Reported by David B. Kutrosky, Managing Director, CCJPA

Ridership for the Capitol Corridor in February 2010 continued to decline compared to February 2009 and 2008, but the monthly loss was less than prior month comparisons. Ridership for February 2010 was down by 4.7% and while the service was impacted by the second phase of the tie renewal program (February 22 – March 15, 2010) between San Pablo and Oakland, the ridership decline appears now to be the clear result of the three Friday furloughs per month for state government employees (which also impacts businesses, vendors, and service industries in the Capitol).  It has been estimated that these furloughs are contributing to an approximate overall reduction of 5%, representing well over half of our YTD ridership decline.

Revenues for February were below projection (-4.5%) but slightly above the prior February (+0.5%) with YTD revenues almost even (-0.8%) with last year.  To respond to the weak discretionary travel market, we are beginning marketing campaigns (now that the tie renewal program is complete).  These campaigns will target mid-day travel (discounts for school groups and seniors) and restart of the Kids Ride Free on Weekends (now including Fridays).

For February, UPRR delivered the Capitol Corridor trains above the On-Time Performance standard (90%) with the trains arriving on-time 92% of the time.  This is quite a spectacular feat considering that the tie renewal program was going on in the busiest section of the corridor during the last week of the month.

With respect to the Governor’s original gas tax swap proposal, there has been much activity in the Senate and Assembly to counter the Governor’s proposal, which would eliminate all state operating assistance to local transit agencies, the Capitol Corridor and the other state Intercity Passenger Rail (IPR) services starting in FY 2012-13.  The State Assembly prepared a proposal that would retain and increase (by 1.75%) the sales tax on diesel which would provide a steady stream of State Transit Assistance (STA) funds to local transit agencies and fully-fund the annual CA IPR Program (operations, staffing, marketing, and equipment renovations), allowing the CA IPR Program to survive and expand plus provide the ability to apply for the FRA capital grants.  This proposal was embraced by the Senate as it met the primary principle that the solution be revenue-neutral as part of this special legislative session.  Both the Assembly and Senate passed this legislation which was forwarded to the Governor for enactment. However, on March 15, 2010, the Governor threatened to veto the package of gas tax swap budget bills explaining that the bills did not provide tax relief for consumers at the pump and the package raises taxes on commuter rail services.

Upon further research, the reference to increased taxes on commuter rail services is a somewhat misplaced.  The Governor is referring to an issue raised by private railroads, which currently are exempt from the excise tax on diesel but pay sales tax on diesel. Their concern is the increased cost they would pay as a result of the increased sales tax rate on diesel proposed in the “gas tax swap” package. The railroads state that this would result in a $10 million tax increase for them. Furthermore, this impact will primarily affect freight rail as the benefits of an enhanced funding stream to the commuter rail agencies from the proposed diesel sales tax increase far outweigh the slight increase in fuel costs paid by
the commuter rail agencies. Please note that Amtrak purchases diesel fuel for the Capitol Corridor and the other IPR services and is exempt from both the excise tax and sales tax on diesel fuel.

Our understanding is that the legislative leaders may repackage the proposal and submit it in the next few weeks to address the governor’s concerns while also maintaining funds for public transportation.

To supplement this report, attached is a pdf file highlighting some of the key activities that have occurred since the previous monthly performance report.

(Download: February 2010 Performance Report)

CAPITOL CORRIDOR (February 2010):

• Ridership: 110,280 riders; -4.7% vs. Feb 2009; -8.2% vs. prior YTD
• 5.9% vs. FY10 Plan; +3% annual growth compared to 2 years ago
• Revenue: +0.5% vs. Feb 2009; -0.8% vs. prior YTD; -4.9% vs. FY10 Plan
• On-Time Performance: #1 in the Amtrak system for multi-frequency trains at 92% (YTD = 92%);  even with Phase 2 of the tie-renewal during the last week of the month, UPRR was able to meet the standard
• System Operating Ratio: 45% YTD vs. 47% in FY09; expenses are under control, revenue are slightly below plan
• The Capitol Corridor route still continues to be third busiest route in the country, with ridership at 1.54 million for the last 12 months

PACIFIC SURFLINERS (February 2010):

• Ridership: 180,196 passengers; +6.0% vs. Feb 2009, and -1.5% vs. prior YTD; first month with ridership increase over prior year month; remains second busiest route in the nation, by a wide margin.
• Ticket Revenue only: +10.1% vs. Feb 2009, and +3.2% vs. prior YTD; excellent results due to ridership gains
• On-time performance for Feb 2010:  83% (YTD FY 2010 on-time performance: 81%)

SAN JOAQUINS (February 2010):

• Ridership: 71,940 passengers  +14.3% vs. Feb 2009, and +4% v.s prior YTD; routes continue its streak of positive growth compared to prior year months
• Ticket Revenue only: +11.7%  vs. Feb 2009, and +4.9% vs. prior YTD
• On-time performance for Feb 2010:  92%, (YTD FY 2010 on-time performance: 91%)