June / July 2020

All Aboard is a news bulletin for employees/retirees of the Railroad. The emailed version includes short briefs with links to longer stories or more information, most of which are posted on our employee website, Inside Track, https://insidetrack.akrr.com/.

CORE VALUES: SUSTAINABILITY CARES Act money to help fill capital funding gap As announced by CEO Bill O’Leary in late July, the is getting some funding from the Coronavirus Aid, Relief and Economic Security (CARES) Act. Below are answers to some frequently asked questions about this funding. Why did we get CARES Act money? The act recognizes that public transportation agencies have been hard-hit by the pandemic. As providers of public transportation, Federal Transit Administration (FTA) grant recipients (like ARRC) were identified to receive CARES Act funds to support transportation infrastructure and services. What is the purpose of CARES Act money flowing through FTA? CARES Act funding is not meant to encourage recipients to come up with new projects. Rather, funding should support ongoing infrastructure needs. The funding is made available through an appropriation bill, the CARES Act, because the federal government recognized that transportation agencies have suffered tremendous cash losses, making it difficult, if not impossible, to fund essential capital investments and improvements. FTA expects ARRC to use the funding to keep our system in a state of good repair and help fill in for revenue shortfalls resulting from the pandemic. This is certainly the case for ARRC, which saw its 2020 budgeted $22 million net income become a forecasted loss of at least $9.3 million. ARRC’s net income is typically used to internally fund projects or to provide the required cash match for federally-funded projects. Negative revenue impacts are likely to continue into 2021, or longer. How much did we get and how did Congress calculate the amount? Nearly $94 million. CARES Act funding was calculated by tripling the amount of a recipient’s 2020 FTA grant allocations. For Anchorage, funding was calculated to be $32.14 million (triple our 2020 FTA 5307 amount), plus $65.43 million (triple our 2020 FTA 5337 amount). (continued on next page) These amounts were combined and came packaged as a $98 million lump sum through the 5307 FTA program to Anchorage. Because it came through 5307, it was subject to the split agreement with the Municipality of Anchorage (MOA). This money was held up for months due to the same “split letter” impasse that has plagued our regular FTA 5307 funding. In mid-July, a split letter was finally signed after ARRC agreed to give MOA $5 million of the rail-generated-funds. In exchange, MOA agreed to split 2021 FTA 5307 funds along modal lines (bus funds to MOA, and rail funds to ARRC), thus avoiding the annual impasse next year. So, for Anchorage, we receive $32.14 + $65.43 - $5 = $92.57 million. We are receiving another $1 million, based on our Fairbanks-based 5337 allocation. Since this also came through the 5307 FTA program, a split document was also accomplished (without any problems) with the Alaska Department of Transportation & Public Facilities. How can we spend this money? In two ways: • To cover COVID-19 related expenses like purchasing masks or expanding janitorial contracts to add more disinfection tasks; or • To make expenditures that are eligible under FTA 5307 rules — for activities that support regularly scheduled passenger services. For more information on eligible expenditures, see story below, A primer on FTA formula grant funding. How are we deciding how to spend this money? Regardless of the source  FTA formula, FTA CARES Act, or internal funds  we follow our normal asset management and capital planning process, in which departments define and submit their needs. Requests are reviewed by our Capital Projects Evaluation Working Group. Standard criteria are used to score project requests in order to prioritize them. Recommendations are then considered by senior managers and the board’s executive committee. Final recommendations are approved by the ARRC Board of Directors. How long do we have to spend the money? While the FTA encourages spending to meet immediate local needs, there is no expiration date. Can the money be used to keep from laying off railroad employees? No. While this money can reimburse some specific COVID-19 related costs as noted above, it cannot be used to pay general payroll costs. This funding is not like funds provided by the Paycheck Protection Program, which was designed to give small businesses (under 500 employees) incentives to keep their workers on payroll.

CORE VALUES: SUSTAINABILITY A primer on FTA formula grant funding When we consider how the CARES Act funding can be used, it’s helpful to understand its packaging as Federal Transit Administration (FTA) funding. Why is this FTA funding called 5307 and 5337? The FTA 5307 and 5337 grant designations come from federal law  U.S. Code (USC) 49, Transportation, Chapter 53  where the funding is authorized, and spending eligibility is explained. FTA 5307 refers to 49 USC Section 5307, Urbanized area formula grants. FTA 5337 refers to 49 USC Section 5337, State of good repair grants. Formula amounts are calculated using such data as passenger statistics and census population. (continued on next page)

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Section 5337 grants must be spent to replace or keep existing assets in a state of good repair to provide public transportation along a fixed guideway. While 5307 grants can support existing infrastructure, they can also support expansion or new improvements. When did the railroad start getting FTA grants? Congress began providing section 5307 money to ARRC in 1998. In 1999, ARRC began receiving section 5309, Fixed Guideway Capital Investment Grants. In 2013, FTA introduced the 5337 classification nation- wide and our 5309 funding was redirected to 5337. Today, ARRC receives 5307 and 5337 grants. Why does ARRC get FTA grants? Because we meet the federal law’s definition of public transportation, meaning we provide regularly scheduled shared-ride transportation to the general public. We receive FTA funding based solely on our scheduled service, not from charters, special trains or pull contracts, or any freight-related service. How does Congress determine how much FTA grant funding to authorize? A key source of FTA funding is the highway tax fund, which underwrites both Federal Highway Administration and FTA budgets. Grant amounts are based on what’s available in the federal budget. How do we typically spend our FTA grants each year? A sizable portion goes to repay bonds and passenger preventive maintenance. Our 5-year Capital Plan  found at AlaskaRailroad.com > CORPORATE > Leadership > Reports  indicates how remaining funds are spent on capital projects ranging from locomotive overhauls to bridge replacements. All expenditures must be related to public transportation services. We cannot spend FTA funds on infrastructure that is not related to regularly scheduled passenger service  for example, not on freight railcars or along the Eielson Branch. How does FTA know that we are spending our FTA grants properly? The Alaska Railroad dedicates significant time and staff resources company-wide to a) properly account for grant expenditures; and b) remain in compliance with applicable laws (such as the Americans with Disabilities Act) , FTA regulations and rules, grant agreement requirements (such as quarterly reports), and our own policies and procedures. In addition, our financial auditors annually conduct a Federal Single Audit that is focused on grant-related activities and compliance with grant requirements. Every three years, FTA sends a team to review our grant-related activities to ensure we are good stewards of FTA funds. If our 2019 FTA Triennial Review is any indication (no discrepancies!) we’re doing a good job of it.

BUSINESS NEWS Summer season brings lessons in adaptation (Note: story links lead to news releases posted on AlaskaRailroad.com > CORPORATE > News / Media > Press / Media.) Over the past five months, the Alaska Railroad has had to continually adapt our passenger business as COVID-19 alters the transportation landscape. By early April, in line with public health agency recommendations, we delayed the start of our summer season by six weeks. To ease the minds of travelers, we offered flexible reservations, and outlined protective measures including social distancing, face coverings, hand sanitizer stations, and frequent disinfection/cleaning protocols. As the summer season got underway July 1, we merged the summer flagstop service onto the due to reduced ridership. To spur sales, we offered rail travel discounts and specials on rail-lodging-activity packages. By late July, in light of mounting losses, we announced service revisions, including a shorter season and fewer Denali Star trains. These latest changes are effective Aug. 2. (continued on next page)

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While we don’t yet know how our service will fare, the last half of our summer season should provide some clues. Even amid the fluid uncertainty, our employees inspire confidence. Railroaders have been quick to modify their work environments, adopt varying work schedules, and take important precautions. That’s been a big factor in how we’ve managed change so far, and how we continue to adapt moving forward.

Marketing Communications Manager Meghan Clemens talks to a reporter covering the first day of daily summer passenger service on July 1. (photo by Tim Sullivan)

From the executive offices on the third floor of the railroad’s headquarters building, Corporate and Executive Administrator Lorine Hall captured this view of the season’s first train preparing to leave the Anchorage Historic Depot.

EMPLOYEE BENEFITS Get half off during end-of-season gift shop sales At the end of August, employees can save on Alaska Railroad items during the week-long end-of-season sales at our main depot gift shops. During these employee-only events, Railroaders get half off of one item. Plus, Railroaders get their normal 30% off discount for apparel , and 20% for other items (exclusions include model trains, books and postcards). Employees must show their ARRC ID badge to receive gift shop discounts. • Historic Anchorage Depot sale: Monday, Aug. 31 to Monday, Sept. 7, during gift shop hours 7 a.m. to 1 p.m. • Fairbanks Depot sale: Sunday, Aug. 30 to Sunday, Sept. 6, during gift shop hours 8:30 a.m. to 2 p.m. Employees in outlying areas can order by phone (265-2326), and items can be sent via train to Seward, Talkeetna, Denali Park or Fairbanks for pickup. Browse the online store for ideas  AlaskaRailroadGiftShop.com.

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OPERATIONS NEWS PTC implementation update: We’re nearly there! The Alaska Railroad is on target to fully implement our Positive Train Control (PTC) system by Dec. 31, if not earlier. We’re in good company, as our progress compares well with the efforts of short line and regional railroads across the country. ARRC’s PTC project follows industry standards, and is based on four “pillars” or components. These include the locomotive onboard equipment, computer- aided dispatch (CAD), wayside infrastructure, and data communications. We’ve finished work on the locomotive, CAD and data communication pillars. The wayside component is well underway, but implementing the infrastructure along 450 miles of track takes time. Organized progress ARRC’s track network is organized into three subdivisions. The Central Subdivision uses Centralized Traffic Control (CTC) as the primary method of train control. The Kenai and Mountain subdivisions use a combination of CTC and Track Warrant Control (TWC). Based on the method of train control and remoteness of the switch locations, ARRC uses three solutions to monitor the state of the switch  open or reversed  and to communicate the states to the locomotive. CTC features automated switches with signal aspects that communicate switch position. CTC is complete and in use along the heaviest traffic corridor between Anchorage and Kashwitna (Central Subdivision). TWC Switch Monitoring (TWC - SM) uses wayside devices to monitor and report switch position. This method is complete and in use in sections adjacent to the CTC corridor, from Kashwitna to Usibelli (near Healy) and from Anchorage to Whittier (both in Kenai and Mountain subdivisions). Virtual Switch Indication (VSI) is a logic-based program that uses data tracking, as opposed to physical or electronic monitoring. (See the map for approximate corridor coverage of each wayside switch detection method.) Innovative wayside approach Advanced Train Control Systems (ATCS) Senior Director George Newman recently explained the VSI system as an innovative approach to meet Alaska-specific challenges. In particular, VSI provides switch status information for very remote switch locations within TWC regions, sometimes referred to as “dark” or non-signalized territories. Earlier this year, the railroad asked FRA to approve a revised implementation plan to allow VSI use on the ends of our route — north of Healy and south of Portage  where train traffic is relatively low. Instead of a signal or wayside device relaying switch position, a database is used to track when a switch has been handled. For example, let’s say a track maintenance crew is working on a stretch of track in the VSI-protected corridor, and they need to change the position of a switch. When the MOW crew calls Dispatch to get permission, the Dispatcher records the activity in the Dispatch system, which then translates this as data in the VSI database. Next, let’s say a train later travels through this VSI-protected area. Via radio, the VSI system transmits the switch status to the locomotive’s onboard computer, so that the train crew and PTC system know if the track switch is open or closed. The VSI solution recently underwent a rigorous third-party hazard analysis. Based on results, FRA approved VSI use. System testing is nearly done, and after testing results are provided to FRA, VSI will be ready for final installation. Once PTC is fully implemented, about two-thirds of ARRC’s railroad route will be covered by CTC and Switch Monitoring systems, with VSI covering the final third.

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CORE VALUE: SAFETY Status of federal safety program requirements A few years ago, railroads nationwide set about meeting significant new safety program requirements set forth by federal transportation regulations  49 CFR Parts 270 and 243. In a January 2018 memo to employees, COO Clark Hopp noted that Part 270 says railroads must have a System Safety Program (SSP) and an SSP plan (SSPP) that includes 20 standard elements. Part 243 says railroads must have a training program that meets certain standards for safety-related employees and contractors. What’s our status on meeting these requirements and what does it mean to railroaders? In short, we’ve met regulatory deadlines so far, and are already putting requirements to good use.

Part 270 System Safety Program Plan Given the original late 2018 deadline, Railroaders may wonder why our new SSPP isn’t We are, and posted on Inside Track’s > SAFETY section. Safety Director Tom Covington explains that, while ARRC finished our SSPP more than a year ago, federal regulators have extended the have been, doing deadline more than once, delaying our submittal. SSP plans are now due by March 4, 2021. the required As this deadline nears, ARRC will make any necessary adjustments to ensure the plan reflects the most recent regulatory and policy changes. Once submitted to the Federal training all along. Railroad Administration (FRA), we’ll post the SSPP online, available to all employees. We just need to Employee impact: Railroaders are essentially already following the SSPP, which compiles, ensure the organizes and reformats existing safety programs and procedures. documentation Part 243 Training Program is consistent. The training program prescribed by Part 243 is done and submitted to the FRA. Program  Toni Curry documentation is far too extensive to post on Inside Track. Rather, ARRC’s Learning Training & Development Management System (LMS) incorporates course training plans and materials for nearly Manager two dozen safety-sensitive positions. For each training course, there are supporting procedures and documentation, including an operating manual, classroom syllabus, presentations (slides, videos and handouts) that mirror the manual’s key points, on-the-job training (OJT) checklist, and a competency test. Course summaries have been submitted to the FRA for evaluation, a slow process. Thus far, about a quarter of the course plans have received official FRA approval. The remaining plans are treated as approved if, or until, FRA reviewers say otherwise. Preparing operational training plans for FRA submittal has been a cooperative effort says Safety Operations Field Manager Rick Cornejo, who has been coordinating with department managers, supervisors and trainers. The results are well defined plans and programs that meet local railroad needs, while assuring quality control and compliance. “We are, and have been, doing the required training all along. We just need to ensure the documentation is consistent,” said Training & Development Manager Toni Curry. ARRC continues to focus on consistency in terms of format and design; in relation to regulations, rules and policies; and in coordination across departments. Employee impact: Safety and operational courses are currently taught according to the submitted plans. They are not online courses, instead requiring classroom and on-the-job instruction. With all course materials located in the LMS, instructors have easy access to teaching tools. Eventually, employees should be able to reference course materials for their particular job classification.

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COMMUNICATIONS Depot digital signs inspire an employee sign project Inspired by the new public-facing digital signs that began operating in the Anchorage Historic Depot this summer, a team is forming to pursue an employee-focused digital sign at the Anchorage Operations Center. The depot digital signs have been working well since late June, when the project went live just prior to the summer passenger season. Using four 75-inch monitors, the depot signs display updated information aimed at passengers and other depot visitors. This includes train schedule updates, gift shop and depot hours, Gold Star service and rail package opportunities, and other information of interest to the traveling public. This sign pilot project was driven by a desire to improve on-site customer communications; and the pandemic accelerated those efforts. The project came to fruition, thanks to a multi-department team — with representatives from Passenger Marketing, Guest Services, Technology and Facilities — who collaborated on sign content, design, location, and ongoing updates. “The digital signs have been a great addition to the depot. Passengers and employees alike appreciate the information on display,” said Robert Russell, Onboard Services Manager, noting that both onboard and depot staff have noticed passengers are not asking as many questions. “As a passenger operations manager, I take great pride in seeing our guests looking at the monitors.” According to Kirt Beck, the depot sign lead from Technology, the experience gained makes it easier to plan and implement additional digital sign projects. Indeed, the AOC digital sign team is eager to put that knowledge to use. Stay tuned for progress reports as the project develops.

Left, the digital signs in the Anchorage Historic Depot display updated passenger-centric information. There are two signs above doors leading to the train and two above doors entering the depot from the street. Right: Facilities Maintenance Mechanic Sawyer Graber tests power to the digital signs after installation.

IN THE COMMUNITY Catch the Train contest kicks off Share the news with friends, family and neighbors  the Alaska Railroad’s Catch the Train Photo Contest is back, encouraging passengers (and fans) to submit photos showcasing our trains and activities. When sharing this news, please stress safety. Advise folks to stay well clear of the tracks and to always keep an eye out for the train. ARRC will accept photos through Dec. 6, via Facebook (https://www.facebook.com/AlaskaRailroad/) or by using #CatchTheTrainAK on Twitter or Instagram. See rules https://www.alaskarailroad.com/alaska-railroad-photo-contest.

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EMPLOYEE RECOGNITION Spike Awards Update Four individuals and one team of railroaders have earned Silver Spikes so far this year.

• Executive and Corporate Administrator Lorine Hall for her support of several new, modified and expanded employee-centric events organized by Corporate Affairs in 2019. In addition to on-the-clock time, she volunteered many hours helping to engage and recognize fellow employees. For the fall 2019 Employee United Way Campaign, Lorine covered myriad tasks and tracked prizes and pledges. For the brand new Anchorage Employee Holiday Train event, Lorine jumped in to help with RSVPs, obtain and track prize donations, and to prepare and organize the prizes on event day. Even in the midst of the holiday season chaos, Lorine managed to assist with the Gold Spike Award Ceremony logistics.

• Seward Port Manager Christy Terry was recognized for earning the Accredited Maritime Port Executive (AMPE) certification. Granted by the Board of the International Association of Maritime and Port Executives (IAMPE) the AMPE credential represents the highest level of professional certification offered in her field. Such advanced certification is designed to be the gold standard for professional education within the international maritime and port industry. It mirrors professional certifications issued in various other industrial disciplines, and involves rigorous continuing educational requirements.

• Human Resources Assistant Kristine Stone was recognized for her positive customer-centric attitude and work ethic while meeting myriad challenges posed by the COVID-19 pandemic. Since mid-March, Kristine has tackled the inconveniences of remote work to deliver superior customer service without interruption. Along with promptly accomplishing her normal task load, she frequently took the initiative in areas beyond the scope of her position. For example, since the front reception position has been vacant, she has been answering all main line incoming calls, and accommodating numerous deliveries to the headquarters building.

• Accounts Payable Technician Linda Anderson earned the gratitude of the entire Accounting Department for her willingness to put retirement on part-time pause to assist with myriad tasks during particularly busy periods over the past year. Just months after Linda's retirement, the person that filled her position moved out of state, leaving Accounts Payable short-staffed. Once the position was re-filled, Linda graciously agreed to help train the incoming technician. In addition, she jumped in to assist with year-end processes, and helped the department prepare its office space to undergo a long-awaited renovation.

• The Facilities maintenance team in Anchorage was recognized for great work and attitude while completing the Accounting Department’s office remodel during the first quarter 2020. The team stuck to a tight schedule, accomplishing a lot within a short window, enabling the Accounting team to be back in their offices in time for the annual financial audit. Members of the Accounting Department were universally grateful for the Facilities team's willingness to keep communications channels open and to fulfill many requests. Often it’s not only what we do, but how we do it, which was the case with the way the Facilities team executed this long-awaited project. Not only Facilities team members highly proficient, working quickly with minimal disruption, they also delivered with very pleasant and patient accommodation throughout. Team members include: Facilities Electricians Doug Falgoust, Mike Lauer and Kevin Munter; Facilities Maintenance Mechanics Sawyer Graber and Spencer Stingley, Facilities Maintenance Technician Eric Stevenson, and Facilities Maintenance Supervisor Chris Corbeil. In addition to Silver Spikes, railroaders presented fellow railroaders with dozens of Bronze Spikes to recognize day-to- day excellence during the first half of the year, through July. Check out on Inside Track > PEOPLE > Recognition > Spike Awards for a run down on recognition for fellow railroaders as noted in this summary report.

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Service Awards The second quarter service awards are now posted on Ins on Inside Track > PEOPLE > Recognition > Service Awards.

EMPLOYEE DIALOG Spring town hall post-survey and participation results A whopping 136 railroaders took the survey following the two mid-May Spring 2020 Employee Town Hall meetings. That’s four times the number of responses to the previous 2019 fall town hall post-meeting survey. This feedback is very helpful, as the railroad considers virtual components to everyday operations in light of the ongoing pandemic. Aside from great survey participation, employees also showed in up greater numbers to take part in the virtual town halls. With an estimated total of 300 participants, attendance at the spring 2020 town halls was 25% higher than for the 2019 fall in-person town halls, which drew 222 employees. The post-meeting surveys ask employees to rate their town hall experience on a scale of 1 (poor) to 5 (excellent). The weighted average rating for spring 2020 town hall was 3.64, or very good. This compares to an average rating of 3.21 (good+) for fall 2019 town halls and 2.93 (good) for spring 2019 town halls. Most spring 2020 survey respondents said that virtual meetings should at least be offered as an option, even if it’s is safe to resume in-person meetings for the next town hall series. A report with detailed findings from the post-meeting survey is posted online on the Inside Track > DIALOG > Employee Surveys page. Key results are highlighted with an infographic sheet at the end of the report.

IN CASE YOU MISSED IT – JUNE AND JULY Leadership Memos Nine memos from senior railroad leaders were emailed and posted in June and July. President & CEO Bill O’Leary notified railroaders about the posting of recent responses to “Ask the CEO” questions, outlined a return-to-work plan and a revised plan for remote-working employees, summarized June board meeting actions, and discussed recent operating challenges and funding opportunities. CFO Barb Amy provided a recap of May and June financials. Chief HR Officer Jennifer Haldane clarified post-travel return-to-work protocols, and VP Marketing & Customer Service Dale Wade shared passenger service summer discounts and announced the 2020 photo contest. Read them on the Inside Track > NEWS > Leadership News pages.

IN CASE YOU MISSED IT – JUNE AND JULY Dialog: New “Ask Our CEO” items President & CEO Bill O’Leary addressed several new inquiries in June and July. Ask Our CEO topics included: • quarantine protocols and COVID-19 testing for employees who travel out of state • employee and property protection in light of rioting related to racial unrest • clarification and rationale for the railroad’s policy mandating face coverings • remote-working employee return-to-work plan provisions and revisions • issues with watering passenger railcars during winter in Fairbanks Visit Inside Track > DIALOG > Ask Our CEO > 2020 Answered Questions to review responses.

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Great Shot! Send your photos for All Aboard use The All Aboard editor is always looking for photos that capture railroaders and railroading in action. Got a great shot? Forward it to Stephenie via email to [email protected]. Similar to years past, railroaders who contribute photos during the year will be included in an end-of-year drawing for a $200 prize. When you’re capturing our beautiful railroad in action, be sure that you do it safely and within our rules. We are ambassadors for safety, and the public watches what we do around the tracks. Here’s great advice from Operation LifeSaver, Inc: https://oli.org/safety-near-trains/walking-safely-near-tracks/photographer-and-filmmaker-safety

Anchorage Terminal Support Clerk Vickie Mackie captured the train as it traveled by the Portage Station during summer 2019.

Director of Safety Rules and Operating Practices Phil Rogers captured the class who graduated July 1, with everyone promoted to conductor. Pictured L-R: Kelsey Starkey, Jay McAllister, Isaac Pickett, Hannah Pryce, Grant Busch, Jordan Howell, Jeremy Kimmel, Lexi Higgins, Clinton Pettingil and Seth Dustin. Road Forman of Engines Michael Reed, center, was their primary instructor.

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