractor KCS maintains all service assets (with the exception of the 30-mile line segment in Rhode Island maintained by Amtrak as part of the Northeast Corridor). For contractual purposes, these assets are divided into: – Service property comprising buildings, track, undergrade bridges, overhead bridges, draw- bridges, culverts, right-of-way assets (e.g., fencing, gates, guardrails, and signage), electrical systems, signal systems, and communications systems. – Support property comprising a lengthy list of vehicles, work equipment, machinery, tools, furnishings, computers and associated computer equipment, information technology sys- tems, etc. – Service equipment, which includes MBTA’s fleet of revenue vehicles such as locomotives, passenger coaches, and control cars that provide the daily service. • Freight rail service operates on several MBTA commuter rail lines by agreement with the pri- vate railroad corporations. Carriers include Providence and Worcester Railroad, CSX Trans- portation, Pan Am Railways, and Grafton and Upton Railroad. Role of Amtrak • Amtrak owns and maintains the rail line and infrastructure in Rhode Island (approximately 30 miles between the Massachusetts–Rhode Island state line and Wickford Junction) over which MBTA trains operate. • Under the terms of a 30-year agreement between MBTA and Amtrak, referred to as the Attleboro Line Agreement, effective July 1, 2003, Amtrak dispatches and maintains rail line for the MBTA-owned Northeast Corridor from Boston South Station to the Massachusetts– Rhode Island state line, approximately 38 miles, at no cost to MBTA. This arrangement stems from the decision by Amtrak not to respond to the competitive procurement for MBTA com- muter rail at the end of the Amtrak contract in 1987–2003, but Amtrak wanted to maintain control of the Northeast Corridor as provided in the Attleboro Line Agreement.

126 Contracting Commuter Rail Services, Volume 1: Guidebook Decision to Contract for Service Freight Railroad MBTA purchased the south rail lines from Penn Central in 1972 and purchased the north rail lines from B&M in 1976. In 2013–2014, MBTA completed acquisition of the remaining part of the Worcester Line still owned by Conrail’s successor, CSX Transportation. MBTA now owns all rail lines over which commuter trains operate except one segment in Rhode Island. MBTA has agreements with private railroad corporations to operate freight rail on some rail lines. Direct Operation or Contracted After acquiring the rail lines and service-related assets used in commuter rail service in 1972 and 1976, MBTA chose to contract for commuter rail rather than operate it directly. Several factors influenced this decision including: • The overall size of the service and the issues inherent in incorporating another mode into MBTA-operated services (i.e., heavy rail, light rail, bus, and trolleybus). • The issue of how to deal with the Railroad Retirement Tax Act and the Railroad Unemployment Insurance Act for 1,000 to 2,000 commuter rail employees while the 5,000 to 6,000 employees of MBTA proper were not railroad employees. In 1977, there was no template for establishing both retirement systems within one organization. (That was not attempted until New Jersey Transit and the Southeast Pennsylvania Transportation Authority did so in 1981–1983.) • Complex labor relations. MBTA had over 20 unions, although more than 50% of the employ- ees were in one union. The commuter rail employees are governed by 13 rail labor unions and 14 union agreements, which could have created an even more complex labor relations situation. Bundled or Unbundled Contract The decision to enter into a bundled agreement is also based on the decisions to acquire the rail lines and service-related assets of private rail lines in 1972 and 1976. MBTA purchased the south rail lines from Penn Central in 1972 and Conrail, successor to Penn Central, became the opera- tor of the south service in 1976. The same year, MBTA purchased the north rail lines from B&M, and B&M continued operating the service. In 1977, MBTA terminated Conrail. B&M became the single operator for north and south service. In 1982, MBTA entered into a single 5-year agreement with B&M to operate all service. Since MBTA had already transitioned away from Conrail operation of any of its service by 1981, the Northeast Rail Services Act of 1981 did not cover the Boston service. MBTA had already gone through a transition process and established a single operator under a single contract. Decision to Continue Contracting In 1982, the combined 5-year operating agreement was essentially a sole-source negotiated agreement with B&M. In 1986, B&M was unable to meet certain requirements that MBTA speci- fied in a procurement process for a new contract. Consequently, in 1987, Amtrak became the single contract operator through a negotiated agreement. MBTA determined there was no benefit in going through a costly transition to reverse the direction and subdivide the commuter rail service into multiple contracts. This decision was reinforced when at least two companies were willing to accept MBTA’s terms and conditions for operation of the service in a bundled contract for competitive procurements in 2002–2003 and 2012–2014.

Case Studies 127 In 2002–2003, MBTA established a formal, three-step procurement process and then repeated the process in 2012–2014. The number of respondents to the three-step process in 2012–2014 included the following: 1. Request for letters of interest—26 letters of interest. 2. Request for qualifications—two respondents, both qualified to submit a proposal. 3. Request for proposals—two respondents. MBCR won the procurement in 2003, and KCS won the procurement in 2014. Amtrak declined to participate in the competitive process to retain the contract in 2002–2003. Amtrak submitted a letter of interest but did not submit qualifications for the procurement in 2012–2014. Overall, the contractor’s scope of services covers the following principal service-related func- tions for all MBTA commuter rail lines (except the Northeast Corridor from Boston South Sta- tion to Wickford Junction in Rhode Island, which Amtrak dispatches and maintains). They are: • Transportation services, including both train operations and train dispatching • Engineering services • Mechanical services • Materials management and procurement • Environmental services • Customer service • Training of personnel • Quality assurance • Safety and security • Information technology and information security The contractor is also expected to develop an annual plan of recommended capital improve- ments; however, there is no requirement for the contractor to implement capital projects unless the capital work is added as part of a change order or supplemental work. Oversight for Contract Compliance The MBTA Railroad Operations Department has approximately 50 positions dedicated full time to the oversight and management of the commuter rail service and the services provided by the contractor. The duties and obligations of the contractor are precisely detailed in the technical schedules of the contract with MBTA. Virtually every aspect of the scope of services is encapsulated in a contractually required document that must be prepared and submitted initially by the operator, approved by MBTA, adhered to by the contractor, and, in most cases, updated periodically to assure currency and relevance. These documents are the Operator Required Deliverables List (ODRL). The ODRLs provide a framework for how to perform and record the scope of services. The contractor is responsible for approximately 300 ODRLs. FRA-required plans and programs and accompanying compliance reports are submitted to FRA by MBTA in its role as the owner of the railroad for the commuter rail service. The actual work of compliance is handled by the contractor, with required reports, as part of the ODRL program. The reports are submitted to MBTA and then forwarded to FRA. Any violation issues or penalties assessed by FRA come first to MBTA, which pays them but then deducts that amount from payments to the contractor. Essentially, MBTA is a middle man in this process, albeit a responsible one with a significant stake in the operator’s diligence in providing a safe service, maintaining a safe railroad, and assuring strict compliance with all FRA-required plans and programs.

128 Contracting Commuter Rail Services, Volume 1: Guidebook In addition to the ODRLs, MBTA uses two primary tools to ensure contract compliance and measure operator performance: • A series of inspections and audits conducted by the team of inspectors from MBTA Railroad Operations. • The penalty provisions, referred to as performance evaluation. (No incentive payments are available to the contractor.) These three mechanisms—ODRLs, the inspector’s reports or audits, and the penalty regime— are integral elements of MBTA’s program of contract management and oversight. The performance evaluation encompasses several metrics that are closely measured and used to calculate operator performance standards. They are • On-time performance, measured as no later than 4 minutes 59 seconds arrival at the final terminal from the published arrival time; • Available seating capacity compliance with the mandated per-train number of seats/coaches; • Minimum onboard conductor staffing levels; • Fleet maintenance, meaning timely documented completion of all required maintenance tasks or programs; and • All passenger amenities in good working order, including air conditioning/heating, doors, toilets, communications systems, and general cleanliness. Using these performance metrics, inspector’s reports, and daily and other periodic reports submitted by the operator to MBTA, MBTA assesses and deducts penalties from the amount of profit available to the operator. MBTA assumes that the operator had planned to make at least a 5% profit and, accordingly, has established a penalty regime that can assess up to 5% of the operator’s annual bid price for the contract. The contractor for the MBTA service reported significant losses in the first full year of the cur- rent contract (July 1, 2014, to June 30, 2015). After this outcome, MBTA and KCS reached an agreement to calculate the penalties on a different basis, reaching the cap limit on a daily rather than a monthly basis. MBTA agreed to give a substantial portion of the penalty monies back to the operator to hire more customer service personnel and additional on-train personnel and to introduce other customer-friendly service enhancements. Basis for Cost The primary responsibility for assumption of unexpected cost or financial risk is borne by the contractor. The MBTA–KCS operating agreement is a firm, fixed-price contract. The contractor submitted a price proposal for the 8-year base term of the agreement. The price proposal also encompassed four option years at a price based on an MBTA-applied escala- tion rate of 3.477% applied to Year 8 for Year 9 and then carried throughout the remaining option years. The first year of the agreement carried a firm fixed price, designated as the annual fee, plus MBTA-specified allowances. The allowances included snow removal, contractor support of MBTA capital projects, maintenance of MBTA-owned rail lines not currently in use in the com- muter rail service, and operations and maintenance of the extensive information technology system developed for the service’s data retention, recordkeeping, and reporting requirements. Thus, the first year’s total contract price was invoiced in 12 monthly installments (less any pen- alty deductions or compliance holdbacks) and the allowances invoiced on an as-incurred basis. There is also a provision for extra work, referred to in this agreement as supplemental work requested by MBTA, agreed to by the contractor (based upon an agreed-upon cost), and

Case Studies 129 conducted according to procedures for supplemental work. The supplemental work provisions are used to cover the cost of any work performed in the categories covered by the allowances but in excess of the total cost allotted to that particular allowance in a given year. In a firm fixed-price contract, the financial risk is with the contractor. Consistent with this contracting principle, in its first full contract year of service (July 1, 2014, to June 30, 2015), the current operating contractor suffered significant operating losses, reportedly equivalent to almost 10% of the annual contract cost for that year. A force majeure provision in the operating agreement may provide the operator relief in the event of occurrences falling within the defini- tion of a force majeure. Locomotive fuel is the responsibility of MBTA, which contracts for and pays for all fuel deliv- eries to the storage tanks on the service property. The inventory for both infrastructure and equipment maintenance belongs to MBTA. Capital Investment The capital program for all the commuter rail assets is the responsibility of MBTA, both in funding and scheduling. However, the contractor is expected to play a significant advisory role in the development and scheduling of the capital program. The contractor is allotted an annual allowance for support work to assist MBTA in the successful planning and implementation of these capital projects. Neither the 2003 nor the 2014 contract required the contractor to invest in the capital program although many regional stakeholders believe this should be a requirement. Implementation of capital projects is critical to the improvement of long-term service quality and the contracts since 2003 have neither introduced nor enabled methods to speed project implementation or to create access to non-MBTA-sourced capital funds. Capital spending remains dependent on MBTA resources. Current Massachusetts state law does not allow private-sector investment in public-sector assets. However, there is ongoing discussion for MassDOT to replace the operating and main- tenance contract with a 30-year concession-type agreement at the end of the current contract’s 8-year base term (2022). Necessary changes will have to be made to state law to make a conces- sion agreement possible. A concession agreement gives a private concessionaire responsibility not only for operations and maintenance of the assets but also for capital investment. Fare Collection • MBTA sets all fare policies and prices and prints all fare media. The types of tickets sold include one way, round trip, 10 trips, and monthly passes. The fare structure is a zone system, running from Zone 1A to Zone 10 (the longest line is approximately 65 miles), with a $3 sur- charge for tickets sold on the train if the passenger has boarded at a station with a ticket sales capability. The monthly pass also provides access to other MBTA transit modes (i.e., heavy rail, light rail, bus, trolleybus, and ferryboat). The senior citizen fare is discounted 50%, and children under 11 years ride free. • MBTA sells fare media at select Boston stations, at various commercial establishments, and by U.S. mail, e-commerce, and employer ticketing programs. In addition, a small number of ticket vending machines sell commuter rail tickets at the three main Boston stations and a limited number of additional outlying stations. • The contractor sells various types of tickets at ticket offices in three Boston stations: North Station, South Station, and Back Bay Station. The contractor is also responsible for selling one-way and round-trip tickets on the trains, pursuant to written fare collection procedures.

130 Contracting Commuter Rail Services, Volume 1: Guidebook • The contractor is responsible for on-train fare enforcement, including selling tickets and col- lecting revenue, checking tickets, and validating tickets (i.e., punching to indicate usage). All ticket revenue collected by the contractor must be deposited daily or otherwise transferred to accounts designated by MBTA. MBTA is responsible for all credit card fees. There is currently no contractual mechanism for any type of revenue sharing in the event of contractor performance leading to increased ridership and revenue. The previous agreement, between MBTA and former contractor MBCR, did contain such a provision. MBTA is currently considering revenue sharing to stimulate increased revenue collection. Notable Practices and Lessons Learned There have been a number of lessons learned from MBTA’s contracting experience. They are: • Discussion with the MBTA board to identify objectives to be achieved through contracting is important and should be undertaken early in the process. The time for these discussions should be built into timelines for procurements. • Because of the size and complexity of the contract, and the amount of information that had to be made available to the non-incumbent proposer, 18 months was simply not enough time for this procurement. The process took a full 2 years and even then resulted in a less- than-desirable 4.5 months for the mobilization/transition to the new contractor to take place. • The provision to extend the contract 6 months in the MBTA–MBCR agreement was inad- equate, leading to a time-consuming, costly negotiation for an additional 6 months. In part, this led MBTA to include two very detailed sections in the MBTA–KCS contract, dealing with service transition in the future. The contract now prescribes what information the incumbent will make available to proposers during a future procurement, an additional transition period of up to 12 months if requested by MBTA, and the manner in which the cost of the additional contract period will be determined. • Looking back to 1986 and 2002–2003, MBTA cannot assume that the incumbent operator will be a responsive proposer, and MBTA cannot assume that all proposals from qualified proposers will be responsive. • If a multi-step procurement process is established and the qualification step is difficult, com- plex, time-consuming, and costly, that may discourage some competitors from participating. • A thorough knowledge of the market for potential contractors is essential. A procurement process with only two qualified proposers is less than ideal. • Penalties cannot be so severe as to disable the contractor because replacement con- tractors cannot be readily arranged. However, contractors can estimate likely penalties and build them into bid prices, reducing the impact of penalty assessments without ensuring improved performance. Competition can help to temper this price cushion for penalties. • Stakeholders may expect both innovation and advantageous pricing from a contractor. How- ever, the size and breadth of the bundled MBTA scope of work may restrict the number of contractors that can responsibly propose on the scope of work, affecting the potential for innovation and for competitive pricing. • Other factors that influence competition are the marketplace at the time of the RFP process and the history of contractual relationships for commuter rail in the particular region. • The board and the public consider increased contract term length important to bring about improved system performance. However, with MBTA fully responsible for the size and timing of the capital program, the contractor term may be less relevant to long-term service quality improvement.

Case Studies 131 MBTA Operating and Performance Statistics Table A17 provides operating and performance statistics for MBTA. Peer Performance Comparisons Table A18 provides the MBTA peer group by directional route miles and annual passenger trips. With 283 directional route miles and 53.8 million unlinked passenger trips in 2016, GO Transit in Toronto, Canada, might be a peer commuter rail system for MBTA, but com- parable data are not available. The commuter rail systems in this peer group are all multi-line systems and operate at a level of service A or B. NJ TRANSIT, Metra, and Metro-North operate 7 days a week, 20 to 24 hours per day, with bi-directional service on all lines. SEPTA and MBTA operate 7 days a week, 16 to 20 hours per day with bi-directional service on all lines. Level of service may be less on some rail lines for all peer systems. The size of each system as measured in directional route miles ranges between 447 miles for SEPTA and 1,002 miles for NJ TRANSIT. MBTA falls in the middle with 776 directional route miles. Of the commuter rail systems in the peer group, MBTA had the lowest annual passenger trips in 2016, followed by SEPTA. The other rail systems (NJ TRANSIT, Metra, and Metro- North) carry more than twice the number of annual passenger trips of MBTA. Table A19 provides the performance metrics for MBTA and peer commuter rail systems. 2016 National Transit Database Operating Data Directional Route Miles 776 Unlinked Passenger Trips 33,830,904 Annual Total Passenger Miles 697,963,284 Passenger Car Revenue Miles 23,532,668 Annual Operating Cost $403,654,786 2016 National Transit Database Performance Metrics Operating Cost per Passenger Car Revenue Mile $17.15 Operating Cost per Passenger Trip $11.93 Passenger Trips per Passenger Car Revenue Mile 1.44 Passenger Miles per Passenger Trip 20.63 Table A17. MBTA operating and performance statistics. Commuter Rail Directional Route Miles Annual Passenger Trips Annual Passenger Miles Annual Passenger Car Revenue Miles Annual Operating Costs NJ TRANSIT 1,002 90,872,267 2,090,913,150 61,393,168 $1,022,642,280 Metra 975 72,289,606 1,616,847,589 43,521,315 $722,591,592 MBTA 776 33,830,904 697,963,284 23,532,668 $403,654,786 Metro-North 546 86,297,511 2,522,415,696 69,580,238 $1,158,814,834 SEPTA 447 36,187,570 455,691,636 19,334,288 $267,844,193 Source: National Transit Database 2016. Table A18. Operating statistics for MBTA and peer commuter rail systems.

132 Contracting Commuter Rail Services, Volume 1: Guidebook Sources Keolis Commuter Services. (April 1, 2016). Management Organization Chart for MBTA Service. MBTA. Capital Investment Program, Sources of Funds. Fiscal Years 2015–2019. MBTA. (June 12, 2013; final version June 27, 2013). Commuter Rail Procurement, Request for Proposals, RFP No. 159-12. MBTA. (Feb. 3, 2016). Railroad Operations Department Staff Organization Chart. MBTA. Statement of Revenue and Expenses. Fiscal Year 2015. MBTA and Keolis Commuter Services. (Feb. 5, 2014). Commuter Rail Operating Agreement, Contract No. 159-12. Commuter Rail Service Delivery Model Operating Cost/ Passenger Car Revenue Mile Operating Cost/ Passenger Trip Passenger Trips/ Passenger Car Revenue Mile Passenger Miles/ Passenger Trip Operating Cost/ Passenger Mile NJ Transit Agency Operated $16.66 $11.25 1.48 23.01 $0.49 Metra Mixed Agency Operated and Contracted $16.60 $10.00 1.66 22.37 $0.45 Metro-North Agency Operated $16.65 $13.43 1.24 29.23 $0.46 SEPTA Agency Operated $13.85 $7.40 1.87 12.59 $0.59 Average of Peers $15.94 $10.52 1.56 21.80 $0.50 Median for Peers $16.63 $10.62 1.57 22.69 $0.47 MBTA Contracted–Bundled $17.15 $11.93 1.44 20.63 $0.58 Source: National Transit Database 2016. Table A19. Performance metrics for MBTA and peer commuter rail systems.

Case Studies 133 Westside Express Service Tri-County Metropolitan Transportation District of Oregon Wilsonville–Beaverton, OR Figure A7. WES commuter rail. Timeline for Public Commuter Rail: 2009 Governance Westside Express Service (WES) is a commuter rail line sponsored by the Tri-County Metro- politan Transportation District of Oregon (TriMet), a public agency that operates mass transit in the Portland metropolitan area. TriMet operates WES commuter rail (Figure A7), Metropolitan Area Express (MAX) light rail, buses, and paratransit. Timeline 1996–1999 Preliminary studies for commuter rail conducted. 1999–2002 Local community and jurisdiction approval sought and received. 2006 The Federal Transit Administration approved a full-funding grant agreement. 2006–2009 Construction occurred on the rail corridor. February 2009 WES service began.

134 Contracting Commuter Rail Services, Volume 1: Guidebook Construction and purchase of vehicles were funded with federal funds, state grants, and regional and local funds. Operating costs are funded through operating revenues (including fares), TriMet tax revenue from employer payroll taxes, federal formula funds, other federal operating grants, state operating grants, and local operating revenue. Level of Service WES commuter rail trains run in each direction every half hour during weekday peak com- muting hours on tracks shared with the Portland and Western Railroad (P&W), which is a short-line freight railroad. WES serves five stations connecting the suburban cities of Beaverton, Tigard, Tualatin, and Wilsonville in the Portland area. At Beaverton Transit Center, WES connects with MAX Red and Blue Line light rail services. WES provides connections to 15 TriMet bus routes at stations along the route. At Wilsonville, WES connects with bus lines serving Salem (Cherriots), Canby (Canby Area Transit), and Wilsonville (South Metro Area Regional Transit). Ownership Track and Rail Infrastructure • All of the WES right-of-way sections are publicly owned by either the Oregon Department of Transportation or TriMet. Tracks are owned by the Oregon Department of Transportation south of Tigard Transit Center and by TriMet north of Tigard Transit Center. • TriMet made capital improvements including trackway upgrades to accommodate com- muter rail train speeds of up to 60 mph. All 34 public grade crossings underwent significant improvements in the WES construction program, and nine were upgraded to FRA quiet- zone-compliant status. • There is a short WES passenger-train-only spur owned by TriMet connecting to the P&W main line in a dedicated right-of-way in the median of Southwest Lombard Avenue (a public street) leading to the WES terminal at Beaverton Transit Center, built specifically for WES. Operations and Maintenance Facility • TriMet owns and maintains the single dedicated WES equipment maintenance facility located adjacent to the southern terminus of the line at Wilsonville. • The facility provides the storage, running maintenance, and most major maintenance for the WES diesel multiple unit (DMU) and rail diesel car fleet. • This facility also offers dedicated office space for P&W train and engine crews as well as small office and supplies storage for P&W communication and signaling crews who maintain the train traffic control and grade crossing protection systems for WES. Stations • The TriMet Beaverton Intermodal Transit Center is a transfer location between TriMet WES, MAX light rail, and bus services. The transit center was built before the addition of WES. To provide convenient level-boarding access to WES, TriMet built a new dedicated high-level platform facility for WES trains. • TriMet built and maintains the Hall/Nimbus Station, the Tigard Transit Center, and the Tualatin Station. • Washington County and the City of Wilsonville built the Wilsonville Station and adjacent Intermodal Transit Center to provide transfers to Wilsonville’s Cherriots Bus System for WES.

Case Studies 135 Equipment • TriMet owns the WES dedicated fleet comprising six units. • Four FRA-compliant DMU train cars were custom ordered by TriMet for WES in 2008. Three units are self-propelled. One of the four new DMUs is actually a similar looking but unpow- ered cab-control-trailer car that only can be operated in conjunction with another (powered) unit as a two-car power-trailer DMU pair. • Two secondhand, remanufactured, Budd-built rail diesel cars originally from the mid-1950s augment the DMU fleet. Role of the Freight Railroad • P&W operates the WES vehicles. • P&W continues to operate freight service on this railroad as part of its larger northern Oregon network. P&W successfully presented its case that the most effective way for the railroad to maintain quality freight service for the region with a new overlay scheduled commuter rail service was to remain vertically integrated and keep all dispatching, passenger/freight opera- tions, and track maintenance functions in house. • TriMet manages the service and maintains the railcars and stations. Role of Amtrak • WES service does not connect with Amtrak. • Amtrak does not have a role in the operation or maintenance of WES. Decision to Contract for Service Freight Railroad Since WES’s initial planning, the regional vision had been that most of the primary opera- tional services would be contracted out to the short-line P&W. As additional details were exam- ined in preparation to implement service, regional transportation planners ultimately decided that TriMet would establish and staff its own WES equipment maintenance facility. One of the key reasons was that P&W does not have any other passenger operations and thus no existing passenger car-trained or qualified mechanics. TriMet contracts with P&W to operate the trains and maintain the tracks. P&W dispatches WES trains and prioritizes them over freight trains. TriMet and P&W entered into an initial contract that includes train operations and infrastructure maintenance and a trackage rights agreement or TRA. The shared-use agreement with P&W runs for 50 years. The operations and maintenance contract and TRA, including revisions of wages/overhead and fringe benefits, have renewal options in 5-year increments. Direct Operation or Contracted TriMet directly provides maintenance of rail vehicles. TriMet recruited skilled workers from its own existing labor pool of mechanical staff from bus and light-rail transit divisions and then trained the mechanics to meet the FRA-mandated qualified maintenance person certification. The direct employees of TriMet, including dedicated FRA-certified maintenance of equip- ment (MOE) mechanics, are not subject to the Railroad Retirement Tax Act (RRTA) and the Railroad Unemployment Insurance Act (RUIA). WES employees are covered by the same retire- ment/state-based unemployment plan as all other TriMet employees.

136 Contracting Commuter Rail Services, Volume 1: Guidebook Conversely, all P&W employees assigned to WES are full-time railroad employees of the short-line railroad and are covered by RRTA/RUIA. Bundled or Unbundled Contract The decision to enter into a bundled agreement with P&W for dispatching, train operations, and maintenance of infrastructure, coupled with the decision to maintain equipment with TriMet personnel, limited the range of contracted services that TriMet might have considered for WES. TriMet does have a third-party contractor for selective major track reconstruction projects with the approval of P&W. Decision to Continue Contracting TriMet is confident of the decision to bundle WES train operations and maintenance of infrastructure functions into a single long-term contract with the short-line host railroad, P&W. This contract includes right-of-way, track, and signal maintenance; train dispatching; multiple operational safety functions; and provision of train and engine crews. As a precondition of access to its railroad for WES, host railroad P&W insisted the freight railroad maintain the track and signal system, as well as provide dispatching. Oversight for Contract Compliance In addition to a small number of fully allocated TriMet management and supervisory staff located at the TriMet Wilsonville MOE facility, there are also several other TriMet departments that provide a portion of staff time (e.g., ticket vending machine and revenue accounting, marketing, facilities, and station/platform maintenance). WES assigns percentages of specific cost functions. P&W directly reports to both FRA and the Oregon Department of Transportation for its operations, including WES. P&W also provides TriMet with all necessary proof of compliance for its own use as well as TriMet’s reporting requirements on WES. P&W has established an ongoing relationship with both its federal- and state-based oversight agencies. Basis for Cost The primary responsibility for assumption of unexpected cost or financial risk is borne by TriMet. Not taking on new (and viewed as unnecessary) financial risk was a precondition of P&W agreeing to operate WES. The following are the specifics of the contract: • The basic TriMet/P&W contract is set for an exact number of weekday peak-period, bidirec- tional WES trips, with no service on weekends or holidays. TriMet has not operated service on WES for special events. • P&W charges TriMet for a variety of pre-agreed dedicated staff or full-time equivalents for such primary functions as train and engine crew, signal and communications maintenance, dispatching, and track/right-of-way maintenance. There is a pre-agreed application of the U.S. Bureau of Labor Statistics Salem–Portland Region Consumer Price Index inflation index to base costs on an annual basis. • P&W is responsible for maintaining a state of good repair on the basic track and related structures over which WES is operated. This is a fundamental condition of the operations and maintenance contract. TriMet is financially responsible for virtually all of the track main- tenance cost and 50% of the track inspection cost for the portion of P&W over which WES operates, in large part because the line is maintained at a higher track class level than would be required for the P&W freight service. • TriMet has pre-arranged time and material rates with P&W for extra work, and any major work must be mutually agreed upon before P&W begins actual expenditure. When TriMet determines the need for major capital improvements on the WES line, TriMet negotiates with

Case Studies 137 P&W using the existing terms for extra work or obtains agreement from P&W to publicly bid out a contract for this specific work. • Since short-line freight such as P&W generally uses a track warrant system rather than the centralized traffic control in use over the section on which WES operates, TriMet is respon- sible for reimbursing P&W for the full cost of the electronic signal system. • Since PTC will be required on this P&W segment expressly because of WES passenger commuter rail, TriMet will pay the entire cost of initially constructing and then maintaining this system. All rail vehicle maintenance up to this point had been performed by TriMet mechanics, with limited outsourcing for items such as prime mover diesel-engine overhaul. When the DMUs reach the age for mid-life overhaul, TriMet will have to make a decision about how/where to perform it. Contract Performance Measures The most straightforward and visible service quality measure is individual trip on-time per- formance, which is tracked and reported daily and then tallied monthly for purposes of P&W incentive achievement. With a few notable exceptions during extreme temperature conditions or other external factors, WES has a consistently high level of on-time performance. Fare Collection • TriMet is fully responsible for WES ticketing. TriMet provides standard light rail station-like ticket vending machines at each WES station. TriMet is also responsible for maintaining the ticket vending machines and collecting coin and bill cash deposited in the machines. • WES has a non-distance-based flat fare consistent with the regional light rail and bus network. Since the fare is fully integrated, any valid TriMet single trip, round trip, or pass constitutes the correct fare for WES. • Fares are based on the proof-of-payment concept. There is no actual fare collection per se; rather, fares are treated as point of sale. Different from the much larger TriMet light rail network, in which random fare inspection is performed by uniformed fare inspection staff, the two-person P&W conductor crews, in traditional railroad uniforms, inspect the TriMet- issued tickets on WES. The conductors can issue a (non-binding) citation or, alternatively, ask a fare violator to exit at the next WES stop. Notable Practices and Lessons Learned • TriMet works closely and constantly with P&W to maintain high performance standards. Good, ongoing communication helps to resolve any operational problems that may occur as soon as problems have been identified. • TriMet acknowledges the challenges of introducing FRA-regulated commuter rail into a tran- sit agency that historically provides bus or light rail transit. From the planning stages through implementation of WES, TriMet believes one of its success factors was hiring seasoned rail- road leaders, especially to oversee the new establishment of a TriMet-staffed, FRA-compliant MOE facility as well as to arrange terms/conditions and then oversee compliance of an FRA- governed contract operator. • TriMet observes that the agency has achieved good success over time in incentivizing P&W to provide high-quality on-time performance by offering positive cash incentive payments for good performance. Any actual on-time performance below specified goals reduces the full (100%) level of incentive payment by a formula-specified amount. • TriMet believes that a simple, fully integrated fare policy (i.e., exactly the same non-distance- based fare as charged for light rail transit and bus) helps increase commuter rail ridership on the relatively short WES corridor. This increase appears to be both a result of the extreme

138 Contracting Commuter Rail Services, Volume 1: Guidebook simplicity of the policy as well as the rider perception that there is zero incremental cost to use commuter rail if already a TriMet customer. • TriMet is satisfied with the initial decision and intends to continue using its own dedicated mechanical staff for WES equipment maintenance, housed in a TriMet-constructed and Tri- Met-maintained facility. TriMet is pleased with the quality of the work and the relative cost- effectiveness. TriMet found that it was relatively straightforward to hire (and subsequently train to FRA standards) the agency’s own staff. TriMet was able to upgrade existing employees primarily from among diesel bus mechanics as well as from light rail staff. The reason more of the WES DMU mechanics came from bus experience is that the DMUs have prime mover diesel engines similar to the diesel motors in buses. WES Operating and Performance Statistics Table A20 provides operating and performance statistics for WES. Peer Performance Comparisons The WES peer group comprises similar commuter rail systems based on directional route miles and annual passenger trips, as shown in Table A21. Northstar operates peak-direction, peak-period commuter rail service. MetroRail operates two directions during peak periods and hourly midday trains. SunRail, Music City Star, and WES operate two directions during peak periods and limited or no midday trains. A-train oper- ates two directions in peak periods with regular midday service. 2016 National Transit Database Operating Data Directional Route Miles 29 Unlinked Passenger Trips 457,374 Annual Total Passenger Miles 3,884,138 Passenger Car Revenue Miles 163,721 Annual Operating Cost $7,898,519 2016 National Transit Database Performance Metrics Operating Cost per Passenger Car Revenue Mile $48.24 Operating Cost per Passenger Trip $17.27 Passenger Trips per Passenger Car Revenue Mile 2.79 Passenger Miles per Passenger Trip 8.49 Table A20. WES operating and performance statistics. Commuter Rail Directional Route Miles Annual Passenger Trips Annual Passenger Miles Annual Passenger Car Revenue Miles Annual Operating Costs Northstar 78 711,167 17,608,093 538,172 $16,677,279 MetroRail 64 806,331 13,241,488 298,379 $23,076,368 SunRail 64 910,380 13,104,921 649,088 $31,209,309 Music City Star 63 277,741 4,434,105 201,335 $5,152,128 A-train 43 545,250 8,000,309 644,711 $12,757,014 WES 29 457,374 3,884,138 163,721 $7,898,519 Source: National Transit Database 2016. Table A21. Operating statistics for WES and peer commuter rail systems.

Case Studies 139 Table A22 provides the performance metrics for WES and peer commuter rail systems. Sources Portland and Western Railroad. Passenger Train Emergency Preparedness Plan Pursuant to 49 CFR 239 for Westside Express Service (WES). Prepared for TriMet, May 1, 2008; revised Oct. 23, 2014. Portland and Western Railroad and TriMet. (Nov. 2006). Shared-Use Agreement by and between Portland and Western Railroad and TriMet: Operations Services (Staffing) and Compensation. Tri-County Metropolitan Transportation District of Oregon Commuter Rail Fleet Management Plan, 2014–2025, Revision 4, Sept. 8, 2014. TriMet. Portland and Western Railroad Westside Express Service Positive Train Control Implementation Plan (PTCIP), Revision 1.8, July 2014. TriMet. (n.d.) Tri-County Metropolitan Transportation District of Oregon WES Ridership Growth and Projec- tions, 2009–2020. TriMet. (Nov. 2015). TriMet Attitude and Awareness Survey. TriMet. (June 2007). Wilsonville-Beaverton Commuter Rail Operations and Maintenance Plan. TriMet. (July 2014). Wilsonville-Beaverton Commuter Rail System Safety Plan. TriMet and City of Wilsonville. Intergovernmental Agreement for Construction of Betterments by Washington County Commuter Rail Project, Wilsonville Terminus, Revision 5. Funding Agreement, January 11, 2006. TriMet and Portland and Western Railroad. (2015). Shared-Use Agreement by and between Portland and Western Railroad and TriMet: Ontime Performance Bonus Adjusted for CPI-U. Commuter Rail Service Delivery Model Cost/ Operating Passenger Trip Trips/ Northstar Mixed Agency Operated and Contracted $30.99 $23.45 1.32 MetroRail Contracted–Bundled $77.34 $28.62 2.70 SunRail Contracted–Unbundled $48.08 $34.28 1.40 Music City Star Contracted–Bundled $25.59 $18.55 1.38 A-train Contracted–Bundled $19.79 $23.40 0.85 Average of Peers $40.36 $25.66 1.53 Median for Peers $30.99 $23.45 1.38 WES Mixed Agency Operated and Contracted $48.24 $17.27 2.79 Source: National Transit Database 2016. Passenger Miles/ Passenger Trip Operating Cost/ Passenger Mile 24.76 16.42 14.40 15.96 14.67 17.24 15.96 8.49 $0.95 $1.74 $2.38 $1.16 $1.59 $1.57 $1.59 $2.03 Passenger Passenger Car Revenue Mile Operating Cost/ Passenger Car Revenue Mile Table A22. Performance metrics for WES and peer commuter rail systems.

140 Contracting Commuter Rail Services, Volume 1: Guidebook MetroRail Capital Metropolitan Transportation Authority Austin, TX Timeline for Public Commuter Rail: 2010 Governance MetroRail is a commuter rail line provided by the Capital Metropolitan Transportation Authority (Capital Metro) in Austin, Texas (Figure A8). Capital Metro is the metropolitan rapid transit authority responsible for providing mass transit service within Austin and surround- ing communities in Travis and Williamson counties (the service area is 534 square miles). In January 1985, voters approved creation of Capital Metro and a 1% sales tax as a dedicated source of funding. Capital Metro began service in July 1985, when the regional agency assumed operation of the transit services formerly provided by the city-owned Austin Transit System. In addition to the MetroRail commuter rail, Capital Metro operates fixed-route buses, bus rapid transit, paratransit, and a vanpool program. Capital Metro is led by an eight-member board of directors appointed by various governing entities within the service area. The board hires a president/chief executive officer to manage the authority’s day-to-day operations. Figure A8. MetroRail commuter rail.

Case Studies 141 Voters approved Capital Metro’s plans to develop a commuter rail corridor in 2004. After overcoming challenges in funding, construction, and mobilization of the commuter rail line, Capital Metro began MetroRail commuter rail service in March 2010. Branded as the Red Line, the 32-mile commuter rail (64 directional route miles) operates from the suburban communi- ties of Leander and Lakeline to downtown Austin on Capital Metro–owned track. The Red Line serves nine stations. Capital Metro operates express and local bus routes from MetroRail stations for continued travel to key destinations in the area. Timeline 1986 Capital Metro and the City of Austin purchased the 162-mile Giddings-to- Llano segment of the Austin and Northwestern Railroad from the Southern Pacific Transportation Company (SP). 1998 Capital Metro acquired the City of Austin’s share in the railroad purchased from SP. 2000 Capital Metro held a voter referendum for a 52-mile rail system that included a north–south Red Line and an east–west Green Line. The proposal was defeated by fewer than 2,000 votes. 2004 Capital Metro presented MetroRail commuter rail as part of the All Systems Go Long-Range Transit Plan. This proposal won 62% voter approval. 2005 Capital Metro contracted with railcar manufacturer Stadler for six GTW 2-6 diesel multiple units (DMUs). 2007 Capital Metro contracted with Veolia Transportation to mobilize, imple- ment, and operate MetroRail commuter rail and to operate freight rail on the Capital Metro–owned railroad. Veolia subcontracted freight operations to Watco Companies. 2009 Capital Metro made the decision to award a new contract to Herzog Transit Services, Inc. for completion of the MetroRail project and to operate service. The authority awarded a separate contract to Watco to meet the freight railroad obligations. March 2010 Service began on the Red Line. 2011 Capital Metro added MetroRail trains during midday. 2012 Capital Metro added MetroRail service for Friday evenings and Saturdays. 2013 Capital Metro won a Transportation Investment Generating Economic Recovery (TIGER) grant to make commuter rail improvements, including four additional sidings and grade crossing signal optimization to increase maximum operating speed. 2014 Capital Metro ordered four new DMU railcars to increase MetroRail capacity. 2015 Capital Metro competed and awarded new contracts for commuter rail and freight rail. Each contract included services for operations and maintenance. 2017 Railcars were delivered in April 2017. TIGER construction contracts were awarded. Level of Service Red Line rail service operates during peak service hours with 5- to 30-minute headways. Each one-way trip from Leander to downtown is approximately 1 hour. During midday hours, commuter rail service operates at 1-hour headways between Lakeline and Downtown stations. Each one-way trip from the Lakeline Station to the Downtown Station is approximately 47 minutes. Service expansion plans include operating trains at 15- to 17-minute headways during peak periods.

142 Contracting Commuter Rail Services, Volume 1: Guidebook Ownership Track and Rail Infrastructure In 1986, in partnership with the City of Austin, Capital Metro purchased the 162-mile Giddings-to-Llano segment of the Austin and Northwestern Railroad from SP. In 1998, Capital Metro acquired the City of Austin’s share in the railroad. Operations and Maintenance Facility • The maintenance facility for the commuter rail is located at the Capital Metro North Opera- tions Facility at 9315 McNeil Road in Austin, Texas. Capital Metro owns the facility. • MetroRail is co-located with a Capital Metro contractor for bus service. Stations • The Red Line serves nine stations. • Stations are located on Capital Metro–owned railroad rights-of-way. Equipment • Capital Metro owns a fleet of six Stadler (G1) GTW 2-6 and four (G4) GTW 2-6 articulated railcars (DMUs) running on diesel-electric engines. Role of the Host Railroad • Capital Metro owns 162 miles of the Capital Metro railroad. Capital Metro is the host railroad. Role of Amtrak • Amtrak does not have a role in the operation or maintenance of MetroRail. Decision to Contract for Service Freight Railroad • Capital Metro owns the 162-mile Capital Metro railroad. • The railroad is divided into three subdivisions (east, central, and west) and four industrial leads (Giddings, Llano, Scobee, and Marble Falls). • Capital Metro contracts freight service to Watco. Freight traffic includes aggregates, crushed limestone, calcium bicarbonate, lumber, beer, chemicals, plastics, and paper. Watco fulfills the authority’s common carrier obligation. • MetroRail operates in the central subdivision. Since the DMU vehicles are not FRA compliant for crashworthiness, MetroRail is required to temporarily separate commuter rail from freight operations. Direct Operation or Contracted Since the initial planning for MetroRail, the objective was to contract the primary functions to a qualified third-party contractor. Capital Metro has a policy to contract with private contractors to deliver all modes of public transit service. Bundled or Unbundled Contract In 2007, Capital Metro issued a competitive procurement for bundled services for a contrac- tor to handle all responsibilities to implement and operate commuter rail and to operate the freight railroad. The successful contractor was Veolia. Veolia subcontracted the freight railroad

Case Studies 143 responsibilities to Watco. Due to a dispute over contract terms, Capital Metro terminated the contract with the original contractor in December 2009. Capital Metro negotiated an agreement with the next contractor that had proposed during the 2007 procurement, which was HTSI. HTSI completed mobilization for the new com- muter rail service. MetroRail service began in March 2010. The contract with HTSI expired September 30, 2015. In December 2009, Capital Metro negotiated a separate contract with Watco for the freight railroad. Decision to Continue Contracting Capital Metro has a policy to contract with private contractors to deliver all modes of public transit service. The policy was confirmed when Capital Metro contracted all bus and paratransit operations to private companies in 2012. The authority did not consider changing policy for MetroRail when the contract with HTSI expired in 2015. Recent Procurement Capital Metro conducted competitive procurements for two contracts for commuter rail operations and maintenance and dispatching for the entire railroad, and for freight rail opera- tions and maintenance effective October 1, 2015. Capital Metro revised the manner in which the contractor provides and invoices for commuter services. For instance, all maintenance (except for major corridor upgrades) is now included in the base cost. This contract provides the following services: • Train operations • Rail dispatching for commuter rail and freight rail on the Capital Metro railroad • Safety testing and training • Accident and incident investigation • Regulatory compliance • Track and right-of-way maintenance • Signal system maintenance • Communication system maintenance • Drainage system maintenance • Bridge maintenance • Rail vehicle maintenance, including DMU overhauls • Material/inventory management • Contract administration and support services Capital Metro received two proposals. Capital Metro awarded the contract to HTSI. The new contract was effective October 1, 2015. The contract base term is 7 years, with two 4-year options for up to 15 years. Oversight for Contract Compliance Capital Metro maintains policy control of all aspects of MetroRail services and operations. The Capital Metro Rail Operations Department provides an active oversight role in order to ensure con- tractual and regulatory compliance and customer satisfaction. The contractor’s responsibility is to perform in accordance with contractual and regulatory requirements. The contractor pays the pen- alties and fines imposed regarding the violation of state and federal codes, regulations, and laws if the violation occurs because of the contractor’s failure to perform as required by the contract. Capital Metro relies on HTSI to be responsible for compliance with FRA, FTA, and Texas Department

144 Contracting Commuter Rail Services, Volume 1: Guidebook of Transportation regulations pertaining to commuter rail operations and maintenance. Capital Metro is responsible for meeting FTA grant obligations. The Capital Metro Rail Operations Depart- ment comprises 11 positions, excluding administrative support. Capital Metro aligns the agency team expertise with the contractor scope of work in the following areas of responsibility: • Safety and regulatory compliance • Rail transportation • Rail fleet services • Rail signals and communications • Maintenance of way, bridges, and structures • Rail business systems Basis for Cost The basis for the contractor’s cost for MetroRail includes annual fixed costs divided by 12 months and variable costs based on vehicle hours. Although the contract is based on two cost items, the proposers were required to present a detailed line-item breakdown of costs for evaluation. The cost items are as follows: • Fixed costs—includes annual costs divided by 12 months for monthly payments for man- agement, administration, support services, dispatching, maintenance of signals and com- munication, maintenance of infrastructure, maintenance of the railroad right of way, and maintenance of DMU vehicles. • Variable costs—includes train operations costs that vary by the vehicle hours of service. Payments are based on actual vehicle hours per month. The contractor also provided pricing for optional service for maintenance of way (track, signals and communication, and right-of-way). Capital Metro can assign optional work orders based on the pricing schedule for optional service or pursue competitive bids including other vendors. Contract Performance Measures Performance Categories Capital Metro identified several performance standards in the contract for bundled services. Performance requirements include the following categories and minimum performance criteria: • Safety – Vehicle accidents not to exceed two annually. – Passenger accidents not to exceed 0.25 passenger accidents per 10,000 passenger miles. • Mean distance between failures of at least 15,000 vehicle miles, subject to annual adjustment by Capital Metro. • Customer complaints not to exceed five complaints reported to the Capital Metro Customer Service Department per 20,000 passengers. A response must be issued within four working days of receipt. • On-time performance of at least 96.0% of the number of trains arriving at a designated station 0 minutes early and no more than 5 minutes and 59 seconds later than scheduled. Performance will be measured from time points at five stations (Downtown, Martin Luther King, Jr., Howard, Lakeline, and Leander Stations). • Vehicles in service must not have service failures that do not affect the on-time performance of the train or mean distance between failures calculations but affect passengers. – Heating or air-conditioning system failure – Door failure

Case Studies 145 – Lighting system failure – Cleanliness failure – Communication system failure – Ride quality failure • Vehicle availability must be 80% of rail vehicles available for standard revenue service at least 2 hours before the start of revenue service. • Preventive maintenance inspections must be performed by the maintenance date recorded in the asset management system. • Vehicle condition must meet all in-service criteria. If a vehicle in service is identified as having an out-of-service item, the vehicle must be replaced within 2 hours. • Cleanliness – Vehicles are clean according to the standards defined in the maintenance plan. – Maintenance work areas are clean, including the shop facility, materials/supply storage facility, and vehicle service location. • Speed restrictions must not limit the performance level of the central subdivision. The Capital Metro goal is 60-mph track speeds in the central subdivision. Temporary speed restrictions imposed by the contractor shall be corrected within 30 days from the date the speed restriction is imposed. • Bridges in the central subdivision must meet the load capacity of 286,000 pounds in accor- dance with the Bridge Management Safety Program. • Right-of-way maintenance – Remove all trash and debris within 24 hours of discovery or notice. – Remove scrap rail and relay rail within 30 days of removal from the track. – Remove vegetation and trees identified by Capital Metro as a nuisance or safety hazard with due diligence but not more than 5 days from notification by Capital Metro. – Remove graffiti at any location on the central subdivision within 24 hours of discovery or notice. • Signal maintenance to ensure the reliability of signal equipment at crossings and wayside signals. – No more than five defects within seven consecutive days. – No more than three repeat defects within 30 consecutive days of the original defect. – Correction of the reported defect within 30 days of the date reported. Incentives and Disincentives Capital Metro applies incentives and disincentives to the total monthly invoiced amount based on performance according to metrics defined in the contract. Incentives are additional compensation for meeting or exceeding the performance requirements. Disincentives (perfor- mance deficiency credits or PDCs) are credits against amounts owing to the contractor for fail- ure to meet performance requirements. Tables A23, A24, and A25 are examples of performance incentives and disincentives in the Capital Metro contract for payment adjustments. This is not an inclusive list of the performance incentives and disincentives. Passenger Accident Rate Disincentive/Incentive (%) 0 0.25 0.01–0.25 0.00 0.26–2 −0.25 2.01 and Above −0.50 Table A23. Accidents.

146 Contracting Commuter Rail Services, Volume 1: Guidebook • Accidents. An accident is any contact with an object, vehicle, or person that results in property damage or injury. Calculate passenger accidents as the total number of reported passenger accidents monthly, divided by the total passenger miles, multiplied by 10,000 miles. • On-time performance. An on-time trip is one that arrives at a designated station 0 minutes early and no more than 5 minutes and 59 seconds later than scheduled. Fare Collection The one-way fare on MetroRail is $3.50 for a full-fare passenger. A day pass is $7.00, a 7-day pass is $27.50, and a 31-day pass is $96.25. Capital Metro fare enforcement officers routinely check passes to ensure fare payment. The MetroRail contractor is not responsible for fare enforcement on MetroRail. Notable Practices and Lessons Learned • Capital Metro decided that a bundled contract is appropriate for MetroRail. Capital Metro defines performance requirements that call for one contractor to be accountable for train operations, maintenance of equipment, and maintenance of infrastructure. • In preparation for the new procurement in 2015, Capital Metro developed a detailed scope of work and contractor requirements to minimize the need for out-of-scope work. • Goals for the new contractor were safety, customer service, and predictable cost. The pricing for the new contract includes fixed costs paid monthly and variable costs based on vehicle hours authorized by Capital Metro. • The contractor provided pricing for optional service for maintenance. Definition of optional service for pricing does not always meet actual services needed. The contractor may not agree to the price in the contract when presented with a specific scope for optional services. Requirement Incident Disincentive/PDC Preventive Maintenance Failure to perform preventive maintenance inspections as required for all revenue vehicles. A PDC of $1,000 per day per inspection performed later than scheduled. Customer Complaints Failure to respond to complaints within 4 working days of receipt. A PDC of $300 per day for each occurrence of a complaint response that fails to meet the response timeline. Bridge Maintenance Failure to maintain bridges at a load capacity of 286,000 pounds or better in accordance with the Bridge Management Safety Program. A PDC of $5,000 for each bridge that is not maintained at a load capacity of 286,000 pounds or better. Track Maintenance Failure to correct temporary speed restrictions within 30 days from the date imposed. A PDC of $1,000 per day for every location where a slow order remains over 30 days. Right-of-Way Maintenance Failure to remove trash, debris, and graffiti from the right-of-way. A $500 PDC per day for each location a right-of-way defect remains after 24 hours. Signal Maintenance Failure to maintain less than five signal defects within 7 consecutive days. A PDC of $1,000 per defect greater than five within 7 days. Table A25. Examples, but not inclusive, of requirements in the Capital Metro contract. On-Time Performance (%) Disincentive (%) 96.00 and above 0.00 95.99–90.00 −0.25 89.99 and below −0.50 Table A24. On-time performance.

Case Studies 147 • Capital Metro developed detailed performance standards and metrics to quantify contractor performance and link performance to financial incentives and disincentives. • Capital Metro hired commuter rail staff with railroad experience to be subject matter experts. Capital Metro aligns the agency team with the required expertise for the contractor scope of work. • Capital Metro and the contractor agree that the public agency sets the tone for the partnership between the agency and the contractor. MetroRail Operating and Performance Statistics Table A26 provides MetroRail operating and performance statistics. Peer Performance Comparisons Table A27 shows the MetroRail peer group comprising similar commuter rail systems based on directional route miles and annual passenger trips. Northstar operates peak-direction, peak-period commuter rail service. MetroRail operates two directions during peak periods and hourly midday trains. SunRail, Music City Star, and WES operate two directions during peak periods and limited or no midday trains. A-train oper- ates two directions in peak periods with regular midday service. 2016 National Transit Database Operating Data Directional Route Miles 64 Unlinked Passenger Trips 806,331 Annual Total Passenger Miles 13,241,488 Passenger Car Revenue Miles 298,379 Annual Operating Costa $23,076,368 2016 National Transit Database Performance Metrics Operating Cost per Passenger Car Revenue Mile $77.34 Operating Cost per Passenger Trip $28.62 Passenger Trips per Passenger Car Revenue Mile 2.70 Passenger Miles per Passenger Trip 16.42 aIn 2016, MetroRail executed a new contract that expanded the contractor’s responsibility for maintenance of way and included DMU vehicle overhauls into the bundled contract for operations and maintenance. These changes increased the reported annual operating cost in 2016. Table A26. MetroRail operating and performance statistics. Commuter Rail Directional Route Miles Annual Passenger Trips Annual Passenger Miles Annual Passenger Car Revenue Miles Annual Operating Costs Northstar 78 711,167 17,608,093 538,172 $16,677,279 MetroRail 64 806,331 13,241,488 298,379 $23,076,368 SunRail 64 910,380 13,104,921 649,088 $31,209,309 Music City Star 63 277,741 4,434,105 201,335 $5,152,128 A-train 43 545,250 8,000,309 644,711 $12,757,014 WES 29 457,374 3,884,138 163,721 $7,898,519 Source: National Transit Database 2016. Table A27. Operating statistics for MetroRail and peer commuter rail systems.

148 Contracting Commuter Rail Services, Volume 1: Guidebook Table A28 provides a comparison of MetroRail performance metrics with the peer group average and median. Sources Capital Metropolitan Transportation Authority. Approved FY 2015 Operating and Capital Budget and Five Year Capital Improvement Plan. Approved Sept. 2014. Capital Metropolitan Transportation Authority. Approved FY 2016 Operating and Capital Budget and Five Year Capital Improvement Plan. Approved Sept. 2015. Capital Metropolitan Transportation Authority. Approved FY 2017 Operating and Capital Budget and Five Year Capital Improvement Plan. Approved Sept. 2016. Capital Metropolitan Transportation Authority. Request for Proposals (RFP), RFP No. 131489, Commuter Rail Dispatching, Operations, and Maintenance. Issued Jan. 2015. Interviews with Capital Metro staff, March 29–30, 2016. Commuter Rail Service Delivery Model Operating Cost/ Passenger Car Revenue Mile Operating Cost/ Passenger Trip Passenger Trips/ Passenger Car Revenue Mile Passenger Miles/ Passenger Trip Operating Cost/ Passenger Mile Northstar Mixed Agency Operated and Contracted $30.99 $23.45 1.32 24.76 $0.95 SunRail Contracted–Unbundled $48.08 $34.28 1.40 14.40 $2.38 Music City Star Contracted–Bundled $25.59 $18.55 1.38 15.96 $1.16 A-train Contracted–Bundled $19.79 $23.40 0.85 14.67 $1.59 WES Mixed Agency Operated and Contracted $48.24 $17.27 2.79 8.49 $2.03 Average of Peers $34.54 $23.39 1.55 15.66 $1.62 Median for Peers $30.99 $23.40 1.38 14.67 $1.59 MetroRaila Contracted–Bundled $77.34 $28.62 2.70 16.42 $1.74 Source: National Transit Database 2016. aIn 2016, MetroRail executed a new contract that expanded the contractor’s responsibility for maintenance of way and included DMU vehicle overhauls into the bundled contract for operations and maintenance. These changes increased the reported annual operating cost in 2016. Table A28. Performance metrics for MetroRail and peer commuter rail systems.

Case Studies 149 FrontRunner Utah Transit Authority Ogden–Salt Lake City–Provo, UT Figure A9. FrontRunner commuter rail. Timeline for Public Commuter Rail: 2008 Governance FrontRunner (Figure A9) is a commuter rail system operated by Utah Transit Author- ity (UTA). In addition to commuter rail, UTA operates buses, paratransit, vanpools, Transit Express (TRAX) light rail, and the S-Line streetcar. Timeline 1970 UTA was incorporated under the authority of the Utah Public Transit District Act of 1969 to provide a public mass transportation system for Utah communities. 2001 UTA made an agreement in principle with Union Pacific Railroad (UPRR) to buy right-of-way and trackage rights. 2005 UTA began construction on its first commuter rail system, FrontRunner. 2008 UTA launched FrontRunner service from Salt Lake City north to Ogden and Pleasant View. 2012 UTA extended FrontRunner south to Provo.

150 Contracting Commuter Rail Services, Volume 1: Guidebook FrontRunner was constructed with a Full Funding Grant Agreement from the FTA. Fares, revenues from a local sales tax from member jurisdictions, and federal funds fund the operation. Brief Description of the Service FrontRunner trains are push/pull diesel trains with either single or bi-level passenger cars. The trains operate primarily on dedicated tracks built for the commuter rail service, staffed by a locomotive engineer who is qualified under the rules of the FRA and a train host or attendant in the passenger-occupied portion of the train. In certain circumstances, when cost justified, UTA may choose to deploy an engineer in the service of a train host. A limited number of trains operate over UPRR tracks between Ogden Station and Pleasant View Station, and thus require the more traditional staffing of a minimum of two FRA-rules- qualified personnel per train. The service on UPRR tracks will terminate in 2018. Level of Service Trains operate hourly service in both directions from 4:00 a.m. to midnight on weekdays and Saturdays. Service is increased weekdays in peak periods to 30-minute, bi-directional service. Limited weekday-only, peak-period service from Ogden to Pleasant View will ter- minate in 2018. Ownership Track and Rail Infrastructure • UTA owns the majority of the FrontRunner railroad track right-of-way and performs the majority of infrastructure maintenance directly (in house), including communications and signals. – The Ogden–Salt Lake City–Provo route is primarily single track, centralized traffic control, with multiple sidings at station stops or between stations. – UTA employs a contractor to perform major overhaul/repairs on UTA-owned and UTA- maintained tracks. • UPRR owns 4.8 miles from Ogden to Pleasant View. UTA entered into a TRA with UPRR for a limited, peak-hour extension. The UPRR TRA runs until 2106. UTA made a decision to discontinue service on the 4.8-mile extension in 2018 because of the operating and capital cost required to provide PTC for train operations on an active freight railroad. Operations and Maintenance Facility • UTA owns the dedicated FrontRunner operations and maintenance facility at Warm Springs, just north of UTA’s North Temple Station. UTA expanded and modernized the former UPRR maintenance facility. • UTA administrative staff is located in the operations and maintenance facility. • UTA staff manages inventory control for commuter rail parts and inventory, including parts for contractors. Stations • UTA owns and maintains all FrontRunner commuter rail stations. • A portion of station platform cleaning, especially at the endpoint stations in Ogden and Provo, is contracted to a private company.

Case Studies 151 Equipment • UTA owns coach cars, cab cars, and locomotives. • Qualified UTA technicians maintain the entire fleet of coach cars at the Warm Springs O&M facility. • A contractor maintained the locomotives in a designated area at the Warm Springs facility until 2017. • In 2017, UTA assumed responsibility for maintaining locomotives with UTA-qualified personnel. Information Technology Systems • UTA maintains all information technology including centralized rail traffic control. • UTA is responsible for dispatching for the entire corridor. Role of the Host Railroad • UTA is the host railroad for the majority of the commuter rail corridor. • UPRR owns, maintains, and dispatches the 4.8 miles from Ogden to Pleasant View. Role of Amtrak • Although FrontRunner service does not directly connect with Amtrak operations, Amtrak shares station facilities (and a parallel, separate platform) at Salt Lake Central Station. • Amtrak does not have a role in the operation or maintenance of FrontRunner. Decision to Directly Operate Service Freight Railroad UPRR owned the right-of-way that paralleled the freight main lines. UPRR was not willing to host passenger commuter rail service on shared track but was willing to sell the parallel right- of-way to UTA. UTA built fully separate tracks and facilities in the shared right-of-way with UPRR. Most of the FrontRunner rail line is single track. Direct Operation or Contracted UTA decided to operate FrontRunner with its own staff. By obtaining FRA approval for a one-person qualified crew, UTA can deliver a more cost-effective service than a tra- ditional two-person crew deployed by either a private contract operator or a host railroad operator. UTA also decided early on to use its own staff for equipment maintenance for the rail coach cars and cab cars. UTA recruited experienced rail mechanics from its own light rail maintenance staff and from the outside and subsequently trained a fully FRA-qualified skilled mechanical workforce. All UTA employees, even the dedicated FRA-certified mechanics and FRA hours-of- service train engineers, are not subject to the Railroad Retirement Tax Act and the Railroad Unemployment Insurance Act. The engineers for the FrontRunner commuter rail train belong to the same bargaining unit as bus and light rail operators and earn exactly the same hourly wage rate.

152 Contracting Commuter Rail Services, Volume 1: Guidebook Bundled or Unbundled Contract UTA decided to contract three specific services in unbundled contracts. They are: 1. Because of the additional complexity of maintaining diesel-electric locomotives, UTA decided to contract locomotive vehicle maintenance. The locomotive maintenance contractor per- sonnel were co-located in the UTA O&M facility. 2. UTA employs a contractor for major overhaul/repairs on UTA-owned and UTA-maintained tracks. 3. UTA contracts with a private company for building cleaning services for the Warm Springs O&M facility and a portion of station platform cleaning, especially at the endpoint stations. Decision to Not Continue Contracting Maintenance of Equipment UTA assumed responsibility for maintenance of equipment for locomotives in 2017. Oversight for Contract Compliance UTA directly assumes all federal and state regulatory compliance responsibility. UTA directly oversees contractors. Basis for Cost UTA assumes all financial risk for its own work, but the agency assigned a portion of the risk for work done on locomotives to the contractor. The UTA contract for locomotive maintenance was a fixed-price contract with pre-specified escalation for each year. There was also a detailed accompanying table for prices of optional extra work. The UTA contract for track overhaul/repairs is predominantly an on-call contract with exten- sive terms and conditions outlining work, price, oversight, damages, et cetera. In typical years, UTA will set out a planned program with a commensurate cost for the programmed right-of- way maintenance work. The on-call contract also will be used for any unanticipated necessary work, such as emergency repairs or post-incident. As owner and operator, UTA assumes full responsibility for maintaining a state of good repair on the FrontRunner track, stations, and related structures. UTA is responsible for the state of good repair of its coach equipment and requires specific state-of-good-repair conditions for the contractor’s maintenance of locomotives. When UTA determines the need for (and finds the necessary financial resources to support) specific work, it uses the extra work terms of its right- of-way maintenance contractor. Contract Performance Measures There were no specific contractor performance measures noted. Fare Collection • UTA is responsible for ticketing. UTA commuter rail, light rail, and streetcar modes use point-of-sale purchase of tickets. • Uniformed UTA representatives are responsible for onboard fare enforcement through ran- dom fare inspection. Notable Practices and Lessons Learned • UTA is able to demonstrate that a public agency can directly operate commuter rail at a lower operating cost per passenger car revenue mile than comparable services provided for other agencies by private contract operators.

Case Studies 153 • UTA attributes a portion of its cost-efficient service to its agreement to operate FRA-regulated commuter rail with only one hours-of-service employee per train on agency-owned track (with the exception of four peak-period round trips that also operated over UPRR track from Ogden to Pleasant View). There is always a second person on board, in the passenger-occupied space of the train in the role of train host, but this person is often not an hours-of-service employee, may be part time, and is paid a lower wage rate than a rules-qualified operating employee. • UTA employs its own staff to perform all major O&M functions for rail vehicles. • UTA built fully separate tracks and facilities in a shared right-of-way with a high-volume UPRR freight line. UTA provides high on-time performance by not sharing track capacity or dispatch priority with a host freight railroad. • UTA is better equipped and prepared to provide emergency bus bridge substitute service during a temporary FrontRunner disruption than a commuter-rail-only agency. UTA has a single operations command and control center, which coordinates effectively with Front- Runner dispatch to more quickly mobilize replacement bus service using its own equipment and staff. In addition, UTA believes having a single, unified communication and radio sys- tem for all modes improves the efficiency and effectiveness of safety and security systems. FrontRunner Operating and Performance Statistics Table A29 provides operating and performance statistics for FrontRunner. Peer Performance Comparisons The FrontRunner peer group comprises similar commuter rail systems based on directional route miles and annual passenger trips, as shown in Table A30. ACE, Sounder, and VRE operate peak-direction, peak-period commuter rail service. Rail Runner operates two directions during peak periods, and Tri-Rail operates limited or hourly midday trains. FrontRunner and South Shore Line operate all-day service in two directions. Table A31 provides a comparison of FrontRunner performance metrics with the peer group average and peer group median. The operating cost data are reported to the National Transit Database. In addition to com- muter rail, UTA operates buses, paratransit, vanpools, TRAX light rail, and the S-Line streetcar. A portion of the UTA general, administrative, technological, and services expenses is allocated across multiple modes. This practice may reflect lower costs as compared with stand-alone com- muter rail agencies. 2016 National Transit Database Operating Data Directional Route Miles 175 Unlinked Passenger Trips 4,545,849 Annual Total Passenger Miles 125,131,274 Passenger Car Revenue Miles 5,401,304 Annual Operating Cost $45,231,732 2016 National Transit Database Performance Metrics Operating Cost per Passenger Car Revenue Mile $8.37 Operating Cost per Passenger Trip $9.95 Passenger Trips per Passenger Car Revenue Mile 0.84 Passenger Miles per Passenger Trip 27.53 Table A29. FrontRunner operating and performance statistics.

154 Contracting Commuter Rail Services, Volume 1: Guidebook Sources UTA. (Jan. 1, 2016). Agency Safety and Security Department Organization Chart. UTA. (2014). Commuter Rail Cost Allocation Spreadsheet for NTD S-10 Form. UTA. (March 2016). Commuter Rail Cost Allocation Spreadsheet. UTA. (2014). Federal Funding Allocation Statistics for NTD FFA-10 Form (Revision: 1). UTA. (2015). FrontRunner Commuter Rail Hazard Log (Excerpt). UTA. (June 15, 2015). Goods and Services Contract, Contract No. 15-1171TB between UTA and R&M Cleaning Services. UTA. (April 1, 2013). Maintenance Agreement, Contract 213-201 between UTA and Wabtec Global Services (division of WGS). UTA. (Feb. 1, 2014). On-Call Maintenance Contract, RFP No. UT13-061GL between UTA and Stacy and Witbeck. UTA. (Jan. 1, 2016). Overall Agency Organization Chart. UTA. (Dec. 31, 2014). Trial Balance Spreadsheet for NTD F30 Form. UTA. (2015). UTA Customer Satisfaction Research Summary Results Including Modal Breakout. Commuter Raila Directional Route Miles Annual Passenger Trips Annual Passenger Miles Annual Passenger Car Revenue Miles Annual Operating Costs Rail Runner 193 886,386 39,741,454 1,406,934 $29,944,982 South Shore Line 180 3,504,080 113,035,111 4,233,598 $48,080,595 FrontRunner 175 4,545,849 125,131,274 5,401,304 $45,231,732 VRE 174 4,352,814 145,777,038 2,289,083 $69,874,827 ACE 172 1,290,085 55,471,664 1,078,543 $17,380,023 Sounder 164 4,312,113 106,687,816 1,794,741 $44,414,515 Tri-Rail 142 4,241,486 117,303,700 3,595,531 $89,987,616 Source: National Transit Database 2016. aCaltrain has similar directional miles (178 miles) but 19 million annual passenger trips. Table A30. Operating statistics for FrontRunner and peer commuter rail systems. Commuter Rail Service Delivery Model Operating Cost/ Passenger Car Revenue Mile Operating Cost/ Passenger Trip Passenger Trips/ Passenger Car Revenue Mile Passenger Miles/ Passenger Trip Operating Cost/ Passenger Mile Rail Runner Contracted–Bundled $21.28 $33.78 0.63 44.84 $0.75 South Shore Line Agency Operated $11.36 $13.72 0.83 32.26 $0.43 VRE Contracted–Unbundled $30.53 $16.05 1.90 33.49 $0.48 ACE Contracted–Bundled $16.11 $13.47 1.20 43.00 $0.31 Sounder Contracted–Unbundled $24.75 $10.30 2.40 24.74 $0.42 Tri-Rail Contracted–Unbundled $25.03 $21.22 1.18 27.66 $0.77 Average of Peers $20.22 $17.50 1.30 31.75 $0.53 Median for Peers $23.02 $14.89 1.01 29.96 $0.45 FrontRunner Agency Operated $8.37 $9.95 0.84 27.53 $0.36 Source: National Transit Database 2016. Table A31. Performance metrics for FrontRunner and peer commuter rail systems.

Case Studies 155 Virginia Railway Express Northern Virginia Transportation Commission and Potomac and Rappahannock Transportation Commission Northern VA–Washington, D.C. Figure A10. VRE commuter rail. Timeline for Public Commuter Rail: 1992 Governance The Virginia Railway Express (VRE) is a transportation partnership of the Northern Virginia Transportation Commission (NVTC) and the Potomac and Rappahannock Transportation Commission (PRTC) to provide commuter rail service (Figure A10) along the Manassas and Fredericksburg lines, connecting northern Virginia suburbs to Alexandria, Crystal City, and downtown Washington, D.C. The commissions represent counties and cities in northern Virginia. Representatives of both commissions sit on the joint VRE Operations Board. The commissions delegate most decisions to the VRE Operations Board but retain the authority for decisions that have high dollar value, approval of significant contracts, and the hiring of the chief executive officer (CEO). In these cases, the VRE Operations Board makes a recommendation to the commissions on the action items. VRE is a joint project of the two commissions. NVTC processes VRE’s state grants and PRTC processes federal grants. The CEO supervises about 50 VRE employees who are technically

156 Contracting Commuter Rail Services, Volume 1: Guidebook employees of PRTC for administrative purposes. VRE reimburses the commissions for staff time and expenses devoted to VRE support. In 1989, NVTC and PRTC executed a master agreement with the jurisdictions participat- ing in the VRE project. The participating jurisdictions agreed to pay the local jurisdictions a subsidy for VRE through a formula that weighted ridership by jurisdiction of residence with a factor of 90% and population with a factor of 10%; that formula has since been amended to be determined based 100% on ridership. The Arlington and Alexandria subsidy is calculated outside the master agreement formula. Timeline 1964 The Virginia General Assembly approved the Transportation District Act and created the Northern Virginia Transportation District. NVTC included Arling- ton and Fairfax counties and the cities of Alexandria, Fairfax, and Falls Church. 1984 Planning for commuter rail gained momentum after a regional feasibility study by R.L. Banks and Associates, Inc., for the Metropolitan Washington Council of Governments. Richmond Fredericksburg and Potomac (RF&P) and Norfolk Southern (NS) owned the two proposed railroad lines. Challenges included the reluctance of the private railroads, limited sources of funding, and concerns about liability insurance. 1986 The Virginia General Assembly created PRTC via an amendment to the Trans- portation District Act. PRTC includes Prince William and Stafford counties and the City of Manassas. Legislation provided for a 2% motor fuels tax within the new district to support transportation investments, including commuter rail. 1987 NVTC and PRTC reached an agreement with Amtrak on an operating contract for all train operations and maintenance of rolling stock. 1988 NVTC and PRTC agreed on the name Virginia Railway Express and established the VRE Operations Board. 1989 VRE executed operating agreements with RF&P and NS for access to railroads, with the Consolidated Rail Corporation (Conrail) for the right to use a bridge over the Potomac River (Long Bridge), and with Amtrak for access to Washington Union Station. 1990 Fredericksburg and Manassas Park agreed to join PRTC and become full participants in the VRE project. Loudoun County joined NVTC. 1991 RF&P merged with CSX Transportation, Inc. (CSX). 1992 VRE revenue service began on the Manassas Line on June 22 and on the Fredericksburg Line on July 20. 1995 VRE entered into operating, access, and master lease agreements with CSX and NS. 1998 VRE agreed to a new operating agreement with Amtrak for the period March 1, 1998, through June 30, 2003. 1999 CSX and NS agreed to acquire Conrail and split most of the company’s assets between the two railroads. CSX acquired Long Bridge over the Potomac River. 2002 NVTC, PRTC, and the Virginia Department of Rail and Public Transporta- tion signed a memorandum of understanding to add service and make corridor capacity improvements. 2003 VRE extended the agreement with Amtrak due to expire June 30, 2003, to January 21, 2004. 2004 VRE extended the agreement with Amtrak to June 30, 2005, with a separate provision for access to Washington Union Station. 2005 VRE agreed to a new 5-year contract with Amtrak for operations, maintenance, and access to storage at Washington Union Station.

Case Studies 157 2009 VRE issued a competitive procurement for train operations and maintenance of equipment and facilities. Keolis Rail Services Virginia, LLC, replaced Amtrak as the contractor. The contract ran from July 1, 2010, to June 30, 2015. 2010 Spotsylvania County joined PRTC and became a participant in VRE. 2014–2015 VRE separated the maintenance of equipment and facilities from train operations and issued a competitive procurement for maintenance services. The existing agreement with Keolis for train operations was extended for a second 5 years to June 30, 2020. Keolis won the competitive procurement for maintenance services. 2016 The new contract with Keolis for maintenance services was effective July 1, 2016. Level of Service VRE operates two lines: the 35-mile Manassas Line connecting Broad Run Airport in Prince William County to Washington Union Station, and the 60-mile Fredericksburg Line connecting Spotsylvania to Washington Union Station. The two lines share track from Alexandria to Wash- ington Union Station. Together, the two lines represent 162 directional route miles. The primary mission of VRE is to transport commuters between outlying suburbs and the Washington-Arlington urban core. Both VRE lines operate Monday through Friday with approximately 30-minute headways during peak periods. VRE trains run mainly in the peak direction (northbound to Washington, D.C., in the morning and southbound in the afternoon). VRE operates 32 trains each weekday, 16 on each line (eight in each direction). The only non- peak service is an early-afternoon return trip from Washington on each line, and two limited- stop reverse-direction trains on the Manassas Line in each peak period. Amtrak honors VRE tickets on select midday and reverse-commute trains between shared Amtrak/VRE stations. Ownership Track and Rail Infrastructure VRE operates on tracks owned by CSX and NS and leases access to Washington Union Sta- tion and midday storage from Amtrak. South of Alexandria, VRE leases tracks from CSX for the Fredericksburg Line and from NS for the Manassas Line. North of Alexandria all VRE trains operate over CSX tracks except the last mile into Washington Union Station, owned by Amtrak. VRE is currently investing in capital improvement projects to maximize VRE service within the existing railroad agreements. Operations and Maintenance Facility • VRE owns two maintenance and storage facilities located at Crossroads near Fredericksburg, Virginia, and Broad Run near Manassas, Virginia. Both yards feature service and inspection buildings and a maintenance pit. Periodic inspections, preventive maintenance, and minor repair of VRE locomotives are performed at the Broad Run and Crossroads yards. • VRE maintains a warehouse at the Crossroads facility for all inventories that supports the rolling stock. VRE performs all purchasing in support of materials for equipment. • VRE leases midday storage for trains at Amtrak’s Ivy City maintenance complex about 1 mile north of Washington Union Station. • VRE has an agreement with CSX to lease land within the railroad right-of-way north of L’Enfant Station in Washington, D.C., for train storage if required. Stations • VRE provides commuter rail service to 19 stations. Most station platforms are located on easements within the railroad right-of-way. Either VRE, local jurisdictions, CSX, or Amtrak

158 Contracting Commuter Rail Services, Volume 1: Guidebook own the stations. Local jurisdictions or independent contractors hired by VRE provide main- tenance for the stations. Amtrak maintains Washington Union Station and the Alexandria Station. • Station parking is owned by various entities: VRE, PRTC, local jurisdictions, and the Virginia Department of Transportation. Parking is available at most VRE stations. Parking is not avail- able at Alexandria, Crystal City, or L’Enfant stations. Washington Union Station has a large parking garage available for a fee. A Washington Metropolitan Area Transportation Authority Metrorail parking facility is available at Franconia–Springfield station (a Metro SmarTrip fare card is required to park). • VRE station platforms are located adjacent to or near Washington Metropolitan Area Trans- portation Authority Metrorail stations at Franconia–Springfield, Alexandria, Crystal City, L’Enfant, and Washington Union Station. • Bus routes operated by local transit agencies serve VRE stations within each respective jurisdiction. Equipment • VRE owns the rolling stock, including 20 diesel electric locomotives and the coach cars. VRE currently has 84 gallery-style coach cars in service daily and owns an additional 14 coach cars. Role of the Host Railroad • CSX owns and provides maintenance of way (including right-of-way, tracks, and signals) for the Fredericksburg Line and the track north of Alexandria except the last mile into Washing- ton Union Station. CSX provides train dispatching for the Fredericksburg Line. • NS owns and provides maintenance of way (including right-of-way, tracks, and signals) for the Manassas Line to Alexandria. NS provides train dispatching for the Manassas Line. • Amtrak owns, maintains, and provides train dispatching for Washington Union Station. Role of Amtrak • Amtrak leases access to VRE at Washington Union Station. • Amtrak leases midday storage for VRE trains at the Ivy City maintenance complex about 1 mile north of Washington Union Station. Amtrak provides limited light maintenance, coach cleaning, and midday emergency mechanical repairs for VRE trains as a provision of the lease. • Amtrak intercity passenger service operates on both VRE lines through track access agree- ments with CSX and NS. • Amtrak provides intercity passenger rail service to three stations that both VRE lines also serve, including Alexandria, L’Enfant, and Washington Union Station. On the Fredericksburg Line, Amtrak also provides service to the following stations: Fredericksburg, Quantico, and Woodbridge. On the Manassas Line, Amtrak also provides service to the following stations: Manassas and Burke Centre. Decision to Contract for Service Freight Railroads Implementation of VRE commuter rail in 1992 required years of planning and negotiat- ing with the respective private freight railroads. Each railroad provides train dispatching and takes responsibility for maintenance of way for the respective railroad right-of-way. Agree- ments with the commonwealth help provide indemnification to the freight railroads for VRE operations.

Case Studies 159 Direct Operation or Contracted VRE is a joint project of NVTC and PRTC and has no independent legal standing. The commissions created VRE to implement and administer commuter rail service. Con- tracting VRE operational functions was an effective way to ensure qualified staff for train operations and maintenance of rolling stock and to limit the size of the VRE administra- tive staff. Bundled or Unbundled Contract When VRE service began in 1992, Amtrak operated intercity passenger service on both the CSX and NS rail corridors and agreed to provide VRE access to Washington Union Station. NVTC and PRTC entered into a negotiated contract with Amtrak to provide train operations and maintenance of equipment. VRE negotiated various extensions of the agreement with Amtrak through June 30, 2010. Decision to Continue Contracting In May 2009, VRE issued a competitive procurement for train operations and maintenance. Keolis won the procurement and replaced Amtrak as the contractor effective July 1, 2010. The contract was for 5 years, ending June 30, 2015, with the option to extend for two additional periods of up to 5 years each. Decision to Unbundle Train Operations and Maintenance Services In January 2014, the VRE Operations Board adopted a life-cycle maintenance strategy for VRE rolling stock. The basis of this strategy is to maintain VRE locomotives and passenger cars at the highest level of reliability throughout the life of the equipment. A new building at the Crossroads Maintenance and Storage Facility was dedicated to these activities. VRE decided to unbundle the maintenance services from train operations. VRE structured a revised scope for maintenance services (maintenance of equipment and maintenance of facili- ties) to better reflect the life-cycle maintenance strategy and to incorporate a fixed price. VRE extended the part of the existing agreement with Keolis for train operations for a second 5 years through June 30, 2020. In October 2014, VRE issued a request for proposals for maintenance services. Keolis won the competitive procurement. The new contract has a 5-year term (July 1, 2016, through June 30, 2021) with the option to extend for two additional periods of up to 5 years each. Current Unbundled Contracts VRE currently works with three railroads for maintenance of way and dispatching (CSX, NS, and Amtrak) and has two separate contracts with a private contractor (Keolis) for train opera- tions and maintenance services (maintenance of equipment and maintenance of facilities). VRE contracts with local vendors for other functions such as maintenance of stations, snow removal, ticket vending machines, and security at the maintenance facilities. VRE also manages multiple contractors for capital improvement projects. Oversight for Contract Compliance Any contractor has the responsibility to comply with the U.S. Department of Transportation, FRA, FTA, U.S. Environmental Protection Agency, and other state and federal agency regula- tions, as applicable to the contracted scope of work. VRE holds each contractor accountable for meeting regulatory obligations. The contractor must also be fully knowledgeable of, and in compliance with, all CSX, NS, and Amtrak operating rules.

160 Contracting Commuter Rail Services, Volume 1: Guidebook In the event that a contractor is found to be in violation of any FRA regulation that results in a fine being assessed by FRA, the contractor is responsible for correction of the violation and for paying the assessed penalty at no additional charge to VRE. VRE staff members are responsible for contract oversight. The project manager for the main- tenance services contract is the VRE deputy CEO/chief operating officer. The project manager for the train operations contract is the VRE director of operations. The VRE contract adminis- trator for both contracts is the VRE manager of purchasing and contract administration. Basis for Cost Train Operations VRE compensates the contractor for train operations based on a combination of fixed costs and variable costs; VRE also pays the contractor for management services as follows: • Fixed costs include the base level of daily service and staffing for each train. Permanent increases or decreases to train service or labor requirements are included as adds or deducts from the fixed amount based on a specified per-train or per-employee position rate. The annual fixed payment is broken into equal monthly installments. A renegotiation of rates will occur if the number of round trips increases or decreases by 20% or more. • Variable costs for test or special trains are paid based on a specified hourly rate. • Management services are paid separately as a monthly fixed payment. Management ser- vices cover all contractor costs not directly related to the operation of the commuter trains, which may include items such as general overhead and administration, accounting, insur- ance, contractor-provided training, contractor-provided vehicles, report preparation, and human resources management. Incentive Payments • The incentive for no train cancellations due to contractor action or inaction during the month is a $5,000 payment. • An incentive for on-time performance (OTP) is based on each service line on a monthly basis as shown in Table A32. Liquidated Damages. Liquidated damages could be assessed in the case of, for example, a member of the required crew not being available, failure to report a delay, or failure to accommodate a passenger with a disability. Maintenance Services • VRE pays the contractor for maintenance services based on a monthly fixed price for mainte- nance of equipment and maintenance of facilities, including management services. Payment is broken into equal monthly installments. Item No. OTP Percent Rate Manassas Line ($) Fredericksburg Line ($) 1 96.0 or higher 30,000 30,000 2 95.9–94.0 25,000 25,000 3 93.9–92.0 20,000 20,000 4 91.9–90.0 15,000 15,000 Note: VRE trains arriving at their final destination station greater than 5 minutes past the scheduled arrival time are considered late. VRE uses one OTP metric for reporting purposes. Table A32. On-time performance incentives for train operations.

Case Studies 161 • Task order work is charged at a rate per hour. The markup on materials for task order work is set at a percentage of the cost of the materials. Incentive Payments • The incentive for no train cancellations due to contractor action or inaction during the month is a $1,000 payment. • An incentive for OTP is based on each service line on a monthly basis as shown in Table A33. Liquidated Damages. Liquidated damages could be assessed in the case of, for example, operating a train set short of railcars because of mechanical failures, air conditioning or heating systems not operating, or failure to follow VRE requirements for safety and maintenance policies. Notable Practices and Lessons Learned • When VRE was conceived, the logical plan was to contract for service. The host railroads (CSX, NS, and Amtrak) provide the tracks, retain responsibility for maintenance of way, and provide train dispatching. The remaining responsibilities are train operations and mainte- nance of rolling stock. NVTC and PRTC saw a clear path to contract with Amtrak for all train operations and maintenance of rolling stock in 1987. • NVTC and PRTC established the VRE Operations Board in 1988 with a vision of a small staff to resolve the myriad of challenges to implementing and operating VRE commuter rail service. At the time, staff responsibility was to work with the contracted operator (Amtrak, initially). • VRE staff stated that maintenance of way and dispatching are best performed by the host railroad. Successful scheduling depends on the dispatcher maintaining a fluid network on the railroad. A service disruption on commuter rail will cause freight traffic to suffer. The railroad dispatcher has a stake in keeping commuter rail running smoothly. • VRE staff spends a lot of time to make the relationships with the host railroads work. VRE pays for the CSX train master (NS does not have enough freight traffic to warrant a train master). • VRE made the decision to separate train operations from maintenance services in 2014. The primary considerations were assigning work to specialists and restructuring maintenance ser- vices as a fixed-price contract. The advantages are expertise and predictability for cost. The disadvantage is the element of separation; the contractors may not be on the same page. In the case of VRE, the same contractor won both contracts; however, the issues are the same, and this may not be the case in the future. Contract administration is more complex. There is more risk of finger pointing. VRE has to be careful about increased costs for administrative overhead with multiple contractors. • In 2009 and again in 2015, unsuccessful proposers challenged the VRE procurements for contracted services. VRE prevailed in each case. These experiences demonstrate the impor- tance of a well-defined procurement process, beginning with procurement justification and specifications for the scope of work. VRE staff recommends following the process carefully and documenting all records thoroughly. Item No. OTP Percent Rate Manassas Line ($) Fredericksburg Line ($) 1 96.0 or higher 7,500 7,500 2 95.9–94.0 6,250 6,250 3 93.9–92.0 5,000 5,000 4 91.9–90.0 3,750 3,750 Table A33. On-time performance incentives for maintenance services.

162 Contracting Commuter Rail Services, Volume 1: Guidebook • With multiple contractors, VRE staff suggests that it is best to put everyone in the same space (building) to create opportunities to work together and establish common goals. Coordina- tion is more effective if all contractors have the same goals and contract performance metrics. In the case of VRE, the focus is on reliability (on-time performance) and customer service. VRE personnel reporting to the director of operations include communications specialists focused on customer service. • VRE expects commuter rail agency staff to be subject matter experts directly involved in train operations. VRE integrates the agency operations team with the contractors. VRE Operating and Performance Statistics Table A34 provides VRE operating and performance statistics. Peer Performance Comparisons The VRE peer group comprises similar commuter rail systems based on directional route miles and annual passenger trips, as shown in Table A35. ACE, Sounder, and VRE operate peak-direction, peak-period commuter rail service. Rail Runner operates two directions during peak periods, and Tri-Rail operates limited or hourly midday trains. FrontRunner and South Shore Line operate all-day service in two directions. Table A36 provides the performance metrics for VRE and the peer groups. 2016 National Transit Database Operating Data Directional Route Miles 174 Unlinked Passenger Trips 4,352,814 Annual Total Passenger Miles 145,777,038 Passenger Car Revenue Miles 2,289,083 Annual Operating Cost $69,874,827 2016 National Transit Database Performance Metrics Operating Cost per Passenger Car Revenue Mile $30.53 Operating Cost per Passenger Trip $16.05 Passenger Trips per Passenger Car Revenue Mile 1.90 Passenger Miles per Passenger Trip 33.49 Table A34. VRE operating and performance statistics. Commuter Raila Directional Route Miles Annual Passenger Trips Annual Passenger Miles Annual Passenger Car Revenue Miles Annual Operating Costs Rail Runner 193 886,386 39,741,454 1,406,934 $29,944,982 South Shore Line 180 3,504,080 113,035,111 4,233,598 $48,080,595 FrontRunner 175 4,545,849 125,131,274 5,401,304 $45,231,732 VRE 174 4,352,814 145,777,038 2,289,083 $69,874,827 ACE 172 1,290,085 55,471,664 1,078,543 $17,380,023 Sounder 164 4,312,113 106,687,816 1,794,741 $44,414,515 Tri-Rail 142 4,241,486 117,303,700 3,595,531 $89,987,616 Source: National Transit Database 2016. aCaltrain has similar directional miles (178 miles) but 19 million annual passenger trips. Table A35. Operating statistics for VRE and peer commuter rail systems.

Case Studies 163 Sources Interviews with VRE staff, April 18–20, 2016. Parsons Brinckerhoff. (Feb. 2014). Virginia Railway Express System Plan 2040 Study. Taube, R. K. (Aug. 11, 2008). Chronology of the Virginia Railway Express—1964 to Present. http://www.prtctransit. org/about-us/VRE-Chronology-with-graphics.pdf. Accessed Sept. 6, 2018. Virginia Department of Rail and Public Transportation. (Dec. 2011). Virginia Railway Express Transit Develop- ment Plan, FY2013–FY2018. Virginia Railway Express. Request for Proposals (RFP), RFP No. 09-013, Operating and Maintenance Services for Commuter Rail Operations. Issued May 8, 2009. Virginia Railway Express. Request for Proposals (RFP), RFP No. 015-004, Maintenance Services for Commuter Rail Operations. Issued Oct. 8, 2014. Virginia Railway Express. Staff. http://www.vre.org/about/staff/. Accessed April 13, 2017. Commuter Rail Service Delivery Model Operating Cost/ Passenger Car Revenue Mile Operating Cost/ Passenger Trip Passenger Trips/ Passenger Car Revenue Mile Passenger Miles/ Passenger Trip Operating Cost/ Passenger Mile Rail Runner Contracted–Bundled $21.28 $33.78 0.63 44.84 $0.75 South Shore Line Agency Operated $11.36 $13.72 0.83 32.26 $0.43 FrontRunner Agency Operated $8.37 $9.95 0.84 27.53 $0.36 ACE Contracted–Bundled $16.11 $13.47 1.20 43.00 $0.31 Sounder Contracted–Unbundled $24.75 $10.30 2.40 24.74 $0.42 Tri-Rail Contracted–Unbundled $25.03 $21.22 1.18 27.66 $0.77 Average of Peers $20.22 $17.50 1.30 31.75 $0.53 Median for Peers $23.02 $14.89 1.01 29.96 $0.45 VRE Contracted–Unbundled $30.53 $16.05 1.90 33.49 $0.48 Source: National Transit Database 2016. Table A36. Performance metrics for VRE and peer commuter rail systems.

164 Contracting Commuter Rail Services, Volume 1: Guidebook GO Transit Greater Toronto Transportation Authority Greater Toronto and Hamilton Area, Ontario, Canada Figure A11. GO Transit commuter rail. Timeline for Public Commuter Rail: 1967 Governance The Metrolinx Act of 2006 created the Greater Toronto Transportation Authority to improve the integration of all modes of transportation in the greater Toronto and Hamilton area. As a government agency, Metrolinx has a memorandum of understanding (MOU) with the Ministry of Transportation. This MOU sets out the working relationship between the two parties in cor- porate governance, funding, reporting, and communications. The MOU is renewed or revised every 5 years. In 2009, Metrolinx merged with GO Transit (Figure A11), the regional public transit service. Since May 1967, GO Transit has evolved from a single train line along Lake Ontario’s shoreline into an extensive network of rail lines and bus routes. To oversee these activities, a Metrolinx board is made of private-sector members appointed by the Province of Ontario. GO Transit’s revenues are from three primary sources: passenger fares, provincial funds, and federal funds. Passenger fare revenues provide about 80% of the operating cost, and the remain- ing operating revenues come from provincial funding to pay for all-day, two-way service on all

Case Studies 165 seven GO Transit rail lines. Federal funding primarily goes to capital projects, supplemented by provincial funds. Timeline 1967 GO Transit began service on a single train line, the East–West Lakeshore Line. 1974 GO Transit added the Georgetown Line (now the Kitchener Line). 1978 The Richmond Hill Line began operation as part of the GO Transit system. 1981 The Milton Line was added to the GO Transit system. 1982 GO Transit incorporated the Barrie Line (as far as Bradford) and the Stouffville Line formerly operated by VIA Rail Canada. 1990 The Barrie Line was extended from Bradford to Barrie. 2006 The Metrolinx Act of 2006 created the Greater Toronto Transportation Authority. 2009 GO Transit merged with Metrolinx. 2011 The Georgetown Line was extended to Kitchener and is now the Kitchener Line. Level of Service Approximately 269 daily trains now operate over seven rail lines, providing service to more than 60 stations and using a fleet of 75 locomotives and more than 900 multi-level coaches (including new vehicles purchased and scheduled for delivery through 2018). GO Transit contracts for the primary functions of train operations, train dispatching, main- tenance of rail equipment, and maintenance of infrastructure. The services are unbundled; GO Transit contracts with several contractors. Ownership Track and Rail Infrastructure • The Canadian National Railway Company (CN) and Canadian Pacific Railway (CP) once owned all of the rail lines over which GO Transit operated. CN owned six lines, and CP owned one line (the Milton Line). • Metrolinx and GO Transit have acquired 80% of the rail lines over which GO Transit operates. • CN and CP still own the remaining rail segments. The private railroads maintain the infra- structure for the rail lines they own. Operations and Maintenance Facility • The Willowbrook Rail Maintenance Facility handles all rail vehicle maintenance, including refueling, daily inspections, washing, and repairs. The facility is owned by GO Transit. • A second major rail equipment maintenance facility is under construction. Located in Whitby, Ontario, the East Rail Maintenance Facility (ERMF) is a critical part of GO Transit’s planned service expansion. The ERMF is being developed through a design, build, maintain, and finance partnership with Plenary Infrastructure ERMF, a consortium that includes a number of partners. Funded by the Province of Ontario and PPP Canada (a public–private partnership arm of the federal government), the project is being delivered using the alternative financing and procurement model. The alternative financing and procurement model is an innovative way to finance and procure large public infrastructure projects. GO Transit transfers appro- priate project risks to the private sector and negotiates a fixed-price contract. The result is a publicly owned infrastructure project, built to a high standard and maintained properly to ensure longevity.

166 Contracting Commuter Rail Services, Volume 1: Guidebook The ERMF will add capacity and flexibility for GO Transit. The ERMF will reduce GO Transit’s operational risks. The ERMF will also help GO Transit service new rolling stock while providing operational flexibility and redundancy if any emergencies arise. The approxi- mately 500,000-square-foot facility is valued at $859.2 million in Canadian dollars. Stations • Almost all of GO Transit’s stations are owned by the public agency and maintained by GO Transit maintenance personnel. • There are a few exceptions, such as Union Station in Toronto, where GO Transit owns the rail infrastructure, but the station building belongs to the City of Toronto. Equipment • GO Transit owns the fleet of 75 locomotives and more than 900 multi-level coaches, including new vehicles purchased and scheduled for delivery through 2018. • Contractors are expected to furnish and maintain whatever non-revenue vehicles they feel are necessary to provide their scope of services to the required standards and level of performance. • Contractors are required to provide their own management information systems pursuant to detailed specifications and performance/reporting requirements contained in the respec- tive agreements. These systems and their intellectual property remain the property of the contractor, but GO Transit has full and unrestricted access to these systems. Role of the Host Railroad • CN and CP own approximately 20% of the rail lines for GO Transit. • The private railroads dispatch all GO Transit trains and maintain the infrastructure for the rail lines they own. • Freight rail service operates on several GO Transit rail lines. Role of VIA Rail Canada • VIA Rail Canada intercity passenger trains operate over some of the GO Transit rail lines and share some stations, especially Union Station in Toronto, a major VIA Rail terminus. Decision to Contract for Service Freight Railroad During approximately the first three decades of GO Transit service, the Canadian Class I rail- roads CN and CP provided all of GO Transit’s principal service functions: • CN provided train crews for six of the seven lines, and CP provided crews for the trains on the CP-owned Milton Line. • Until 1997, CN was responsible for maintenance of locomotives and passenger coaches. • CN and CP provided maintenance of infrastructure on the lines that each railroad owned. Today, CN and CP provide infrastructure maintenance only on the rail lines they own. Since 1994, three events have changed the role of the Class I railroads: • From 1994 to 1996, GO Transit conducted a competitive procurement for maintenance of equipment. CN chose not to participate as a proposer. The successful proposer was Bombardier, and the company took over maintenance of equipment in 1997.

Case Studies 167 • GO Transit has acquired more and more of the rail infrastructure, now about 80% of the lines over which commuter rail operates. As GO Transit acquires a rail line or rail segment, the agency assigns maintenance of infrastructure to one of two contractors, PNR RailWorks and Toronto Terminal Railway. • In 2007, GO Transit awarded two independent contracts for train operations and mainte- nance of equipment. Both contracts were awarded to Bombardier, and each contract has a 5-year base term with three 5-year options, for a total possible contract term of 20 years. CP continued to provide train crews for the Milton Line until early 2015. That year, GO Transit transferred the Milton Line to Bombardier, bringing operational crewing responsibility for all GO Transit trains under one contract. Direct Operation or Contracted • GO Transit was created to establish and fund but not to operate rail service. • When GO Transit began commuter rail service in 1967 and for the next three decades, CN and CP provided all of GO Transit’s principal service functions. GO Transit, therefore, relied on a model to contract for services rather than to directly operate and maintain the service. • The initial influencing factor that led GO Transit to seek a contract for maintenance of rail equipment from 1994 to 1996 was the desire to have a more structured, comprehen- sive, and sophisticated approach to the maintenance of its fleet than CN was then able to provide. Detailed passenger rail maintenance procedures, International Organization for Standardization (ISO)–certified maintenance programs for passenger rail equipment, and intact trainset maintenance programs—all developed and implemented under competitive pricing conditions—simply did not fall within the core business programs and principles of a Class I freight railroad. • Years later, CN found that continuing to provide passenger train crews for GO Transit, espe- cially on rail lines that increasingly belonged to the public entity rather than to CN, appeared to pose more of a distraction than a profitable ongoing line of business for CN. • When it came to the train operations decision, GO Transit wanted a more customer-focused, customer-service-oriented approach to train crewing, including the inclusion of a non- railroad qualified customer service ambassador on each train. These practices were not something within the normal business envelope of freight railroads and not easily achiev- able given rail union work rules. This was a significant influencing factor in contracting this function out to a non-railroad service provider. • From 2006 to 2008, GO Transit solicited competitive proposals for train operations. The suc- cessful contractor was Bombardier. By 2015, CP transferred the responsibility for providing passenger train crews on the Milton Line to GO Transit and its contractor. Bundled or Unbundled Contract • In 1994, GO Transit hired a consulting team of equipment engineers and commuter rail contract specialists to develop maintenance standards and procedures, prepare a request for proposals, and draft an agreement for maintenance of equipment. GO Transit conducted a procurement process to select an equipment maintenance contractor with requirements to perform according to the maintenance standards. While CN did declare an interest in continuing to perform maintenance of equipment, as a Class I freight rail- road CN did not have the level of specialization and expertise in maintaining passenger rail equipment that GO Transit was seeking. After an extensive procurement process, Bombardier was selected as the new equipment maintainer for GO Transit and took over this function in early 1997. • A decade later, the experience and lessons learned through the first contracting process were applied in the reprocurement for equipment maintenance services and the initial procurement

168 Contracting Commuter Rail Services, Volume 1: Guidebook for train operations. When the process began, GO Transit intended a single procurement for a combined train operations and maintenance of equipment contract. However, after con- sideration of several factors, including the size and scope of the new contract and the finan- cial magnitude of the prospective relationship with an as-yet-unidentified entity, GO Transit made the decision to unbundle and separate the two functions into separate procurement processes and contracts. • In the 2006–2008 procurement, GO Transit felt that one contract for both functions was simply too big. After a rigorous qualification phase, there were two identical qualified proposers for each contract, and in each case Bombardier emerged as the successful pro- poser. This process resulted in the late 2007 award of two separate contracts, each with a 5-year base term and three 5-year options, for a total available contract term of 20 years in each case. • For the maintenance of infrastructure function, there are also two prime contracts and contractors, as well as the residual agreements with CN and CP. PNR maintains the pre- ponderance of GO Transit’s owned infrastructure, in excess of 80% of all the lines and line segments that GO Transit owns. Toronto Terminal Railway maintains the segment in and around Union Station in Toronto, referred to as the Union Station Rail Corridor. Both contracts have been in effect for several years (at least 5 years), are currently being renegotiated/renewed in the short term (i.e., 3 years plus a 1-year option), and have had additional responsibilities assigned to them as GO Transit’s ownership has increased. Both contracts include the maintenance of track, structures, signaling, grade crossing protec- tion, and so forth. Current GO Transit plans are to continue these arrangements until 2019–2020, when a sig- nificant amount of infrastructure capital improvements will be complete (currently funded at approximately $3.5 billion per year). GO Transit plans to begin the procurement process for a longer-term agreement or agreements (at least a 10-year base term plus options) for the infrastructure functions, as has been done with train operations and rail equipment maintenance. Also being considered is whether there should be one procurement process for all of GO Transit’s rail lines or whether the RFP should be broken up into two separate geographical areas. Decision to Continue Contracting • GO Transit senior management expressed satisfaction with this current arrangement, although at the same time acknowledging that GO Transit may consider re-bundling critical service functions (train operations and maintenance of equipment) when the two separate contracts reach their full term in 2028. • When construction for a new control center is complete in 2019–2020, GO Transit will assume the train dispatching function for all trains from CN and CP. Oversight for Contract Compliance GO Transit staff includes contract compliance officers in three areas: train operations, rail equipment maintenance, and rail corridor maintenance. All contract compliance officers are trained and must demonstrate familiarity with the service, the provisions of the contract, audit procedures and processes, the liquidated damages regime, and the reporting requirements of the contractor. Contract compliance personnel are expected to develop and maintain a work- ing partnership with the respective contractors and not use liquidated damages provisions in a punitive manner or be overly prescriptive in the application of contract standards and requirements. GO Transit contract compliance managers are all required to be experienced and competent in their area of responsibility, as well as be trained and proficient in the governing contract and

Case Studies 169 the contract standards and provisions they are responsible for monitoring. As examples of this training: • The compliance officers involved in train operations are trained and qualified in Cana- dian operating rules and procedures and actually conduct joint operational testing with Bombardier, CN, and CP operations management personnel. • The equipment maintenance compliance officers go through the same training courses as Bombardier’s employees, so they are aware of and familiar with how Bombardier trains its people to work on GO Transit’s fleet. In both cases, these compliance officers also receive training on the appropriate contract for services. Since the inception of contracting for services, GO Transit has dedicated the time and financial resources to provide detailed contract training to its compliance staff for each contract. GO Transit’s management approach to contract compliance and to the relationship between agency and contractor is to achieve a working partnership. The governing contracts contain tasks, standards, schedules, intervals, work procedures, regulatory obligations, and report- ing requirements. GO Transit management seeks to establish a complementary relationship with the contractor, in which both entities contribute to the quality, safety, and success of the service. Basis for Cost Both contracts for train operations and the maintenance of equipment are based on a combi- nation of a lump sum (e.g., management, administration, and support) and unit costs (e.g., the cost of a train crew, an inspection, or a servicing event or repair). The costing sheets included in the contracts contain lengthy lists of the items that will be provided by the contractor and the cost of each item. Similarly, the maintenance-of-infrastructure contracts have a fixed annual cost, billed in monthly increments, and unit costs for specific types of work performed, as well as provisions for approval of task orders for additional work that might be required. These contracts also contain stipulated cost/price escalation factors to be applied in subse- quent years after the first year of the base term. For each agreement, invoicing is monthly and contains both 1/12 of the annual cost for lump sum (or fixed) cost elements and the actual number of unit price items at the appropriate agreed-upon rates. Other significant terms and conditions include a contractor-developed and contractor- updated proposed capital improvement plan for the GO Transit fleet, required ISO regis- tration for the Bombardier workforce, and an operational excellence requirement for the manner in which GO Transit’s trains are operated. The contract also includes an innovative service change provision, which requires the contractor to implement the agency-requested change within a certain time frame even if there is no agreement between the parties on price, and then invokes the dispute resolution provision in the agreements to settle the matter. Another important element of the service change provision is that while day-to-day opera- tional and equipment maintenance services are provided on a fixed-price/unit-price basis for service changes, the contractor has to reveal the exact pricing and elements used in developing the proposed cost of the service change. This is an excellent mechanism for allowing the agency to remain aware of the exact cost, not just the price, of its services.

170 Contracting Commuter Rail Services, Volume 1: Guidebook Each contract also specifies a transition process at the end of the contract term and the require- ments, which the contractor must fulfill during such a process. Liquidated Damages There are no incentives contained in GO Transit’s agreements, and Canadian law prohibits the assessment of penalties. However, liquidated damages are permitted. The train operations, maintenance-of-equipment, and infrastructure maintenance contracts all contain detailed schedules of liquidated damages, including • Late trains, canceled trains, train crew shortages, train crew failure to perform, and/or defi- ciencies in appearance in the train operations agreement; • Mechanical failures, inoperative amenities or systems on the equipment, shortages in the number of railcars for the train, or heating/air conditioning failures in the maintenance-of- equipment agreement; and • Track-, signal-, and structure-caused delays in the infrastructure agreements (liquidated damages are applied based on so many thousands of dollars per a certain number of minutes of delay). Liquidated damages incurred in train operations have recently run in the $40,000–$50,000 per month range, approximately $20,000 for equipment maintenance and $5,000–$10,000 for infrastructure maintenance. Reported Performance Measures The GO Transit website contains the GO Passenger Charter, which includes five quantifiable performance standards promised to the passenger riding on GO Transit’s services, along with a current measurement of how GO Transit is performing pursuant to the charter and its estab- lished standards. These include 1. Be on time (within 5 minutes of schedule): The target is 94%. Performance through April 2016 is 95%. 2. Always take safety seriously (i.e., safety-related complaints): The target is 30 or fewer com- plaints per 1 million riders. Performance through April 2016 is 31 complaints per 1 million riders. 3. Keep passengers informed: The target is 30 or fewer complaints per 1 million riders. Perfor- mance through April 2016 is 21 complaints per 1 million riders. 4. Make the experience comfortable: The target is 30 or fewer complaints per 1 million riders. Performance through April 2016 is 18 complaints per 1 million riders. 5. Respond quickly and courteously: The target is to resolve 85% of customer concerns at first contact. Performance through April 2016 is 99%. Fare Collection GO Transit was one of the first North American commuter rail systems to introduce proof- of-payment ticketing on commuter trains in the 1970s. The basic fare structure is a zone system with the fare based on the number of zones through which the passenger travels. Fares are also based on the type of ticket (e.g., single ride, day pass, or monthly pass) and the category of pas- senger (e.g., adults, seniors, students, and children). Tickets can be used on GO Transit trains or buses or on both. PRESTO cards are also available on all GO Transit trains and buses. These are reloadable fare cards that can carry any amount from $10 to $1,000 and are good on almost all transit

Case Studies 171 services throughout the greater Toronto and Hamilton area. PRESTO is an operating division of Metrolinx. Passengers are subject to random inspections for a valid ticket or pass on board the train by GO Transit customer attendants. Fines for failure to produce valid fare media start at $100. Notable Practices and Lessons Learned GO Transit’s ability to establish, meet, or exceed high levels of service performance is influenced by • The growing ownership and control of the rail corridors over which the GO Transit service is operated; • A steady stream of additions and enhancements to its fleet of locomotives and coaches; • A robust capital program that benefits the rail corridors, equipment fleet, and maintenance facilities; • Commuter rail service contracts that emphasize service safety, performance, and excellence; and • A contract compliance approach based on a partnership between an agency and contractor, and a cadre of compliance officers familiar with and trained in the contracts and service condi- tions of the GO Transit system. Both contracts for train operations and maintenance of equipment have the same stated goal and performance requirement: that trains shall always arrive on or ahead of schedule. Reliability and service quality are the expected standards for GO Transit service—for every train every day. A regime for liquidated damages, as described above, does exist and is enforced by GO Transit compliance officers, but GO Transit officials are emphatic that they are not looking to assess liquidated damages. Rather they are looking for—and expect—safe, on-time train performance, using clean, fully functioning, reliable equipment and staffed by competent, friendly, properly uniformed, customer-service-focused train crews. GO Transit Service Data Table A37 provides GO Transit service data from two sources. Peer Performance Comparisons Two of the significant measures of the effectiveness of the GO Transit service are the num- ber of passengers carried in relation to the number of daily trains operated and the operating expense per passenger. GO Transit’s performance is compared with two diesel-hauled, non-electrified North Ameri- can commuter rail services—the Massachusetts Bay Transit Authority (MBTA) commuter rail in Boston and the Metropolitan Rail Corporation (Metra) in Chicago. Table A38 compares GO Transit to MBTA commuter rail and Metra. Operations data are as reported by the transit agencies. The GO Transit cost per passenger in Canadian dollars is as reported in Quick Facts Info to GO, August 2014. The MBTA and Metra costs per passenger in U.S. dollars are as reported in the 2014 National Transit Database. Measure Amount Directional Route Miles 283 Unlinked Passenger Trips 2016 53.8 million Sources: Canadian Urban Transit Association and Metrolinx. Table A37. GO Transit service data.

172 Contracting Commuter Rail Services, Volume 1: Guidebook Sources Bombardier. (Feb. 25, 2016). Bombardier Train Operations Organization Chart. Bombardier. (March 18, 2016). Bombardier Willowbrook Rail Equipment Maintenance Organization Chart. GO Transit. Quick Facts. Info To GO, August 2014. Interviews with GO Transit staff during site visit, Feb. 23, 2016. Massachusetts Bay Transportation Authority. APTA Commuter Rail Ridership, January–December 2014, Massachusetts Bay Transportation Authority Commuter Rail Procurement, Request for Proposals, RFP No. 159-12, June 12, 2013, Page A-1. Metropolitan Rail Corporation. (n.d.). Operations and Ridership Data, Weekday Ridership and Service Levels, July 2014–June 2015. Measure GO Transit MBTA Metra Number of Daily Trains 250a 494 703 Average Daily Ridership (per train) 197,000 (788) 130,600 (264) 293,600 (418) Operating Cost per Passenger Trip (2014) $4.89 $10.81 $9.12 aGO Transit increased the number of daily trains to 269 in 2016. Table A38. Comparative ridership per train for major North American diesel-hauled commuter rail.