WILMINGTON – Amtrak’s plan to centralize hundreds of employees in the Renaissance Center in Wilmington, which it purchased for $41.1 million in May 2020, will fall way short of that mark, according to an Amtrak Office of Inspector General report released Friday.
Only 40 of the 250 dispatchers and only 25 to 35 of the more than 400 IT employees to be relocated or hired as replacement will actually occupy the building. The report further said Amtrak did not effectively verify the feasibility of its plan before it made the purchase. The rail service is reportedly in the early stages of a $37 million redesign to retrofit the building to accommodate staff from Washington, D.C., and Atlanta offices.
The report was first reviewed by Amtrak management, Amtrak’s Board of Directors, and key committees in Congress before being made public.
“The purchase was largely premised on two significant yet faulty assumptions,” the report states, “that the company could centralize and collocate its train control and dispatch personnel along with a specialized APD unit and social media staff and use the remaining space to relocate IT personnel from leased space; and that the program would yield cost savings. Neither has materialized because the company did not effectively verify the feasibility of centralizing these personnel and functions, including retrofitting the building to accommodate significant IT requirements, before purchasing the building.”
In the report, the name of the building on North King Street was redacted, but details are the same as released in the original purchase announcement.
Amtrak acquired the Renaissance Centre with the stated intention of occupying the 70,000 square feet of vacant space in the building and employing upward of 200 people there. “This purchase is part of Amtrak’s long-term strategy to reduce costs by having employees work out of owned property,” the rail service stated at the time.
According to the report, the purchase of the building grew out of a December 2018 decision by Amtrak to begin planning to centralize its Unified Operations Center (UOC) program, a multi-year effort to relocate several vital customer care functions, including train-dispatching personnel responsible for the movement of trains, who are currently spread across five cities.
The report concludes that, “To help the company make more informed decisions about the future of the UOC program, the building it purchased, and the best use of resources, we recommend that it verify the assumptions in its revised business case about the UOC program’s functions and staff relocations, as well as develop the most accurate estimates possible of the associated costs and benefits so decision makers can determine whether and how to proceed. In commenting on a draft of our report, the executive vice president/service delivery & operations agreed with our recommendation and, in response, will continue updating the business case before finalizing its plans for the UOC program.”
Among the shortcomings of the planning effort, the report cited:
“When the company presented the original program business case in late 2019, there were already indications that collocating all train-dispatching functions and personnel would not materialize. Specifically, company officials had determined that they would not relocate dispatching personnel based in Boston and some personnel in New York City. In 2021, the company further reduced the UOC program scope to exclude dispatchers based in Chicago and the balance of those in New York City.
“As of May 2021, the company planned to relocate approximately 40 dispatchers from outside Wilmington, a reduction of 83% from the 250 originally planned. Company officials told us they made these decisions for commercial, logistical, or labor relations reasons, such as maintaining the co-dispatching arrangement in New York City with Long Island Rail Road.”
“When the company presented the original business case,” the report continued, “it acknowledged that most of the IT personnel it planned to move would be unwilling to relocate to Wilmington or, as contractors, would be ineligible to relocate; therefore, it assumed that it would replace more than 400 of them (86%) at that location. Senior IT officials told us the assumption to relocate or replace these IT staff was not feasible in 2019 or now, primarily because of the significant operational disruption that would result from losing so many people with company-specific technology knowledge. Instead, IT officials estimate they will likely relocate 25 to 35 IT positions that directly support the UOC program.”
According to Beth Toll, Amtrak media relations for Wilmington, most-recent figures show Amtrak in Fiscal Year 2020 employed 1,004 Delaware residents and paid them almost $91.7 million in wages. That includes not only workers at Amtrak offices in the former Renaissance Center at 4th and North King streets, which it purchased in 2020, and in nearby Philadelphia, but also at two of its maintenance facilities – the Wilmington Shops and the Bear Heavy Maintenance Facility.
Wilmington is also home to Amtrak’s Consolidated National Operations Center (CNOC), the high-tech, 50,000-square-foot facility from which Amtrak’s national operations are controlled. It opened in 1998, and in 2012 the Centralized Electrification and Traffic Control (CETC) center moved from Philadelphia to CNOC in Wilmington. Amtrak’s High-Speed Rail Training Facility in Wilmington is where engineers, conductors, and onboard staff are trained for service.
The 2020 figures are not much lower than where they were in 2019, the last pre-pandemic fiscal year, when there were 1,043 Delaware residents employed by Amtrak with a total payroll of $92.6 million. Additionally, local procurement of goods and services during 2019 was $2.24 million in Wilmington city and another $2.45 million for New Castle County. During that last “normal” year before the pandemic, there were 717,359 “boardings and alightings” in Delaware, 705,259 of them in Wilmington and 12,100 in Newark, the only other Amtrak stop in the state.