Amtrak Losses Could Derail State Service

California’s network of passenger trains--including the Los Angeles area’s Metrolink service and trains running to San Diego and San Francisco--could come to a grinding halt if Amtrak doesn’t receive a loan from Congress next week to help cover its massive debt, state officials say.

The threatened stoppage is a byproduct of a tense dispute in Washington over the fate of Amtrak, the fiscally hemorrhaging operation reliant on federal support.

In a Thursday speech, Transportation Secretary Norman Y. Mineta provided the Bush administration’s blueprint for Amtrak: an agency shorn of federal subsidies, open to privatization and reliant on the kind of state investment that has made California a national rail leader.

But Amtrak’s new president, David Gunn, upstaged Mineta. He told a Senate panel that Amtrak’s financial picture is much worse than previously thought, that it needs at least an immediate $200-million boost to make it through the summer, and that if he does not get the money he’ll begin shutting down the system.

“We are at the point of no return,” Gunn said.

Amtrak spokesman Vernae Graham said California may end up halting its train service by July 1.

“A shutdown is certainly on the table,” added Jeff Morales, director of the California Department of Transportation, which oversees the state’s transit systems. “Everyone is scrambling to figure out what’s going on, what the options are. It’s not a comfortable time.”

California is a hub of Amtrak activity. Four long-distance Amtrak trains, such as the Coast Starlight connecting Los Angeles to Seattle, run through the state. Three intercity routes--San Diego to San Luis Obispo, San Jose to Sacramento, and Oakland to Bakersfield--are among the most used Amtrak trains in the nation.

What’s more, Amtrak managers, dispatchers and operators staff three of the state’s commuter systems--the Bay Area’s Caltrain, San Diego County’s Coaster, and Metrolink, which provides about 34,000 rides each weekday on a five-county rail network that feeds into Los Angeles.

All of these trains could sit idle if Gunn follows through on his threat.

In downtown Los Angeles, that prospect sobered riders waiting for trains at Union Station. Such a move, said Bruce Noldon, a Beverly Hills commodity broker who travels Amtrak to San Diego once a week, would “force people back onto the roads.”

“The trains are pretty much packed,” he said, expressing his displeasure. “I’ve never been on a train that’s empty.... You can’t tell by the service that they’re having financial problems.”

At Metrolink’s downtown headquarters, Chief Executive David Solow spent Friday planning how his agency will respond if Amtrak pulls the plug.

Solow said that at worst Metrolink will come to a complete halt for “a month or two.”

Then the agency would be faced with two options. Metrolink could either rework the contracts of the 145 key Amtrak workers, a delicate task that would require union and federal approval of a contract that totals about $18 million annually. Or it could hire new staff, a difficult prospect, Solow said, since train operators would have to learn Metrolink’s 416-mile rail network and then pass rail safety exams.

“We’re obviously hoping Amtrak will get the money they need,” said Solow. “But if not, we have to be ready.... Shutting things down is going to aggravate the traffic environment. There certainly would be a lot more cars on freeways.”

The shutdown threat comes as new figures show that Amtrak’s fiscal health is even worse than previously thought.

Faced with mounting debt, former Amtrak chief George Warrington contemplated putting an end to long-haul routes considered the agency’s biggest money losers, a spokesman said. But when Gunn began looking at his budget after assuming Amtrak leadership early this year, he quickly saw that more wholesale moves might be required.

Gunn told the Senate committee Thursday that in the 2001 fiscal year Amtrak lost $1.19 billion instead of the $900 million previously reported.

The $200 million Gunn is requesting now would help the agency meet its budget targets for the short term, but would do nothing to fix a system that has been underfunded and financially shaky since its 1971 inception, when the federal government created the quasi-governmental agency to take the place of private passenger rail lines.

Amtrak’s political support is now less certain than ever, with a near-even number of proponents and critics in Washington. Some say the system, largely regarded as underfunded and overburdened by a mandate to pay its own way, should simply be the recipient of a massive infusion of federal money.

Others, such as a reform body set up by President Clinton when his administration kept Amtrak afloat with a $2.2-billion grant in 1997, argue that privatization should be introduced, management should be restructured and states should start footing a greater chunk of the bill.

On that final point, California is far ahead of other states, boosting the in-state Amtrak lines by spending at least $2.4 billion since the 1970s on the three routes.

That state money, some of it augmented by local governments, bankrolls infrastructure: new trains and tracks, improved signals and stations.

The infusion has allowed Amtrak to concentrate on operations and has paved the way for Amtrak in California to achieve a modicum of success.

With its new trains, the Pacific Surfliner, connecting San Diego and Santa Barbara through downtown Los Angeles, carries a little more than 1 million riders a year, making it the second busiest Amtrak train line in the nation. The rail system serving the Northeast is the busiest and most financially healthy.

Morales said that if Amtrak fails, California may be forced to consider breaking away and running its own service, contracting out with private companies that would run the trains. Such a move would be made difficult by laws protecting Amtrak workers and would be contingent on federal legislation to allow companies other than Amtrak to run trains on the nation’s rail system.

“We’re just hoping this gets sorted out before anything drastic has to be considered,” said Morales. “Right now we are at the mercy of Washington.”

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Times staff writer Anthony McCartney contributed to this report.