STB REPORT #66 - SEPTEMBER 16 - 30, 2000 ****************************************************************************** A compilation of decisions and notices published by the Surface Transportation Board. Includes information on track abandonments, ownership changes and trackage rights agreements. Condensed for readability. The full text is available at www.stb.dot.gov/ ****************************************************************************** SURFACE TRANSPORTATION BOARD DECISION Docket No. AB-33 (Sub-No. 99X) UNION PACIFIC RAILROAD COMPANY--ABANDONMENT EXEMPTION--LITTLE MOUNTAIN JUNCTION-LITTLE MOUNTAIN LINE IN BOX ELDER AND WEBER COUNTIES, UT Union Pacific Railroad Company (UP) filed to abandon approximately 12.0 miles of the Little Mountain Junction-Little Mountain Line (portion of the Little Mountain Branch) from milepost 0.0 near Little Mountain Junction to milepost 12.0 near Little Mountain, in Box Elder and Weber Counties, UT. By letter filed December 22, 1997, and amended on December 31, 1997, UP notified the Board that it had exercised the authority conferred as follows: (1) service was discontinued over the 10-mile portion of the line extending from milepost 1.0 near Little Mountain Junction to milepost 11.0 near Little Mountain, UT; (2) the 1-mile portion of the line extending from milepost 0.0 to milepost 1.0 near Little Mountain Junction, UT, was reclassified to yard trackage; and (3) the 1-mile portion of the line extending from milepost 11.0 to milepost 12.0 near Little Mountain, UT, was reclassified to yard trackage. A decision and notice of interim trail use or abandonment (NITU) was served on August 12, 1996, authorizing, among other things, a 180-day period for UP to negotiate an interim trail use/rail banking agreement with various parties and governmental agencies for the 12.0-mile line of railroad. At the request of UP, the negotiation period under the NITU was extended by decisions served February 10, 1997, January 26, 1998, August 5, 1998, July 30, 1999, August 4, 1999, February 18, 2000, and August 7, 2000. The latest extension was due to expire on September 8, 2000. In a joint pleading filed on September 7, 2000, Weber County, a political subdivision of the State of Utah, and Weber County Pathways (WCP), a private, non-profit corporation of the State of Utah, request substitution of WCP as the new interim trail user and the termination of the County as the interim trail user for the right-of-way between milepost 1.00 and milepost 11.00 effective September 7, 2000. WCP states that it has completed a purchase agreement with UP and to support its statement submitted a copy of the agreement. The requested relief will be granted. It is ordered: 1. This proceeding is reopened. 2. The NITU in this proceeding served on August 12, 1996, is vacated. 3. A replacement NITU applicable to WCP as interim trail user is issued, effective September 7, 2000, subject to historic and environmental mitigating conditions imposed in the August 12, 1996 decision. 4. The new trail user is required to assume, for the term of the agreement, full responsibility for management of, for any legal liability arising out of the transfer or use of (unless the user is immune from liability, in which case it need only indemnify the railroad against any potential liability), and for the payment of any and all taxes that may be levied or assessed against, the right-of-way. 5. Interim trail use/rail banking is subject to the future restoration of rail service and to the new user continuing to meet the financial obligations for the right-of-way. 6. If the new trail user intends to terminate trail use, it must send the Board a copy of this decision and notice and request that it be vacated on a specified date. Decided: September 13, 2000 Service Date - September 18, 2000 ------------------------------------------------------------------------- DEPARTMENT OF TRANSPORTATION Surface Transportation Board [STB Docket No. AB-290 (Sub-No. 199X)] Norfolk Southern Railway Company--Abandonment Exemption--in Buncombe County, NC Norfolk Southern Railway Company (NS) has filed to abandon a 3.45-mile line of its railroad between old Asheville Southern Station 76+97 at Asheville and old Asheville & Craggy Mountain Station 123+00 at New Bridge, in Buncombe County, NC. Provided no formal expression of intent to file an offer of financial assistance (OFA) has been received, this exemption will be effective on October 18, 2000, unless stayed pending reconsideration. NS shall file a notice of consummation with the Board to signify that it has exercised the authority granted and fully abandoned the line. If consummation has not been effected by NS's filing of a notice of consummation by September 18, 2001, and there are no legal or regulatory barriers to consummation, the authority to abandon will automatically expire. Decided: September 11, 2000 Service Date - September 18, 2000 ------------------------------------------------------------------------- SURFACE TRANSPORTATION BOARD DECISION STB Docket No. AB-402 (Sub-No. 6X) FOX VALLEY & WESTERN LTD. ABANDONMENT EXEMPTION IN WAUPACA COUNTY, WI By decision and notice of interim trail use or abandonment (NITU) served on March 30, 1999, a 180-day period was authorized for the Wisconsin Department of Natural Resources (WisDNR), acting through the Wisconsin Department of Transportation, to negotiate an interim trail use/rail banking agreement with Fox Valley & Western Ltd. (FVW) for a 10.7-mile line of railroad, known as the Manawa-Scandinavia Line, extending from milepost 50.3 near Manawa to the end of the line at milepost 61.0 in Scandinavia, in Waupaca County, WI. The 180-day negotiating period was scheduled to expire on September 26, 1999. By decisions served September 24, 1999, and March 15, 2000, the negotiating period was extended to March 24 and September 20, 2000, respectively. By joint motion filed September 7, 2000, WisDNR and FVW have filed a third request to extend the negotiating period for an additional 180 days until March 19, 2001. The parties state that WisDNR has made an initial timely offer to FVW and that, while negotiations are currently continuing in good faith, more time is needed to finalize negotiations. The parties request is reasonable. Accordingly, the extension will be granted. It is ordered: 1. The joint motion to extend the NITU negotiating period is granted. 2. The NITU negotiating period is extended for a period of 180 days from September 20, 2000, or until March 19, 2001. Decided: September 13, 2000 Service Date - September 18, 2000 ------------------------------------------------------------------------- DEPARTMENT OF TRANSPORTATION Surface Transportation Board [STB Finance Docket No. 33918] Henry G. Hohorst, Bruce Hohorst, Joan D. Hohorst, and Anthony M. Linn Continuance in Control Exemption IRW Railway, LLC Henry G. Hohorst, Bruce Hohorst, Joan D. Hohorst, and Anthony M. Linn, individuals, have filed a verified notice of exemption to continue in control of the IRW Railway, LLC, a limited liability company, after it acquires ownership of the title to the lands and track of the West Tennessee Railroad line. The parties expected to purchase the line after approval of the transaction. The earliest the exemption could have been consummated was August 30, 2000. This transaction is related to STB Finance Docket No. 33919, wherein IRW will acquire ownership of title to the line from the Gibson County Railroad Authority. Applicants own a controlling interest in South Central Rail Group, Inc., which owns the West Tennessee Railroad Corp., which currently operates the line under a lease and operating agreement with the Authority. The rail operation obligations of Authority will be transferred to IRW and West Tennessee Railroad Corp. will continue to operate the line. Applicants also hold a controlling interest in the Tennken Railroad Co., which operates in the States of Tennessee and Kentucky. According to applicants, the two railroads do not connect and there are no plans to connect them. Decided: September 8, 2000. Service Date - September 18, 2000 ------------------------------------------------------------------------- DEPARTMENT OF TRANSPORTATION Surface Transportation Board [STB Finance Docket No. 33919] IRW Railway, LLC Acquisition Exemption West Tennessee Railroad Line IRW Railway, LLC, a noncarrier, has filed a verified notice to acquire the West Tennessee Railroad line (WTR line) from the Gibson County Railroad Authority. The WTR line extends from milepost 394.5, north of Carol, TN, to milepost 431.31, at Kenton, TN, a distance of 36.8 miles. The WTR line was acquired by Authority pursuant to the Board's decision in Finance Docket No. 30502 (ICC served 8/27/84). West Tennessee Railroad Corp. (WTRC) currently provides rail service over the line under an operating agreement with Authority. The rail operation obligations of Authority will be transferred to IRW and WTRC will continue to operate the line. The parties intended to purchase title to the line after approval of this exemption. The earliest the exemption could have been consummated was August 30, 2000. This transaction is related to STB Finance Docket No. 33918, wherein Henry G. Hohorst, Bruce Hohorst, Joan D. Hohorst, and Anthony M. Linn have filed a verified notice of exemption to continue in control of IRW after it acquires ownership of the title to the lands and track of the WTR line. Decided: September 8, 2000. Service Date - September 18, 2000 ------------------------------------------------------------------------- SURFACE TRANSPORTATION BOARD DECISION STB Docket No. AB-77 (Sub-No. 11X) BANGOR & AROOSTOOK RAILROAD COMPANY-- ABANDONMENT EXEMPTION--IN AROOSTOOK COUNTY, ME Bangor & Aroostook Railroad Company filed to abandon a 0.4-mile portion of its St. Francis line between milepost 0.0 and milepost R-0.40 in Fort Kent, Aroostook County, ME. Notice of the exemption was served on August 18, 2000. The exemption is scheduled to become effective on September 19, 2000. The Board's Section of Environmental Analysis (SEA) served an environmental assessment (EA) in this proceeding on August 25, 2000. In the EA, SEA states that the Maine Historical Commission has indicated that it has reviewed information submitted on the trestle built over the Fish River in 1910, and has determined that although there is not enough information presented to comment on the eligibility of this structure to be listed in the National Register of Historic Places, the proposed transfer of the subject bridge to the Town of Fort Kent should result in no adverse effect on this unevaluated resource. Therefore, SEA recommends that a condition be imposed requiring Applicant to retain its interest in and take no steps to alter the historic integrity of the trestle over the Fish River until completion of the section 106 process of the National Historic Preservation Act, pending transfer of the trestle to the town. SEA further states that the U.S. Army Corps of Engineers has not completed its review of the proposed abandonment. Therefore, SEA recommends that a condition be imposed requiring Applicant to consult with the Corps prior to salvage operations to determine if the proposed project is consistent with applicable Federal, state and local water quality standards, and if permits are required under the Clean Water Act. SEA initially recommended that Applicant be required to consult with the Maine Department of Environmental Protection (DEP) to: (1) determine whether wells exist within 1000 feet of the proposed abandonment area; and (2) develop a remediation or response action plan with state clean-up regulations prior to any salvage activity within the right-of-way. By facsimile dated September 6, 2000, however, Applicant submitted a letter from the DEP stating that the contamination site previously referenced in the EA is not within the right-of-way proposed for abandonment and that further investigation or remediation planning is no longer required. Therefore, according to SEA, the DEP condition need not be imposed. It is ordered: 1. This proceeding is reopened. 2. Upon reconsideration, the exemption of the abandonment of the line described above is subject to the conditions that Applicant shall: (a) retain its interest in and take no steps to alter the historic integrity of the trestle built over the Fish River until completion of the section 106 process of the National Historic Preservation Act, pending transfer of the trestle to the Town of Fort Kent; and (b) consult with the Corps to determine if the proposed abandonment is consistent with applicable Federal, state and local water quality standards, and if permits are required under section 404 of the Clean Water Act. Decided: September 18, 2000 Service Date - Late Release September 18, 2000 ------------------------------------------------------------------------- SURFACE TRANSPORTATION BOARD DECISION STB Docket No. AB-6 (Sub-No. 385X) THE BURLINGTON NORTHERN AND SANTA FE RAILWAY COMPANY--ABANDONMENT EXEMPTION--IN GREENE COUNTY, MO The Burlington Northern and Santa Fe Railway Company (BNSF) filed to abandon a 5.82-mile line of its railroad between milepost 189.22 near Springfield and milepost 183.40 near Willard, in Greene County, MO. Notice of the exemption was served on September 16, 1999. On March 23, 2000, a decision and notice of interim trail use or abandonment (NITU) was served, which reopened the proceeding to implement interim trail use/rail banking for the entire line, and provided a 180-day period for Ozark Greenways, Inc. (OGI) to negotiate an interim trail use/rail banking agreement with BNSF for the right-of-way involved in this proceeding. The 180-day period under the NITU is scheduled to expire on September 19, 2000. On September 11, 2000, OGI filed a request to extend the NITU negotiation period for an additional 180 days. OGI states that OGI and BNSF have been working to complete negotiations, but due to difficulty in determining the legal description, it does not appear that an agreement will be reached by September 19, 2000. In a separate letter filed September 15, 2000, BNSF states that, due to ongoing negotiations, it concurs with OGI's request that the NITU be extended, but only for the portion of the line between milepost 189.18 and milepost 183.40. BNSF states that, in the near future, it plans to convey the remaining portion of the line from milepost 189.22 to milepost 189.18 to the Missouri Highway Department. Where, as here, the carrier is willing to continue trail use negotiations for the segment between milepost 189.18 and milepost 183.40, the Board may extend the NITU negotiating period for that segment. Accordingly, the negotiating period for this segment will be extended to March 18, 2001. It is ordered: 1. The NITU negotiating period for that portion of the line between milepost 189.18 and milepost 183.40 is extended to March 18, 2001. Decided: September 18, 2000 Service Date - September 19, 2000 ------------------------------------------------------------------------- DEPARTMENT OF TRANSPORTATION Surface Transportation Board [STB Finance Docket No. 33885] CSX Transportation, Inc. Trackage Rights Exemption Norfolk Southern Railway Company, and The Cincinnati, Texas and New Orleans Railway Company Norfolk Southern Railway Company (NS) and The Cincinnati, Texas and New Orleans Railway Company (CNO&TP -- a subsidiary of NS) have agreed to grant overhead trackage rights to CSX Transportation, Inc. (CSXT). The trackage rights to be acquired are described as follows: from the connection of CSXT and NS at the east leg of the wye of the NS main track at Harriman, TN (milepost 49.6D), to the turnout of milepost 50.3D/milepost 166.0H, near Devonia Street, in Harriman, to the connection with the CNO&TP main line at milepost 259.1, thence over the CNO&TP to the connection with trackage owned by the Tennessee Valley Authority (TVA), at milepost 260.8, at or near Emory Gap, TN, a distance of approximately 3.7 miles. The transaction is scheduled to be consummated on September 13, 2000. The primary purpose of the trackage rights is to allow CSXT to provide direct rail service for TVA of bituminous and sub-bituminous coal shipments that terminate at TVA's Kingston Fossil Plant near Emory Gap. Decided: September 11, 2000. Service Date - September 19, 2000 ------------------------------------------------------------------------- DEPARTMENT OF TRANSPORTATION Surface Transportation Board [STB Finance Docket No. 33861] Norfolk Southern Railway Company Trackage Rights Exemption Bessemer and Lake Erie Railroad Company Bessemer and Lake Erie Railroad Company (B&LE), a Class II rail common carrier, has agreed to grant overhead trackage rights to Norfolk Southern Railway Company (NS) over approximately 50.38 miles of B&LE's mainline of railroad between NS connection at Shenango, PA (at approximately milepost G4.27 in Mercer County), and NS connection at Wallace Junction, PA (at approximately milepost E8.90 in Erie County). NS reported that it intends to consummate the transaction on September 20, 2000, or as soon thereafter as the parties may agree and/or the time required for any necessary labor notice is given. The purpose of the trackage rights is to permit NS to move traffic more safely, efficiently and expeditiously in the western Pennsylvania region. Decided: September 18, 2000 Service Date - September 19, 2000 ------------------------------------------------------------------------- DEPARTMENT OF TRANSPORTATION Surface Transportation Board [STB Finance Docket No. 33921] Norfolk Southern Railway Company Trackage Rights Exemption Wisconsin Chicago Link, Ltd. Wisconsin Chicago Link, Ltd. (WCLL), a Class III rail carrier and a subsidiary of Wisconsin Central Transportation Company, a noncarrier holding company, has agreed to grant non-exclusive overhead trackage rights to Norfolk Southern Railway Company (NS) over approximately 1.9 miles of rail line known as the Panhandle Line, which WCLL currently leases from Pennsylvania Lines LLC (PRR), between approximately PCC&StL milepost 309.8 at Odgen Junction near Rockwell Street and approximately PCC&StL milepost 307.9 near the Ash Street Interlocking in Chicago, Cook County, IL. The Panhandle Line was formerly owned by Consolidated Rail Corporation. NS states that although the lease is yet to be executed and put into effect, the parties expect it to become effective in the near future and wish to be able to put the grant of trackage rights back to NS into effect on or near the same date. NS reported that it intends to consummate the transaction on September 15, 2000, or as soon thereafter as the parties may agree and/or the time required for any necessary labor notice is given. The purpose of this trackage rights is to permit NS to move overhead traffic more safely, efficiently, and quickly, as well as reduce congestion and help avoid delays of NS's traffic in the Chicago area. Decided: September 18, 2000 Service Date - September 19, 2000 ------------------------------------------------------------------------- SURFACE TRANSPORTATION BOARD DECISION STB Docket No. AB-550X R.J. CORMAN RAILROAD COMPANY/ALLENTOWN LINES, INC.-- ABANDONMENT EXEMPTION--IN LEHIGH COUNTY, PA R.J. Corman Railroad Company/Allentown Lines, Inc. (RJCN) filed to abandon a 1.945- mile line of railroad known as the Barber's Quarry Industrial Track between milepost 93.144 in the vicinity of Union and 3rd Streets in Allentown and milepost 95.089 in the vicinity of Lawrence Street and Lehigh Parkway in the township of Salisbury, Lehigh County, PA. Notice of the exemption was served on September 8, 1998. On October 7, 1998, a notice of interim trail use or abandonment (NITU) was served, that reopened the proceeding to implement interim trail use/rail banking for the entire line, and provided a 90-day period for the County of Lehigh, PA, to negotiate an interim trail use/rail banking agreement with RJCN for the right-of-way involved in this proceeding. The negotiation period under the NITU expired on January 6, 1999, but was extended to March 15, 2000 by decision served September 17, 1999. By decision served May 24, 2000, the negotiation period under the NITU was extended to September 11, 2000, at the request of RJCN and the City of Allentown. On September 12, 2000, the City filed a request to extend the NITU negotiation period until November 10, 2000. The City states that it is currently negotiating with RJCN for the acquisition of the right-of-way. By letter filed September 18, 2000, RJCN advised that it concurs with the extension request. Accordingly, the NITU negotiation period will be extended, as requested by the City, to November 10, 2000. It is ordered: 1. The request to extend the interim trail use negotiating period is granted. 2. The NITU negotiating period is extended until November 10, 2000. Decided: September 19, 2000 Service Date - September 21, 2000 ------------------------------------------------------------------------- DEPARTMENT OF TRANSPORTATION Surface Transportation Board [STB Docket No. AB-573X] Trinidad Railway, Inc.--Abandonment Exemption--in Las Animas County, CO [STB Docket No. AB-6 (Sub-No. 388X)] The Burlington Northern Company and Santa Fe Railway Company--Discontinuance of Trackage Rights Exemption--in Las Animas County, CO [STB Docket No. AB-33 (Sub-No. 160X)] Union Pacific Railroad Company--Discontinuance of Trackage Rights Exemption--in Las Animas County, CO Trinidad Railway, Inc., The Burlington Northern and Santa Fe Railway Company (BNSF), and the Union Pacific Railroad Company (UP) have filed for Trinidad to abandon and BNSF and UP to discontinue trackage rights over an approximately 30.0-mile line of railroad from milepost 2.0 at Jensen (west of Trinidad), to the end of the line at the former New Elk Mine at milepost 30.0 (east of Stonewall), in Las Animas County, CO. Trinidad states that it is retaining the first two miles of the line operated by BNSF and UP. Stating that the line covers a distance of up to 30.0 miles, the notices indicates that there is a discrepancy over the actual length of the rail line. Trinidad acquired the involved line from the Colorado & Wyoming Railway Company as part of the transaction authorized in Finance Docket No. 32183 (ICC served Nov. 23, 1992). Provided no formal expression of intent to file an offer of financial assistance (OFA) has been received, this exemption will be effective on October 21, 2000, unless stayed pending reconsideration. Trinidad shall file a notice of consummation with the Board to signify that it has exercised the authority granted and fully abandoned the line. If consummation has not been effected by Trinidad's filing of a notice of consummation by September 21, 2001, and there are no legal or regulatory barriers to consummation, the authority to abandon will automatically expire. Decided: September 14, 2000. Service Date - September 21, 2000 ------------------------------------------------------------------------ DEPARTMENT OF TRANSPORTATION Surface Transportation Board [STB Finance Docket No. 33922] Acadiana Railway Company, Inc. Lease Exemption Union Pacific Railroad Company Acadiana Railway Company, Inc. (AKDN), a Class III rail carrier, has filed to lease and operate 5.0 miles of rail line from Union Pacific Railroad Company (UP) between milepost 0.0 at McCall, LA, and milepost 5.0 at Lula, LA. The transaction was scheduled to be consummated on or after September 13, 2000. Decided: September 14, 2000. Service Date - September 21, 2000 ------------------------------------------------------------------------- SURFACE TRANSPORTATION BOARD DECISION STB Docket No. AB-33 (Sub-No. 112X) UNION PACIFIC RAILROAD COMPANY--ABANDONMENT EXEMPTION-- IN LANCASTER COUNTY, NE A notice of interim trail use or abandonment (NITU) served on September 24, 1997, authorized the Union Pacific Railroad Company (UP) to abandon a 1.88-mile segment of its Lincoln Branch between milepost 494.76 near 10th Street and milepost 492.88 near 33rd Street in Lincoln, Lancaster County, NE. By decisions served July 7, 1998, and June 30, 1999, UP was granted extensions until September 24, 2000, to exercise the abandonment authority. In a letter dated September 20, 2000, UP requests a 45-day extension until November 8, 2000 to exercise the abandonment authority for that portion of the line from just east of 18th Street to 33rd Street. UP indicates that it needs additional time to conclude negotiating the sale of the segment between the west edge of 24th Street and 18th Street to Lincoln Lumber Company under the Offer of Financial Assistance (OFA) procedures. UP states that it hopes to conclude negotiations within that time, or it will seek to vacate the OFA process to allow abandonment of that portion. UP states further that it is in the process of conveying the portion between 10th Street and 18th Street to the University of Nebraska. UP states that it is in a position to consummate abandonment of that segment, and is notifying the Board separately of consummation of abandonment of that portion. UP has shown good cause to extend the time to consummate abandonment and for filing a notice of consummation for the portion of the line from just east of 18th Street to 33rd Street in this proceeding. Accordingly, the request will be granted. It is ordered: 1. UP's request for a 45-day extension of the time to exercise abandonment authority for the portion of the line from just east of 18th Street to 33rd Street is granted. 2. The authority to abandon is scheduled to expire on November 8, 2000. Decided: September 21, 2000 Service Date - September 22, 2000 ------------------------------------------------------------------------- DEPARTMENT OF TRANSPORTATION Surface Transportation Board [STB Finance Docket No. 33925] Buffalo Ridge Regional Railroad Authority Operation Exemption Rail Line Between Manley and Worthington, MN Buffalo Ridge Regional Railroad Authority -- a political subdivision of the State of Minnesota (BRRRA), a noncarrier, has filed to operate over its own rail line between milepost 0.0, at or near Agate, MN, and milepost 41.44, at or near Manley, MN, a distance of approximately 41.44 miles. BRRRA's line is a segment of a 65.6-mile rail line previously owned and abandoned by the Chicago and North Western Transportation Company. According to BRRRA, it acquired the line after consummation of the abandonment in Docket No. AB-1 (Sub-No. 202) but never operated the line itself. Nobles Rock Railroad Co. (NRRC) currently provides common carrier rail service over the line pursuant to Finance Docket No. 32368 (ICC served Nov. 1, 1993). BRRRA states that NRRC appears to have become insolvent or close to insolvency and that termination of its lease to NRRC appears to be imminent. BRRRA further states that it now intends to operate the line itself. In addition, BRRRA will operate, pursuant to incidental trackage rights, over a 3.4-mile rail line owned by Union Pacific Railroad Company between Agate and Worthington, MN, for a total of 44.84 miles. The transaction is expected to be consummated no earlier than the September 15, 2000 effective date of the exemption. Decided: September 14, 2000. Service Date - September 22, 2000 ------------------------------------------------------------------------- DEPARTMENT OF TRANSPORTATION Surface Transportation Board [STB Finance Docket No. 33927] SMS Rail Service, Inc. Acquisition and Operation Exemption Valero Refining Company New Jersey SMS Rail Service, Inc., a Class III rail carrier, has filed to acquire, maintain and operate railroad track within the 970-acre Paulsboro, NJ, refinery of Valero Refining Company New Jersey, formerly the refinery of Mobil Oil Corporation, pursuant to an agreement with Valero dated August 31, 2000. The trackage extends northward from a connection 950 feet to the west of milepost 14 on the Paulsboro Industrial Track of Consolidated Rail Corporation (Conrail), a distance of approximately 5.8 miles in Gloucester County, NJ. SMS indicates that Conrail currently operates the rail line. The transaction was expected to be consummated on or after September 12, 2000. Decided: September 14, 2000. Service Date - September 22, 2000 ------------------------------------------------------------------------- DEPARTMENT OF TRANSPORTATION Surface Transportation Board [STB Docket No. AB-55 (Sub-No. 580X) CSX Transportation, Inc. Abandonment Exemption in Muhlenberg and McLean Counties, KY On September 5, 2000, CSX Transportation, Inc. (CSXT) filed to abandon a portion of its line of railroad in the Midwest Region, known as its Nashville Division, O&N Nashville Subdivision, extending from railroad Milepost 00D-186.35 near Moorman in Muhlenberg County, KY, to railroad Milepost 00D-193.83 near Livermore in McLean County, KY, a distance of 7.48 miles. By issuing this notice, the Board is instituting an exemption proceeding. A final decision will be issued by December 22, 2000. Decided: September 15, 2000. Service Date - September 25, 2000 ------------------------------------------------------------------------- SURFACE TRANSPORTATION BOARD ENVIRONMENTAL ASSESSMENT DOCKET NO. AB-573X Trinidad Railway, Incorporated - Abandonment Exemption and Discontinuance - In Las Animas County, CO Trinidad Railway, Incorporated has filed a notice in connection with the abandonment and discontinuance of service over its rail line from milepost 2.0 to milepost 30.0 east of Stonewall, CO, a distance of 28 miles in Las Animas County, CO. Trinidad will not abandon the first two miles of rail line and BNSF and UP will continue to operate over this portion via trackage rights. According to Trinidad, there has been no service on the rail line since March 1996 and it further states that it is unlikely that there will be any prospect for new traffic. In 1992 Trinidad granted trackage rights to Burlington Northern Santa Fe (BNSF) and Union Pacific (UP). In 1996, Trinidad anticipated providing rail service to the New Elk Mine, however, the coal mine owners have since determined that it would not be economically feasible to open and operate a coal mine in this area. Trinidad describes the area surrounding the line as scenic and rural in nature. The rail line parallels State Highway 12, which is considered as a Historic and Scenic Byway by the Colorado Department of Transportation. From east to west, this rail line parallels the Purgatoire River, a narrow non-navigable river, the shore of Lake Trinidad, and a campsite and recreational area. As the rail line proceeds west, from Lake Trinidad, it encounters a gradual one percent grade for much of the remaining distance. The are four structures on the right-of-way all of which are more than 50 years old. There are three steel bridges that were constructed in 1902 and one freight house/train depot that was constructed in 1904. Trinidad does not believe that any of these structures are historically significant. Because many of the agencies we rely on to complete our environmental analysis have not yet completed their review, we preliminarily recommend the following conditions. A copy of the Environmental Assessment has been sent to those agencies for consideration. 1. The U.S. Army Corps of Engineers (COE) has not completed its review of the proposed abandonment. Therefore, we recommend, that Trinidad Railway Incorporated consult with the COE prior to salvage of the rail line to determine if the proposed abandonment is consistent with applicable Federal, state, and local water quality standards, and if permits are required under the Clean Water Act. 2. The U.S. Environmental Protection Agency (EPA), Region 8, has not completed its review of the proposed abandonment. Therefore, we recommend, that Trinidad Railway Incorporated consult the EPA regarding the discharge of stormwater resulting from the disturbance of more than five acres, the railroad shall consult with the EPA and secure all necessary permits prior to initiation of salvage or disposal activities. 3. The U.S. Department of Agriculture, Fish and Wildlife Service (USFW) has not completed its review of the proposed abandonment. Therefore, we recommend, that Trinidad Railway Incorporated consult the USFW prior to initiation of salvage or disposal activities. 4. The Colorado Department of Archaeology and Preservation (SHPO) has not completed its review of the proposed abandonment. Therefore, we recommend, that Trinidad Railway Incorporated consult with the SHPO prior to salvage of the rail line to determine if the proposed abandonment is consistent with Section 106 process of the National Historic Preservation Act. 5. The Colorado Department of Transportation (CO-DOT) has not completed its review of the proposed abandonment. Therefore, we recommend, that Trinidad Railway Incorporated consult with the CO-DOT prior to abandonment to determine the impact of salvage activities on existing highway/rail at-grade crossings. 6. The Colorado Department of Environmental Quality (CO-DEQ) has not completed its review of the proposed abandonment. Therefore, we recommend, that Trinidad Railway Incorporated consult with the CO-DEQ prior to abandonment to secure all necessary permits prior to initiation of salvage or disposal activities. 7. If salvage operations are expected to destroy or disturb any of the 10 geodetic station markers listed in Attachment 14 of Trinidad Railway's Environmental Report, the railroad shall notify the U.S. Department of Commerce, National Geodetic Survey in not less than ninety days prior to commencement of such operations. Service Date - September 26, 2000 ------------------------------------------------------------------------- SURFACE TRANSPORTATION BOARD DECISION Docket No. AB-33 (Sub-No. 70) UNION PACIFIC RAILROAD COMPANY ABANDONMENT WALLACE BRANCH, ID By decision and certificate of interim trail use or abandonment served June 26, 2000, the Board gave final approval to the Union Pacific Railroad Company (UP) to salvage its 71.5-mile Wallace Branch rail line in Benewah, Kootenai, and Shoshone Counties, ID, subject to four environmental conditions and other terms and conditions. The Board also authorized the railroad to negotiate an interim trail use agreement with the State of Idaho and the Coeur d Alene Tribe. In the June Decision, of the four environmental conditions imposed by the Board, Condition No. 3 prohibited the railroad from taking any steps to alter the historic integrity of the Chatcolet swing bridge until completion of the section 106 process of the National Historic Preservation Act. By memorandum dated September 12, 2000, the Board's Section of Environmental Analysis (SEA) forwarded to the Board a copy of a Memorandum of Agreement (MOA) executed by the Idaho State Historic Preservation Officer, the Coeur d Alene Tribe, UP, and the Board concerning the section 106 historic preservation condition imposed in this proceeding. SEA indicates that the MOA, which has been signed by all parties, concludes the process implementing the section 106 process of the National Historic Preservation Act. SEA therefore recommends that the condition be removed. Accordingly, the proceeding will be reopened and the previously imposed historic preservation condition will be removed. It is ordered: 1. This proceeding is reopened. 2. Upon reconsideration, the section 106 historic preservation condition (Condition No. 3) imposed in the decision served June 26, 2000, is removed. Decided: September 26, 2000 Service Date - September 27, 2000 ------------------------------------------------------------------------- SURFACE TRANSPORTATION BOARD ENVIRONMENTAL ASSESSMENT AB-290 (SUB-NO.199X) The Norfolk Southern Railway Company Abandonment In Buncombe County, North Carolina. In this proceeding, the Norfolk Southern Railway Company (NS) has filed a notice in connection with the abandonment of service of 3.45 miles of railroad line between old Ashville Southern Station 76+97 at Ashville and old Ashville & Craggy Mountain Station Station 123+00 at New Bridge, North Carolina. The NS line proposed for abandonment traverses through mostly industrial and a small residential area. In addition, the right-of-way traverses through Riverside Park and runs adjacent to the French Broad River and crosses Reed Creek in the Town of Woodfin, in Buncombe County, North Carolina. According to NS, there has been no rail service along the rail corridor within the past two years. There is one bridge on the line. In its application, NS states that the Town of Woodfin has asked for a public use and a trail use condition to convert part of the right-of-way to trails use. However, if abandonment authority is granted, NS plans to convey the abandoned right-of-way to Cragy Mountain Line, a non-profit rail historical operation. We recommend the following environmental conditions be placed on any decision granting abandonment authority: 1. The National Geodetic Survey (NGS) has identified six geodetic station makers that may be affected by the proposed abandonment. Therefore, we recommend, that NS notify NGS at least 90 days prior to any salvage activity so that plans may be made for their relocation. 2. The North Carolina State Historic Preservation Officer (SHPO) has not yet completed their review of the proposed abandonment. Therefore, we recommend, that NS further consult with the North Carolina SHPO, and retain its interest in and take no steps to alter the historic integrity of the line segment until completion of the Section 106 process of the National Historic Preservation Act. Service Date - September 27, 2000 ------------------------------------------------------------------------- SURFACE TRANSPORTATION BOARD ENVIRONMENTAL ASSESSMENT AB-290 (SUB-NO.208X) The Cincinnati New Orleans and Texas Pacific Railway Company Petition for Exemption Between Crab Orchard and Rockwood in Cumberland and Roan Counties, Tn. In this proceeding, the Cincinnati New Orleans and Texas Pacific Railway Company (CNOTP) has filed a petition in connection with the abandonment of service of 15.4 miles of railroad line between railroad milepost 141.5-H at Crab Orchard, TN and railroad milepost 156.9-H at Rockwood, TN (the Crab Orchard Line). The line passes through mostly mountainous forest and a small residential and industrial area. There are twelve(12) bridges present along the right-of-way, each over 50 years old. There is one active shipper on the line, Franklin Industries that ships limestone. In its application CNOTP, indicates that the only shipper on the line, Franklin Industries, intends to buy the entire right-of-way and continue to use the track for its own account as a private industrial lead track. We recommend the following environmental conditions be placed on any decision granting abandonment authority: 1. The Tennessee State Historic Preservation Office (SHPO) has not yet completed their review of the proposed abandonment. Therefore, we recommend, that NS further consult with the Tennessee SHPO, and retain its interest in and take no steps to alter the historic integrity of the line segment until completion of the Section 106 process of the National Historic Preservation Act. 2. The U.S. Fish and Wildlife Service (US FWS) has not yet completed their review of the proposed NS rail line abandonment. Therefore, we recommend, that a condition be placed on any decision granting abandonment authority prohibiting NS from salvaging or disposing of the entire right-of-way until completion of the Section 7 process of the Endangered Species Act. Service Date - September 27, 2000 ------------------------------------------------------------------------- SURFACE TRANSPORTATION BOARD STB Finance Docket No. 33407 DAKOTA, MINNESOTA & EASTERN RAILROAD CORPORATION CONSTRUCTION INTO THE POWDER RIVER BASIN ACTION: Notice of availability of Draft Environmental Impact Statement and notice of public meetings. SUMMARY: The Dakota, Minnesota & Eastern Railroad Corporation (DM&E) has filed an application with the Surface Transportation Board for authority to construct and operate new rail line facilities in east-central Wyoming, southwest South Dakota, and south-central Minnesota. The project, known as the Powder River Basin Expansion Project, involves approximately 280.9 miles of new rail line construction and would extend DM&E's existing rail line from Wall, South Dakota west to coal mines in Wyoming's Powder River Basin. Additionally, DM&E proposes to rebuild approximately 597.8 miles of existing rail line along its current system to standards acceptable for operation of unit coal trains. The project would require actions by a number of Federal agencies, including the Board, the U.S. Department of Agriculture Forest Service (USFS), the U.S. Department of the Interior Bureau of Land Management (BLM), the U.S. Army Corps of Engineers (COE), the U.S. Department of the Interior Bureau of Reclamation, and the U.S. Coast Guard. The Board, through its Section of Environmental Analysis (SEA) and in cooperation with USFS, BLM, COE, Reclamation, and the Coast Guard, has published a Draft Environmental Impact Statement (Draft EIS) for the Powder River Basin Expansion Project. This Draft EIS is a preliminary analysis of the potential environmental impacts of the DM&E proposal and its reasonable and feasible alternatives, including the No-Action Alternative. SEA emphasizes that the conclusions and recommended environmental mitigation measures in this Draft EIS are preliminary, and invites public and agency comments on all aspects of the Draft EIS. SEA, working with the five cooperating agencies, will make its final recommendations on the project, including environmentally preferable alternative(s) and environmental mitigation, to the Board in the Final EIS, after considering all public comments on the Draft EIS and conducting further environmental analysis, agency consultations, and site visits, as appropriate. The Final EIS will be issued after public comments have been received, reviewed, and fully evaluated. Following issuance of the Final EIS, the Board will make its final decision regarding this project and any environmental conditions it might impose. When considering whether to grant final approval of the proposed transaction, the Board will consider the potential environmental effects and the cost of any environmental mitigation it might impose on the project. In reaching its final decision in this proceeding, the Board will take into account the full environmental record, including the Draft EIS, the Final EIS, and all public and agency comments received. The cooperating agencies will issue their decisions based on the same environmental record. The Dakota, Minnesota & Eastern Railroad Powder River Basin Expansion Project Draft Environmental Impact Statement consists of an Executive Summary and eight volumes, including appendices. To view this Draft EIS, click on: http://www.stb.dot.gov/eis/dme/dme_deis.htm Decided September 22, 2000 Service Date - September 27, 2000 ------------------------------------------------------------------------- DEPARTMENT OF TRANSPORTATION Surface Transportation Board [STB Finance Docket No. 33932] ParkSierra Corp., Arizona & California Railroad Company Limited Partnership, and California Northern Railroad Company, L.P. Corporate Family Transaction Exemption ParkSierra Corp., Arizona & California Railroad Company Limited Partnership (ARZC), and California Northern Railroad Company, L.P. (CFNR) have filed a verified notice of exemption. The exempt transaction involves the contribution of all of ARZC's and CFNR's assets to ParkSierra in exchange for shares of common stock of ParkSierra. ParkSierra, a noncarrier, is the sole general partner of ARZC and CFNR, both Class III rail carriers. In addition to owning rail lines in the States of Arizona and California, ARZC owns rail lines in the State of Washington that are operated by an operating division of ARZC d/b/a Puget Sound & Pacific Railroad (PSAP). CFNR operates in the State of California. Upon consummation of the transaction, ParkSierra will assume the common carrier obligations of ARZC and CFNR, and ARZC, CFNR, and PSAP each will continue to provide railroad servce as a d/b/a and separate operating division of ParkSierra. The transaction is/was expected to be consummated on or after September 20, 2000. The transaction is intended to simplify the organizational structure of ParkSierra, ARZC, and CFNR and to create administrative efficiencies. Decided September 22, 2000 Service Date - September 27, 2000 ------------------------------------------------------------------------- SURFACE TRANSPORTATION BOARD DECISION STB Finance Docket No. 33386 DECATUR COUNTY COMMISSIONERS, ET AL. v. THE CENTRAL RAILROAD COMPANY OF INDIANA In a complaint filed on April 2, 1997, Complainants allege that The Central Railroad Company of Indiana (CIND) discontinued operations over, and abandoned, its 58-mile rail line between Shelbyville, IN, milepost 81.0, and Greendale, IN, milepost 23.0 (Shelbyville Line or Line), without obtaining abandonment authority. Complainants include: (1) three government entities the Board of Commissioners of Decatur County, IN, the Board of Commissioners of Shelby County, IN, and the City of Shelbyville, IN; and (2) five Shipper Complainants Lowe's Pellets & Grain, Inc., Premier Ag Co-op, Inc., Kolkmeier Brothers Feed, Inc., Greensburg Milling, Inc., and Kova Fertilizer, Inc. Knauf Fiberglass, GmbH, located on track just to the north of the Line, is participating as an interested party. Complainants charge that CIND unlawfully embargoed the Shelbyville Line, in violation of its common carrier obligation to provide service on reasonable request, and established surcharges that were unlawful and the establishment of which constituted an unreasonable practice. An embargo is a carrier's notice to the railroad industry and affected shippers that a disability or interruption in operations exists which temporarily prevents it from providing service or performing its common carrier duties. An embargo does not require prior Board approval. Under the procedures of the Association of American Railroads (AAR), an embargo is issued by a railroad through notice to the AAR and may remain in effect for 1 year, unless the railroad cancels or amends it. An embargo allows an immediate cessation of operations and temporarily excuses a railroad's common carrier service obligation, but the obligation is not extinguished until abandonment authority or an exemption is granted. A railroad may be liable for damages if its embargo is found unreasonable. Complainants request that the five Shipper Complainants Lowe s, Kolkmeier, Greensburg Milling, Premier, and Kova be awarded $848,690 in damages for higher motor carrier freight rates paid and business lost in the absence of viable rail alternatives during the embargo period. Complainants also initially requested that CIND be compelled to restore service or that another rail carrier be directed to operate the Line. Because operations resumed in November 1998, however, the request for restoration of service and directed operations need not be considered. CIND filed an answer denying the allegations on April 22, 1997, and we served a decision on September 30, 1997, instituting an investigation and adopting a procedural schedule for submitting evidence. Complainants filed their opening statement on October 30, 1997. CIND filed its Reply on December 1, 1997, and errata on December 18, 1997, and complainants filed their rebuttal statement on December 19, 1997, and supplemental rebuttal on January 22, 1998. We have fully reviewed the evidence, and, for the reasons discussed below, we find that CIND's failure to operate over the embargoed segment of the Shelbyville Line for the period in question was not unlawful; that CIND did not violate its common carrier obligation; and that the establishment of the disputed surcharge did not violate the law. Therefore, CIND is not liable for damages, and this complaint is dismissed. The Shelbyville Line is the last 58 miles of the Shelbyville Secondary Track. CIND, an affiliate of Central Railroad Company of Indianapolis (CERA) and a wholly owned subsidiary of Central Properties, Inc. (CPI), became a carrier in 1991, when it acquired the 85.4-mile Shelbyville Cluster from Consolidated Rail Corporation (Conrail). The transaction primarily included the Shelbyville Secondary Track, between Shelbyville, at milepost 81 (to the northwest), and Cincinnati, OH, milepost 0.0 (to the southeast), and 76.3 miles of overhead trackage rights between Shelbyville and Frankfort, IN. In addition to the Shelbyville Secondary Track, the Shelbyville Cluster included: the Lawrenceburg Industrial Track (approximately 3.8 miles) between Lawrenceburg Junction and Lawrenceburg, IN, and both the Greensburg Industrial Track (approximately 1.2 miles) and the Westport Industrial Track (approximately 1.25 miles) in Greensburg, IN. CIND initially intended to interchange traffic with Conrail in Shelbyville. The two carriers, however, subsequently agreed to interchange traffic in Indianapolis instead. Beyond Frankfort, traffic moved over the lines of CERA, Winamac Southern Railway, and Toledo, Peoria and Western Railway Corporation (TPW). The Shelbyville Line had been approved for abandonment in 1982, but was subsequently returned to service when Conrail entered into an agreement with the State of Indiana and local interests to provide local and overhead non-common carrier rail service. When that agreement expired, Conrail and the States of Indiana and Ohio negotiated to return the Line to common carrier service. The agreement between Conrail and CIND resulted from this effort. When CIND acquired the Line, almost all of it met Federal Railroad Administration (FRA) Class 2 standards. CIND spent approximately $271,000 to return the Line to service. Over the next 2« years, CIND continued to maintain the segment between milepost 22 and milepost 0.0, but maintenance otherwise was deferred, and approximately 30 miles of track deteriorated to FRA Class 1 standards. In October 1994, CIND applied for $704,804 in Federal Local Rail Freight Assistance (LRFA) funds to rehabilitate the track between milepost 22 and milepost 40 (essentially, the subsequently embargoed segment) to FRA Class 2 standards. The application was based on a cost/benefit analysis that included a projected $476,515 increase in incremental revenues. The LFRA funds were to be used to replace crossties and perform ditching and surfacing. CIND replaced its management in November 1994. The new management embarked on a program to rehabilitate the entire Line to FRA Class 2 standards. The segment between Greensburg, at milepost 63.0, and Sunman, IN, at milepost 39.0, was rehabilitated to FRA Class 2 standards in 1995. CIND's application for LFRA funds was also granted in part, and in May 1995, CIND was awarded $172,521. However, as a condition of the grant, CIND was required to spend $30 of its own funds for each $70 of LFRA funds that it spent. CIND never used the LFRA grant funds. CIND states that it became aware of slippage, erosion, slides, and other problems between milepost 23.0 and milepost 39.0 during an inspection trip after heavy spring rains in 1996. The railroad made temporary repairs to permit continued operations but held off on a permanent resolution, claiming uncertainty over the Shelbyville Line's viability. CIND ceased operating over the 16-mile segment between milepost 23.0 and milepost 39.0 on February 24, 1997, after its personnel and a consultant inspected the line and found that significant slippage had occurred at milepost 32.8. On the same day, CIND's President, Mr. Christopher Burger, telephoned the Shelbyville Line shippers and notified them by letter that rail operations were being discontinued over the affected segment but that they would continue to be served from the west. Mr. Burger advised the shippers that they would soon be notified of rate changes in connection with the new routing. He also warned that the affected segment might not be repaired, stating, Based upon our knowledge of existing and potential traffic, we do not believe at this time that the expense of repairing, rehabilitating and continuing to operate the line can be justified. At the time CIND stopped operations over the affected segment, the Shelbyville Line handled primarily overhead traffic. Premier, Kova, Lowe s, and Greensburg Milling at Greensburg, and Kolkmeier at St. Paul, at milepost 73.0 (the Northend Shippers) were responsible for all of the local traffic that originated or terminated on the Line; none is located on the portion between milepost 23.0 and 39.0 on which CIND ceased to operate. Most of the Line's overhead traffic originated and/or terminated with shippers located on the 23 miles of CIND line between Greendale and Cincinnati (the Southend Shippers) and was interchanged with Conrail at Indianapolis or CERA at Frankfort. A week after CIND ceased operating the 16-mile segment, CIND, on March 1, 1997, rerouted its Conrail interchange traffic from Indianapolis to Sharonville. Two weeks later, on March 13, 1997, CIND announced surcharges of $700 or $1,000 on all carloads moving between the Shelbyville Line and interchange points at Shelbyville, Indianapolis, or Frankfort, to become effective on April 2, 1997 -- the date this complaint was filed. On April 10, 1997, CIND placed the disputed embargo on the portion of the Line between milepost 23.0 and milepost 39.0. In addition, CIND ceased operating the 1.25-mile industrial lead serving Lowe s. CIND notified Lowe's of this on March 17, 1997, immediately after CIND personnel had made a walking inspection of the lead, which, CIND stated, disclosed serious track structure problems that had been caused by poor drainage. CIND gave notice of its intent to abandon the Shelbyville Line on July 2, 1997, and filed an amended System Diagram Map with the Board on August 7, 1997. CIND also negotiated with NS and CSXT seeking favorably restructured traffic flows and other concessions. No agreement was reached, however, and, on January 14, 1998, CIND filed a petition for exemption to abandon the entire 58-mile Shelbyville Line. The petition for abandonment exemption which complainants and one additional shipper, Consolidated Grain & Barge Co., opposed--was denied. We found the record inadequate and advised that a formal application should be filed, if CIND wished to pursue the abandonment. CIND filed a petition to reopen on May 22, 1998, and replies in opposition were filed on June 11, 1998. RailTex, Inc., then sought authority to acquire CIND and CERA, which was granted in STB Finance Docket No. 33585 (STB served June 26, 1998). In a letter filed on November 3, 1998, CIND, now a RailTex subsidiary, notified the Board that it had decided to resume operations over the entire Shelbyville Line and withdrew its petition to reopen the abandonment proceeding. Accordingly, we discontinued the abandonment proceeding in a decision served on November 12, 1998. An embargo can be issued by a carrier to temporarily cease or limit service when it is physically unable to serve specific shipper locations. Embargoes, which may be of varying duration, are quite common in the railroad industry and typically do not result in government intervention. They can be challenged, however, and in the rare case in which they are used improperly, a rail carrier may be liable for damages and/or an injunction. Under its common carrier obligation, the embargoing railroad must restore safe and adequate service within a reasonable period of time to any line as to which it has not applied for abandonment authority. A service curtailment that extends beyond a reasonable time can be construed as an illegal abandonment if unaccompanied by an abandonment application or exemption request. The reasonableness of an embargo is determined by a balancing test, taking into consideration such factors as the length of the service cessation, the carrier's intent, the cost of repairs, the line's traffic volume and revenues, and the carrier's financial condition. The cost of repairs, relative to the volume of traffic on the line and the financial condition of the carrier, often is particularly important. Typically, an embargo is found to be invalid, or to constitute an unlawful abandonment, where the embargo is a long one and the cost of repairs is not substantial. In applying the traditional balancing test to CIND's actions, we do so in the context of examining: (1) whether CIND's initial decision to impose an embargo was reasonable; and (2) whether CIND made all efforts that it reasonably could under the circumstances be expected to make to facilitate the reinstitution of service. Here, we believe the answer to both questions is yes, and hence, that CIND should not be found to be liable for damages. At the outset, we find that CIND acted reasonably in imposing the embargo on the 16- mile segment of the Line in the first place. As we have noted, under well established procedures, the railroad decides in the first instance whether there exists an unsafe condition that temporarily prevents it from operating. Where, as here, we are called on to review such a determination, we defer to a railroad's judgment as to whether a line is safe to operate at a given point in time, so long as it is reasonable. Here, no one disputes that the affected 16-mile segment was unsafe on February 24, 1997, when CIND discontinued operating over it. Moreover, the problem clearly remained for some time. When Complainants primary witness, Mr. Henry Weller (CIND's chief operating officer from 1991-94, and CERA's president and chief operating officer from 1989-94) visually inspected the Shelbyville Line between milepost 32.8 and milepost 37.7 and the Lowe's Industrial Spur on October 23, 1997, he found that there was slippage at milepost 32.8 and that the slippage should be repaired before it would be prudent to operate trains. Similarly, on October 15, 1997, Mr. G. Allen Davis, Jr. (president of Tri-States Railroad Consultants, Inc.) inspected the then-embargoed segment for Complainants and found that portion of the Line unsafe to operate. Complainants concede that there was a potential for slippage at milepost 32.8 but argue that the slippage would have been comparatively easy, and relatively inexpensive, to repair had it been addressed when first noticed in 1996, and that the failure to make the repair immediately exacerbated the problem and resulted in the repair cost's more than doubling. CIND does not provide any evidence or argument regarding the cost of repairing the washout in 1996, but submits a verified statement prepared by its engineering consultant, Mr. Richard H. McDonald, addressing the repair costs by 1997. Mr. McDonald inspected the Line over a 2-day period in May 1997 and identified four major problem areas along the embargoed segment that he attributed to erosion or washouts. He estimated: (1) that $262,000 would be required to repair the embargoed segment and bring it up to FRA Class 1 standards ($142,000 for repairs at milepost 32.8, and $120,000 for repairs at mileposts 33.3-35.3, milepost 28.4, and milepost 23.5); that a total of $775,000 would be required to upgrade the Line to FRA Class 1 standards ($278,000 for erosion repairs, $190,000 for tie replacement, and $307,000 for bridge repairs); and (3) that a total of $1,980,250 would be required to upgrade the Line to FRA Class 2 standards (in addition to the erosion and bridge repairs, $1,395,250 was for tie replacement, resurfacing and weed control). Mr. McDonald claimed that, unless the line were upgraded to FRA Class 2 standards, the line could not be operated efficiently because train crews would not be able to complete a full trip under the Federal Hours of Service Law and the 10 mph speed limitation applicable to FRA Class 1 track. Complainants contend that CIND's estimates are overstated. They argue that $103,160 would be adequate to make the repairs at milepost 32.8 and that several small washouts on the embargoed segment could be repaired with very little trouble as normal maintenance. Complainants estimate that an additional $252,505 would bring the entire embargoed segment up to FRA Class 1 standards and that an additional $457,697 ($248,897 for normal rehabilitation and $208,800 to repair roadbed damage caused by the installation of fiber optic cable) would bring the entire line up to FRA Class 1 standards. Complainants assert that the Line's tie condition is adequate for operations at both FRA Class 1 and Class 2 standards and, presumably for that reason, did not submit a separate FRA Class 2 estimate. It is clear from the record that here the cost of rehabilitation was quite high. The evidence is insufficient to determine which of the parties 1997 estimates to repair the slippage at milepost 32.8 ($103,160 or $142,000) is more accurate. We will accept CIND's estimate of $142,000 as the best evidence of record. Moreover, the parties estimates for repairing the embargoed segment and bringing it up to FRA Class 1 standards ($252,502 for Complainants and $278,000 for CIND) are not directly comparable because they do not always address the same locations. Based on our examination of the underlying evidence, we have determined that $227,230 would be required to repair the rest of the embargoed segment and bring it up to FRA Class 1 standards. We find CIND's cost estimate to rehabilitate the non-embargoed segment of the Line to FRA Class 1 standards to be overstated. Its tie replacement estimate fails to recognize that the 24-mile segment between milepost 39 and milepost 63 was upgraded to FRA Class 2 standards in 1995. Complainants tie replacement rate is based on repairing defective tie clusters and appears to be the better evidence of record in view of CIND's evidence showing that a substantial number of ties recently had been replaced at a number of locations. We also exclude CIND's repair cost attributable to the installation of fiber optic cable because it should be reimbursable from the contractor. Furthermore, CIND's general bridge rehabilitation cost estimate is excluded because there is no specific bridge rehabilitation requirement under FRA Class 1 standards, and Complainants submitted a detailed bridge evaluation that establishes that, although there is need for routine bridge maintenance, no rehabilitation was necessary to reopen the line. Based on our analysis of the record, we find that $187,250 ($137,500 for tie repair, $16,000 for erosion repair at three points, $20,000 for weed control and surfacing, and $13,750 for contingencies) would be required to rehabilitate the non-embargoed segment of the Line, and that a total of $556,480 ($142,000, $227,230, and $187,250) would be required to rehabilitate the entire Line to FRA Class 1 standards. And we reject as overstated CIND's FRA Class 2 estimate, except for CIND's reasonable inclusion of an additional $25,000 for weed control and surfacing, thus bringing to $581,480 the total cost to rehabilitate the entire Shelbyville Line to FRA Class 2 standards. We also find that CIND acted reasonably in not making $68,943 in erosion repairs in 1996. Prior to the slippage at milepost 32.8, CIND had adopted a policy of applying its limited resources to the profitable southeast end of its system (between milepost 23.0 and milepost 0.0) to hold down expenses. This is a normal and acceptable practice for carriers seeking to reduce their operating losses. Operationally, CIND was in a difficult financial condition and faced dim prospects for increased traffic and revenues. We find no credible evidence that CIND was deliberately downgrading, or actively discouraging traffic on, a viable line simply to facilitate its abandonment. Similarly, the evidence fails to show that CIND should have known that the slippage at milepost 32.8 would worsen, that the cost of repair would escalate, and that the failure to make the repair in 1996 would eventually lead to a discontinuance of CIND's operations over the affected segment. Another criterion used to assess the reasonableness of an embargo is the volume and type of traffic on the line. Complainants claim that the Shelbyville Line is the best and shortest rail route between Cincinnati and Indianapolis and a ... direct, logical, and economically advantageous route to the Cincinnati Gateway and the Ohio River. Mr. Weller states that the five complaining shippers as well as another shipper became customers of, and sought additional rail service from, CIND during its first 3 years of operation; that CIND's revenues were on an upward track and the Shelbyville Line was largely self-sustaining when he left in 1994; and that the complaining shippers level of usage continued to increase after he left. Complainants claim that 8,170, 9,742, and 7,759 carloads moved over the Line in 1994, 1995, and 1996, respectively. Complainants claim that there was also a demand for service from new shippers. For example, they claim that: (1) CIND had agreed to expand Lowe's siding prior to the cessation of service and this would have generated 600 cars or more per year, a 50% increase in rail usage; (2) Kova expressed interest in rehabilitating the north secondary in the summer of 1996 to give CIND direct access to Kova's plant (as opposed to access through the Greensburg lead), and that Kova's volume of freight received would have doubled; and (3) Next Generation, Inc. expressed interest in rehabilitating the north secondary in October 1993 to give CIND direct access to Next Generation's Greensburg warehouse, and that CIND would have gained at least 225 cars per year of high rate freight moving through Cincinnati. Complainants further contend that CIND's present management acted imprudently in rerouting the Conrail overhead traffic. They dispute CIND's claim that the Sharonville interchange is more efficient or economical than the Indianapolis interchange, and argue that the Conrail overhead traffic was not rerouted but rather was lost. Additionally, they contend that CIND failed to communicate with its shippers, and, as a consequence, unreasonably denied itself and them the opportunity to protect and improve service. Shipper Complainants claim that they were never contacted in any effort to increase freight volumes or to persuade them to accept increased freight rates or to contribute to maintenance, repair, or restoration. Had this been done, Shipper Complainants claim, they would have worked out mutually agreeable terms to permit CIND to continue operating the line. Complainants contend that certain of CIND's statements betray a lack of familiarity with the needs of its shippers, and that CIND denied the shippers any opportunity to restore service after the embargo was imposed and failed to offer any terms or conditions for restoring service. On the other hand, CIND explains that it took various actions to increase traffic on the Line but that its efforts were unsuccessful. Specifically, CIND states that it maintained extremely low, pre-surcharge grain rates (approximately $275 per carload) to promote local traffic and that it otherwise marketed the Line in an aggressive manner. It notes that it negotiated extensively with James River for plastics traffic between 1993 and 1995; that it hoped to tap into intermodal traffic moving from Fort Madison, IA, to Cincinnati; that it had worked hard since 1992 to obtain a coal delivery contract with Citizens Gas & Coke in Indianapolis; and that it actively solicited traffic from existing customers and potential new customers through February 24, 1997. However, James River sold its facility before rail service could be implemented, and Citizens renewed its contract with CSXT. CIND claims that, by September 1996, when it had lost out to CSXT on its bid for part of the Citizens coal traffic and when its other efforts to attract significant new traffic had failed, it had no choice but to consider seeking abandonment authority. CIND also states that, although it entered into 500-car minimum commitment ( take or pay ) contracts with Greensburg Milling and Lowe's in 1992 and a similar 250-car minimum commitment contract with Kolkmeier in 1993, none of the three entered into subsequent contracts or tendered volumes as large as those contemplated in the initial contracts. According to CIND, the complaining shippers traffic and the attributable revenues declined from 1994 to 1996. Overhead traffic accounted for approximately 80% of the carloads moved over the Shelbyville Line in 1994, 1995, and 1996, and Conrail traffic accounted for 67%, 61%, and 55%, respectively, of all carloads handled in those years. CIND states that overhead traffic and total traffic decreased from 1994 to 1996. CIND disputes Complainants assessment of the Line's future potential. It notes that the Line remained virtually idle for the almost 10-year period following the ICC's authorization of abandonment by Conrail and that, although Knauf filed an offer of financial assistance to buy the Line through an affiliated railroad, Knauf's affiliate declined to consummate the transaction after the ICC set the price for the sale. CIND argues that Complainants optimistic view of the Line's ability to compete in the Cincinnati-Indianapolis corridor ignores the paucity of on-line traffic, which made it extremely difficult for the Shelbyville Line to compete on the basis of rates and service with CSXT's high density Cincinnati-Indianapolis mainline, via Hamilton, OH (with at least 30 times the traffic density). Moreover, the Line ends 25 miles east of Indianapolis, and CIND's trackage rights agreement with Conrail restricts it to serving only one Indianapolis customer, Citizens (which never used CIND's service and declined CIND's bid to provide service), and against interchanging traffic in Indianapolis with any carrier other than Conrail. Moreover, CIND explains that, while the unsafe condition of the portion of the Line where the slippage had occurred may have expedited the March 1, 1997 rerouting of Conrail overhead traffic to Sharonville, the rerouting would have happened anyway. CIND also states that there was virtually no likelihood of rerouting Conrail's overhead traffic back over the Line. CIND submits that it began considering rerouting the Conrail traffic in 1996, because the Line's traffic density was low and declining and CIND had failed to attract significant new traffic. Additionally, CIND states that continuing financial difficulties had prevented it from rehabilitating and maintaining the Line at FRA Class 2 standards. This meant that the Line could not be operated with a single crew, negating one of the reasons for the original decision to interchange traffic at Shelbyville. CIND states that two Conrail interchanges would have been too expensive to operate and that it chose the Shelbyville interchange because of the congestion in the Cincinnati area and the higher allowances it would receive on high-revenue, westbound chemical traffic, and because the Line could be operated at 25 mph or more, allowing a single crew to perform round trips. According to CIND, between January 1, 1991, and December 31, 1996, the 23-mile eastern segment between Cincinnati and Greendale originated and terminated approximately 90% of CIND's traffic. When the Conrail acquisition proposal was announced in October 1996, CIND apparently concluded that most of its Conrail traffic was from points that could be better served via Cincinnati than via Shelbyville. CIND was of the view that the shorter haul to Cincinnati would improve its operating efficiency, particularly since track congestion at Cincinnati had improved as a result of track construction and likely would continue to improve if the proposed sale of Conrail were approved and implemented. According to CIND, its decision to give notice of an intent to abandon the Line in July 1997 was based on an analysis of its post-embargo options prepared for CPI by Mr. Andrew A. Jennings. Mr. Jennings determined that there was little justification for doing the rehabilitation and repairs needed to resume operations over the entire Line, concluding, that: (1) the Line's traffic had never reached expectations, despite what originally appeared to be a reasonable operating plan and significant efforts by CIND; (2) Next Generation's traffic would have had little effect on the bottom line; and (3) the Line was the best engineered route between Indianapolis and Cincinnati, but, as a low volume, poorly maintained, two-carrier joint route, it would not be able to compete in the evolving railroad landscape. Complainants criticism of CIND's marketing efforts and overall management is not persuasive. The record does not show that CIND intentionally held down traffic levels in the years preceding the embargo. Complaining shippers assertions that they would have made more traffic available, and would have paid higher transportation charges, if CIND had discussed its difficulties with them, are self-serving and fail to account for why more traffic was not tendered to CIND instead of to the other, allegedly more expensive transportation alternatives. Under the circumstances, CIND reasonably decided to divert overhead traffic from a line that was in need of substantial rehabilitation and lost money in each of the preceding 5 years. Complainants evidence fails to distinguish between the Shelbyville Line and CIND's systemwide traffic. The traffic volumes and revenues Complainants attribute to CIND's Southend Shippers do not move over, and therefore are not relevant to, the Shelbyville Line. Moreover, we agree with CIND that all of the Line's overhead Conrail traffic, which averaged 77% of CIND's overhead traffic in 1994, 1995, and 1996, has been lost and will not be rerouted back. CIND possibly could have retained a portion of CERA's and TPW's overhead traffic, which accounted for an average of 23% of CIND historical overhead traffic. But even if all of CERA's and TPW's overhead traffic were added back into the historical traffic levels for purposes of projecting future traffic volumes, CIND at best would have had only 1,421, 1,741, and 1,454, overhead carload movements, respectively, in 1994, 1995, and 1996. Projected revenues from such traffic would be significantly less than what would be needed to cover operating expenses and provide a return on investment (ROI), let alone to cover the needed repairs and rehabilitation. Based on CIND's income statements for 1996 and the first three quarters of 1997, Complainants contend that CIND had more than enough funds available to make the repairs required for CIND's operations over the entire Line to continue. They note that CIND's 1996 net income and cash on hand greatly exceeded the estimated slippage repair cost at milepost 32.8. Additionally, they observe that the $172,521 in LFRA funds were more than adequate to make the repairs at milepost 32.8, pointing out that the funds had not been used, and were still available, as of October 1997. Complainants also challenge CIND's financial evidence, alleging, among other things, that the submitted financial statements were not audited and do not include information about CPI or CERA. Complainants contend that CIND was financially sound and had a positive cash flow and a positive working capital that was increasing every year. CIND replies that its financial condition precluded it from repairing and further investing in the Line. It explains that the Line was never self-sustaining, with or without overhead traffic, that the railroad realized a net annual loss every year through 1995 and would have suffered its second worst loss in 1996 had it not been for the fortuitous sale of real estate (2.2 miles of right- of-way between Lawrenceburg Junction and Lawrenceburg to the Indiana Gaming Company), and that its working capital was negative at the end of each year through 1996. CIND acknowledges that it repaid its primary loan after the 1996 sale of real estate and that it was financially successful in 1997, but claims that its working capital remained negative until September 1997, when a large cash contribution from CPI resulted in its first month of positive working capital. CIND further states that it was in default to its primary lender and faced foreclosure for virtually its entire operating history. The precariousness of its financial condition allegedly was apparent as early as June 1992, when CIND breached its financial covenants with its lending bank, and liberalized covenants had to be negotiated. In August 1993, the original obligation had to be refinanced to reduce principal payments, but the interest rate was increased, and CPI shareholders had to infuse $100,000 of additional equity. In March 1994, CIND defaulted on the amended, liberalized covenants that had been negotiated in 1992, and $100,000 in subordinated loans had to be arranged. CIND claims that its financial condition continued to deteriorate to the point that it was unable to make its fourth quarter 1994 and first quarter 1995 principal payments, and it had to negotiate a forbearance arrangement that required the infusion of an additional $500,000 of equity. CIND explains that it would have been too costly to use the $172,521 LFRA grant for erosion repair because the terms of the LRFA Agreement required that $30 of a recipient's own funds be spent for each $70 of grant funds. Additionally, CIND claims that it would have been a waste of LFRA funds and of its own limited resources--to rehabilitate and make costly repairs to a rail line that could not support the cost of operations. We have reviewed the parties financial presentations and find CIND's to be credible. We recognize that CIND could have repaired the Line and rehabilitated it up to FRA Class 1 or FRA Class 2 standards in 1996 with the use of borrowed funds, LFRA grant funds, or some of the proceeds from the real estate sale. CIND's decision not to, however, was a reasonable business decision given the fact that the Line's projected revenues under any realistic scenario were not sufficient to cover operating expenses and provide a return on investment. Moreover, CIND's decision was reasonable given a record showing that, by the end of 1996, CIND: (1) had experienced 5 years of operating the Line at a loss and increasing indebtedness that was offset only by the fortuitous real estate sale; (2) had failed to negotiate a coal delivery contract with Citizens or to attract significant additional traffic from new shippers; (3) had failed to attract additional local traffic and actually saw local traffic decline by 17% since 1994; (4) had begun to consider rerouting Conrail's overhead traffic, which would necessarily affect the Line's future viability; and (5) had begun to factor into its decisional process CPI's decision to make CIND available for sale. Complainants submit that CIND intentionally or not created the dilemma it relies upon as an excuse for its failures, and that at a minimum [it] failed to exercise prudent judgment and must be held accountable. They argue that the Line could have been operated successfully had CIND better maintained and marketed it. Complainants claim that the Line is a key link between the Ohio Valley and the Indianapolis-Cincinnati corridor, that the Line's traffic volumes were adequate and that there was potential for attracting additional local and overhead traffic, that funds were readily available to make the necessary repairs and perform maintenance, and that the Northend Shippers were supportive and willing to work to ensure continued operations. Referring to Mr. Morgan's evidence showing that CIND spent a total of $660,000 for track and equipment between 1992 and 1995, but only $16,000 for equipment in 1996, Complainants question CIND's extreme cut in capital expenditures. They also claim that at least three other railroads were ready, willing, and able to assume operation of the Shelbyville Line, and that at least 27 railroads and businesses in the last 2 years expressed interest in purchasing the line. In their view, this underscores the unreasonableness of CIND's refusal to restore rail service over the Line, or permit someone else to do so, and demonstrates that other entities considered the Line to be operable, profitable, and valuable. Complainants have not supported their claims. Rather the record shows that CIND made a serious, long-term commitment, financially and otherwise, to operate the Line until 1996, when a variety of circumstances led it to investigate other options. Complainants allegations that other carriers were interested in acquiring, or being directed to operate, the Line are not persuasive. The two actual offers to provide directed service appear to have been based on the misconception that CIND intended to salvage the track. The offers were withdrawn when the matter was clarified. Finally, we disagree with Complainants criticism of CIND's imposition of a surcharge. It is well settled that a surcharge is not per se unlawful, or a de facto abandonment, even if its effect will be to eliminate the movement of traffic from the Line. In sum, we conclude that CIND acted reasonably in imposing the embargo in light of the cost of repairs, the economics of running the Line, and the carrier's financial condition. Having concluded that the embargo was not unlawful when it was imposed, we now consider whether CIND left the embargo in place for an unreasonably long period of time and whether it did too little to resolve the situation. Initially, we note that the embargoed segment was not operated for 20 months, from February 24, 1997 (when CIND notified shippers that, as a result of significant slippage at milepost 32.8, it would cease operating between milepost 23 and milepost 39), to November 1998, when CIND, by then a RailTex subsidiary, withdrew its abandonment proposal). However, the embargo did not become effective until April 10, 1997, almost seven weeks after operations over the affected segment ceased. We accept CIND's explanation that it mistakenly believed that there was no need to impose an embargo earlier because it had intended to provide, and had arranged to continue providing, service to the shippers via alternate routes. Moreover, less than 3 months elapsed between the date the embargo became effective and the date CIND gave notice of its intent to abandon the line (on July 2, 1997). This is not unreasonable. The record demonstrates that CIND did not sit idle until it filed the abandonment exemption petition in January 1998, and that CIND did not plan to leave the Line segment in an embargoed status indefinitely. Rather, the record shows that CIND was the victim of circumstances beyond its control, i.e., dim prospects for obtaining new traffic, and its facing financial difficulties, so that there was little justification for expending the resources needed to make the necessary repairs. Because the Line historically had carried primarily Conrail's overhead traffic, CIND reasonably determined the proposed Conrail acquisition initially announced in 1996--and the potential loss of the Conrail overhead traffic--would significantly affect the future viability of the Line. CIND engaged in substantive discussions with representatives of CSXT, NS, the City of Indianapolis, and INDOT between October 1996 and October 1997 to discuss various options for the Line but was not satisfied with the results. The discussions terminated on October 16, 1997, at which point CIND apparently felt that the time had come to seek abandonment authority. The petition for an abandonment exemption was filed less than 3 months later. Furthermore, it is clear from the record here that CIND took actions to protect shippers while the embargo was in effect. CIND rerouted all overhead traffic without apparent complaint from the affected overhead shippers. CIND also continued to operate the unembargoed portion of the Line. Most importantly, CIND made, or was prepared to make, alternative arrangements to assure uninterrupted rail service for originating/terminating traffic, albeit at a higher rate. At no time was rail service unavailable to the affected shippers. Thus, we find that CIND acted reasonably during the period of the embargo. In sum, consistent with prior cases, we have balanced the length of the embargo, the cost of required repairs, the apparent intent of the railroad, the amount of traffic, the shippers needs, and the financial ability of the railroad to make repairs in determining whether the embargo and its continuation were justified. This balancing of the circumstances in this case persuades us that here the cessation of operations over a portion of the Line was warranted initially and at no point became unreasonable. Accordingly, we find no violation in this case and hence no basis for damages. As noted above, CIND imposed a surcharge of $700 per carload to Shelbyville Line movements interchanged at Shelbyville, and $1,000 per carload to Shelbyville Line movements interchanged at other points (Indianapolis and Frankfort). Complainants challenge both the reasonableness of the surcharge itself and the reasonableness of the circumstances of its imposition. They request that CIND be ordered to cease charging unlawful rates or engaging in unlawful practices and that damages be awarded. We find no merit to Complainants contention that CIND's publication of the surcharge constituted an unreasonable practice. CIND made arrangements to assure that rail service would continue to be available to affected shippers after it ceased operating the affected segment. CIND negotiated a temporary haulage agreement with NS and was prepared to make arrangements with Conrail to ensure continued rail service if CIND's service had been requested after the surcharge went into effect. The record thus does not support Complainants contention that CIND refused to provide service on request. Finally, Complainants argue that the imposition of a $1,000 per car surcharge was punitive and that CIND failed to present credible evidence to show that the surcharges are reasonable. They suggest that the surcharge constituted CIND's attempt to price itself out of the competitive range for service to the Shelbyville Line shippers. Complainants challenge CIND's limited cost presentation, but Complainants fail to make out even the barest essentials of a case of rate unreasonableness. CIND's cessation of operations over a portion of the Shelbyville Line was reasonable initially and at no point became unreasonable, and the challenged surcharges were not unlawful or unreasonable. It is ordered: 1. The complaint is denied, and this proceeding is discontinued. 2. This decision is effective 30 days from the date of service. Decided: September 28, 2000 Service Date - Late Release September 29, 2000 ============================================================ Comments or questions about this compilation should be directed to Paul Moore at 71367.1057@Compuserve.com. ============================================================