Alaska railroad moves forward: O'Leary optimistic for growth.

• Author: White, Rindi
• Position: TRANSPORTATION

It's been a long season of change for the state-owned Alaska Railroad Corporation, and it's not over yet. But with a new CEO at the helm and increased interest in a few of the railroad's services, there are glimmers of hope on the horizon.

The Alaska Railroad is a smaller entity today than it was six years ago. Three rounds of layoffs have left the company nearly one third smaller than in 2008. While the corporation has seen declines among several freight customers, the biggest hit has been from its historically largest customer, the North Pole refinery.

"We've reorganized, we've gone through significant restructuring, and that's just the people side of the house. We've also taken an immense amount of cost out of our non-personnel cost, to the extent we can," says Alaska Railroad CEO Bill O'Leary.

"We have a renewed, aggressive focus on revenue generation right now. We're not going to be able to cut our way out of the situation we find ourselves in right now. If there is a mantra I'm trying to push right now, it's that we're going to grow our way out of this situation," O'Leary says.

An Alaska-Owned Railway with an Alaska-Born CEO

Bill O'Leary was born and raised in Fairbanks. He went to high school there and graduated from the University of Alaska Fairbanks with a degree in accounting. He has been at the Alaska Railroad since 2001 and CEO since November, but his connections to the railroad go deeper.

From its very beginning, the Alaska Railroad has been a public entity. Owned by the federal government from its early days, the State of Alaska bought the railroad in 1985 for $22.3 million. Throughout its history, the railroad has been a key figure in Alaska's development, from supporting the war effort in World War II to helping build the trans-Alaska oil pipeline in the 1970s.

Although it's owned by the state, the railroad doesn't receive operational funding from the state. It relies instead on revenue from passenger service, freight hauling, and real estate, primarily. As the owner of the railroad, the state has the ability to conduct financial or performance audits. O'Leary helped write some of those early audits when he was fresh out of college and working for the Alaska Legislative Budget and Audit Committee.

"At that particular time, the railroad was of interest to the Legislature. It was relatively soon after the transfer [of ownership] to the state, so the railroad was still kind of figuring out its place in the world, not only within the state government but also in general," O'Leary says.

The committee presented reports to the railroad suggesting ways to make it run efficiently. Whether those recommendations were followed or not (some were, some weren't), it was a unique way to get to know the railroad, O'Leary says. He spent a lot of time evaluating many aspects of operations, from procurement practices to real estate activities.

After ten years at Legislative Budget and Audit, he moved to the financial controller position at the Alaska International Airport System. That's the umbrella agency that oversees the Anchorage and Fairbanks International airports. O'Leary spent three years there before taking the chief financial officer position at the railroad under then-CEO Pat Gamble.

Gamble stepped down from the job in 2010, and O'Leary was interim CEO for about six months while the board of directors conducted a national search for a new leader. O'Leary applied for the job, but Alaska Railroad Corporation board members said he wasn't ready for the role yet.

"We did feel there were some areas Bill needed more experience in," says longtime board...