A RailPAC Special Report, November, 2004. — In its September issue, the Train Riders Association of California’s (TRAC) “California Rail News” displays a front page photograph taken without permission from the RailPAC website. The photo isn’t shown in its entirety. The entire photo was published in the August 2004, “Western Rail Passenger Review” magazine (on page 6), and was posted to www.railpac.org that same month (and is reproduced here). Three people are shown in the edited version with their heads cropped off. The two males are wearing suits and ties as if the editor wants the audience to believe, that “Amtrak suits repeatedly had free dinners at the now-closed Chef Mario’s Island Lighthouse Seafood Grotto.” Absent evidence, does the article’s author hope the gullible will believe the worst as a result of seeing the cropped photo?

Of course, as RailPAC members know, the original photo, taken by RailPAC secretary Russ Jackson, doesn’t show Amtrak or Caltrans “suits,” but RailPAC members Art Lloyd and Bruce Jenkins, former TRAC officers, who were invited (along with current RailPAC and TRAC officers, San Joaquin Valley Rail Committee members and the Capitol Corridor’s CC Riders representatives) by Caltrans and Amtrak to participate in a taste test of potential new menu items for San Joaquin and Capitol Corridor trains. As Caltrans and Amtrak explained on the day of the test, it was not designed, as the photo’s caption suggests, to select new vendors, but to involve riders, to the maximum extent possible, in choosing food to be served aboard trains. Test participants were given the opportunity to rate a large selection of potential items and rate them on taste and marketability.

This is the second year that RailPAC has participated in this process, while TRAC did not. The test is held in the PPS kitchen in Alameda and the food is prepared and displayed as it would appear on the trains, by Chef Mario Garcia, one of the two food contractors who provide food for the San Joaquins and Capitols. Some of the proposed dishes weren’t very good. The reviewers of those dishes were unhesitant and merciless. Any “mystery meat and stale pasta” cited in the TRAC article is doomed by this critique. Other recipes, however, are excellent, and the favorites, as chosen by the test participants, become candidates for serving aboard the trains. Some are already available to customers. The article alleges several other improprieties in the Caltrans relationship with Chef Mario. To find out the real story RailPAC asked several questions the article raised. The picture Caltrans paints is very different than the one portrayed by the article.

Most food sold aboard state-funded trains is provided by Amtrak’s national food provider, Gate Gourmet. The exceptions are dinner and breakfast entrees aboard the San Joaquins and fresh sandwiches aboard both the San Joaquins and Capitols. These are provided, under a separate Amtrak contract with Party Picnic Specialists (PPS), the firm owned by Mario Garcia, the Chef Mario referred to on on-board menus, and in the article. The article delights in using descriptive phrases such as, “Caltrans’ favorite contractor” to refer to PPS, but it’s a curious sort of favoritism that, according to Eric Schatmeier, Caltrans’ Manager of Rail Operations and Marketing, has shrunk the dollar amount of the contract to about half its original size.

Caltrans’ relationship with Chef Mario began three years ago after the Division of Rail commissioned a consultant report examining San Joaquin dining car business practices. The report opined that the attendant-served meals then served on the trains could never cover their costs and that high quality micro-waveable meals could be formulated and served over-the-counter at great savings. The consultant, a Seattle chef named Kathy Casey, had developed similar menu items for Pacific Northwest corridor service and, as part of her work on Caltrans’ behalf, produced California-style recipes for the San Joaquins. In the short term, these recipes appeared on board the train to rave reviews. For the long-term, Caltrans asked Amtrak to put the entr=E9e/fresh sandwich menu development and food preparation portion of the business out to bid. This was done and the contract extensively advertised. Two bids were received and the winner in the bid process, managed by Amtrak procurement, was PPS. Similar to Caltrans, Amtrak’s bid process frowns on sole-sourcing without extensive and detailed justification. No such justification was sought in this case because none was needed or desired by either Amtrak or Caltrans. This was, according to Schatmeier, a competitively bid contract in every sense of the term. Since it is the only evidence offered for the article’s assertion that “inside Caltrans, sole sourcing continues unabated” the claim looks to be both unproven and incorrect.

As is the case with all Amtrak food providers, the PPS contract requires Chef Mario to pass frequent Food and Drug Administration (FDA) inspections, to specify the quantity and quality of the ingredients in the menu items he provides and to withstand periodic “spec checks” to ensure that he delivers the right food for the right price. According to Schatmeier, Chef Mario has consistently met his obligations during the contract, whatever the condition of his outside business interests. In addition, contrary to the article’s assertion that, “competition between vendors has been replaced by taste tests,” anyone attending the tests knows that their function is to establish a repertoire of menu selections that will be attractive to train customers and that Amtrak and Caltrans solicit a variety of customer input to this end. “Our goal is to make the food service on the trains 100% customer-driven,” Schatmeier says. “The tests are aimed at making sure that we’re responding to what the riders want rather than what we might choose. I’m gratified that RailPAC takes the process seriously and provides us with both praise and needed criticism. I’m also puzzled about why TRAC chooses to sit on the sidelines.”

According to Schatmeier, the article’s claim that, “TRAC has been asking CALTRANS for more than a year why they picked Chef Mario to provide food service is false.” Until this article appeared, we have never been asked by TRAC or anyone else to provide information about what we do or why we do it. “It isn’t due to lack of interest,” he says. “I attribute it to three things. First, we anticipate our riders’ and the public’s interest and curiosity about on-board dining and so we share all of our plans in public at venues such as the San Joaquin Valley Rail Committee. When we took radical steps like discontinuing attendant-served meals, we made detailed presentations about the economics involved and the alternatives. We never moved without their sign off. Advocacy organizations such as RailPAC are regular attendees and contributors at these meetings. Second, as a public agency, we know that nothing we do is secret. All anyone has to do is ask and if the information exists, we provide it. TRAC is certainly within its rights to make a public records act request, but it seems odd that they would do so when the same information is available to anyone just by asking. Finally, customers are satisfied with the food we provide them. In addition to the tests, we perform more market research on the subject of food than any other service in the country. This research consistently yields praise. Sales are down recently, but so is train ridership. 2004 has been a rough year for the San Joaquins. We’ve had track maintenance blitz’s, levee breaks and paralyzing freight train interference that has led to late trains and significant ridership loss. In June, the month cited in the article, a huge percentage of our trains were annulled. If fewer people ride the train, fewer people eat the meals. Those who do, however, love them for their quality and value.”

And what of the economics of food service? The article claims that, “Caltrans has not disclosed how much it pays for the meals that Chef Mario provides,..” but maybe that’s because TRAC never asked. This information was not part of the public records letter and RailPAC has learned, simply by asking, that the cost, for example, of the San Joaquins’ new pork loin dish is $7.24 compared to its selling price of $9. This represents a 25% mark-up, which contributes to Caltrans’ and Amtrak’s overall goal of earning a 50% average profit on food items. In the fiscal year ending September 30, Amtrak will report a profit on San Joaquin food service of about 23%, with revenues of about $1.7 million and costs of about $1.4 million. “Despite all our problems this year,” Schatmeier says, “we’ve been successful at our goal to have food service contribute to lowering train operating costs. Every dollar we take in here is a dollar we can allocate to additional services elsewhere.”

Finally, what are we to make of the article’s portrayal of PPS’ outside business problems and un-named “whistleblowers?” “I suspect smoke-blowers’ would be a more appropriate term,” says Schatmeier. “But Chef Mario’s alleged problems are of interest to me only to the extent that they limit PPS’ ability to fulfill the terms of the contract it has with Amtrak. To date, PPS has met every contractual obligation they’re required to. We expect them to continue to do so well into the future.”

Caltrans and Amtrak are fair game for criticism for bad calls and RailPAC must always guard against being co-opted. But these organizations are also entitled to praise when they do the job right. Lacking evidence to the contrary, they appear to be on the right track with food.

Article approved by: Noel Braymer, James Smith, Russ Jackson, and Richard Silver.