Mirror photo by Gary M. Baranec / Amtran mechanic Ben Wallace performs maintenance on one of the transit system’s new buses on Jan 18.

Amtran has high operating costs compared to other transit systems with similar profiles in Pennsylvania and elsewhere, and the problem seems to be worsening, according to a recently released performance report from PennDOT for the five-year period ending 2015.

The high costs per passenger and per hour for each bus are largely the result of the previously high average age of Amtran buses and the organization’s legacy as successor to a private transportation company — the Altoona and Logan Valley Electric Railway, according to Amtran General Manager Eric Wolf.

Amtran is “at risk” of operating subsidy reductions from PennDOT in four of the eight categories in the report, which deals with passengers per bus, costs per passenger, costs per hour for each bus, revenue per hour for each bus — along with the annual percentage change for each of those categories over the previous five years.

While that is three more “at risk” findings than in PennDOT’s first performance report in 2012, the department doesn’t plan to apply penalties — they can amount to 5 percent of PennDOT’s annual operating subsidy, which for Amtran is $680,000 — because, as the new report acknowledges, Amtran made a good faith effort to achieve the performance goals set in 2012, Wolf said.

Amtran spent $7.87 per passenger at the end of the recent review period, highest among the 13-member peer group, which averaged $5.50, according to the report.

Amtran’s cost per passenger rose an annual average of 8.86 percent during the review period, compared to the peer group’s 1.38 percent, according to the report. The changes both in costs and annual percentage increases took Amtran from “in compliance” to “at risk.”

Amtran spent an average of $113 per hour to operate each bus, highest among the peer group, which averaged $81. The high cost kept Amtran in the “at risk” category, according to the report.

Amtran’s cost per hour for each bus rose an annual average of 4.46 percent, compared to the peer group’s 2.65 percent. The annual increase places Amtran 10th among group members, allowing Amtran to remain “in compliance” for this category.

The performance report also found Amtran “at risk” because of its annual 4 percent shrinkage in the number of passengers per hour per bus — a category in which it ranked last among its peers.

The peer group averaged a shrinkage of only 1.3 percent.

The recent performance report — like its predecessor, conducted in keeping with Act 44 of 2007, which provided additional transit funding, but also additional oversight to ensure efficiency — calls for Amtran to monitor operating costs, find ways to save money, develop a strategic plan and conduct a cost-benefit analysis to evaluate potential “route guarantee” arrangements.

Route guarantees are subsidies paid to Amtran by organizations that want to ensure bus service for their constituents.

Amtran receives subsidies already from Penn State Altoona for service between its Ivyside and downtown campuses and the Hollidaysburg Veterans Home.

Amtran will produce an action plan within the next month or two, then submit it to PennDOT for approval, Wolf said.

During the five-year period reviewed by PennDOT, Amtran had one of the oldest fleets in the business, largely because it included six GMCs used for school tripper service — buses that Amtran retained until last year, when they were 40 years old, officials have said.

Now it has one of the newest fleets, because in 2018 it added 16 Compr­essed Natural Gas buses, paid for by PennDOT and the Federal Transit Administration in connection with a PennDOT initiative to boost the use of natural gas extracted in Pennsylvania.

The younger fleet will reduce operation and maintenance costs, officials said.

The fleet should become even younger in 2021, if, as expected, federal and state grants pay for seven more CNGs.

The performance report acknowledges this fleet overhaul as one of two “major steps” taken by Amtran to improve its performance after the 2012 report.

The other major step was to increase revenue by negotiating a subsidy hike from Penn State Altoona.

Amtran’s costs tend to be high because they started high, due to the authority’s creation in 1958 from the remains of A&LVERy, an Amalgamated Transit Union-staffed operation that went bankrupt because of competition from private cars, according to Wolf.

“I don’t want to use it as an excuse,” Wolf said.

Nevertheless, Amtran inherited not only hefty wages, but an expensive defined-benefit pension plan and work rules unfavorable to management when it took control to ensure public transit continued here, Wolf said.

The union remains attached to the pension plan “financially and emotionally,” he said.

The work rules — which evolved to keep employees from bolting to the Pennsylvania Railroad — included one forbidding termination for anything short of drunkenness or theft, he said.

One might think that management would have neutralized the problematic start during the 60 years since the transition, but collective bargaining helped ensure otherwise, Wolf said.

“We can say we’re going to take that stuff away,” he said. “But that’s not how collective bargaining works.”

When it’s time for a new contract, neither side can dictate, he said.

Rather, if one side wants something, the other may be willing to talk, but will generally demand a concession, he said.

Initiatives that will be part of the action plan submitted to PennDOT are already underway, Wolf said.

They include membership in a health care insurance pool, which Amtran expects will save money in the same way that its 25-year membership in a pool for property and liability and workers compensation insurance has saved money, he said.

They also include discussions with the Altoona Area School District on tweaking Amtran’s school tripper routes so drivers can pick up additional students without adding many service hours by taking advantage of the staggered schedules of the elementary and high schools, he said.

Even if such efforts don’t bring Amtran in compliance with the goals that PennDOT has set for the next five years, Amtran shouldn’t incur penalties in 2023, because “we will continue to try,” he said.

The Act 44 performance reviews have turned out to be “a mixed bag,” Wolf said.

“They’re reasonably evenhanded,” he said.

But they also require lots of staff time to find and deliver data to PennDOT, he said.

It can be frustrating, although overall, it’s a plus, he said.

As for Amtran falling to “at risk” in half the categories in the current report:

“The numbers are what they are,” Wolf said. “We did what we could.”

Mirror Staff Writer William Kibler is at 949-7038.