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Untitled (15) / d/ M .Wb� !L 5,I I-� IE.ar Xed jj� �� . y A � ƒ . \ � � \ \� } \} } \` \\ � } \ � > 1 \: } ƒ , ƒ§ I ƒ� I � §} ( {} I � \.- ~ ,amu.,11-VJb VJ:VJ f ffti5If t- 1 VJJ VJJ 'FKUM �W5LU1 KH1L �--�, 3bIJ '(VJta bti'L1 1 Xed SUBJECT- MARK YOUR CALENDAR FOR THURSDAY, NOMIIRE'R 1211998 The Second Washington State Short Line Association formation meeting will be held: Thursday,November 12 11 a.m. to 1:30 p.m. at Tyee Hotel, 500 Tyee Drive Tumwater, SVA, 9$512 (360)352-0511 Attached is a draft agenda of topics For discussion. (My first agenda wasn't Followed too closely, so expect otb.er short line topics as well). We especially desire to have representatives from management of those railroads who were unable to attend the initial meeting. (Jur meeting in Yakima was very informal-'a'nd informative. Please let me know if you plan to attend. I may be reached by any of the following_ Telephone: 253.591.5766 E-mail; dl�aridarci.tacoma.wa.us Fax: 253.591.5262 I look forward to seeing you in Tumwater on November 1.2. Sincerely, Daniel S. Vanda Asst. Engineering Division Manager Representative for the Tacoma Eastern Railroad. Attachments Draft Agenda Map to Tyee Hotel 'ML!ri :waLui MF-iii i^�, 360 706 6821 -'' 1,11-06 10:08 #$54 P.02/03 i WASHINGTON STATE SHORT LINE ASSOCIATION FORMATION MEETING TWO Tumwater, WA Thursday, November 12,. 1998 AGENDA L Bylaw Discussion Copies of the California Short Line Association were distributed at the initial for review as a possible guide for our association. We will go over these by-laws and see if there is consensus of what would work for us and what won't. II. Executive Director/Lobbyist The City of Tacoma staff lobbyist will be attending to provide guidance to the group on haw lobbyists conduct business in Olympia with the legislature and its staff. A short list of interested lobbyists will be presented for discussion by those present. Ill. Action Plan (Strategy) From Here What is the priority of the issues we want to tackle? Mat Js our budget? How many short lines can we realistically expect to participate (financial as well as moral support)? Do we proceed to interview the short list of directorsAobbyists? Next State Legislative Session begins in January. What is our strategy individually and as a group voice? FROM :WSDOT RAIL 360 706 6621 11-06 10:08 #854 P.03/03 MAPS Maos-Yellow Pages - People Search Help F.:"6a';' _ --;. ;;`r:�HU fbids.l3tanat: OalinaApp!!pq Brand name computers wit warranties Yahoo! Maps New Location 500 Tyee Drive, Tumwater, WA 9551 , - ?MAPaVgV.t7-Z Lnv cdAlye SW I 17izivw�dA{te 5 /dl lumHr&ter O sa'OnPcm !f r W aar es- � t � TraperRd SW �� 1 V �--� EUe St— Be union cemetery Trl fX SL SE 010>17 G**3ysb ms G b ba l W rp.;C 1597 NavTach ee a p, ee t e ! —Or report map pro ems. Copyright o 199{-98Yuhn)n.'X111 Rig us Reserved SHORT LINE MEETING WEE HOTEL (360) 352-0311 (TAKE EXIT 102 FROM 1-5) .../pmap.py?Fyt=Tmap&YY=7730&addr=500%20Tyee%2ODrive&city=Tumwater&state=WA 10/22/93 FRANK J.OWENS ARTHUR L.DAVIES O W E N S DAVIES M A C K I E P.S. JOHN V.LYMAN ALEXANDER W.MACKIE' A Professional Services Corporation RICHARD G.PHILLIPS,JR. BRIAN L.BUDSBERG Attorneys at Law Street address MICHAEL W.MAYBERRY 926-24th Way S.W. KIRK M.VEIS Olympia,Washington 98502 ROBERT F.HAUTH MATTHEW B.EDWARDS Mailing address BURTON R.JOHNSON(1970) P.O.BOX 187 ERIK D.PRICE Olympia,Washington 98507-0187 DAVID B.MERCHANT Phone (360)943-8320 'ALSO ADMITTED IN WASHINGTON.D.C. Facsimile (360)943-6150 November 9, 1998 VIA TELEFAX 206-343-7053 Stephen L. Day Betts Patterson & Mines, P.S. 800 Financial Center 1215 Fourth Avenue Seattle, WA 98161-1090 RE: City of Yelm Dear Steve: I am enclosing some changes on your resolution. The Rail Advisory Committee is not an operating entity per se, but rather an advisory committee to the City of Yelm. As such, it would not have its own budget. Rather, I have included a marketing fund which the Rail Advisory Committee would recommend for use, but which would be included in the Public Works Director's overall budget. Thus, all funds would be budgeted, administered, and accounted for by the City. The Advisory Committee would have no corporate standing in terms of contracting or expenditures (and thus no significant risk or liability as a corporate entity). My changes are shown in redline in the attached. Very truly yours, OWENS DAVIES MACKIE, P.S. Alexander W. Mackie AWM/kr Enclosure cc: -,"Ken Garmann w/enc Shelly Badger w/enc CA53Welm�DayU Wpd SUGGESTED MODIFICATIONS TO PROPOSED RESOLUTION ... [starting with Section 2] Section 2. A Rail Advisory Committee. A Rail Advisory Committee is established to assist and advise the City of Yelm in acquiring, operating and developing the Yelm Branch line. (a) The Committee shall be composed of the Mayor of Yelm,the Mayor of Roy,or their designees, and two persons appointed by the City of Yelm and one person appointed by the City of Roy,to serve at the pleasure of the respective appointing Mayor: (b) The Committee members will receive no additional compensation, except that the Cit maGentmittee may by majority vote reimburse any travel or administrative expenses of the appointees out of the administrative fund established herein under the guidelines established by the City. (e) Administrative ftind. A Section 3. Rail Marketing Fund. The Rail Advisory Committee shall advise the Public Works Director on an annual marketing budget as determined by the City of Yelm of up to %2 of I%of any rents,profits or other payments received by the City of Yelm for use or uses of any part of the Yelm Branch. This fund to be created annual as part of the operating budget of the Department of Public Works, and its use shall be subject to review and audit. The fund shall be used to promote the use of the rail line. Section 4. 3-: The Director of Public Works shall: (a) Negotiate the acquisition of the Yelm Branch Line and appurtenant property with the appropriate BNSF officials and submit to the council a proposal for such acquisition. (b) Develop in consultation with the Rail Advisory Committee created herein,and submit to the Council for approval, a proposed rail policy which will encourage and promote freight and commuter rail service,provide for safe and economical development and use of all property in the acquired Branch Line, and prepare a prudent and business-like property management plan for the acquired property. (c) Assist the Rail Advisory Committee in preparing an appropriate budget for its operating expenditures and other such uses of the Marketing ^ tnit 'strat w Fund created in Section 3 , and, as part of the Public Works' normal budgeting process. the Direetor will ii.....l.d. '.'..e Rail A visory Ganunittee proposed btidget in the Pt+lie IvNlorks budget for Gai (d) Create a proposed bid ... [no changes to remainder of proposed resolution] CA53\Ye1m\Rai1Changes.wpd Plvl J JU lnvix 11 UJ "i vnLAU. !!nl lliUj 111n V111L I-na PTV. I J U I J 1, 1 V�� _ . OWENS DAVIES MACS,P.S.,Attorneys at Law 926-24th Way S.W.,Olympia,WA 98502 P.O.Box 1877 Olympia,WA 98507 Phone: (360)943-8320 Fax: (360)943-6150 "FAX" COVER SHEET Fax number TO: Stephen Day 206-343-7053 cc:JEe G mann and Shelly Badger 458-4348 FROM: A.W. (Sandy)Mackie DATE: November 9, 1998 NUMBER OF PAGES: 3 (including this page) DOCUMENT: Fetter w/attachment Hard copy will be sent THIS FACSIMILE MAY CONTAIN CONFIDENTIAL; >'RTVILEGED INFORMATION INTENDED ONLY FOR THE INDIVIDUAL OR ENTITY TO WHOM IT IS ADDRIJSSI?p.bo NOT READ,COPY,OR DISSEMINATE THIS INFORMATION UNLESS YOU ARE THEADDRESSEE(ORTHE PERSONRESPONSIBLEI+ORDELIVERING IT).IFYOUHAVERECEIVED THIS COMMUNICATION IN ERROR,PLEASE CALL US COLLECT IMMEDIATELY AT 360.943.8320 AND RETURN THE ORIGINAL COMMUNICATION TO OWENS DAVIES MACKIE,PO BOX 187, OLYMPIA,WA 9.8507,VIA.TIME POSTAL SERVICE. MAILING COSTS WILL BIJ REIMBURSED. TETANIC YOU. If you did not receive all copies,or if any are illegible,please call Karen at(360)943-8320. r 'Au P- J-jo MVA 11 Uj nevi 07-A', IJAY IBJ, lnhUlz rAA rlu, , -41�4J01JU r. L FRANK L.DAVIES OWENS ARTOWENS [SAV I E S M AC K I E P.S. A JOHN V LYMAN ALEXANDER W.MACKI6' A Professional Services Corporation RICHARD G.PHILLIPS,JR. BRIAN L BUDS9ER0 Attorneys at Law Street address MICHAEL W.MAYBERRY 926-24th Way S.W. aRK M.VEIS Olrhpla,Washington 98502 ROBERT F.HAUTH MAtiTHEW B,EDWARDS Mailing address BURTON R.JOHNSON(im) P.O.Box 187 ERIK D.PRICE Olympia,Washington 98507-0187 DAVID B.MERCHANT Phone (360)943.8320 -ALSO ADMITTEQ IN muo! TON,D.O. Facsimile (360)943-6150 November 9, 1998 VIA TELEFAX 206-3431-7053 Stephen I„Day Betts Patterson&Mines,P.S. 800 Financial Center 1215 Fourth Avenue Seattle,WA 98161-1090 RE: City of'Y'elm Dear Steve: I am enclosing some changes sin your resolution. The Rail Advisory Committee is not an operating entity per se,but rather an advisory committee to the City of Yelm. As such,it would not have its own budget. Rather,I have included a marketing fund which the Rail Advisory Committee would recommend for use,but which would be included in the Public Works)Director's overall budget. Thus, all funds would be budgeted, administered, and accounted for by the City.. The Advisory Committee would have no corporate standing in terms of contracting or expenditures(and thus no significant risk or liability as a corporate entity). My changes are shown in redline in the attached. Very truly yours, OWENS DAVIE MACKIE,P.S. Alexander W.Mackie AWM/kr Enclosure cc: Ken Garmann w/enc Shelly Badger w/enc C:\53\Y6lm\DayLt wpd AU Z)—JO MULL 11 - I nlrl 1/nY izo, 1vinwuz PAA LIU. J SUGGESTED MODIFICATIONS TO PROPOSED RESOLUTION ... (starting with Section 2] Section 2. A Rail Advisory Committee. A Rail Advisory Committee is established to assist ad advise the City of Yelm in acquiring, operating and developing the Yelm Branch line. (a) The Committee shall be composed of the Mayor of Yehn,the Mayor of Roy,or their designees,and two persons appointed by the City of Yelm and one person appointed by the City of Roy,to serve at the pleasure of the respective appointing Mayor: (b) The Committee members will receive no additional compensation, except that the Ci1Y ma reimburse any travel or administrative expenses of the appointees out of the administrative fund established herein under the guidelines-established by the C� Section 3. Rail Marketing Fund. The Rail Advisory Committee shall advise the Eu-blip Works Director on an annual marketing budget as determined by the City of Yelm of up to %of 1%of any rents,profits or other payments received by the City of Yelm for use or uses of any part of the Yelm Branch. This fund to be created annual as part of the operating budget of the Department of Public Works,and its use shall be subject to review and audit, The fund shall be used topromote the use of the rail line. Section 4.-3 The Director of Public Works shall: (a) Negotiate the acquisition of the Yelm Branch Line and appurtenant property with the appropriate 13NSF officials and submit to the council a proposal for such acquisition, (b) Develop in consultation'with the Rail Advisory Committee created herein,and submit to the Council for approval,a proposed rail policy which will.encourage and promote freight and commuter rail service,provide for safe and economical development and use of all property in the acquired Branch Line, and prepare a prudent and business-like property management plan for the acquired property. (c) Assist the Rail Advisory Committee in preparing an appropriate budget for its operating expenditures and other such uses of the MarketingAdministrati. Fund created in Section 3a;G Subscetien and, as part of the Public 'Works' normal budgeting.process. the Direetor (d) Create a proposed bid... [no changes to remainder of proposed resolution] CA531Ye1m\Rai1Changes.wpd NOV-09-1998 12:02 BETTS PATTERSON MINES P.01/04 (9wC)fficLw �ETTi� PATT g RSON &MI NES., P.S. 800'Financial'Center '1215 Fourth Pvenuc Seattle,Washington 98161-1090 l Fax: 206-341-7053 ` Phone: 20&2192-3988 i I FAX COVER SHEET TO: ! Ke ma FAX NO.: f16M 458-4348 i OF: j City of_ lm �I FROM: Stgphen L. Day OUR FILE: 5 2 01 I RE: Revi ed Draft Of REW sed Rcsolutiffl NO. O PAGES (INCL. TFaS PAGE): 4_ DATE: 1119198 I • NO'1"Ey The following draft incorporates Sandy Mackie's suggestions an a rail marketing fund as a new section 3. Sandys letter emphasizes that the rail advisory committee is not an opera 'ting entity per se. Since it is advisory only, and has no corporate standing for contradting or expenditures, it should not have its onm budget. This is as we envisioned the entity and Sandy's suggestions artfully clarify the status and the budgeting process. I will send a copy of the current draft back to Sandy Mackie. Also, since there is so little time before tonight's meeting, I will send a copy to directly to Gordon Scraggin. cc: Alexander W. Mackie (360) 943-8320 Gordon A. Scraggin (360) 843-0279 THE I RMATION CONTAINED IN THIS'VACSIMME COMMUNICATION IS PRIVILEGED AND/OR CONFIDENTIAL INPOR 'TION INTENDED ONLY FOR THE USE OF THE INDIVIDUAL OR FNTTrY NAM13D ABOVE, 1F THE READER OF THIS CQVER PAGE IS NOT'I HE INTENDaD RECIPIENT,YOU ARE HEREBY'NOTMED THAT ANY DISSEMINATION, D ON OR COPYING OF THIS COMMUNICATION OR THE INFORMATION CONTAINED HEREIN IS STRICTLY PROHIB . IF YOU HAVE RECEIVED THIS COMMUNICA'T'ION IN ERROR,PLEASE IMMEDIATE-L Y NOTIFY US BY TEL NE(206)292-948$,AND RETURN'T HIS FACSIMIV E To US A'I"THE ABEs OVADDRESS VIA U.S.POSTAL SERVICE THANK YOU. I . I NOV-06-1998 17:45 BETTS PATTERSON MINES P.01 taw Offices i BETTS PATTi E XLJ 8 MMES, P.S. 800 Fin anc 1 Center 1235 FourtI Avenue Seattle,Wathin�ton9£i1C1-'1090 Fak: 206-343-7053 Phone: 206-292-9988 FAX COVER SHEET i :TO: Ken Garmann FAX NO. : (360) 458-4348 OF$ I city Of Xelm FROM Stephen L. Day OUR FILE: 99990008 'RE: Ij Latest Draft NO. OF PAGES (INCL. THIS PAGE) : 4 DATE: 1116198 Pleale call (206)292-9988 (Ext. 557) if you do not receive any of thest pages or if there is a problem. ;PLEP►83 DELIVER n MEDIATELY: (_) .NOTE typoI emailed a copy to your office, as well. Hope there are no I did it myself. I I I I THE IIFORMATION CONTAINED IN THIS FACSIMILE COMMUNICATION IS PRIVILEGED AND/OR CONFIDENTIAL INFORMATION INTENDED ONLY FOR THE USE OF THE INDIVIDUAL OR ENTITY NAMED ABOVE. IF THE READER OF THIS COVER PAGE IS NOT THE INTENDED RECIPIENT, YOU ARE HiPj= NOTIFIED THAT ANY DISSEMINATION, DISTRIBUTION OR COPYING OF THIS COMMU*ICATION OR THE INFORMATION CONTAINED HEREIN IS STRICTLY PROHIBITED. IF YOU HAVE AECEMD THIS COMMUNICATION, IN ERROR, PLEASE IMMEDIATELY NOTIFY IIS BY TSLEPF,iONE (206) 292-9988, AND RETURN THIS FACSIMILE TO US AT THE ABOVE ADDRESS VIA T7 POSTAL SERVICE. THANK YOU. I NOV-06-1998 17 45 BETTS PATTERSON MINES P.02 I i I RESOLUTION NO. A RESOLUTION To state the guiding principles for the acquisition and use and operational oversight of the railroad branch line, the Yelm Branch Line, currently owned by'the Burlington Northern Santa Fe Railway Company; to create a Rail Advisory Committee to advise the city on the use, operation and development of the acquired property;;and to provide guidance to the Director of Public Works on how to proceed; and I WHEThe Burlington Northern Santa Fe Railway (BNSF) currently operates over a railroa� corridor called the Yelm Branch Line which extends from Milepost 8.55 near f.akeview� on the north to toile post 2555 in the City of Yelm on the south and has indicatedl its interest in discontinuing rail service over at least a part of that branch line; and WHERE S, The City of Yelm has indicated its interest in acquiring all property interests pow held by the BNSF in its Yelm.Branch Line for general public welfare, economic development and investment purposes; and I WHEREAS, The City of Roy has expressed its interest in participating with the City of Yelm in �etting public policy for the use and development of the BNSF Yelm Branch, insofar ' such use operation and development affects the City of Roy; and 'vel been supporting the public 'UUHEREAS, The Yelm Chamber of Commerce has actively pp g p acquisition of the Yelm branch; and I BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF YELM, THE MA.YOl CONCURRING: Section 1. The Council endorses the following guiding principles in acquisition, operatioh and development of the BNSF Yelm Branch Line (formerly known as the Northern Pacific's Prairie Line): All property ropertY interests its Yelm Branch Line, should be acquired by the City of � Yehn a�d after such acquisition the line of railroad shall be referred to as 'The Prairie Line." The pre I ervation and vitality of businesses located along the BNSF's Yehn Branch Line should preserved, and additional businesses should be encouraged to locate along the line. 982940186/1I7 1721/ 1 NOV-06-1998 17:46 BETTS PATTERSON MINES P.03 I I I The exploration and development of commuter rail and other passenger uses in conjuncti'on with development of the acquired property should be encouraged. i The interests of the City of Roy and its citizens will be considered in any use or dei elopiaient of the BNSF"s Yehn Branch line, and appropriate interlocal agreements or contracts may be entered into by the two Cities to achieve and carry out mutual intierests.I Section 21, The Prairie Line Rail Advisory Committee. The Prairie Line Rail Advisory Committge is established to assist and advise the City of Yehn in acquiring, operating and developing the acquired rail property, °°The Prairie Line. (a) The Committee shall be composed of the Mayor of Yelm, the Mayor of Roy, or their designees, and two persons appointed by the City of Yelm and one person appointe6 by the City of Roy, to serve at the pleasure of the respective appointing Mayor: i (n) The committee members will receive no additional compensation, except that the Coma tee may by majority vote reimburse any travel or administrative expenses of the appointees out of the administrative fund established herein. ( Administrative fund. The Prairie Une Rail Advisory Committee may receive up to 1/g of 1016 of any rents, profits or other payments received by the City of Yelm for use or uses of any part of the Prairie Line. This fund to be created annually as part of the operating budget of the Department of Public Works, and its use shall be subject to review and audit. Section 3. The Director of Public Works shall: ( ) Negotiate the acquisition of BNSF's Yelm Branch Line and appurtenant property with appropriate BNSF officials and submit to the council a proposal for s*ch acquisition. cleDevelopin consultation with the Prairie Line Rail Advisory Committee ated herin, and submit to the Council for approval, a proposed rayl policy *ch will encourage and promote freight and commuter rail service, provide for safe and economical development and use of all property in the acquired branch lane, and prepare a prudent and business-like property management plan for the acquired property. ( ) Assist the Prairie Line Rail Advisory Committee in preparing an appropriate budget for its operating expenditures and other such uses of the Administrative I 2 9szW186A10M/1721/ NOV-06-1998 17 46 BETTS PATTERSON MINES P.04 I I Fw�d created in Section 2 subsection (c), and, as part of the Public Works' normal buidgeting process, the Director will include the Prairie Line Rail Advisory Cgmmittee proposed budget in the Public Works budget for Council approval. i (d� Create a proposed bid requirement to solicit appropriate offers from cotent rail operators to contract with the City for engaging in common and ,or o tract carrier freight rail service over the Prairie Line. The qualifications for a co0act rail operator should emphasize financial responsibility and rail operation experience, and ability to meet current rail customer's transportation reiquirements. (el) Develop an Operating Agreement which the City may use to engage the seivlces of a competent rail operator, or operators, ensuring that such agreement will provide an operator or operators who will meet the reasonable service requests of businesses who desire common carrier rail service, that the City will rimain in overall control of the properties, and that such operators will be able to bear the full expense and risk attendant with such rail operations. Develop a program of active oversight of future rail operations and other property uses in the Prairie Line to ensure all such uses are in compliance with contract, safety and public use requirements. (g) Prepare and file on behalf of the City any documents necessary to carry out toe acquisition and operation of The Prairie Line with the Surface Transportation board, the Federal Railroad Administration, the Washington Utilities and Transportation commission, the Washington Department of Transportation, the Association of American. Railroads, or any similar agencies or organizations. Section �4. The Council supports all progressive and safe uses of the acquired property which well benefit the general public and directs the Mayor to explore all reasonable opportunities for The Prairie Lime to yield,a return on the City's investment; Provided, howevei that such uses must be consistent, and not interfere, with the general acqulsidon purpose of providing freight and passenger rail service, so long as there is a reasonable demand or potential need for such services. I I 982MS6,1106"/1721/ 3 TOTAL P.04 • l MEMO TO : Stephani Conners FROM : KEN GARMANN te� RE : " BNSF ai.lway" DATE : 11-8-98 l Steve Day on Friday was going t "Ell mai o your station a new draft of the Yelm Branch reso ut s we did not see it as of the end of day Friday, will you check and see if it is available. If it is not available by mid-morning please fax & distribute the attached copy as a "draft" to the following: �v "e 11 y=Badger �VMmoo` d(f-:G-_Petersori - -- - - - - fCharlie–Burn_ham- t;_ faX�#_ 253=922'9=7:81;-or you`eou-ld.-'!E"" Jo.e�l_-Der-efrield;Ma T-11 -1 -- # 253 843 _0279 cJoeWill-Tams-&--John'- Thompson Prairie- Development �-------- ---- — fax #_ 3-6'07-74-5 8--8 3 0.1.. -- Lisa Kttlsb_y,�Mi.les_Sand=-& Gravel -; ----n--:-fax #x-25-3-8-3-3-3_7 4 6 BradBarton,--Miles,-Sand &:-Gravel, �__m_� P __�_• �_, ._� _ . - see abovef' Ray_A11lred -Dot Rail f ax # 36 0_-7 0 5 _6 8 2-1-' Bar i�r e Wilcox, Wilcox Farms -- phone ,#r360=458 7774,check -witYi-Wilcox Farms'for Will you p ck with UCBO to confirm the availability of the passenger van for monday and 5 : 00 pm. I called and voice mailed a request for its use seve al weeks ago. Thanks memo47 DRAFT RESOLUTION NO. A RESOLUTION To state the guiding principles for the acquisition and use and operational oversight of the railroad branch line, the Yelm Branch Line, currently owned by the Burlington Northern Santa Fe Railway Company; to create a Rail Advisory Committee to advise the city on the use, operation and development of the acquired property; and to provide guidance to the Director of Public Works on how to proceed; and WHEREAS, The Burlington Northern Santa Fe Railway (BNSF) currently operates over a railroad corridor called the Yelm Branch Line which extends from Milepost 8.55 near Lakeview on the north to mile post 25.55 in the City of Yelm on the south and has indicated its interest in discontinuing rail service over at least a part of that branch line; and WHEREAS, The City of Yelm has indicated its interest in acquiring all property interests now held by the BNSF in its Yelm Branch Line for general public welfare, economic development and investment purposes; and WHEREAS, The City of Roy has expressed its interest in participating with the City of Yelm in setting public policy for the use and development of the BNSF Yelm Branch, insofar as such use operation and development affects the City of Roy; and WHEREAS, The Yelm Chamber of Commerce has actively been supporting the public acquisition of the Yelm branch; and BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF YELM, THE MAYOR CONCURRING: Section 1. The Council endorses the following guiding principles in acquisition, operation and development of the BNSF Yelm Branch Line (formerly known as the Northern Pacific's Prairie Line): All BNSF property interests its Yelm Branch Line, should be acquired by the City of Yelm and after such acquisition the line of railroad shall be referred to as "The Prairie Line." The preservation and vitality of businesses located along the BNSF's Yelm Branch Line should be preserved, and additional businesses should be encouraged to locate along the line. The exploration and development of commuter rail and other passenger uses in conjunction with development of the acquired property should be encouraged. 982940186/110998/1039/ The interests of the City of Roy and its citizens will be considered in any use or development of the BNSF's Yelm Branch line, and appropriate interlocal agreements or contracts may be entered into by the two Cities to achieve and carry out mutual interests. Section 2. The Prairie Line Rail Advisory Committee. The Prairie Line Rail Advisory Committee is established to assist and advise the City of Yelm in acquiring, operating and developing the acquired rail property, "The Prairie Line." (a) The Committee shall be composed of the Mayor of Yelm, the Mayor of Roy, or their designees, and two persons appointed by the City of Yelm and one person appointed by the City of Roy, to serve at the pleasure of the respective appointing Mayor: (b) The committee members will receive no additional compensation, except that the Committee may by majority vote reimburse any travel or administrative expenses of the appointees out of the administrative fund established herein. (c) Administrative fund. The Prairie Line Rail Advisory Committee may receive up to 1/2 of 1% of any rents, profits or other payments received by the City of Yelm for use or uses of any part of the Prairie Line. This fund to be created annually as part of the operating budget of the Department of Public Works, and its use shall be subject to review and audit. Section 3. The Director of Public Works shall: (a) Negotiate the acquisition of BNSF's Yelm Branch Line and appurtenant property with appropriate BNSF officials and submit to the council a proposal for such acquisition. (b) Develop in consultation with the Prairie Line Rail Advisory Committee created herein, and submit to the Council for approval, a proposed rail policy which will encourage and promote freight and commuter rail service, provide for safe and economical development and use of all property in the acquired branch line, and prepare a prudent and business-like property management plan for the acquired property. (c) Assist the Prairie Line Rail Advisory Committee in preparing an appropriate budget for its operating expenditures and other such uses of the Administrative Fund created in Section 2 subsection (c), and, as part of the Public Works' normal budgeting process, the Director will include the Prairie Line Rail Advisory Committee proposed budget in the Public Works budget for Council approval. 982940186/110998/1039/ 2 (d) Create a proposed bid requirement to solicit appropriate offers from competent rail operators to contract with the City for engaging in common and contract carrier freight rail service over the Prairie Line. The qualifications for a contract rail operator should emphasize financial responsibility and rail operation experience, and ability to meet current rail customer's transportation requirements. (e) Develop an Operating Agreement which the City may use to engage the services of a competent rail operator, or operators, ensuring that such agreement will provide an operator or operators who will meet the reasonable service requests of businesses who desire common carrier rail service, that the City will remain in overall control of the properties, and that such operators will be able to bear the full expense and risk attendant with such rail operations. (f) Develop a program of active oversight of future rail operations and other property uses in the Prairie Line to ensure all such uses are in compliance with contract, safety and public use requirements. (g) Prepare and file on behalf of the City any documents necessary to carry out the acquisition and operation of The Prairie Line with the Surface Transportation Board, the Federal Railroad Administration, the Washington Utilities and Transportation Commission, the Washington Department of Transportation, the Association of American Railroads, or any similar agencies or organizations. Section 4. The Council supports all progressive and safe uses of the acquired property which will benefit the general public and directs the Mayor to explore all reasonable opportunities for The Prairie Line to yield a return on the City's investment; Provided, however, that such uses must be consistent, and not interfere, with the general acquisition purpose of providing freight and passenger rail service, so long as there is a reasonable demand or potential need for such services. 982940186/110998/1039/ 3 ow°F Tt� r FAx TRANSMISSION CITY OF YELM PO BOX 479 - 105 YELM AVE W YELM YELM WA 98597 WASHINGTON 360-458-3244 FAX: •360-458-4348 To: �L �� C'��l`� Date: 1 (/9 ` g Fag#: u 6 9S-D Pages: including:this cover sheet. From: Subject: CONIlVIENTS: ** If you do not receive all copies or any copy is not legible,please call(360)458-3244 as soon as possible. ds/cAoffice\forms\fax.3 i� ��`� 4- ) t ; �ti OF THE p�l� FAX TRANSMISSION CITY OF YELM PO BOX 479 - 105 YELM AVE W YELM YELM WA 98597 WASHINGTON 360-458-3244 FAX: 360-458-4348 To: Date: Fax#: _ Pages: including,this cover sheet. From: Subject: COMNMNTS: ** If you do not receive all copies or any copy is not legible,please call(360)458-3244 as soon as possible. ds/c:bffice\forms\fax.3 jl 1 FAx TRANSMISSION CITY OF YELM PO BOX 479 - 105 YELM AVE W YELM YELM WA 98597 WASHINGTON 360-458-3244 FAX: 360-458-4348 U�" — C� To: �6�t= Date: Fax#: Pages: including,this cover sheet. From: Subject: COMMENTS: 74 ** If you do not receive all copies or any copy is not legible,please call(360)458-3244 as soon as possible. ds/c:office\forms\fax.3 �� a �! �� ,yy�w uF THE FAx TRANSMISSION CITY OF YELM PO BOX 479 - 105 YELM AVE W YELM YELM WA 98597 WASHINGTON 360-458-3244 FAX: 360-458-4348 To: Date: 9 Fax#: �� Pages: -� , including;this cover sheet. From: Subject: COMMENTS: ** If you do not receive all copies or any copy is not legible,please call(360)458-3244 as soon as possible. ds/c:bffice\forms\fax.3 U THE p�f FAX TRANSMISSION CITY OF YELM PO BOX 479 - 105 YELM AVE W YELM YELM WA 98597 WASHINGTON 360-458-3244 FAX: 360-458-4348 To: Date: Fax#: � , p 13 , Pages: including,this cover sheet. From: Subject: COMMENTS: ** If you do not receive all copies or any copy is not legible,please call(360)458-3244 as soon as possible. ds/c:bffice\fonms\fax.3 THE r FAx TRANSMISSION CITY OF YELM PO BOX 479 - 105 YELM AVE W YELM YELM WA 98597 WASHINGTON 360-458-3244 FAX: 360-458-4348 To: Date: Fax 9: �,-- � —�� Pages: including:this cover sheet. From: Subject: COMMENTS: ** If you do not receive all copies or any copy is not legible,please call(360)458-3244 as soon as possible. ds/c:office\fomis\fax.3 �� r N,00-03-1998 11:28 - BETTS PATTERSON MINES �•� P.01 i I dw Offices TTS PATTERSON &MINES, Ps. 800-Fittandal Center 1215 Fourth Avenue Seattle,Washington 9$1(.,-1-'1090 Fax: 206-343.7053 Phoiw: 206-292-9938 FAX COVER SHEET TO: Ken- Garmann FAX NO. : (360) 458-4348 OF: City of Yelm FROM: Stephen L. Day OUR FILE: 57820Q01 RE: Revised draft NO. OF PAGES (INCA.,. THIS PACE) : 4 DATE: Please call (206)292-998$ (Ext. 557) if you do not receive any of these pages or if there is a problem. PLEASE DELIVER MEDIATELY: (_) NOTE: Here is the revised draft which includes your comments and Charlie's comments; reorders the principles in Section 1; attempts- to ttemptsto make the rail advisory panels budgeting process clearer. I assume you submit a Public Works budget for Council approval. . . is that the correct process? Pr ised things (1) 'fOme up with a mood name for the Rail Advisory Cvunoil. (2 Ge I., die Mackie tt- decide sin the organizational entity.)Md the rail property - it should probably have t esame name as the advisory council and there is no reason we can't have it be a railroad name such as "Nisqually Valley" Railroad Company. This would add to its historical color, and give notice that the City's organiz n a railroad company and the operators are merely contractors. 3' insider doing some initial exploratory talks with a few po en a rail operators to see what their interests and concerns might be. Y suggests 'Puget Sound & Pacific, Rail America and Willamette & Pacific THE INFORMA`T'ION CONTAINED IN THIS FACSIMILE COMMUNICATION IS PRIVILEGED AND/OR CONFIDENTIAL INFORMATION INTENDED ONLY FOR THE USE OF THE INDIVIDUAL OR ENTITY NAMED ABOVE. IF THE READER OF THIS COVER PAGE IS NOT THE INTENDED RECIPIENT, YOU ARE HEREBY NOTIFIED THAT ANY DISSEMINATION, DISTRI$UTION OR COPYING OF THIS COMMUNICATION OR THE INFORMATION CONTAINED HEREIN IS STRICTLY PROHIBITED.- IF YOU JMVE RBCFIVED THIS COMMUNICATION .IN ERROR, PLEASE IMMEDIATELY NOTIFY US BY TELEPHONE (206) 292-9988, AND RETURN THIS FACSIMILE TO US AT THE ABOVE ADDRESS VIA U.S. POSTAL SERVICE. THANK YOU. k'0)-03-1998 11:29 BETTS"PRTTERSON M I NES P.02 RESOLUTION NO. A RESOLUTION To state the guiding principles for the acquisition and use and operational oversight of the Yehn Branch of railroad currently owned by the Burlington Northern Santa Fe Railway Company; to-create a Rail Advisory Committee to advise the city on the use, operation'and development of the Yehn Branch; and to provide guidance to the Director of Public Works on how to proceed; and WHEREAS, The Burlington Northern Santa Fe Railway (BNSF) currently operates over a railroad corridor called the'Yehn Branch Tine which extends from Milepost 8.55 near Lakeview on the north to mile post 25.55 in the City of Yelm on the south and has indicated its interest in discontinuing rail'service over a part of its Yelm Branch; and WHEREAS, The City of Yehn has indicated its interest in acquiring all property interests now held by the BNSF in the Yelm Branch Line for general public welfare, economic development and investment purposes; and WHEREAS, The City of Roy has expressed its interest in participating with the City of Yehn in setting public policy for the use and development of the Yelm Branch, insofar as such use operation and development affects the City of Roy; and WIRBAS, The Yelm. Chamber of Commerce has actively been supporting the public acquisition of the Yelm branch; and BE IT RESOLVER BY THE CITY COUNCIL OF THE CITY OF YELM, THE MAYOR CONCURRING Section 1. The Council endorses the following guiding principles in acquisition, operation and development of the Yelm Branch Line: All BNSF property interests in the Yelm Branch Line should be acquired by the City. The preservation and vitality of businesses located along the Yelm Branch Line should be preserved, and additional businesses should be encouraged to locate along the line. The exploration and development of cornmuter rail and other passenger uses in conjunction with development of the Yelm Branch Line should be encouraged. The interests of the City of Roy and its citizens will be considered in any use or development of the Yelm Branch line, and appropriate interlocal agreements or 982940186/110398/1047/ N V-03-1998 11:29 BETTS PATTERSON MINES P.03 contracts may be entered into by the two Cities to achieve and carry out mutual interests. Section 2, [Nisqually Valley] Rail Advisory Committee. A Rail Advisory Committee is established to assist and advise the City of Yehn in acquiring, operating and developing the Yehn Branch line. (a) The Committee shall be composed of the Mayor of Yehn, the Mayor of Roy, or their designees, and two persons appointed by the City of Yelm and one person appointed by the City of Roy, to serve at'the pleasure of the respective appointing Mayor: (b) The committee members will receive no additional compensation, except that the Committee may by majority vote reimburse any travel or administrative expenses-of the appointees out of the administrative fund established herein. (c) Administrative fund. The [Nisqually Valley] Rail Advisory Committee may receive up to 1/2 of 1% of any rents, profits or other payments received by the City of Yelm for use or uses of any part of the Yelm Branch. This fund to be created annually as part of the operating budget of the Department of Public Works, and its use shall be subject to review and audit. Section 3. The Director of public Works.shall: (a) Negotiate the acquisition of the Yelm Branch Line and appurtenant property with appropriate BNSF officials and submit to the council a proposal for such acquisition. (b) Develop in consultation with the [Nisqually Valley] Rail Advisory Committee created herein, and submit to the Council for approval, a proposed rail policy which will encourage and promote freight and commuter rail service, provide for safe and economical development and use of all property in the acquired Branch Line, and prepare a prudent and business-like property management plan for the acquired property. (c) Assist the [Nisqually Valley] Rail Advisory Committee in preparing an appropriate budget for its operating expenditures and other such uses of the Administrative Fund created in Section 2 subsection (c), and, as part of the Public Works' normal budgeting process, the Director will include the [Nisqually Valley] Rail Advisory Committee proposed budget in the Public Works budget for Council approval. 982940186/110398/1047/ 2 410V-03-199e 11:30 BETTS PATTERSON MINES P.04 (d) Create a proposed bid requirement to solicit appropriate offers from competent rail operators to contract with the City for engaging in common and contract carrier freight rail service over the 'Yelm Branch Line. The qualifications for a contract rail operator should emphasize financial responsibility and rail operation experience, and ability to meet current rail customer's transportation requirements. (e) Develop an Operating Agreement which the City may use to engage the services of a competent rail operator, or operators, ensuring that such agreement will provide an operator or operators who will meet the reasonable service requests of businesses who desire common carrier rail service, that the City will remain in overall control of the properties, and that such operators will be able to bear the full expense and risk attendant with such rail operations. (f) Develop a program of active oversight of future rail operations and other property uses in the Yelm Branch Lane to ensure all such uses are in compliance with contract, safety and public use requirements. (g) Prepare and file on behalf of the City any documents necessary to carry out the acquisition and operation of the "Yelm Branch Lire with the Surface Transportation Board, the Federal Railroad Administration, the Washington Utilities and 'Transportation Commission, the Washington Department of Transportation, the Association of American Railroads, or any similar agencies or organizations. Section 4. The Council supports all progressive and safe uses of the acquired property which will benefit the general public and directs the Mayor to explore all reasonable opportunities for the Yeltn Branch line to yield a return on the City's investment; Provided, however, that such uses must be consistent, and not interfere, with the general acquisition purpose of providing freight and passenger rail service, so long as there is a reasonable demand or potential need for such services. M940186/1103es/1047/ 3 TOTAL P.04 NOU-03-1998 14:04 BETTS PRTTERSON MINES 'Li� P.01 gr BETTS FAX MESSAGE PATTERSON & 1141NES, P.S. 800 Financial Center 1215 Fourth Avenue scattic,Washington 98161-1090 Phonc; (206)292-9988 Fax- (206)343-7053 PRIVILEGED AND CONFIDENTIAL The information contained in this transmission is privileged and confidential. It is intended solely for the use of the above named recipient. If you received this transmission in error, YOU ARE HEREBY NOTIFIED THAT ANY DISSEMINATION, DISTRIBUTION OR COPYING OF THIS COMMUNICATION IS STRICTLY PROHIBITED. If you have received this transmission in error, please notify us immediately by telephone and return the original transmission to us at the above address via first class mail. We will, of course, be happy to reimburse you for any costs. Thank you. DATE: November 3, 1998 FILE NO.: 5782.0001 TO: Kett Garma m Director of Public works FACSRVIILE NO.: 1-360-458-1348 TELEPHONE NO.: 1-360-458-3244 FROM: Stephen L. Day, Esq. RE: STS Decision-Tacoma Eastern Railway MESSAGE: Attached for your information is the STB decision we discussed. This transmission consists of 10 pages, including this cover sheet. If you have not received the entire transmission, please call us at(206) 292-9988. i.NOV-03-1998 14:05 BETTS PATTERSON MINES P.02 29664 SERVICE DATE-OCTOBER 16, 1998 EB SURFACE TRANSPORTATION BOARD DECISION STB Docket No,AB-548 TACOMAEASTERNRAILWAY COMPANY—ADVERSE DISCONTINUANCE OF OPERATIONS APPLICATIONA LINE OF CITY OF TACOMA,INPIERCE,THURSTON AND LEWIS COUNTIES,WA Decided: October 15, 1998 On June 23, 1998,the City of Tacoma,WA(City),filed an application under 49 U.S.C_ 10903 requesting that the Surface Transportation Board(Board)find that the public convenience and necessity require and permit the discontinuance ofthe operations by the Tacoma Eastern . Railway Company(TE)1 on 131.5 miles of City rail line in Pierce,Thurston, and Lewis Counties, WA(line).' We will grant the application. Pursuant to an operating agreement(the Operating Agreement or the Contract)entered into by the City and TE on December 30, 1994,TE became the exclusive operator of the line for 25 years. Under the Contract,the City could terminate the Operating Agreement for material default if, after notice,TE failed to cure the default. According to the City,the Contract has been terminated because TE has not satisfactorily performed its obligations. Specifically,the City states that TE has failed to(1)develop freight traffic on the line,(2)respond in a timely manner to the City's request for information concerning its operation ofthe line, (3)provide the City with financial information regarding its operation ofthe line,and(4)cooperate in the City's grant funding efforts. Because TE is unwilling to cease operations,the City filed for relief in the form of an adverse discontinuance of operations! ' TE was authorized to operate the line by lease in Tacoma Eastern Railway Co.--Lease and Qperation Ex=tion—Cily ofTacoma,Washin .on.Finance Docket No.32591 (ICC served Nov. 3) 1994), ' The lime extends(1)from milepost 2192.0,at Tacoma, to milepost 17.7,at Chehalis, and (2)from milepost 2192.0,at Tacoma,to milepost 64.2,at Morton. 3 The City intends to replace the operations of TE with operations by the Belt Line Division ofthe City of Tacoma Department of Public Utilities(Belt Line). NOV-03-1998 14:05 BETTS PATTERSON MINES P.03 STB Docket No.AB-548 On application by the City,an adverse discontinuance proceeding was instituted on July 13, 1998. TE filed its statement in opposition to the application on August 7, 1998. The City replied on August 27, 1998.4 EVIDENCE The City's Application_ The City filed 6 verified statements'in support of its application, from individuals familiar with the operation of the line by TE. The first is from Martha Anderson,Division Manager, Economic Development Division ofthe Planning and Development Services Department for the City(Anderson),'who testifies that the City acquired the line from the Weyerhaeuser Company with the expectation of development ofboth passenger and freight service for the purpose of economic development_ Gray Line of Seattle(GLS),a subsidiary of Holland America Line-Westours,Inc„ and TE were selected based on representations that,as a team,they could provide a strong marketing,tourism promotion and business development expertise that would develop freight and passenger service on the line. TE was selected based on the representations ofits president,Edward M.Berntsen(Berntsen),that he possessed extensive railroad operating experience. Anderson notes that the City has invested approximately$5 million in the line for purposes of economic development but that after 3 years of experience with TE,the City realizes it will never achieve its objective. Anderson offers its impression that Berntsen is not capable of operating a business. Anderson states that the marketing and business development expertise that was supposed to have been provided never materialized. The City,on December 31, 1997,notified TE that it was terminating the Operating Agreement on 60 days'notice. The second verified statement is fromPeter Huffman,Economic Development Specialist, Economic Development Division for the City(Huffman),"who testifies that TE has failed to develop significant business on the line,with its only regular freight customer being The Boeing Company (Boeing). Huffman says that Berntsen has been uncooperative with the City in its efforts to complete grant money applications. Huffman avers that Berntsen's failure to provide the City with information concerning existing traffic,potential shippers currently on the he,efforts made to develop traffic from those shippers,or other information required by state and Federal grant Replies were due August 24, 1998. On August 24, 1998,the City,through its counsel, requested an extension of time until August 28, 1998,to file its reply. The extension was required because,due to absences of key client personnel from the office,the reply could not be completely assembled. TE 78 counsel had no objection. The extension of time will be granted. s Anderson's responsibility includes developing the Train to the Mountain excursion and encouraging development oftraffic on the line operated by TE. " Huffiman's responsibility includes developing the Train to the Mountain excursion service and developing traffic on the line operated by TE. 2 NOV-03-1998 14:06 BETTS PATTERSON MINES P.04 STB Docket No.AB-548 administrators jeopardized the City's ability to apply for grants in the amount of approximately$4.5 million. Huffman notes that Berntsen has shown a reluctance toward marketing the railroad by failing to respond,or delaying in responding,to inquiries from potential existing industries on the line, Huffman further notes that Berntsen's failure to accept traffic from prospective shippers on the line has inhibited the City's ability to market and develop the be. Huffman echoes Anderson's expressed impressions ofBerntsen's abilities to meet the City's objectives for the line. The third verified statement is from Dan Handa,Principal Professional Civil Engineer and Assistant Engineering Division Manager,Public Works Department for the City(Handa). Handa states that the City contracted with TE to initially provide and develop increased freight service,with an eventual goal of providing passenger excursion service from the City to Mount Rainier National Park. One of Handa's primary objectives is to find outside sources of grant money for upgrading the City's railroad. As part of the application process to receive grant money from the Washington State Department of Transportation,Handa says he attempted to obtain data fromMr.Berntsen on TE's revenue,and amounts and types offreight moved. Because ofl&.Berntsen's failure to provide the data in a timely manner,Handa says that the City was delayed in submitting its grant application and received substantially less than was initially available. Handa avers that,because of the City's concern that it was not receiving revenue it was contractually entitled to,the City conducted an audit by an outside certified public accountant(CPA)under contract to the City. The CPA was assertedly unable to conduct an,audit of TE's revenues and expenditures because TE's financial records were unorganized and largely missing. According to Randa,TE has defaulted on the Contract with the City by failing to keep financial records accessible to the City using generally accepted accounting principles. Handa maintains that TE has not been successful in developing more than occasional business from past railroad customers along the line,that TE is slow to respond to prospective customer requests for rate quotes,and that TE has failed to manage and control agreements and permits in accordance with its Contract with the City. Handa expresses his beliefthat Berntsen is undercapitalized as demonstrated by his inability to timely pay TE debts and company payroll_ Finally,Handa points out that,without the capitalization and business management resources of GLS,'he believes TE cannot correct its current regrettable situation. The fourth verified statement is from Mitchefi McCalvin, Senior Financial Analyst,Finance Department for the City(McCalvin),'who testifies that the Contract requires TE to keep financial records using generally accepted accounting principles_ McCalvin states that the City initiated an independent audit of TE's records and that the independent auditor's report indicated that there were ' According to Huffman,although TE and GLS submitted a joint proposal whereby Holland would participate and support TE in the operation ofthe line,GLS did not sign its name to the CityfM Contract and it appears that GLS is no longer supporting TE. ' McCalvin is responsible for processing funds from the Public Works Department and the Planning and Development Services Department for the City relative to various contracts concerning the line_ 3 NOV-03-1998 14:06 BETTS PATTERSON MINES P.05 STB Docket No.AB-548 no financial records available for 1997. He notes that TE is required to pay 5%ofthe net income earned on the line to the City. According to McCalvin,TE has not kept any financial records or made any payments to the City. The fifth verified statement is from Jack Anderson(Anderson),who is the owner/operator of the scenic railroad business known as the Mount Rainier Scenic Railroad(NWRR). Anderson operates his excursion trains from spring through the summer and into the fall each year in addition to special excursions_ Anderson notes that his operations on the rail system were smooth and without any difficulty for 18 years until 1994;when the City obtained ownership ofthe railroad and contracted with TE to operate the City's entire system,including the portion ofthe line over which Anderson operates his business. Anderson cites several examples to support his contention that Berntsen has employed"extortion-like tactics"to create numerous serious problems which have greatly hindered Anderson's continued operation ofhis passenger business. Anderson states that on several occasions Berntsen has refused access to the MRSRR until it complied with some non- railroad related demand or signed temporary agreements with TE_ Anderson reports.that he has had constant problems with Berntsen's interpretation ofFederal Railroad Administration rules and regulations concerning track maintenance,noting that Berntsen uses a lower standard for maintenance on the portion ofthe railroad that TE operates versus the portion of the railroad that MRSRR operates. Finally,Anderson notes that MRSRR has consistently maintained the track in operable conditions despiteBerntsen's efforts to stop its operation. Anderson supports the City's efforts to have Belt Line take over the operation ofthe line. The sixth verified statement is from Lynne Brady,Traffic Administrator,Boeing Rail Car Program,The Boeing Company(Brady). Boeing,at Frederickson,produces wings for commercial aircraft manufactured in the Puget Sound area. Boeing is TE's largest shipper and uses TE to transport the cars carrying the materials used in the construction ofthe aircraft wings from Tacoma to.Frederickson. Brady states that it is essential to have the items delivered by TE to Boeing in strict accordance with its production schedules. Brady testifies that,in the three years that TE has been providing service between Tacoma and Frederickson,"we have some delivery delays which have come close to interrupting our production operations." Brady attributes the delays to the fact that TE appears to have very limited resources for operation and maintenance ofthe line. Boeing supports the efforts ofthe City to substitute Belt Line for TE. TE's Statement in 011poskion. In opposition,TE states that the application should be dismissed for lack of jurisdiction because the Operating Agreement remains in effect despite the City's purported attempts to terminate the Operating Agreement for material default on December 31, 1997. TE further argues that the Contract continues to govern the rights ofthe parties in regard to the line,and that the City is not entitled to cancel the Contract until the mediation arbitration process is completed as provided for in the Contract. 4 NOV-03-1998 14:07 BETTS PATTERSON MINES P.06 S'I'B Docket No.AB-548 TE states that it has been instrumental in developing freight traffic,in contrast to the City's unsupported allegations. Berntsen testifies in his verified statement that there are 4 active shippers on the line: (1)Boeing;(2)James Hardie Building Products,Inc. (Hardie);(3)Rainier Veneer,Inc. (Rainier);and(4)GFN Utilization&Marketing,Inc. (GFN). Hardie,a new shipper,became operational in May 19982' As to the alleged material defaults that TE failed to respond in a timely manner to the City's request for information concerning TE's operation ofthe fine,to provide the City with financial information regarding its operation ofthe line,and to cooperate in the City's grant funding efforts, TE replies that delayed compliance of this nature is not a material default under Washington state contract law. TE argues that its delays in furnishing information are excused because they were attributable to the City's own material defaults,which included failure to reimburse TE for necessary maintenance,failure to fund necessary capital improvements,diversion of fees for various permits or licenses.which belong to TE,and numerous breaches ofthe City's obligation of good faith and fair dealing. (Appendix 2(b)). Because of being deprived of substantial revenue,TE states that it was unable to hire adequate staff and thus was unable to act in a timely manner to provide operating and financial information and to cooperate in the City's grant funding efforts. Ifthe application is not dismissed,TE states that it should be denied,as there is no basis for a finding that public convenience and necessity.require or permit discontinuance of rail service by TE.. In support ofits position,TE notes that,ofthe four active shippers on the line,only one shipper, Boeing,supported discontinuance.10 TE also noted that Boeing failed to provide specific evidence of any service failures on the part of TE. Berntsen reports that rail freight traffic has increased,noting that,for Boeing,TE transported 59 cars in 1996, 110 cars in 1997, and 91 cars in the first 7 months of 1998. Berrntsen states that TE has provided high quality service for Boeing and that it provides service to Boeing promptly upon being notified that cars are available for transportation. Further, Derntsen states that TE derives substantial revenues from storing cars on its line for Union Pacific Railroad Company_ TE contends that it can provide more economical service for Boeing than Belt Line. TE states that there is a strong potential for continued operation ofthe line and increased revenue,noting that,in the near future,a commuter rail operation and.Amtrak passenger trains will use a portion ofthe line. Finally,TE asserts that a local passenger operation, Train to the Mountain,ll would further increase revenue for the lime. ' According to Berntsen,'IE has transported 36 carloads of logs for Rainier and 1 shipment for GFN since September 1997_ TE has transported 17 carloads for Hardie since its operations began in May 1998. 10 TE has provided letters in support of its continued operation of the line from Hardie and GFN_ According to TE,Rainier has remained neutral. !1 Berntsen notes that the reference on page 5 ofthe application to the Train to the Mountain being the only passenger service on the line is,false. According to a verified statement of David E. (continued...) 5 NOV-03-1998 14:08 BETTS PRTTERSON MINES P.07 STB Docket No.AB-548 Ci s R _ly to TE's Statement in..Onposition. In reply,the City states that it has made clear its position that the Contract under which TE has been permitted to operate on the line has been terminated for cause_ The City notes that not a single shipper has intervened in opposition of its application to displace TE and replace it with the Belt Line. The City further notes that neither Hardie nor GFN disclosed in their letters included in TE's opposition what,if any,traffic they have tendered to TE or what,if any,traffic they propose to tender in the future. (Hardie has since stated that it would be supportive of TE providing further service but that it would be open to receiving service from the Belt Line;Attachment A to Handa's reply verified statement.) While Bernsten's verified statement portrayed Rainier as being neutral,the City responds that Rainier's experience with TE had been less than satisfactory and if it had it to do over again it would not use TE to ship products. Huffman reply verified statement at 2. The City maintains that TE never had a realistic business plan for operating the line and that TE's current financial condition is such that it is not likely to survive_ The City says that TE's financial troubles began as soon as it began operation in December 1994,noting that the internal Revenue Service(IRS)has contacted the City advising that TE owed the ILLS more than$45,000 in unpaid taxes and penalties for the years 1995'and 1996. Handa reply verified statement at 3. While Bernsten noted that additional revenue would be generated from the future commuter rail and Amtrak operations on the City line,the City states that those revenues would pass to it,not to TE. Huffman verified statement at 3. In response to Beagle's allegation that the City has not rebuilt the track for the Train to the Mountain,the City responds that it has been successful in receiving over$5 million in grant funds with no assistance from TE. The City notes that money has been invested in the railroad,and the City says it continues to aggressively seek funding for further track restoration from both private and public sources. Finally,the City argues that TE has thwarted its goals of promoting economic development. The City further argues that nothing could more effectively stifle the willingness of public bodies to continue to make substantial investments in rail facilities to permit continued rail service than the 11(.-.continued) Beagle(Beagle),who represented GLS at thetime the joint proposal was made to the City for the operation ofthe line,the City was to seek funding to rebuild the trackage for the start ofthe Train to the Mountain passenger service,and after thetrackage was rebuilt,GLS would start passenger service over the line. Beagle states that he made it clear during the proposal presentation that TE would handle all freight service operations. To date,Beagle states that the City has not rebuilt the track for passenger service so as to enable GLS to carry out its plan to provide the passenger service. Finally,Beagle states that the City has never officially requested GLS'involvement to assist with the freight operator. 6 NOV-03-1998 14:08 BETTS PATTERSON MINES P.08 STB Docket No. AB-548 knowledge that they can be saddled with an incompetent operator who can effectively deny them the benefit of their investment. DISCC.TSSION AND CONCLUSIONS The statutory standard governing discontinuance of operations is whether the present and future public convenience and necessity require or permit the proposed discontinuance. In malting the finding,the Board shall consider whether the discontinuance will have a serious,adverse impact on rural and community development. 49 U.S.C. 10903(d)(2). In an adverse discontinuance,the burden of proof is on the moving party. ,m Cheatham Q=Rail Authority"Application and otition"&rAdverse Discontinua=Docket No.AB-379X(ICC served Nov.43 1992). The former Interstate Commerce Commission and now the Board have found that a finding that the public convenience and necessity requires or permits abandonment or discontinuance terminates our exclusive and plenary abandonment jurisdiction over the line,enabling interested parties to undertake other legal remedies to e1I'ectively remove a carrier from a line. So Modem HandMftj , Abandonment 363 I.C.C. 969(1981),ForpRiverRR.Coro.--Discon.Exempt NorfolkCouniv_.MA.8 I.C.C.2d 307,310(1992), Grand Trunk Western Railroad IncgMorated-- yQrraQDiscontinuance ofTrackaae Rights n lip cation-- .Line ofNorfolk and WestemRailway Company in Cincinnati'Hamilton County.OH.STB Docket No.A13-31 (Sub-No.39)(STB served May 13, 1998). The public convenience and necessity support the requested grant for discontinuance authority. Ofthe four shippers on the line,three support replacement of TE by the Belt Line. The fourth says it"would be open"to the services of Belt Line. Allowing TE to discontinue operations will not result in a serious adverse impact on the shippers and the community. The Belt Line will provide,without interruption,all ofthe services currently being provided by TE. The evidence supports a finding that the four shippers and the MRSRR would welcome the opportunity to be served by a new operator. TE's lack of financial reporting to the City and its inability to work effectively with the City have imposed a significant burden on the City. TE's inability to provide information on a timely basis has interfered with the City's ability to raise funds to further the economic development. Discontinuing TE's operations on the line and replacing it with Belt Line, which has proven its ability to provide high quality service,will afford the City an opportunity to receive revenue from the operation ofthe line and thus a return on its investment. We see no need to perpetuate TE's unwanted,unneeded operations. The City has met its burden of proof and we will grant its application.1z iz Any disputes arising out of TE's alleged failure to fulfill its contractual obligations under the Operating Agreement and the City's alleged termination ofthe Operating Agreement can be resolved in other appropriate forums. 7 NOV-03-1998 14:09 BETTS PATTERSON MINES P.09 STB Docket No.AB-548 In approving this application,we must ensure that affected rail employees will be adequately protected. 49 U.S.C. 10903(b)(2). We have found that the conditions imposed in Oregon Short Linea.Co.--Abandorimep; Qshenn 360 I.C.C. 91 (1979),satisfy the statutory requirements, and we will impose those conditions here. Because considering an offer of financial assistance(OFA)to subsidize TE's continued operations would frustrate our findings that our jurisdiction should not be permitted to shield TE from the legitimate operation of state law,we will not entertain any OFAs,requests for trail usetrai l banking,or requests for public use. This proceeding is exempted from the environmental and historic reporting requirements of49 CFR 1105 by virtue of 49 CFR 1105.6(c)(6)and 1105.8(b)(3). We find: 1. The present and future public convenience and necessity require and permit the discontinuance of operations by TE over the above-described he ofrailroad,subject to the employee protective conditions in n$hgg Lin --A - 360 I.C.C. 91 (1979). 2. Discontinuance of operations will not result in an adverse impact on rural and community development. 3. This action will not significantly affect either the quality of the human environment or the conservation of energy resources. It is ordered: 1 The City's request for an extension of time is granted. 2. The City's application for the adverse discontinuance of operations as described above is granted.. 3. This decision is effective on November 15, 1998. 4. Petitions to stay must be filed by October 26, 1998. 8 NOO-03-1998 14:09 BETTS PATTERSON MINES P.10 e STB Docket No.AB-548 5. Petitions to reopen must be filed by November 5, 1998. By the Board, Chairman Morgan ando Vice Cbairman Owen. Vernon A. Williams Secretary 9 TOTAL P.10 _ 11/02/98 MON 14:41 FAX 253 922 9781 DAVID EVANS&ASSOCIATES U001 ILLI OJ fAVIlf� VANS A,NI TELECOPY TRANSMITTAL 3700 Pacific Highway Fast TO: FAX NO: ?j(�(� `t'S S _ 7 J Suite 311 PHONE NO: Tacoma, Washington 9&424 �f FIRM: C-17�f (7� 0 OF PAGES: "1 Te[: s53.c�zs_g78o /"' � /� Fax: 25g.c�zz.g�8r FROM: Ltf ►��d-G.iE J� REGARDING: ►C�4(�11'7'ILY�! ��•4�� DATE: !I COPIES: ORIGINAL TO FOLLOW: REGULAR MAIL ❑ OVERNIGHT MAIL ❑ COURIER E] NIA COMMENTS: ��1/1[�e.JrS►�" T!J F� L7/Z,gI� �' �' .� 1'—TiU ANY M � 1 1, opt' m �^'� a 11/02/98 MON 14:41 FAX 253 A22 9781 DAVID EVANS&ASSOCIATES IM002 ION 9/1998 14:52 360-4' 348 CITY OF YELM PAGE 63185 " OCT-23-1998 18=26 BETTS PATTERSDI MINES P.02 i i tTTbtate RESOLLMON NO. A RESOLUTIONthe guiding principles for the acquUitfon and use and ope ationd overYelm Branch of railroad currently owned by the Burlington Northern Santa FCompaW, to create a.Rail Advisory Committee to advise the city on�the use, operation and development of the Yelm )Branch-, and to provide guidance to the Director of Public Works on,how to proce4 and VAHEREAS, The Burlington Northern Santa Fe RalwoAayd (BNSF) currently operates. over a railtoad corridor called the Yelm Branch Line which extends from NMepost 8,S5 Haar Lakewood on the north to mile post ' in the City of Yelm on the south andhhaas indicated iks interest in discontinuing rail se part of its Yelm Branch; and i 25 �5 WMMEAThe City of Yelm has indicated i interest in acquiring all property interests zvow held by the BNSF in the Yelm Branch Line for general public welfare, ,economic development and investment purposes; and i WHEREMI The City 0 Roy has expressed Its interest in parddpating with the City of Yehn in sitting public policy for the use and development of the Yelm Branch, insofar as such use opemion and development affects the City of Roy; and i WIPREA'S.110 Yehn Chamber of Commerce has actively bssn supporting the public acq�,isitionr of the Ydm branch; and BE rr RESOLVED BY THE CITY COUNCIL OF THE CrfY OF YEL.K THE MAYOR iCONLIM O: sec[Ion 1. The Council endorses the following guiding principles in acquisition, operation and development of the Yelm Branch Lane: Tbei press vation and vitality of businesses located along the Yelm Branch line should be preserved, and additional bu3in:esses ahould be encouraged to locate along the line. The.exploration and development of commuter rail and other passenger uses in conjunction with development of the Yelm Branch Line, +.a 8E 1�zyv CD040,4 SO- i All BNSF property interests in the Yelm Branch Tine should be, acquired by the City_ Thee lntere'sts of the City of Roy and its citizens will be considered in.any use or a development of the Yelm Branch line, and appropriate interlocal agreements or i ' I �9aozea/ta�/laoat - i i 10/29/98 THU 15:55 [TX/RX NO 84233 U003 11/02/98 MON 14:42 FAX 253 A22 9781 DAVID EVANS&ASSOCIATES 2003 10/'29/199E 14:52 366-4! W CITY 0E YELM PAGE 04/05 ` UCT-23-1998 10:27 BETTS PATTERSON MINES P93 contractsmay be entered into by the two Cities to achieve and cazry out mutual interests. Section 2. [Nbq udl y Valley] Rail Advisory Committee. A Rail Advisory Committee is estalisbed to assist and advise the City of Yelm in aaquiriig. operating and developing the elm Branch line. (a).The Committee sbaU be composed of the Mayor of YebA the Mayor of Roy, or teir dq� es, and two persons appointed by the City of Yelm and one person appointed ilby the City of Roy, to serve at the pleasure of the respective appointing Mayor. • (b)The committee members will receive no additional cmVeasation, except that •'the Committee may by majority vote reimburse any travel or administrative expenses of the appointees out of the administr811 fund established herein. (c) Administrative fluid, The [Nisqually Valley] Rail Advisory Committee may receive up;to 1/2 of 1% of any rents, profits or otbw payments received by the City of Yelm for use or uses of aoy part of the Yelm BTancb, '!itis fund to be created annually as part of the operating budget of the Department of Public Works, and its use shall be •subject to Teview and audit. Secdon 3. The Director of Public Works shall; i (a) Negotiate the acquisidoa of the Yelm Branab Linc and appurtenant property with appropriate BNSF officials and submit to the council a proposal for such a acgwsita= y (b);Develop in consultation with, the [Nisqually Valley] Rail Advisory Committee created herein and submit to the Council for approval, a proposed rail policyN� which will encourage and promote freight and commuter rail service, provide for V �' safe and economical development and use of all property in the acquired Branch Line, and prepare rodent and businesslike roperty management lata for the ` ' FRal d ro __ a Director of Public works ss all assist the [Nisqually !!alley]Advisory Coritmitteo in preparing a budget. (c) ate a proposed bid requhv=nt to solicit appropriate offers from cor*petent rail operators,to contmet with the City for engaging in common and contact carrier freight rail service aver The Yelm Brancb Lane. The qualifications for is contract rail operator should emphasize financial responsilAty and rail i i an n=lei 003/ 2 10/29/98 THU 15:55 [TX/RX No 8423] U 004 E� 11/02/98 MON 14:42 FAX 253 922 9781 DAVID EVANS&ASSOCIATES 1@004 1' PAGE 05/05 1'0/-29/1998 14:52 360-4E 34® CITY ❑F YELM l3-er NEI IS NRI It'f" MILS P.04 q it � operation experience, and ability to meet current rail customer's transportation req#1rements. (d) 3evelop an Operating Agreement wbich the City may use to enure the services of a coMpetent rail operator, or operators, ensuring ring that such aWeemmt wills provide an operator or operators who will meet the reasonable survice requests of businewies wbo desire cownim carrier rail service, that the City wilt rcr4Wn in overall control of the properties, and that such operators will be able to bear the frill expense and risk attemdant with such rail operations. (e)!Develop a program of active ov*rd&t of future rail ra and other property uses in the Yelm Breach.Tine to ensure all sue »e in compLianoe with contras safety and public use requirements. i (f) Ptgwe and file on behalf of the City any documents necenary to carry out the;acgaisition and operation of the Yehn Branch Line with the Surface Traivsportation Board, the Federal Railroad AdwW&tration, the WaahbVon Utilities and Transportation Commission, the Washington Department of 'T'ransportation, the Association of American, Railroads, or any similar agencies or organizatious. Section 4.'The Council supports ad progressive and safe uses of the acquired property which will'benefit the general public and directs the Mayor to explore all reasonable r opportunities for the Yelm Branch line to yield a return on the City's investment; Ftolrided, however, that such uses must be consistent, and not interfere, with the general ! a isidon purpose of providing freight and passenger rail ser Ace, so long as there is a reasonabld demand or potential need for such services. i 3 10/29/98 M 15:55 [TI/R% NO 84231 RESOLUTION NO. A RESOLUTION To state the guiding principles for the acquisition and use and operational oversight of the railroad branch line, the Yehn Branch Line, currently owned by the Burlington Northern Santa Fe Railway Company; to create a Rail Advisory Committee to advise the city on the use, operation and development of the acquired property; and to provide guidance to the Director of Public Works on how to proceed; and WHEREAS, The Burlington Northern Santa Fe railway (BNSF) currently operates over a railroad corridor called the Yelm Branch Line which extends from Milepost 8.55 near Lakeview on the north to mile post 2555 in the City of Yelm on the south and has indicated its interest in discontinuing rail service over at least a part of that branch line; and WHEREAS, The City of Yelm has indicated its interest in acquiring all property interests now Heid by the BNSF in its Yelm Branch Line, for general public welfare, economic development and investment purposes; and WIMREAS, The City of Roy has expressed its interest in participating with the City of Yelm in setting public policy for the use and development of the BNSF Yelm Branch, insofar as ,such use operation and development affects the City of Roy; and WHEREAS, The Yelm Chamber of Commerce has actively been supporting the public acquisition of the Yelm branch; and BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF YELM, THE MAYOR CONCURRING: Section 1. The Council endorses the following guiding principles in acquisition, opdration;and development of the BNSF Yelm Branch Line (formerly known as the Northern ifacifies Prairie Line); All.BNSF property interests its Yehn Branch Line, should be acquired by the City of Yelm ano after such acquisition the line of railroad shall be referred to as 'The Prairie Line." ; The preservation and vitality of businesses located along the BNSF"s Yelm Branch Line should bpreserved, and additional businesses should be encouraged to locate along the line. Ii iPost-ItT brand fax transmittal memo 7671 #oof pages ► `' To '� ` rt� From n jJa p Co. i Co. 9829401$6/11®996/111&/ Dept. Phone# Fax# C? J Fax# P 3 1 NUV—ley—lyyti 12:06 it 115 t'H I I tKSUN MINt5 t'.U.-VU4 i The exploration and development of commuter rail and other passenger uses in conjunction with development of the acquired property should be encouraged. The interests of the City of Roy and its citizens will be considered in any use or developmOt of the BNSF's Yelm Branch line, and appropriate interlocal agreements or contracts may be entered into by the two Cities to achieve and carry out mutual interests. Section 2. The Prairie Line Rail Advisory Committee. The Prairie Line Rail Advisory Committee is established to assist and advise the City of Yelm in acquiring, operating and'developing the acquired rail property, 'The Prairie line.- (a) : The Committee shall be composed of the Mayor of Yelm, the Mayor of Roy, or their designees, and two persons appointed by the City of Yelm and one person appointed;by the City of Roy, to serve at the pleasure of the respective appointing Mayor: (b) The committee members will receive no additional compensation, except that the City may reimburse any travel or administrative expenses of the appointees out of the:marketing fund established herein, under the guidelines established by the City. Section 3. Rail Marketing Fund. The Prairie Line Rail Advisory Committee shall advise . the Public.Works Director on an annual marketing budget as determined by the City of yelm ofup to 1/2 of 101b of any rents, profits or other payments received by the City of Yelm for use or uses of any part of the Prairie Line. This fund to be created annually as part of the operating budget of the Department of Public Works, and its use shall be subject to,review and audit. The fund shall be used to promote the use of the Prairie Rail Line. Section 4 The Director of Public Works shall: W Negotiate the acquisition of BNSF's Yelm Branch Line and appurtenant property with appropriate BNSF officials and submit to the council a proposal for su6h acquisition (b) Develop in consultation with the Prairie Line Rail Advisory Committee created herein, and submit to the Council for approval, a proposed rail policy which will encourage and promote freight and commuter rail service, provide for sale and economical development and use of all property in the acquired branch lode, and prepare a prudent and business-like property management plan for the acquired property. 9nM186/11b998/1118/ i I I I i VV VJ jJJll 1L'V� LL I I V 1 1 11 1 LI\VVI l 1 I1111�V 1 .V� V� (c) Assist the Prairie Line Rail Advisory Committee in preparing an appropriate budget for its operating expenditures and other such uses of the rial Marketing Fund created in Section 3, and, as part of the Public Works' normal budgeting Process'. (d) eate a proposed bid requirement to solicit appropriate offers from competent rail operators to contract with the City for engaging in common and contract carrier freight rail service over the Prairie Line. The qualifications for a contract rail operator should emphasize financial responsibility and rail operation experience, and ability to meet current rail customer's transportation requirements. (e) Develop an Operating Agreement which the City may use to engage the services of a competent rail operator, or operators, ensuring that such agreement will provide an operator or operators who will meet the reasonable service requests of businesses who desire common carrier rail service, that the City will remain in overall control of the properties, and that such operators will be able to bear the full expense and risk attendant with such rail operations. M bevelop a program of active oversight of future rail operations and other property uses in the Prairie Line to ensure all such uses are in compliance with contract, safety and public use .requirements. (g)l Prepare and file on behalf of the City any documents necessary to carry out the, acquisition and operation of The Prairie Line with the Surface Transportation Board, the Federal Railroad Administration, the Washington Utilities and Transportation Commission, the Washington Department of Transportation, the As'sociation of American Railroads, or any similar agencies or organizations. Section 51. The Council supports all progressive and safe uses of the acquired property which will benefit the general public and directs the Mayor to explore all reasonable opportunities for The Prairie Line to yield a return on the City's investment; Provided, however,;that such uses must be consistent, and not interfere, with the general acquisitign purpose of providing freight.and passenger rail service, so long as there is a reasonable demand or potential need for such services. i i i 3 i TOTAL P.04 Orlllla 0< Andover �0`I' Allyn cK *�vo o Q�z �\�A �rti5xa C GO Henrys 4 P� Ravensdale Palm, Auburnd ti Block Diamond Soy Shore it o TACOMA Fife lerinper Ion er vel nterSumner Weston Illsdal //5-f Nlocoom W Puyallup Mee er Tacoma YK tr It AKEVIE K Midland Iderton Tillcum ;:` A Isor McMTII!n 4M ord upont gti "�zp noway A ,n �. OLYMPIA n el^� H I urst Fredrickson 0 °10 NTgquoay °u to Gra Thrift .> :d �. oxo Ohm Tumwoter BN St.Clair ' Cm a �0 Kyro ROY; Belmoro Capitol Olympia Kopawsin E. Plum YELM�e f cKenna ' Clay City Maytown T6 Wastern Jo+ 0 Llttlerock 0 ~� Segale xo�a �G0 a Rainier �0 0�0 Gate o° oo �o(a S�Q+� oJ T enino �0 Vail BUcoda 0 Pi 400��0 National wr bash Raise Centralia, � Mineral CHEHALIS Divide Napavine Curtis lvlorton ; WTnlock V City of Ye I m Branch Line Vader \ YELU AIL LINE .. --E—y OT' RAIL LINES 01e qua 0 s to MILES Cr►sile Flock. 90 1s xw LAKEVIEW YELIVI%ROY TO LAKEVIEW ' "A PUBL' - UTILITY" PROPORTIONATELY OWNED BY THE CITIES OF YELM AND ROY TO PROMOTE BUSINESS DEVELOMENT, ECONOMIC GROWTH, TO IMPROVE THE ENVIRONMENT AND ENCOURAGE A QUALITY OF LIFE ALONG THE RAIL CORRIDOR ROY y � YELM trJ �, ►� •F YELM CITY COUNCIL NOTICE OF SPECIAL MEETING The Yelm City Council has scheduled a Special dy Session for Monday, November 9, 1998, at 7:00 pm, at Roy Com .riity Center, 122 Third Street, Roy, Washington.the subject of the st�xd'y session will be z presentation to th —Yel"m and Roy_Councrr ng the possible acquisition of the urlington Northern Santa F Sho me between Yelm and Lakewood. For a ��ional rmatiurf,please contact Ken Garmann, Yelm Public Works Director at (360) 458-8499. If you need special accommodations to attend or participate in this meeting, please contact Betty Garrison, Roy Town Clerk, at (253) 843-1113. Distribution: Council Packet Mailing October 22, 1998 Mayor: Kathryn M. Wolf Councilmembers: Don Miller Martha Parsons Velma Curry Glen Cunningham Adam Rivas City Administrator: Shelly A. Badger Attorney: Alexander Mackie Staff/Public Newspaper of Record: Nisqually Valley News Posted: Yelm City Hall Yelm-Timberland Library YELM CITY COUNCIL NOTICE OF SPECIAL MEETING The Yelm City Council has scheduled a Special Study Session for Monday, November 9, 1998, at 7:00 pm, at Roy Community Center, 122 Third Street, Roy, Washington. The subject of the study session will be a presentation to the Yelm and Roy Councils concerning the possible acquisition of the Burlington Northern Santa Fe Short Line between Yelm and Lakewood. For additional information, please contact Ken Garmann, Yelm Public Works Director at (360) 458-8499.- If you need special accommodations to attend or participate in this meeting, please contact Betty Garrison, Roy Town Clerk, at (253) 843-1113. Distribution: Council Packet Mailing October'22, 1998 Mayor: Kathryn M. Wolf Councilmembers: Don Miller Martha Parsons Velma Curry Glen Cunningham Adam Rivas City Administrator: Shelly A. Badger Attorney: Alexander Mackie Stephen L. Day Staff/Public Newspaper of Record: Nisqually Valley News Posted: Yelm City Hall Yelm-Timberland Library Third Circuit Case 94-36071: VE V. RAILS TO... Pagel of 5 This opinion was acquired from the 9th Circuit and enhanced for distribution on the Internet by • The Villanova Center for Information Law and Policy. This opinion was acquired from the 9th Circuit and enhanced for distribution on the Internet by The Villanova Center for Information and Polio FOR PUBLICATION UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT LEONARD DAVE; BILL GIERSCH; MARY GIERSCH; LOUISE MATTSON; STAN CROCKER; NOREEN CROCKER; B.J. KESSINGER; HANK DANE; KAY HARRIGAN; SAM HUMPHRIES; BUD TUCKER, Plaintiffs-Appellants, V. No. 94-36071 RAILS TO TRAILS CONSERVANCY, a D.C. No. non-profit District of Columbia CV-94-03050-AAM Corporation; CLEVE PINNIX, Director, Washington State Parks OPINION and Recreation Commission, in his individual capacity; QUEENIE ALLADO; ROBERT PETERSEN; MELVIN WORTMAN, Commissioners, Washington State Parks and Recreation Commission, in their individual capacity, et. al., Defendants-Appellees. Appeal from the United States District Court for the Eastern District of Washington Alan A. McDonald, District Judge, Presiding Argued and Submitted December 8, 1995--Seattle, Washington Filed March 27, 1996 3817 Before: Dorothy W. Nelson and John T. Noonan, Jr., Circuit Judges, Jack E. Tanner, District Judge.* opinion by Judge Noonan SUMMARY 1/6/97 5:53:00 PM Third Circuit Case 94-36071 ,VE V. RAILS TO... Page.3 of 5 COUNSEL Michael E. Haglund, Shay S. Scott, Haglund & Kirtley, Port- land, Oregon, for the plaintiffs-appellants. 3819 Matthew Cohen, Carole Rafferty, Heller, Ehrman, White & McAuliffe, Seattle, Washington; Joseph Earl Shorin, Assis- tant Attorney General, Olympia, Washington; Andrea C. Fer- ster, Washington, D.C. , for the defendants-appellees. OPINION NOONAN, Circuit Judge: Leonard Dave and other alleged owners of reversionary interests in railroad easements (the Plaintiffs) brought suit against the Rails-To-Trails Conservancy (RTC) and the direc- tor and commissioners of the Washington State Parks and Recreation Commission (the Commission) alleging violation of their civil rights under 42 U.S.C. S .1983 and of the National Trails System Act, 16 U.S.C. S 1247 (d) . The district court dismissed the action for lack of jurisdiction. We affirm the dismissal. BACKGROUND The National Trails System Act was enacted in 1983. The history and purpose of the legislation are amply set out in Preseault v. ICC, 494 U.S. 1, 5-9 (1990) . The legislation per- mitted the Interstate Commerce Commission to authorize the use of easements granted by private property owners to rail- roads to be converted for use as recreational trails without resulting in an abandonment of the right of way by the rail- road -- a banking of lines available for rail use coupled with a contemporary use of the land for hiking and other recre- ation. The conversion for the time being of the property to a use other than rail service created the possibility that rever- sioners of the easements might have a claim for compensation for the taking of their reversionary interest. It has proved to be a teasing and frustrating path for the reversioners, or alleged reversioners, to find a way to establish a claim. See 3820 Preseault v. U.S., 66 F.3d 1167 (Fed. Cir. 1995) . The present case is a not implausible but ultimately unsuccessful effort by a group of alleged reversioners to find a way. FACTS 1/6/97 5:53:00 PM Third Circuit Case 94-36071'- LVE V. RAELS TO... Page 4 of 5 , For purposes of this appeal, we assume these facts alleged in the complaint to be true: The Plaintiffs consist of Leonard Dave, a member of the Klickitat tribe who owns historical Indian land; Bill and Mary Giersch, who own the OK Ranch in Glenwood, Washington, which has been operated for over a century as a beef cattle and native grass hay farm; Louise Mattson, owner of the Mattson Ranch on which cattle wheat and alfalfa have been raised since the 1930s; Stan and Noreen Crocker, owners of Canyon Pasture, which is used for the feeding and watering of cattle; B.J. Kessinger, owner of two parcels of land in Klickitat county; Hank Dane and his wife Kay Harrigan, own- ers of property purchased for privacy; Sam Humphries, owner of grassy meadow wetlands; and Bud Tucker who lives in a rustic cabin without electricity or running water. All these persons own land on which easements have been granted to the Burlington and Northern Railroad (BN) for railroad pur- poses only. The Defendants are the RTC, a nonprofit corpora- tion of the District of Columbia, and the director and members of the Commission which is responsible for acquir- ing and developing the state park system for the State of Washington. The following facts are undisputed matters of public record: In 1991 BN petitioned the Interstate Commerce Commis- sion (ICC) for leave to abandon 28 miles of right of way between Klickitat and Goldendale, Washington on grounds that the lines no longer supported commercial freight traffic. The City of Goldendale filed a request for interim trail use 3821 and rail banking. On April 3, 1992 the ICC issued a Notice of Interim Trail Use or Abandonment (NITU) , declaring that if an agreement was reached for such use 180 days after ser- vice of the decision "interim trail use may be implemented. " In 1992 BN petitioned the ICC to abandon another 14 miles of the same line. RTC filed a request for interim trail use/rail banking. The ICC issued a NITU authorizing the use. In August 1993 RTC and BN entered into an agreement by which RTC purchased seven rail corridors in Washington; including 30 miles of the 42 miles covered by the two NITUS. RTC assumed certain liabilities in accordance with this agree- ment. In April 1994 RTC donated its interests to the Commis- sion. PROCEEDINGS On April 26, 1994 the Plaintiffs brought this action against RTC and the Commission. They allege that their reversionary interests had become possessory when the railroad line was abandoned and that RTC and the Commission violated their right to possess and use the railroad right of way. They also allege that the National Trails System Act, 16 U.S.C. S 1247 (d) , authorized the interim use of a railroad right of way as a recreational trail where the transferee was "prepared to assume full responsibility for management of such rights of way and for any legal liability arising out of such transfer or use. " They also assert state claims against RTC of conversion, 1/6/97 5:53:00 PM Third Circuit Case 94-36071', VE V. RAII,S TO... Page 5 of 5 trespass and nuisance, alleging total damages of $9,000. On September 29, 1994 the district court dismissed the action. It held that both of the federal claims sought a review of the NITU orders of the ICC and that the only jurisdiction to review an ICC order lay in a court of appeals. 28 U.S.C. S 2342, Add.24. The district court dismissed the state claims as not meeting the jurisdictional amount required in a diver- sity action. 3822 The Plaintiffs appeal. ANALYSIS [1] The plaintiffs' attempt to hold the transferees of the rail- road right of way liable for compensation for a taking of their property is a monkey wrench thrown into the intended opera- tion of the Rails-to-Trails Act. It is a monkey wrench that impacts the orders of the ICC granting the NITUs. Although not in form a request for review of an ICC order, the practical effect is to seek such a review. Consequently, the district court lacked jurisdiction. Assure Competitive Transportation, Inc. v. United States, 629 F.2d 467, 472 (7th Cir. 1980) , cert. denied, 449 U.S. 1124 (1981) . As the district court had no jurisdiction, we have no alternative but to affirm its dismissal. Only the United States Court of Federal Claims has jurisdic- tion for the takings allegedly effected by the transfer of the railroad easements. Preseault v. ICC, 494 U.S. at 17. [2] The Plaintiffs earnestly contend that the Rails-to-Trails Act, S 1247 (d) created a third-party right entitling them to sue the transferees for the compensation allegedly owed them by the United States for taking their property. Since we have no jurisdiction we cannot pass upon this argument except by dic- tum to say that we would be unconvinced by it if we had jurisdiction and that it is contrary to the ICC's understanding of the statute. There is no dispute that the state claims did not meet the $50, 000 amount required for diversity jurisdiction under 28 U.S. S 1332 (a) (1) . Since the district court had no jurisdiction over the federal question claims, it could not exercise jurisdic- tion over the remaining common law claims and properly declined to do so. Accordingly, the judgment.of dismissal is AFFIRMED. 3823 the end 1/6/97 5:53:00 PM r= [494 US 1] J. PAUL PRESEAULT, et ux., Petitioners v INTERSTATE COMMERCE COMMISSION et al. 494 US 1, 108 L Ed 2d 1, 110 S Ct 914 [No. 88-1076] Argued November 1, 1989. Decided February 21, 1990. Decision: Fifth Amendment "taking" claim as to interim use of disused railroad route as recreational trail under federal statute ..(16 USCS § 1247(d)) held premature; statute held valid exercise of commerce power. SUMMARY j As part of an effort to prevent disused railroad lines from being lost to f possible future use through abandonment and reversion, Congress enacted the National Trails System Act Amendments of 1983(16 USCS§§1241-1251), §8(d) of which (16 USCS §1247(d)) provided that a railroad wishing to cease operations along a particular route, rather than to abandon the use of the right of way for railroad purposes, could negotiate with a state,municipality, or private group to have the latter assume financial and managerial respon- sibility for the right of way during its interim use as a recreational trail. Af- ter a railroad ceased using a railroad right of wayf all railroad equipment therefrom, adjacent landowners broughtaa quiet-title s 3 action in state court, which action alleged that the railroad's easement had been extinguished by abandonment,and that the right of way had reverted to the landowners under state law.That action,however,was dismissed for lack determined that the Interstat6 of jurisdiction, as the state courts determe Commerce Commission (ICC) had not authorized abandonment of the route, and there- fore retained exclusive jurisdiction. The landowners then sought a certificate of abandonment of the route from the ICC,but the ICC instead(1)granted a petition by the railroad and the state to permit discontinuance of service on that route and to transfer the.right of way to a local government for interim use as a trail under§8(d); and(2)subsequently denied a motion for reconsid- eration and/or clarification of that decision (3 ICC2d 903). The landowners sought review of the ICUs decision in the United States Court of Appeals for Briefs of Counsel, p 975, infra. 1 � n U.S. SUPREME COURT RE] __CS 108 L Ed 2d �. the Second Circuit, and argued that §8(d) was unconstitutional on its face because it (1) took private property—specifically, the landowner's reversion- ary interest in the right of way—without just compensation, in violation of the Federal Constitution's Fifth Amendment;and(2)was not a valid exercise of Congress'power under the Constitution's commerce clause(Art I, §8,cl 3). The Court of Appeals, however, affirmed the ICC's decision, as it held(1)that §8(d) did not effect a "taking" of property for Fifth Amendment purposes, because no reversionary interest in a railroad right of way could vest until the ICC determined that abandonment.was appropriate; and (2) that §8(d) was reasonably adapted to legitimate congressional purposes under the commerce clause (853 F2d 145). On certiorari, the United States Supreme Court affirmed. In an opinion by BRENNAN,J., expressing the unanimous view of the court,it•was held that(1) the Trails Act Amendments did not withdraw the remedy otherwise afforded in"taking"cases under the Tucker Act(28 USCS§1491(a)(1))through actions in the United States Claims Court; (2)the landowners' failure to make use of the available Tucker Act remedy rendered their "taking" challenge to the ICC's order premature, so that it was unnecessary for the Supreme Court to determine in this case whether the order did effect a "taking" within the meaning of the Fifth Amendment; and (3) the Amendments were a valid exercise of congressional power under the commerce clause of the Federal Constitution (Art I, §8, cl 3), as they were reasonably adapted to:the valid congressional objectives of (a) encouraging the'development of additional trails and assisting recreational users by providing opportunities for trail use on an interim basis, and (b) preserving established rights of way for possible future reactivation of rail service. O'CONNOR, J., joined by ScAuA and KENNEDY, JJ., concurred; expressing the view that (1) state law determines what property interest the petitioner landowners possess in the right of way at issue,as the actions of the ICC may pre-empt the operation and effect of certain state laws but do not displace state law as the traditional source of real-property interests; and (2) the traditional "taking" doctrine will determine whether the Federal Govern- ment must compensate the landowners for the burden imposed on any property interest they may possess. 1 2 F u' Proms.' «�r 'k Ott U.S. SUPRENI ( URtEPORTS 108 L Ed 2d HEADNOTES Classified to U.S.Supreme Court Digest,Lawyers'Edition Claims §38; Railroads §26; Stat-• therefor would-'not have been ap- utes §§ 102, 103, 145.4, 164 — proved in advance,because(a)rail-to- Tucker Act remedy — taking trail conversions giving rise to just —interim trail use of railroad compensation claims are clearly au- right of way thorized by' §8(d), and (b) §.101 la-1g. The National Trails System speaks only to appropriations under Act Amendments of 1983—§8(d) of_ the Amendments and not 'to relief which (16 USCS § 1247(d)) (1) allows available under the Tucker Act; (3) unused railroad rights of way to be although the legislative history of the i put to interim public use as recre- ational trails and to be maintained by sire that they operate at low cost,this state or local governments or private might reflect Congress' rejection of a groups,notwithstanding whatever re- more ambitious program of federally versionary property interests may ex- owned andmaner trails rather ist in the rights of way under state than the withdrawal of a Tucker Act law,and thereby(2)allegedly"takes" remedy; and(4)the limitation on the such property interests within the condemnation power of the Interstate meaning of the just -compensation Commerce Commission (ICC) under clause of the Federal Constitutio-ft's- §8(d), which the ICC has interpreted Fifth Amendment—do not withdraw, s providing for conversion of a r—fight the remedy otherwise afforded of way to interim trail use only when against the United States Govern- a railroad voluntarily seeks such con ment in "taking" cases under the version, is not relevant to the ques- Tucker Act (28 USCS §1491(a)(1)), tion whether compensation under the because Congress, in enacting the Tucker Act is available for those con- Trails Act Amendments, did not ex- versions which.do occur. hibit the type of unambiguous inten- Actions §'8; Claims §38; Courts tion to withdraw the Tucker Act rem- §763— taking— prematurity edy that is necessary to preclude a of challenge — availability of Tucker.Act claim, given that (1).nei- claims remedy .ther the'Amendments nor their legis- 2a,.2b. The United States Supreme lative history mentions the Tucker Court need not decide whether there Act; (2) §101 of the Amendments _.was.a'Uking"' of private property for (note following ' 16 USCS public use,within the meaning of the §1249)--which provides that, not- just compensation clause of the Fed- withstanding any other provision of eral Constitution's Fifth Amend- the Trails Act,authority to enter into ment, in-'a case where landowners contracts or make payments:under claiming a reversionary interest in a M_ I that Act is effective only to such ex- disused railroad right ofwa chal- tent or in such amounts as are pro- lenge, as such a "taking" of their vided in advance in appropriations interest, an Interstate Commerce acts--:does not show the.requisite con-' Commission order-allowing the right gressional intent on the theory that of way to be put to interim use as a conversions which could result in recreational trail rather than be Tucker Act litigation were not autho- deemed abandoned and ,hence sub- rized by Congress since payment' ject to reversion under state law, 4 i h� _ _IEAULT.v ICC.. _ (1990)4940 x,108 L Ed 2d 1,110 8 Ct 914 because ;the landowners' failure to valuable:.national:asset-that~merits make use of the .available remedy preservationhevennif=;no":future rail under the- Tucker Act (28 USCS use.for it is currently foreseeable;.the §1491(axl))—which provides jurisdic- courts ar :,not-at-libert -under,the tion in the United: States Claims rational basis standard,of review to Court for any claim against the Fed- hold the Amendments invalid merely eral Government for damages because more draconian measures— founded on the Constitution—' such as a program of mandatory con- renders the landowners' challenge versions or a prohibition of all right- premature. of-way abandonments—might Commerce §86 — validity,of fed- advance, more completely the rail eral regulation—interim trail banking_purpose: use of railroad route Interstate Commerce Commission 3a-3d. The National Trails System §36 — abandonment or dis- Act Amendments of 1983—§8(d) of continuance which(16 USCS § 1247(d)) allows dis- 4a, 4b. There.is an important dis- used.railroad rights of-way to be put tinction in the Interstate Commerce to interim public use as recreational Act (49 USCS § 10903) between .trails rather than be deemed aban- "abandonment" of a rail line and doned—are a valid exercise of con- "discontinuance" of service, in that gressional power under the com- (1) once a carrier "abandons" a rail coerce clause of the Federal line pursuant to.authority granted by, Constitution (Art I, §8; cl-3), as they the Interstate Commerce Commission are reasonably adapted to the valid (ICC),the line is no longer part'of the congressional objectives of(1)encour- national transportation system, and aging the development of additional although the ICC is empowered to trails and assisting recreational use impose conditions on abandonments, by providing opportunities for trail as a general proposition ICC jurisdic- i use on an interim basis, and (2) pre- tion terminates; but (2) in contrast, serving established rights of way for "discontinuance" authority allows a future reactivation of rail service, railroad to cease operating a line for protecting rail transportation corri- an indefinite period while preserving dors, and encouraging energy- the rail corridor for possible reactiva- efficient transportation use; the tion of service in the future. Amendments would.be valid even if ' they served only the trail. develop- Interstate Commerce Commission I ment op'ective,and they do serve the § 36; Railroads §26; States, rail banking objective, even though Territories, .and Possessions trail conversion is permitted only af- §43 —abandonment of rights ter the Interstate Commerce Commis- of way reversionary inter- sion determines .that rail service on eats—federal or state law the right.of.way in question will not 5. State law generally governs..the be.needed in the foreseeable future, disposition-of.reversionary.interests because, given the'long tradition of .in railroad rights-of.wayrsubject to congressional regulation of railroad the, Interstate Commerce; Commis- abandonments,Congress was entitled sion's exclusive and:plenary jurisdic- to make its apparent judgment.that tion to regulate'abandonments:.of every railroad line is a potentially such rights of:way--and to- impose 5 U.S SUPREMECOUA' ,PORTS los L Ed2a conditions. affecting, postabaadon- resort tothat-process-yields-just com went use of the property; ngress, pensation,-then-.the property b dee the intersm use'of disused has no claim p ' owent y deeming against the government rights.of--way as recreational trails, for a taking in violation of-the-just under-the National Trails System Act compensation clause of the Federal Amendments of,1983 (16 USCS Constitution's Fifth Amendment; for §§1241-1251), to be like a "discon- this-reason "taking" claims against tinuance" of rail service—which pre-. the Federal Government are prema- serves the rail corridor for possible ture until the property owner has future reactivation-rather than an availed itself of the process provided "abandonment" of the rail line, pre- by the Tucker Act (28 USCS vented property interests from re- §1491(a)(1)). verting under state law. Eminent Domain §5 Claims §38 — Claims Court— govern- diction—taking juris- ment power Amendment — effect of Fifth 9. If there is a "taking" of private 6. The just compensation clause of property for public use, the claim of the Federal Con`stitution's Fifth the owner for compensation is Amendment does not.prohibit the founded upon the 'Constitution" taking of private property and is not thin the meaning of the Tucker Act designed to limit government inter- (28 USCS §1491(a)(1)) and thus is ference with property rights as such, thin the jurisdiction of the United but instead places a condition upon States Claims Court to hear and de- the exercise of that power and is de- termme. signed to secure compensation'in the Claims §7G —Claims Court jam_ event of an otherwise proper interfer- ence which amounts to a taking. diction — statutory with- drawal Eminent Domain §§ 112, 113 — 10a, 10b. 'The proper inquiry, m time of compensation determining whether a remedy .is 7. The juste compensation clause of available under the Tucker Act.(28 the Federal Constitution's Fifth USCS §1491(a)(1))for a claim arising Amendment does not require that out of a federal statute, is not just compensation be paid in advance whether that statute expresses an af- of, or even contemporaneously with, firmative• showing of congressional the taking of private property for intent to permit recourse to a Tucker i, publicuse;,all that is required is the Act remedy, but whether Congress existence of a reasonable, certain, has, in the statute, withdrawn the and adequate provision for obtaining Tucker Act's grant of jurisdiction to' compensation at the'time'of the tak- the United States Claims Court to ing• .. hear a suit' involving the statute j Actions §8;.Clams §38. -. founded upon the*Federal Constitu- Eminent tion; a Tucker Act remedy exists un- Domain'�§ 1061—' remedy of less there-are unambiguous indica- owner. ripeness tions to the contrary. 8aSb: If"tlie government has pro- vided"an•adequate-process for obtain- Courts§116 congressional regu- ing comFsensation for a taking ofpri- , lation of commerce'—judicial vate property--for public use, and-if deference .6 i - � r:_.ire _ � �!++{�Y:�.Y�+,��:.. .... • ' (1990)494 US 1,1OB:L Ed 2d 1,110 S.Ct 91_4 11, In determining whether,a par- gress,are'reaeonably,adapted to the titular . exercise of congressional end permitted by the Constitution. power is valid under the commerce clause of the Federal .Constitution Commerce, .§63 :.single•purpose (Art I, §8, cl 3),a court must defer to . federal regulation—validity a congressional finding that a regu- 12. There is no requirement that a lated activity affects interstatetom- federal law serve more than one legit- merce if there is any rational basis urate purpose in order to be a valid i for such a finding, and, must insure exercise of congressional power un- der the commerce clause of the Fed- I only that the means selected by Con- eral Constitution (Art I, §8, cl 3). SYLLABUS BY REPORTER OF DECISIONS Because pre-existing federal law tioners' larid in Vermont,.petitioners failed to deal adequately with the brought a state-court, quiet-title ac- national problem of shrinking rail tion, alleging that the railroad's ease- trackage, Congress enacted the Na- ment had been abandoned and thus tional Trails System Act .Amend- extinguished and that the'right-of- ments of 1983 (Amendments) to the way had therefore reverted to them National Trails-System Act (Trails ander state law. Holding that it Act), which authorize the Interstate lacked jurisdiction because 'the ICC Commerce Commission (ICC or Com- had not authorized abandonment of mission) to preserve for possible fu- the route and therefore still exercised tore railroad use rights-of-way not exclusive jurisdiction over it, the currently in service and to allow in- court dismissed the. action, and the terim use of the land as recreational trails. Section 8(d) of this so-called State Supreme Court affirmed. Peti- "rails-to-trails" statute provides thattioners then sought a certificate of a railroad wishing to cease operations abandonment from the ICC, but the along a particular route may negoti- Commission granted a petition to Aer- ate with a State,municipality,or.pri- mit the railroad to discontinue rail vate group prepared to assume finan- service and transfer the right-of-way cial and managerial responsibility for to the city of Burlington for interim the right-of--way. If.the parties reach trail use under §8(d). The Federal agreement, the land may, subject to Court of Appeals affirmed, rejecting ICC-imposed terms and conditions,be petitioners' contentions that §8(d) is transferred to the trail operator for unconstitutional on its face because it interim trail use notwithstanding takes private property without just whatever reversionary interests may compensation in violation of the Fifth exist in the ' property under state law. Amendment and because it:is nota . If no agreement`is reached,the..rai1- valid exercise of Congress'Commerce road may abandon the line'entirely, Clause power. thereby allowing the property to re- Hel vert-to=-abuttingr-landowners.if-=the 1. Eben-if-the xails-to-trails statute terms of`applicable` easements==and gives rise to'8 taking, compensation state law,provide-for such reversion. is available::undd -the Tacker-Act, After-Vermont!Railway,Inc.;stopped and the:requirements of the-:-Fifthusing aright—Of—Way adjacent-to peti- Amendment;ares therefore satisfied. 7 { i - U.S. SUPREME COURT-"k, ?ORTS 108 L Ed 2d i Since the Amendments and their leg- to withdraw the Tucker Act remedy, islative;history do not mention the since a-generalized desire to protect Tucker Act—which provides Claims the public fisc is insufficient for that Court§urisdiction over claims against purpose,see,e.g.,Regional Rail Reor_ the Government to recover damages ganization Act Cases, 419 US 102, founded on, inter alia, the Constitu- 127-128, 42 L Ed 2d 320, 95 S Ct 335, tion—the Amendments do not ex- and since the statements might sim- hibit the type of"unambiguous inten- tion" to withdraw the Tucker Act 'ply reflect Congress' rejection of a� remedy that is necessary to preclude more ambitious program of federally owned and managed trails. Because a claim under that Act. See Ruck- elshaus v Monsanto Co. 467 US 986, petitioners'failure to make use of the 1019, 81 L Ed 2d 815, 104 S Ct 2862. available Tucker Act remedy renders Section 101 of the Amendments— their takings challenge to the ICUs which provides that "authority to order premature, there is no need to . make payments . . . under this determine whether a taking oc- i Act shall be effective only to such curred. j extent or in such amounts as are 2• The Amendments are a valid provided in advance in appropriation exercise of Congress' Commerce Acts"—does not, as petitioners claim, Clause power. The stated congressio- indirectly manifest the necessary in- nal purposes--(1) to encourage the tent by rendering"unauthorized," as development of additional recre- not approved by Congress for pay- ational trails on an interim basis and ment in advance, any rail-to-trail (2) to preserve established railroad I conversion that could result in rights-of-way .for future reactivation Claims Court litigation. Since §8(d) of rail service—are valid objectives to speaks in capacious terms of interim which the Amendments are reason- use of any right-of-way, it clearly au- ably adapted. 'Even if petitioners 1 thorizes conversions giving rise to were correct that the rail banking i just compensation claims and there- purpose is a sham concealing a true fore does not support petitioners'con- . tention. .That there is no explicit purpose of preventing reversion of promise to pay for any takings is rights-of-way to property owners af- irrelevant, since the Tucker Act con- ter abandonment; 'the Amendments stitutes an implied promise to :pay would still be valid because they are just compensation.which individual reasonably adapted to the goal of en- laws need not reiterate. Moreover, couiraging the development of addi- §101 speaks only to payments under tional trails.There is no requirement the Amendments themselves and-not that a law serve more than one legit- to takings claims that "arise" under imate purpose. Moreover, this Court, the Fifth Amendment and for-which is not free under the applicable ratio- payments are made "under" the nal basis.standard of review to hold Tucker Act from-the separately.::ap- the Amendments-invalid simply.be- propriated Judgment Fund.. Nor do cause the-rail-banking.:purpose might i statements;in the legislative.history be advanced:more:completely by mea- indicating,-Congress'.desire.that:the sures,more. Draconian, than §8(d) Amendments(operate at "low:.cost" --such as a program of mandatory demonstrate an unambiguous intent conversions-or a>prohibition of all i 8 (1990)494 USI,108`L Ed 2d 1,110 3 Ct.914 c abandonments.:,The:long. history cof that the`ICC must cei ,that-public congressibnalettempts to address the convenience-P'anda;n •=permit i! problems„ofi;rall+iabandonments: pro- abandonment,before granting an in- vides,suf plenkreason-to.defer:to the terim-trail'ul9e>permit does;not indi legislative•judgment that §8(d) is an tate that the statute=fails to•promote appropriate answer. Furthermore, in its purpose of preserving rail corri- light of that history, Congress was dors. entitled to make.the judgment that 853 F2d 145, affirmed. every line is a potentially valuable Brennan, J., delivered the opinion national asset meriting preservation for a unanimous Court;O'Connor, J., even if no future rail use for it is filed a concurring opinion, in which currently foreseeable,so that the fact Scalia and Kennedy, JJ.,joined. APPEARANCES OF COUNSEL Michael M.Berger argued the cause for petitioners. Brian J.Martin argued the cause for federal respondents. John K.Dunleavy argued the cause for state respondents. Briefs of Counsel, p 975, infra. OPMON OF THE COURT [494 US 4] requirements of the Fifth Amend- Justice Brennan delivered the ment are satisfied. We also hold that opinion of the Court. the statute is a valid exercise of con- [1a, 2a, 3a] The question presented gressional power under the Com- is the constitutionality.of a federal merce Clause. "rails-to-trails” statute under which unused railroad rights-of-way are I converted into recreational trails not- withstanding whatever reversionary A property interests may exist under state law. Petitioners contend that [4a] The statute at issue in this the statute violates both the Fifth case, the National Trails System Act Amendment Takings Clause and the Amendments of 1983 (Amendments), Commerce Clause,Art I, §8:We find Pub L 98-11, 97 Stat 48, to the Na- it unnecessary.to evaluate the merits tional Trails System Act(Trails Act), of the takings claim because we hold Pub L 90-543,82 Stat 919(codified,as that even if the rails-to-trails statute amended,at 16 USC§1241 et seq.[16 gives rise to a taking,compensation is USCS.§§1241 et seq.v, is the culmi- available 'to petitions under the nation of congressional efforts to pre- Tucker Act,.28 USC serve shrinking rail trackage by con- [494.US 51 verting . unused ..fights-of4ay to 11491(a)(1).(1982 recreationaltrails-1 an.1920, the•Na- ed) [28 •USCS :§1491(aX1)]; and the tion's-_railway- systehif reached its 1.:Many-nature-trails.are-operated directly tion�we)of the-Trails Act,-16 USC.§'1246(e)[16 I' by.the Federal.Government.pursuant to the USCS§1246(e)1'provides that the land noes- t Trails Act,.in.which Congress reserved to itself nary for a'designadl i scenia'or Historic trail the right:to`designate scenic and historic trails may be acquired by state orrlocal?governments and delegated toAhe Secretary of the Interior or by federal authorities;'either-through-000p- and the.Secretary of Agriculture authority to erative agreements with-landowners or by pur- designate:recreational trails and to-develop chase. In the event that all voluntary means and administer the entire trails system.See 16 for acquiring the property fail,the appropriate. USC§§1242-1246,[16 USCS§§1242-12461.Sec- Secretary is given limited power to'obtain-pri- 9 108IL-Ed.2d U.S.--SUPIREM&COU peak.,oL 272,000, miles;-,today., only an.,order.- permitting,abandonment, about.-MLOOO-.miles are4museivand unlessthe -property had first.--been experts:predict that:.3,00O.?miles--mill offered for sale on reasonable-termsbe abandonedei" veryvear.through,the for public-purposes-including:recre- end of this century.2-ConCeMe&about atidnal use. See 49 USC § 10906'[49 the loss of trackage, Congress mi - USCS §10906]. cluded in the Railroad Revitalization and Regulatory Reform Act of 1976 By 1983, Congress recognized that (4-R Act), Pub L 94-210, 90 Stat 144, these measures "ha[d] not been suc- as amended,49 USC§ 10906(1982 ed) cessful in establishing a process [49 USCS §10906], several provisions through which railroad rights-of-way aimed at promoting the conversion of which are not immediately necessary abandonedlines for active service can be utilized for [494 US 6] to trails. Section trail purposes." HR Rep No. 98-28, p 809(a) of the 4-R Act required the 8(1983)(HR Rep); S Rep No. 98-1,p 9 Secretary of Transportation to pre- (1983) (S Rep) (same). Congress en- parea report on alternative uses for acted the Amendments to the Trails abandoned railroad rights-of-way. Act, which authorize the ICC to pre- Section 809(b) authorized the Secre- serve for possible future railroad use tary of the Interior to encourage con- rights-of-way not currently in service version of abandoned rights-of-way to and to allow interim use of the land recreational and conservational uses as recreational trails. Section 8(d) through financial, educational, and provides that a railroad wishing to technical assistance to local, state, cease operations along a particular and federal agencies. See note follow- route may negotiate with a State, ing 49 USC §10906 (1982 ed) [49 municipality, or private group that is USCS §10906]. Section 809(c) autho- prepared to assume rized the Interstate Commerce Com- [494 US 7] mission(ICC or Commission)to delay financial and the disposition of rail property for up managerial responsibility for the to 180 days after the effective date of right-of-way.* If the parties reach 2.See authorities cited in Comment,Rails to cease operating a line for an indefinite period Trails:Converting America's Abandoned Rail- while preserving the rail corridor for possible roads Into Nature Trails,22 Akron L Rev 645 reactivation of service in the future' (1989);see also 102 IOC Ann Rep 44-45.(1988); 4.Section 8(d),codified at 16 USC§1247(d). 101 ICC Ann Rep 37-38(1987). [16 USCS§1247(d)],provides: 3.[4b]There is an important distinction in . 'Me Secretary of Transportation,the Choir_ the Interstate Commerce Act between"aban- man of the-interstate Commerce Co donment".of a rail line and.!discontinuance, and the Secretary of the.Interior,in of service. See 49 USC §109.03 (1982 ed) [49 tering the Railroad Revitalization and Regula- USCS §10903].-Once a carrier "abandons" a tory Reform Act of 1976,shall encourage state rail line pursuant to authority granted by the and local agencies and private interests to Interstate Commerce Commission,-the line is establish-appropriate trails using the provi- no longer-part of the--national.transportation cions of,,Bush'Programs. Consistent with the system, and althoughAhe Commission-is em--.. purposes of that Act,and in furtherance of the powered'ito:impose,-conditions,.6n.-.abandon- national-policy-to preserve established railroad meats,-see,-.eg., 49 USC §§1090504), 10906 rights-of-way.-for;-future-reactivation of i ran (1982-ed)[49 USCS§§10905(t)(4),.109061-as a service.to-protect--ran transportation:corri- general -proposition JCC jurisdiction--termi- dors,and to encourage energyefficient4trans- -P W, an notes-See HayfieldNorthern I.Co.v Chicago �portation u in the case ofinterim-use of y & North Western--TransP.%Co., 467-US..622, established railroad rights-of-way pursuant-to 633-634,81 L Ed 2d 527,104-S Ct 2610(1984), donation,transfer,.leaseimle,or otherwise in a 54 Fed Reg 8011-8012(1989).In contrast,"dis- manner,-consistent with this chapter [the, continuance" authority allows.a,railroad to Trails Act],.;if such interim use is subject to 10 I U.S.SUP U1M',FEPORTS los L Ed 2d . hould eliminate many of the,prob- and-therefore still exercised exclusive ems'with this program; The -con- jurisdiction-over it.-:The-Vermont Su- reg- ;ept of attempting .to establish- premeiCourt afrmed..Trustees of.Di wails only after the.formal.aban- ocese of Vermont v,State, 145 Vt`510, Kallonment of a railroad right-of-way 496 A2d 151 (1985). O ! s self-defeating; once a right-of- petitioners then sought a certifi- . and, 67 vay is abandoned for railroad pur- tate of abandonment of the rail line )oses there may be nothing left for >sta- from the ICC. The State of Vermont ` rail use. This amendment would See �' Insure that potential interim trail intervened, claiming title in fee sim- ;o& ns will be considered prior to ple to the right-of-way and arguing in US abandonment." HR Rep, at 8-9. the alternative that, even if the States interest were an easement, i Ct [494 US 9] the land could not revert while it was trail j s S Rep, at 9 (same). The primary still being used for a public purpose. ther ie in this case is whether Congress Vermont Railway and the State then pra, violated the Fifth Amendment by petitioned the ICC to permit the rail- iter- cluding reversion of state prop- road to discontinue rail service and 1w: i y interests• transfer the right-of-way to the city of end- B Burlington for interim use as a public rail- trail under§8(d)of the Trails Act.By 'etitioners claim a reversionary in- a Notice of Exemption decided Janu- use' est in a railroad right-of-way adja- ary 2, 1986, the ICC allowed the rail- in- it to their land in Vermont. In road to discontinue service and ap- don- ;2, the State of Vermont acquired proved the agreement between the On- , Rutland-Canadian Railway Com- State and the city for interim trail ad- iy's interest in the right-of-way use. See 51 Fed Reg.454-455. On Feb- lone i then leased the right-of-way to ruary 4, 1986, the rmont Railway,Inc.Vermont Rail- [494 Us 10] from V stopped using the route more ICC Chairman den- t Use n a decade ago and has since re- ied petitioners' application for a stay radon- ved all railroad equipment,includ- pending administrative review,s and Is, 2 switches,bridges, and track,from the decision became effective on Feb- t988). portion of the right-of-way ruary 5, 1986. Petitioners'motion for enol wimed by petitioners. In 1981,peti- reconsideration and/or clarification and iers brought a quiet-title action in was denied on July 17, 1987. The olun- ' Superior Court of Chittenden Commission noted that "[i]nevitably, ith a i mty, allegingthat the easement interim trail use will conflict with the =tisf been abandoned.-and was thus reversionary rights of adjacent land ztho- i anguished, and that the right-of- owners, but that is the very purpose ce 7 had reverted to them by opera- of the Trails Act." State of Vermont vati st yet i of state property law. In August and Vermont Railway, Inc.—Discon- ment- S. the Superior Court dismissed tinuance .of Service Exemption in n the action,.holding that-it lacked ju- Chittenden County, 3 ICC 2d 903, sudla fiction .because,the ICC had not 908. ' horized abandonment of the--route ..Petitioners sought. review•of the State of Vermont and Vermont Railway, Chittenden County, Docket No. AB-265 (Sub- Discontinuance of Service Exemption in No.IIC. i 11 irx>. ` PRESEAULT v ICC . (1990)494 US 1,108 L Ed 2d 1,110 3 Ct 914 ICCs order in:the Court of Appeals Evangelical'Lutheran -Church of for the Second Circuit, arguing that Glendale v County:of Los Angeles, §8(d)of the Trails Act is wiconstitu- .482 US,304;314,96 L Ed 2d 250, 107 tional on its face because it takes S Ct 2378(1987).It is designed"notto private property without just com- limit the governmental interference pensation and because it is not a with property rights per se, but valid exercise of Congress'Commerce rather to secure compensation in the Clause power. The Court of Appeals event of otherwise .proper interfer- rejected both arguments.853 F2d 145 ence amounting to a taking." Id., at (1988). It reasoned that the ICC has 315, 96 L Ed 2d 250, 107 S Ct 2378 "plenary and exclusive authority" (emphasis in original). Furthermore, over abandonments, id., at 151, and the Fifth Amendment does not re- that federal law must be considered quire that just compensation be paid in determining the property right in advance of or even contemporane- held by petitioners. "For as long as it ously with the taking. See William- determines that the land will serve a son County Regional Planning `railroad purpose,'.the ICC retains ju- Comm'n v Hamilton Bank of Johnson risdiction over railroad rights-of-way; City,473 US 172,194,87 L Ed 2d'126, it does not matter whether that pur- 105 S Ct 3108 (1985). All that is re- pose is immediate or in the future." quired is the existence of a "'reason- Ibid. Because the court believed that able, certain and adequate provision no reversionary interest could vest for obtaining compensation"' at the until the ICC determined that aban- time of the taking. Regional Rail Re- donment was appropriate, the court organization Act Cases, 419 US 102, concluded that the Trails Act did not 124-125, 42 L Ed 2d 320, 95 S Ct 335 result in a taking. Next, the court (1974) (quoting Cherokee Nation v ' found that the Trails Act was reason- Southern Kansas R. Co., 135 US 641, ably adapted to two legitimate con- 659, 34 L Ed 295, 10 S Ct 965 (1890)). gressional purposes under the Com- "If the government has provided an merce Clause: "preserving rail adequate process for obtaining com- corridors for future railroad use"and pensation, and if resort to that pro- "permitting public recreational use cess `yield[s]just compensation,' then of trails." Id., at 150. The Court of the property owner `has no claim Appeals therefore dismissed petition- against the Government' for a tak- ers' Commerce Clause challenge. We mg." Williamson County Regional granted certiorari. 490 US 1034, 104 Planning Comm'n, supra, at 194-195, L Ed 2d 401, 109 S Ct 1929 (1989). 87 L Ed 2d 126, 105 S Ct 3108.(quot- ing Ruckelshaus v Monsanto Co., 467 [494 Us 11]' US 986, 1013, 1018, n 21, 81 L Ed 2d II 815, 104 S Ct 2862(1984)). [6,7,8a]The Fifth Amendment pro- [8b, 9] For this reason, "taking vides in-relevant part that "private claims:against the"Federal.Govern- property[shall not]be taken-for pub- ment are pie-mature until the prop- f lic use, without just:compensation." erty owner..has availed itself of the The Amendment "does not prohibit process provided by the'Tucker-Act:" theof private property,:.but Williamson, County Regional-':Plan- instead egional`Plan- instead places a condition on the ex- ning Comm'n, supra, at 195, 87 LEd j ercise of that power." First English 2d 126,: 105 S Ct 3108; see -also 13 U.S:SUPREME,COli r.REPORTS 108 L Ed 2d United: States -v.Riverside Bayview "unambiguous intention to-withdraw Homes, Inc., 474 US 121, 127-128, 88. the Tucker Act remedy," Monsanto, L .Ed 2d 419, 106 S Ct.455 (1985); supra,at-1019, 81 L.Ed 2d 8159-:104 S Monsanto,supra,at 1016,'81 L Ed 2d Ct 2862,that is necessary to preclude 815, 104 S Ct 2862; Duke Power Co. a Tucker Act claim.See Glosemeyer v v Carolina Environmental Study Missouri-Kansas-Texas R. Co., 685 F Group,Inc., 438 US 59, 94, n 39, 57 L Supp 1108, 1120-1121 (ED Mo 1988), Ed 2d 595, 98 S Ct 2620 (1978). aff d, 879 F2d 316, 324-325 (CA8 The Tucker Act provides jurisdiction 1989). [494 US 121 [1c] Neitherthtat in the United States Claims Court for e statute nor its le g- islative histo mentions the Tucker any claim against the Federal Gov- Act. As indirect evidence of Congress' ernment to recover damages founded ( on the Constitution,a statute,a regu- intent to prevent recourse to the ` lation, or an express or implied-in- Tucker Act, petitioners point to§101 fact contract. See 28 USC§1491(a)(1) of the Amendments which, although ! (1982 ed) [28 USCS §1491(a)(1)]; see it was not codified into law, provides also §1346(a)(2) (Little Tucker Act, in relevant part.that: which creates concurrent jurisdiction "Notwithstanding any other provi' in the district courts for such claims sion of this Act, authority to enter not exceeding$10,000 in amount). "If into contracts, and to make pay- there is a' taking, the claim is ments, under this Act shall be ef- `founded upon the Constitution' and fective only to such extent or in within the jurisdiction of the[Claims such amounts as are provided in Court] to hear and determine." advance in appropriation w' United States v Causby, 328.US 256, [494 US 13] 267, 90 L Ed 1206, 66 S Ct 1062 Acts." 97 i (1946). Stat 42, note following 16 USC [ib, 10a] The critical question in § 1249 [16 USCS §1249]. this case, therefore, is whether .a Petitioners contend that this section Tucker Act remedy is.available for limits the ICC's authority for conver- claims arising out of takings pursu- sions to those not requiring the ex- ant to the Amendments. The proper 'Penditure of any funds and to those inquiry is'not whether the statute others for which funds had been ap- "expresses an affirmative showing of Propriated in advance.Thus,any con- ! ' congressional intent to permit re-. version that could result in Claims course to a Tucker Act remedy," but Court litigation,was not' authorized rather "whether Congress has in the by Congress, since payment for such [statute] withdrawn the Tucker Act an acquisition would not have been grant of jurisdiction. to the [Claims approved by Congress in advance.Pe- Court]'to hear a suit involving the titioners insist. that such unautho- _[statute] `founded ... . upon the Con- rued Government actions cannot cre- stitution.' '.Regional Rail R•eorgani- ate:Tucker Act. ability,citing Hooe v nation Act Cases, supra; at 126, 42 L United.States, 218,US 322;,335, 54 L Ed 2d.320, 95:S Ct 335 (emphasis in Ed 1055,:.31 S'Ct.85 (1910), and Re- original). Under this..standard; ,we gional Rail Reorganization Act.Cases, conclude that the Amendments did supra,at 127;n 16,42 L Ed 2d 820,95 not withdraw the Tricker Act remedy. S Ct 335. Congress did not exhibit the type of [1d, 10b] We need not decide what 14 6,^ :a:L RESF - (1 990)494 US 1;108Z'Eami,110S-Ct 914 of;oifi 6&-id'-authorization -1 .any, meats: Thw,mcdon-•means ;simply �. tyle. -'to=create federal Habil= that-payments;.made pursuant,to the are necessar9. ity. under.-.the-Fifth Amendment, be Amendments;'such as funding for cause we lmd-that rail-to-trail conver- scenic_.trails; markers, and'<similar sions giving rise to Just compensation p u r p o s e s, '`see 'Amendments claims are clearly authorized by §209MC), 97 Stat 49 (codified at 16 §8(d). That section speaks in capa- USC § 12 4 9(5)(C) [16 USC S cious terms of "interim use of any §1249(5)(C)]) (authorizing appropria- - established railroad rights-of-way" tions for the development and admin- (emphasis added) and does not sup- istration of certain National Scenic port petitioners' proposed distinction and National Historic Trails), are ef- between conversions that might re- fective only "in such amounts as are sult in a taking and those that do not. -provided in advance in appropriation Although Congress did not explicitly Acts," a concept that mirrors Art I, promise to pay for any takings, we §g, of-the Constitution ("No Money have always assumed that the Tucker shall be drawn from the Treasury, Act is an"implie[d]promis[e]" to pay but in Consequence of Appropriations just compensation which individual made by Law").Payments for takings laws need not reiterate. Yearsley v claims are not.affected by this lan- W. A. Ross Construction Co. 309 US guage, because such claims "arise" 18, 21, 84 L Ed 554, 60 S Ct 413 under the Fifth Amendment, see (1940). Petitioners' argument that First English Evangelical Lutheran specific congressional authorization is Church, 482 US, at 315-316, 96 L Ed required for those conversions that 2d 250, 107 S Ct 2378. Payments for might result in takings is a thinly takings would be made "under" the veiled attempt to circumvent the es- ' Tucker Act, not the Trails Act, and tablished. method for determining would be drawn from the Judgment ` whether Tucker Act relief is avail- Fund, which is a.separate appropri- able for claims arising out of takings ated account, see 31 USC §1304(a) pursuant to a federal statute. We re- (1982 ed)[31 USCS§1304(a)].Section affirm that a Tucker Act remedy ex- 101 does not manifest the type of ists unless there are unambiguous in- clear and unmistakable congressio- dications to the contrary. nal intent necessary to withdraw [ie] Section 1012 moreover, speaks Tucker Act coverage. only to appropriations under the if petitioners next assert that Amendments themselves and not to Congress' desire that the Amend- relief available. ments operate at"low cost,"HR Rep, 1494 US 141 . under the Tucker at 3, somehow indicates that Con- Act, as evidenced by §101's opening -grecs withdrew the Tucker Act rem- clause—"[n]otwithstandmg any other edy. There is no doubt that Congress provision of this Act" (emphasis add- meant _to keep the: costs of the minimum.7_This ed}=which refers to the 1983 Amend- :Amendments�to a i 7.See Iii'Rep,at 2(noting that the Commit mended a revised-text which eliminated most tee'eliminatedmost of the items which could .of the items which would-require future Fed- require future.Federal expenditures"}:S Rep, eral expenditures:.'::additional recommen-, 1 at 3(samer HR Rep,ar11(reporting.regaired dations reflect oontinuiug-efforis to encourage funding for.the bill to be"insignificant");129 the expansion of trail recreation opportunities Cong Rec 5219 (1983) (remarks of floor man- across the Nation at a low cosel. ager Rep Seiberling)("['1']he committee recom- 15 } U.S. SUPREME`COURT.REFORTS 108 L Ed 2d intent, however,: has-.little. bearing under•the:Tucker Act would•pro- on the Tucker Act:..question. We vide the-necessary.remedy for any [494 US 18�. taking. that- may occur. In .any have previously rejected the argu- event, the::failure cannot.be'con- went that a generalized desire to pro- strued to reflect an unambiguous tect the. public fisc, is sufficient to intention to withdraw the Tucker withdraw relief under the Tucker Act remedy."467 US,at 1018-1019, Act. In the Regional Rail Reorganiza- 81 L Ed 2d 815, 104 S Ct 2862. tion Act Cases, we recognized that Similar logic applies to the instant the Rail Act established "[m]axi- case. The statements made in Con- mum" funding authorizations, 419 gress during the passage of the Trails US, at 127-128, 42 L Ed 2d 320, 95 S Act Amendments might reflect Ct 335,but we nevertheless held that merely the decision not to create a those limits were not an unambigu- program of direct federal purchase,e ous repeal of the Tucker Act remedy. construction, and We reasoned that the maximum lim- (494 US 161 j its might "support the inference that maintenance of Congress was so convinced 'that the trails, and instead to allow state and huge- sums provided would surely local governments and private groups equal or exceed the required constitu- to establish and manage trails. The tional minimum that it never focused alternative chosen by Congress is less upon the possible need for a `suit in costly than a program of direct fed- the Court of Claims."Id.,at 128,42 L eral trail acquisition because, under Ed 2d 320, 95 S Ct 335. In Monsanto, any view of takings .law, only some we stated that: rail-to-trail conversions will amount to takings. Some rights-of-way are 'Congress in [the statute] did not held in fee simple.See National Wild- address the liability of the Govern- life Federation v ICC,271 US App DC went to pay just compensation 1, 10, 850 F2d 694, 703(1988). Others should a taking occur. Congress' are held as easements that do not failure specifically, to mention or even as a matter of state law revert provide for recourse against the upon interim use as nature trails.9 In Government may reflect a congres- addition, under §8(d) the Federal sional belief that.use of data by[the Government neither incurs the costs Government] .in the. ways autho- of constructing and maintaining the rized by [the statute] •effects no trails nor assumeslegal liability for Fifth Amendment-taking or it may the transfer or use of the right-of- reflect Congress' assumption that way..In contrast, the costs of acquir- the 1 general grant of jurisdiction ing and administering national sce- 8.We note that the.ICC has construed§.8(d) 9.Some state courts have held that trail use as not providing federal power to.condemn does not constitute abandonment of a right-0f- railroad rights-of-way for interim trail use.See way for ' travel so as to trigger.reversion- Rail Abandonments;2 ICC2d, at 596-598;see my rights See State by Washington Wildlife also National Wildlife Federation-v ICC' 271 Preservatioa ,Inc:v State,329 NW2d 548,545- US App DC 1,4,n 4,6-9.850-F2d 694 697,n 4, 548 Minn), cert denied,463 US.1209,.77 L Ed699-702(1988);Connecticut Trust for.historic Preservation v..ICC,841 F2d 479,482483(CA2 2d 1390, 103 S Ct 3540(1983);Reiger v`Penn 1988}Washington State Dept.of Game'v ICC, -Central Corp.,`No.;8.5-CA 11 (Ct�App Greene 829 F2d 877,879-882 1CA9 1987)..c; County,,®hio,May.21,1985). . 16 i i ° PRESEAI7h IC(3 L Edd (1990)494 U$1;108 3;.110$ Ct�l4 ".-kHodel,.v n1C..and`--national,&istoriCa trails.are baBls, O'TSIdi] . d .4, i borne-directly by;the•FederaltGovern= .Virginia,,Sur ace.MO .W- &1WIama-. ' ment. Seen 1;_supra. Thus, the "low tion Assn.,Ine.=452�TS�264-276;69 L cost" language might reflect: Ed:2d;1;101 S G' -2352.(1981);_and we Con- gress' rejection of-a more ambitious must ensure only that,the means:se- program of federally owned and man- lected by Congress are reasonably aged trails, rather than withdrawal adapt to the end permitted by the of a,Tucker Act remedy. The lan- Constitution.'" Ibid. (quoting Heart .� of Atlanta Motel; Inc. v United gunge does not amount to the unam- States, 379 US 241, 262, 13 L Ed 2d biguous intention" required by our 258, 85 S Ct '348 (1964)); see also prior case..10 Hodel v Indiana,452 US 314,323-324, [494 US 171 69 L Ed 2d 40, 101 S Ct 2376 (1981). [2b] In sum,, petitioners_' failure to The Amendments clearly pass mus- make use of the available Tucker Act ter. remedy renders their takings chal- [3c] Two congressional purposes lenge to the ICUs order premature. are evident. First, Congress intended We need not decide whether a taking to ,encourage the development of ad- occurred in this case. ditional trails" .and to "assist recre- III ation[al] users by providing opportu- nities for trail use on an interim [3b, 11] Petitioners also contend basis."HR Rep,at 8,9;S Rep,at 9,10 that the Amendments to the Trails (same); see also 16 USC §1241(a) [16 Act are not a valid exercise-of con- USCS §1241(a)] (Trails Act "pro- gressional power under the Com- mote[s]the preservation of,public ac- merce Clause, Art,I, §8,because the Cess to, travel within, and enjoyment true purpose of §8(d) is to prevent and appreciation of the open-air, reversion of railroad rights=of-way to outdoor property owners after abandonment [494 US 181 and to create recreational trails, areas and historic re- rather than to preserve rail corridors sources of the Nation"). Second, Con- for future railroad.use. We evaluate gress intended "to preserve estab- this claim under the traditional ratio- lished railroad rights-of-way for fu- nality standard of review: we mustture reactivation of rail service, to defer to a congressional finding that a protect rail transportation corridors, regulated activity affects .interstate and to encourage energy efficient commerce "if there is any rational transportation use." HR Rep, at 8; S 10. [1g] Petitioners also claim that a floor. ified trail operator to establish interim trail statement by Senator Domenici that"the Fed- use.The ICC does not set up trails on its own eral Government has acquired too much land and has interpreted§8(d)to exclude the type from landowners using condemnation proce- of condemnation power vested in the Secretar- dures that in essence short changed the prop- ies of Interior and Agriculture by 16 USC erty rights of the landowners," 129 Cong Rec §1246(g)[16 USCS §1246(g)]. See n 8,:supra. 1607 (1983), means-that Tucker Act relief is This limitation.on ICC,condemnation author- unavailable. We disagree. The Senator-spoke " ity is not relevant to.the question whether in the:context of praising the statute.for-.en- oourag[ing]cooperation".rather than resorting compensation under the Tucker Act is avail- couradautomat g]llyw to condemnation anJbicortin- ablefor takings resulting from the conversions ministered1by the ICC;-the conversion,process that do occur,` it certainly'is'not an unam-. begins when a,railroad°voluntarily seeks a biguous sign that Congress'meautto withdraw CITU or NITU;it then negotiates with a qual- Tucker Act relief. . 17 R U S SUPREME C tTe.,REPORTS 108 L Ed 2d Rep;(at-9,'see;Ww 16 USC §1247(d) pose.4Moreover7'we are'not-'at liberty [16.XSCS:'§1247(d)].,:These`'are•valid under.thb4atioaalbasis-standard of congression_al objectives to which the review*to hold. the Amendments in- Amendments' are: reasonably valid merely . adapted:"' (494 Us 19] Petitioners contend that the because more Draco- nian measures—such as a program of Amendments do not reasonably pro- mandatory conversions or a prohibi- mote the latter purpose because the tion of all abandonments—might ad- ICC cannot authorize trail use until it vane more completely the rail bank- has found that the right-of-way at ing purpose. The process of issue is not necessary for "present or legislating often involves tradeoffs, future public convenience and neces- compromises, and imperfect, solu- sity." 49 USC §10903(a) (1982 ed) [49 tions,and our ability to imagine ways USCS §10903(a)] (emphasis added). of redesigning the statute to advance The ICC has explained that: one of Congress'ends does not render "In every Trails Act case, we will it irrational. See, e. g., Minnesota v already have found that the public Clover Leaf Creamery Co., 449 US 456,469,66 L Ed 2d 659,101 S Ct 715 convenience and necessity permit (1981). The history of congressional abandonment (or that regulatory approval is not required under 49 attempts to address the problem of USC §10505" [49 'USCS §10505])." rail abandonments, see supra, at 5-6, r 54 Fed Reg 8012, n 3(1989). 108 L Ed 2d,at 10, provides sufficient u reason to defer to the legislative judg- Thus, trail conversion is permitted ment that §8(d) is an appropriate only after the Commission deter- answer. Here, as in Virginia Surface mines that rail service will not be not Mining & Reclamation Assn.,' Inc., needed in the foreseeable. future. "Congress considered the effective= j This,according to petitioners,reveals ness of existing legislation and con- that the rail banking rationale is a cluded that additional measures were sham. If Congress really wished to necessary." 452 US, at 283, 69 L Ed address the. problem of shrinking 2d 1,.101 S Ct 2352. trackage, it would not have left con- versions to voluntary agreements be- Petitioners argument that §8(d) tween railroads and state and local does not serve the rail banking pur- pose, agencies moreover, is not well taken. es or private groups. Rather, petitioners suggest, Congress would That the ICC must certify that public have created a mandato convenience and necessity "permit �' ,program administered directly by the ICC. abandonment before granting.a CITU or NITU:'does not indicate that the i [3d, 121 We note at the outset that statute fails to promote its purpose of even .under petitioners' .reading, the preserving _rail corridors.'.Congress Amendments would still be a valid did not distinguish between short- exercise of congressional power un- term, and longterm rail banking, j -der the 'Commerce:.Clause because no did "it require .that the Commis they are reasonably adapted-to the cion -develop -a- specific•contingency goal of encouraging tl'q,deve16Jp t plan for reactivation of a line before of additional' recreational .trails. perm itting. conversion.,To the cont- There-Js is:no requirement that a law racy, Congress. apparently believed serve more than,one legitimate pur- that every :-'line is a potentially 18 I i fe PRESEA T.1 ! (1990)494 US!.lOS LL 1.110 S COO. Y /ti' ei r u OO�� y e► a.. '�"� a a. valuable natibnal''asset :than merits. jiin 1 tled:to, Preservation..,even if.no,future;.rail,• make r+a use for it is-currently' foreseeable.. y Given the long-tradition of congres- For the ,reasons related, donments; see, e.g., Colorado v -the judg- sional regulation of railroad aban- went of the Court'�df.Appeals is af- . United States, 271 US 153, 70 L Ed firmed 878, 46 S Ct 452 (1926); that is a It is so ordered. SEPARATE OPHGON [494 US 201 are mindful of the basic axiom that Justice O'Connor,with whom Jus- '[p]roperty interests . . . are not cre- tice Scalia and Justice Kennedy ated by the Constitution. Rather, join,concurring. they are created and their dimen- Petitioners assert that the actions sions are defined by existing rules or of the Interstate Commerce Commis- understandings that stem from an sion (ICC or Commission) prevent independent source such 'as state them from enjoying property rights law.'" Ruckelshaus v Monsanto Co., secured by Vermont law and thereby 467 US 986,1001, L Ed 2d 815, 104 have effected a compensable, taking. S Ct 2862(1984),quoting Webb's Fab- The Court of Appeals for the Second ulous pharmacies, Inc. v Beckwith, Circuit determined that, no matter 449 US 155, 161,66 L Ed 2d 358, 101 what Vermont law might provide, S Ct 446 (1980) (internal quotation the ICC's actions forestalled petition- omitted). Although original. federal ers from possessing the asserted re- giants of railway easements may in- versionary interest, and thus that no fluence certain disputes over inter- takings claim could arise. Today the ests in land, see Great Northern R. Court affirms the Second Circuits judgment on quite different grounds. Co.v United States,315 US 262,86 L Ed 836, 62 S Ct 529 (1942); Idaho v I join the Court's opinion,. but write Oregon Short separately to express my view that .Line R.Co.,617 F Supp 207(Idaho 1985), no such federal role` state law determines what property is Present in this case. Rather, the interest petitioners possess and that , traditional takings .doctrine will de- parties sharply dispute what interest, according to Vermont law;the State termine whether the Government must compensate petitioners for the of [494 us 21] burden imposed on any propertyin- Vermont acquired from the Rut- terest they possess. land Railway Corporation pLnd,corre- As the Court acknowledges, ante, spondingly, whether petitioners..pos- at 8-9, .15-16, 108 L Ed 2d, at 11-12, seas the property interest that they 16-17, state law.creates and defines claim has been taken. See Brief for the scope of the reversionary or other Petitioners- 15,;and n 14; Brief for real property:interests affected by the Respondents State'of Vermont et al ICUs actions pursuant to§208 of the 22=25;Reply Brief for,-Petitioners 24. National Trails System Act Amend- Similar.:reference�tdg state ,_law .has meats of.1983;.16-USC §1247(d) [16 guided"other -.deur- USCS §:-1247(d)]. In determining mine whether 4 railway,right;of way whether a taking has occurred, "we lapsed upon the conversion to trail 19 U S. SUPREME RT-,;9M, RTS 108 L Ed`2d use-.,Compare State.:by..WA4Jngtow thusy,unlewt.he, omm�ssion att esu Wildlife Preservation, Inc. v. State,: postaba;xdonment conditions:;.to.�:the: 329 NW2d 543, 545 (Minn) (trail abandonment certificate; - 548 use within original interest, thus re- [494 U3-221.. versionary rights have not matured), "brings[the cert denied,.463 US 1209, 77 L Ed 2d Commission's] .regulatory mission to 1390, 103 S Ct 3540(1983),with Law- an end." Hayfield Northern R. Co. v son v State, 107 Wash 2d 444, 730 Chicago & North Western Transp. Ptd 1308(1986)(change in use would Co., 467 US 622, 633, 81 L Ed 2d 527, give effect to reversionary interests); 104 S Ct 2610(1984). As the Vermont McKinley v Waterloo R.. Co., 368 Supreme Court recognized, state NW2d 131, 133-136 (Iowa 1985) (lack courts cannot enforce or give effect to of railway use triggered period lead- ing to reversion); Schnabel v County enforcement would interfere with the of DuPage, 101 Ill App 3d 553, 428 Commission's administration of the NE2d 671 (1981) (easement lapsed). I Determining what interest petition- Interstate Commerce Act. See Trust- ers would have enjoyed under Ver- ees of Diocese of Vermont v State; mont law, in the absence of the ICC's 145 Vt 510,496 A2d 151(1985).These recent actions,will establish whether results are simply routine and well- petitioners possess the predicate established consequences of the .Su- property interest that must underlie premacy Clause, US Const, Art VI, cl any takings claim. See Ruckelshaus v 2• Monsanto Co.,supra,at 1001-1004,81 The scope of the Commission's au- L Ed 2d 815, 104 S Ct 2862.We do not thorit attempt to resolve that issue. Y to regulate abandonments, thereby delimiting the ambit of fed- It is also clear that the Interstate eral power, is an issue quite distinct Commerce Act, and the ICC's actions from whether the Commission's exer- pursuant to it, pre-empt the opera- cise of power over matters within its tion and effect of certain state laws jurisdiction effected a taking of peti- that "conflict with or interfere with tioners' property. Cf. Kaiser Aetna v federal authority over the same activ- United States, 444 US 164, 174, 62 L ity." Chicago & North Western Ed 2d 332, 100 S Ct 383 .(1979) Transp. Co. v Kalo Brick & Tile Co., ("[T]here is no question but that Con- 450 US 311, 319, 67 L Ed 2d 258, 101 gress could assure the public a free S Ct 1124 (1981); see id., at 318-319, right of access. . . —Whether a stat- 67 L Ed 2d 258, 101 S Ct 1124. States ute or regulation that went so far may not impose obligations upon car- amounted to a `taking,' however, is i riers at odds with those governed an entirely separate question"). Al- through'the ICUs "exclusive" and though the Commission's actions may "Plenary authority to regulate . . . preempt the.operation and effect of i rail carriers' cessations of service on certain statelaws; those actions do their lines." Id., at 323, 67 L Ed"2d not displace.state law as the tradi- 258,101•S:Ct 1124;see id.-,-At 324-327, tional source of the real property in- 67.L Ed 2d 258;101 S Ct 1124.A State terests:See Ruckelshausv Monsanto - may.again'exercise its 'regulatory Co.,'supra,"at 100A-1604, 1012, 81L powers once the ICC authorizes a car- Ed:2d'815, 104 S Ct.2862.(state law Tier's abandonment of service, and,` creates property right in trade se- 4 20 I " i PRES'i= (1990)494 US 1,108 L Ed 2d 1,110 S Q 914 ° creta for =purposes of Fifth Amend- .read the-Just,.Compefisation Clause > meat,and regulatory regime does not out of the Constitution:The ICC may Pre-empt state property law). The poems_the power.to postpone.enjoy- Commission's. actions - may -:delay ment of reversionary' interests,- property owners' enjoyment of their the Fifth, Amendment,, and well- ! reversionary interests,but that delay established doctrine indicate that in burdens and defeats the property in- terest rather than suspends or defers certain circumstances the Govern- the vesting of those property rights. ment must compensate owners of See National Wildlife Federation v those property interests when it exer- ICC, 271 US App DC 1, 11-12, and n cises that power. See First English 16, 850 F2d 694, 704-705, and n 16 Evangelical Lutheran Church of (1988). Any other conclusion would Glendale v County of Los Angeles, convert the ICC's power to pre-empt 482 US 304, 314-315, 96 L Ed 2d 250, conflicting state regulation of inter- 107 S Ct 2378 (1987) (The Taking state commerce into the power to pre- Clause "does not prohibit the taking empt,the rights guaranteed by state of private property, but instead property law, a result incompatible places a condition on the exercise of with the Fifth Amendment. See that power,"Ruckelshaus po er, and the Clause is de- [494 US 231 signed not to limit the governmental v Monsanto Co„ supra, interference with property rights per at 1012,81 L Ed 2d 815, 104 S Ct 2862 se, but rather to secure compensation ("If Congress can `pre-empt' state in the event of otherwise proper in- property law in the manner advo- terference amounting to a taking"). cated b EPA then the Takia 3' � g Nothing in the Court's opinion dis- Clause has lost all vitality. [A] sover- avows these principles. The Court's }a� eign, `by ipse dixit, may not trans- conclusion that §8(d) authorizes ' form private property into public rails-to-trails conversions that property without compensation. amount to takings, ante, at 13 108 L This is the very kind of thing that the Taking Clause of the Fifth Amend- Ed 2d 15, and its conclusion that went was meant to prevent"'), quot- "under any view of takings law- only some rail-to-trail conversions will I ing Webbs Fabulous Pharmacies, Inc. v Beckwith, supra, at 164, 66 L amount to takings,"ante,at 16, 108 L Ed 2d 358 101 S Ct 446. Ed 2d,at 16,are inconsistent with the ' Second Circuit's view. Indeed, if the The Court of Appeals for the Sec- Second Circuit's and Circuit adopted just this unjusti- [494 US 24) fled interpretation of the effect of the approach were ICUs exercise of federal power. The adopted,discussion of the availability court concluded that even if petition- of the Tucker Act remedy would be ers held the reversionary interest unnecessary. Even the federal re- they claim, no taking occurred be- spondents acknowledge that the exis- cause "no reversionary interest can tence of a taking will rest upon the or would vest" until the ICC deter- nature of the state-created property mines that abandonment is appropri- interest that.petitioners would have ate.See 853 F2d 145, 151 (1988).This enjoyed absent the federal action and view conflates the scope of the ICC's upon the extent that the federal ac- power with the existence of a com- tion burdened that interest.See Brief pensable taking and threatens to for Federal Respondents 23-24. - 21 U S.�SUP.,REME COU iEPORTS 108"L`Ed'2d Well=established prInciples`'�will mentphysically invades only an`aL se- govern.analysis,of:whether.the'lbur- mentin property;Mitust nonetheless den the ICC's actions impose:..upon pay just compensation").The Govern- state-defined real property interests ment's appropriation of:other,,lesser amounts to a compensable--.taking. servitudes may also impose a burden We recently concluded in Nollan v requiring payment of just compensa- California Coastal Comm'n, 483 US tion. See United States.v Causby, 328 825,831-832,97 L Ed 2d 677, 107 S Ct US 256, 90 L Ed 1206, 66 S Ct 1062 3141 (1987), that a taking would oc- (1946); Portsmouth Harbor Land & cur if the Government appropriated a Hotel Co. v United States, 260 US public easement. See also Kaiser 327, 67 L Ed 287, 43 S Ct 135 (1922). Aetna, supra, at 179-180, 62 L Ed 2d And the Court recently concluded ' 332, 100 S Ct 383 ("[T]he `right to that the Government's burdening of exclude,' so universally held to be a property for a distinct period,short of fundamental element of the property a permanent taking, may neverthe- right, falls within this category of less mandate compensation.See First interests that the Government can- English Evangelical Lutheran not take without compensation") Church,supra, at 318-319,96 L Ed 2d (footnote omitted). In such a case, a 250, 107 S Ct 2378. Of course, a party "permanent physical occupation" of may gain the benefit of these "• princi- the underlying property "has oc- ples only after establishing posses- curred . . . where individuals are sion of a property interest given a permanent and continuous [494 US 25] right to pass to and fro, so that the that has real property may continuously be been burdened. As today's decision traversed, even though no particular indicates, petitioners and persons individual is similarly situated will have ample permitted to station Y himself permanently upon the pre- opportunity to make that showing. a` mises."Nollan,supra,at 832,97 L Ed With this understanding, and for 2d 677, 107 S Ct 3141;see also,Kaiser the reasons set forth in the Court's Aetna, supra, at 180, 62 L Ed 2d 332, opinion, I agree that the judgment 'w 100 S Ct 383 ("[E]ven if the Govern- below should be affirmed. h FJJ rt, .:. 22 ?f I 16. 97 Pfeseault v. U.S. Page 1 of 59 UNITED STATES COURT OF APPEALS FOR THE FEDERAL CIRCUIT 93-5067,-5068 J. PAUL PRESEAULT and PATRICIA PRESEAULT, Individually and as Partners of 985 ASSOCIATES, LTD., a Vermont Limited Partnership, and 985 ASSOCIATES, LTD., Plaintiffs-Appellants, V. THE UNITED STATES, Defendant-Appellee, and THE STATE OF VERMONT, Defendant/Cross-Appellant. Patrick W. Hanifin. New England Legal Foundation, of Boston, Massachusetts, argued"for plaintiffs-appellants. With him on the brief were Emily R. Livingston and Stephen S. Ostrach. Jeffrey P. Kehne, Attorney,Environment and Natural Resources Division, Department of Justice, of Washington, D.C., argued for defendant-appellee. With him on the brief were Peter R. Steenland. Jr., Acting Assistant Attorney General, and James E. Brookshire, Susan.V. Cook, and Robert L. Klarquist, Attorneys. Of counsel on the brief was Louis Mackall, Office of General Counsel, Interstate Commerce Commission, of Washington, D.C. John K. Dunleavy, Assistant Attorney General, Vermont Agency of Transportation, of Montpelier, Vermont, argued for defendant/cross- appellant. With him on the brief was JeffrgY L. Amestoy, Attorney General. William Perry, PendleX,Mountain States Legal Foundation, of Denver, Colorado, for amici curiae Maurice L. and Delores J. Glosemeyer. Thomas C. Jackson, Beveridge&Diamond, P.C., of Washington, D.C., for amici curiae Rails-to-Trails Conservancy and The National Trust for Historic Preservation in the United States. With him on the brief were Henry L. Diamond, David G. Isaacs, and J. Andrew Stephenson. Of counsel on the brief were Andrea C. Ferster, General Counsel, Rails-to-Trails Conservancy, of Washington, D.C., and David A. Doheny, General Counsel, and Elizabeth S. Merritt, Associate General Counsel, National Trust for Historic Preservation, of Washington, D.C. John D. Echeverria, National Audubon Society, of Washington, D.C., for amicus curiae National Audubon Society. Appealed from: United.States.Court of Federal Claims Judge Miller http://www.1l.georgetown.edu/Fed-Ct/Circuit/fe.d/opinions/93-5067.html 10/7/98 Preseault v. U.S. - Page 2 of 59 ' United States Court of Appeals for the Federal Circuit 93-5067, -5068 J. PAUL PRESEAULT AND PATRICIA'PRESEAULT, INDIVIDUALLY AND AS PARTNERS OF 985 ASSOCIATES, LTD., A VERMONT LIMITED PARTNERSHIP, AND 985 ASSOCIATES, LTD., Plaintiffs-Appellants, V. THE UNITED STATES, Defendant-Appellee, and THE STATE OF VERMONT, Defendant/Cross-Appellant. DECIDED: November 5, 1996 Before RICH,NEWMAN, MAYER, MICHEL,PLAGER, LOURIE, CLEVENGER, RADER, and SCHALL, Circuit Judges.* Opinion filed by Circuit Judge PLAGER, in which Circuit Judges RICH, NEWMAN, and MAYER r join. Concurring opinion filed by Circuit Judge RADER, in which Circuit Judge LOURIE joins. Dissenting opinion filed by Circuit Judge CLEVENGER, in which Circuit Judges MICHEL and SCHALL join. PLAGER, Circuit Judge. In this Takings case, the United States denies liability under the Fifth Amendment of the Constitution 1 for actions it took pursuant to the Federal legislation known as the Rails-to-Trails Act. The original parties to the case.were the property owners, J. Paul and Patricia Preseault, plaintiffs, and the United States(the"Government"), defendant. The State of Vermont (the"State"), claiming an interest in the properties involved, intervened and,under the joinder rules of the Court of Federal Claims, entered its appearance as a co-defendant. The Court of Federal Claims, on summary judgment after hearings and argument, concluded that the law was on the Government's side, and rendered judgment against the complaining property owners. Preseault v.'United States, 27 Fed. Cl. 69 (1992). The property owners appeal. The appeal initially was heard by a three-judge panel which agreed with the trial court judgment in the Government's favor and affirmed. Preseault v. United States, 66 F.3d 1167(Fed. Cir. 1995). Subsequently the full court concluded that the case raised important issues of Constitutional dimension, and that it was not certain thaf the property owners were wrong in their claims; http://www.1l.georgetown.edu/Fed-Ct/Circuit/f`ed/opinions/93-5067.html 10/7/98 Breseault v. U.S. Page 3 of 59 Accordingly, the panel opinion was vacated, the case was taken in banc, and additional briefing and argument was ordered. Preseault v. United States, 66 F.3d 1190 (Fed. Cir. 1995). The matter having now been heard before the in banc court, and thorough consideration having been given to the issues and to the arguments of the parties and the several amici , we conclude that, for the reasons we shall explain, the trial court erred in giving judgment for the Government; that judgment is reversed. The case is.remanded to the trial court for further proceedings to determine the just compensation to which the property owners are entitled. A. INTRODUCTION AND SUMMARY ; In brief, the issue in this case is whether the conversion, under the authority of the Rails-to-Trails Act and by order of the Interstate Commerce Commission, of a long unused railroad right-of-way to a public recreational hiking and biking trail constituted a taking of the property of the-owners of the underlying fee simple estate. At this point we shall refer to the railroad's interest in the property by the term"right-of-way." That term is sufficient to indicate that the railroad had obtained a property interest allowing it to operate its equipment over the land involved. Later in the opinion it will become important to more precisely delineate the nature of the railroad's,property interests, after which the use of the term"right-of-way"will refer only to those defined interests. The facts of the case are reported in full in the several opinions already rendered in connection with this matter: the decision of the United States Court of Appeals for the Second Circuit, holding the Rails-to-Trails Act constitutional and the`Preseaults without remedy, Preseault-y. ICC, 853-F.2d 145 (2d Cir. 1988) (Preseault I) ;the decision of the United States Supreme Court, on certiorari from the Second Circuit, affirming the constitutionality of the Rails-to-Trails Act on its face, but concluding that the Preseaults may have-a- remedy in the Court of Federal Claims under the Tucker Act for a"Fifth Amendment"taking,"Preseault v. ICC. 494 U.S. 1 (1990) (Preseault II); the initial decision of the Court of Federal Claims, Preseault v. United States, 24 Cl. Ct. 818 (1992) (Preseault 1), in which the trial judge, after hearing and argument, granted partial summary judgment for the Preseaults, and denied the Government's cross-motions for summary judgment; and the final judgment of the Court r of Federal Claims, reported at 27 Fed. Cl. 69 (1992) (Preseault 2), concluding that the law was against the Preseault's claim for compensation under the Fifth Amendment, granting the Government's second cross-motion for summary judgment, and ordering judgment dismissing the complaint. There are also two decisions in related matters by the Supreme Court of Vermont. The first,in 1985, holds that affected property owners(in that case the Preseaults and others) cannot maintain a suit in state court for a declaration of rights concerning the matter at issue before us because the matter is exclusively within the province of the Federal Government pursuant to the provisions of the Ijnterstate Commerce Commission Act, and that the state court is therefore without subject matter jurisdiction. Trustees of the Diocese of Vermont v.`State,,.145 Vt. 510, 496 A.2d 151 (1985). The second state court decision, some ten years later, affirms;an injunction against the Preseaults prohibiting them from using that part of their property subject to the original right-of-way for any purpose other than as members of the general public. State v. Preseault, 652 A.2d 1001 (Vt. 1994). In light of this record, we refer the reader to the earlier opinions for the full details of the events leading up to this appeal. For purposes of the decision here we summarize and,condense that history, and recite only the salient facts relevant to the decision. On appeal we affirm a summary judgment if the record before us discloses that"there is no genuine http://www.1l.georgetown.edu/Fed-Ct/Circuit/fed/opinions/93-5067.htm1 10/7/98 i Preseault v. U.S. Page 4 of 59 ' issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c). Although we give due consideration to the views of the trial court, we decide anew questions about the applicable law, without deference to those views. In summary,we conclude that the trial court was correct in finding that the 1899 transfers to the railroad created easements for use for railroad purposes;the fee estates remained with the original property owners. (Part C.1.)We accept the Government's position that ultimately this is a matter to be decided under controlling federal law and Constitution, but we reject the Government's central thesis that general federal legislation providing for the governance of interstate railroads, enacted over the years of the Twentieth Century, somehow redefined state-created property rights and destroyed them without entitlement to compensation. (Part C.2.)The trial court erred in accepting that thesis. As far as the Government's defenses based on the state's property law are concerned, we conclude that even if these easements were still in existence at the time the trail was created, there was no legal justification for the intrusion upon the Preseault's property. We find no support in Vermont law for the proposition, propounded by the defendants and accepted by the dissent, that the scope of an easement limited to railroad purposes should be read to include public recreational hiking and biking trails(Part D). But we find no clear error in the trial court's determination that in fact these easements had been abandoned years before the creation of the trail(Part E), and that determination is affirmed. Finally, we conclude that the taking that resulted from the establishment of the recreational trail is properly laid at the doorstep of the Federal Government. Whether the State's role in the matter should have resulted in liability for the State, or whether the State could absolve itself by pointing to the Federal Government, as the State Court held, is immaterial. The Federal Government authorized and controlled the behavior of the State in this matter, and the consequences properly fall there. (Part E.) B. FACTUAL BACKGROUND The Preseaults own a fee simple interest in a tract of land near the shore of Lake Champlain in Burlington, Vermont, on which they have a home. This tract of land is made up of several previously r separate properties, the identities of which date back to before the turn of the century. The dispute centers on three parcels within this tract, areas over which the original railroad right-of-way ran. The areas are designated by the trial court as Parcels A,B, and C. Two of those parcels, A and B, derive from the old Barker Estate property. The third parcel, C, is part of what was the larger Manwell property. The Rutland-Canadian Railroad Company, a corporation organized under the laws of Vermont, acquired in 1899 the rights-of-way at issue on Parcels A, B, and C, over which it laid its rails and operated its railroad. Over time the ownership interests of the Rutland-Canadian passed into the hands of several successor railroads with different names; except as it may be necessary to differentiate among them, they will be referred to collectively as the Railroad. Meanwhile, ownership of the properties over which the rights-of-way ran passed through the hands of successors in interest, eventually arriving in the hands of the Preseaults. A map of the Preseault tract, showing the various parcels and the areas subject to the railroad's rights-of-way, appears in 27 Fed. Cl. at 72, and is reproduced here for the benefit of the reader: C. THE PROPERTY INTERESTS http://www.1l.georgetown.edu/Fed-Ct/Circuit/fed/opinions/93-5067.html 10/7/98 Preseault v. U.S. Page 5 of 59 In Preseault II, Justice Brennan writing for the Supreme Court noted the importance of determining the nature of the interests created by these turn-of-the-century transfers: The alternative chosen by Congress [the Rails-to-Trails program] is less costly than a program of direct federal trail acquisition because, under any view of takings law, only some rail-to-trail conversions will amount to takings. Some rights-of-way are held in fee simple. Others are held as easements that do not even as a matter of state law revert upon interim use as nature trails. Preseault II, 494 U.S. at 16 (citation omitted). Justice O'Connor, in a concurring opinion for herself and Justices Scalia and Kennedy, developed the point further: [T]he parties sharply dispute what interest, according to Vermont law, the State of Vermont acquired from the Rutland Railway Corporation and, correspondingly, whether petitioners possess the property interest that they claim has been taken. . . . Determining what interest petitioners would have enjoyed under Vermont law, in the absence of the ICC's recent actions, will establish whether petitioners possess the predicate property interest that must underlie any takings claim. We do not attempt to resolve that issue. Id. at 20(citation omitted). Clearly, if the Railroad obtained fee simple title to the land over which it was to-operate, and that title inures, as it would, to its successors, the Preseaults today would have no right or interest in those parcels and could have no claim related to those parcels for a taking. If, on the other hand, the Railroad acquired only easements for use, easements imposed on the property owners' underlying fee simple estates, and if those easements were limited to uses that did not include public recreational hiking and biking trails ("nature trails" as Justice Brennan referred to them), or if the easements prior to their conversion to trails had been extinguished by operation of law leaving the property owner with unfettered fee simples, the argument of the Preseaults becomes viable. r The determinative issues in the case, then, are three: (1)who owned the strips of land involved, specifically did the Railroad by the 1899 transfers acquire only easements, or did it obtain fee simple estates; (2)if the Railroad acquired only easements, were the terms of the easements limited to use for railroad purposes, or did they include future use as public recreational trails; and (3) even if the grants of the Railroad's easements were broad enough to encompass recreational trails, had these easements terminated prior to the alleged'taking so that the property owners at that time held fee simples unencumbered by the.easements. The Government enriches the case with an argument that would have profound impact on future takings jurisprudence: that the general federal legislation providing for the Government's control over interstate railroad operations as enacted and amended over the years had the effect of redefining the private property rights of these owners, leaving them without a compensable interest in the land. Before addressing these several issues, a preliminarymatter. There is an alternative way, frequently used today including by the parties here, to describe.property transactions involving easements. Instead of calling the property owner's retained interest a fee simple burdened by the easement, this alternative labels the property owner's retained interest following the creation of an easement as a "reversion" in fee. Upon the termination, however achieved, of the,easement, the"reversion" is said to become fully possessory; it is sometimes loosely said that the estate"reverts" to the owner. http://www.1l.georgetown.edu/Fed-Ct/Circuit/fed/opinions/93-5067.html 10/7/98 Preseault v. U.S. Page 6 of 59 ' Under traditional common law estates terminology, a"reversion" is a future interest remaining in the transferor following the conveyance of certain lesser estates to a transferee, typically when the transferee takes a possessory estate of freehold, for example a life estate. An easement is not such a possessory estate of freehold. Traditional characterization describes an easement as a"use" interest, sometimes an"incorporeal hereditament,"but not a"possessory" interest in the land. Therefore labeling the retained interest a"reversion".is not consistent with the traditional classification scheme, which views the retained interest as a present estate in fee simple, subject to the burden of the easement. Be that as it may, whether the property owner's retained interest following the conveyance of•an easement is denominated a fee simple estate or a reversion, it is uniformly treated at common law as a vested estate in fee. Under either characterization the result upon termination of the easement is the same. For consistency we use the traditional terminology which recognizes that the transferor remains seised of the freehold estate, and thus labels the owner's estate as a fee simple, burdened, during the life of the easement, by the easement-holder's rights. 1. The Interests Created The question of what estates in property were created by these turn-of-the-century transfers to the Railroad requires a close examination of the conveying instruments,,read in light of the common law and statutes of Vermont then in effect. Ideally that question would be decided by the State of Vermont's courts, utilizing their knowledge of and experience with their state's property law. However,'when-the question of the rights of the property owners vis-a-vis the successors of the Railroad was raised in the Vermont courts in the suit brought in 1981, cited above, the Vermont Supreme Court took the position that the state courts were without subject matter jurisdiction due to the pervasive role of the Federal Government in railroad matters See Trustees of the Diocese of Vermont v. State, 145 Vt. 510, 496 A.2d 151 (1985). The Vermont courts thus declined to address the question. Later, when this question of state law came before this court in bane, the possibility of referring the question back to the state courts was considered. However, at the argument in the case before us we were advised by,the State's Assistant Attorney General that Vermont has no mechanism r for having such a question referred by a federal court to the state courts for decision. We have no choice, then, but to determine this question of state law ourselves. In this undertaking we have the benefit of careful analysis by the trial judge. With regard to the two parcels, A and B, derived from the Barker Estate, the trial judge examined, as have we, the document referred to as a"Commissioner's Award," dated September 2, 1899, as well as the relevant cases and statutes of Vermont. The Commissioner's Award, which is the only document that memorializes the event, is unlike a deed in that it does not contain the usual premises(the clause describing the parties to and purposes of the transaction) or habendum clause(defining the extent of the ownership interest conveyed). Usually in a-deed the habendum clause would define the exact interest to be conveyed, whether a fee simple or a lesser interest, although the premises clause sometimes serves as well. Here, the Commissioner's Award simply confirms that "the Rutland-Canadian Railroad Company . . . for the purposes of its railroad has located, entered upon and occupied lands owned by [the Barkers] . . . described as follows [and here follows a metes and bounds description of the strip of land]." The document then states that the owners of the land and the Railroad have not agreed as to the damages to be paid to the owners, that upon application by the Railroad three disinterested commissioners were appointed by the Supreme Court of Vermont, and that"according to the provisions of the Act incorporating said'Company and the Statutes of the State of Vermont" the commissioners"appraise http://www.1l.georgetown.edu/Fed-Ct/Circuit/fed/opinions/93-5067.html 10/7/98 Preseault v. U.S. Page 7 of 59 and determine the damage to the said owners of said land occasioned by such location, entry and occupation by the said Company"to be aastated sum. The references to the purposes of the Railroad, and to the provisions of the Act incorporating it, are to 1898 Vermont Acts No. 160, entitled"An Act to.Incorporate the Rutland-Canadian Railroad Company," approved November 4, 1898. That Act provided that certain named individuals constituted and created a body politic and corporate by the name of the"Rutland- Canadian Railroad Company," for the purpose and with the right of constructing, maintaining and operating a railroad . for public use in the conveyance of persons and property by the power of steam or otherwise . . . . Said Corporation shall have and enjoy the right of eminent domain . . . [and]'may . . .. take . . . such real and personal estate as is necessary or proper in the judgment of such corporation, for the construction, maintenance and accommodation of such railroad . . . as the purposes of the corporation may require . . . . 1898 Vt. Acts No. 160, § 1. The Act goes on to state'that the corporation shall have all privileges and rights given by the general law to railroad companies for acquiring title and possession to property covered by its location. It is clear from the relevant documents and statutes'that the actions of the Railroad in this case fall under well-established Vermont laws and procedures for acquisition of rights-of-way by companies incorporated for railroad purposes. In her opinion, the trial judge concluded that, in the context of the Vermont procedure for commissioners' awards for railroad rights-of-way, and in.light of the Vermont case law, cited and discussed in the trial court's opinion, "[t]he portion of the right-of-way consisting of the parcel of land condemned from the Barker Estate and taken by commissioner's award is indisputably an easement under the law of the State of Vermont." 24 Cl. Ct. at 827. As a result of our independent examination of the question we conclude that there is little real dispute about this.That was the rule in the early Vermont cases, and continues to be the rule today. See, e.g., Dessureau v. Maurice Memorials, Inc., 132 Vt. 350, 351, 318 A.2d 652 (1974) ("The taking, pursuant to statutory authority, gave the railroad only an easement, not a fee, and upon abandonment, r the property reverts to the former owner.") (citing Troy&Boston R.R. v. Potter, 42 Vt.-265, 274 '(1869)). In Troy&Boston Railroad v. Potter, the suit was an action of trespass on the freehold, testing the question of whether the original property owner who sold the right-of-way to the railroad retained the right to harvest the herbage and other products of the soil growing on the right-of-way. The right-of-way had been surveyed and located, and there was some dispute over whether a conveying document had been properly executed and recorded. The court held that, regardless of the recording question, the survey and location of the road is what constitutes the taking of the land over which it was laid. Troy&Boston R.R. v. Potter, 42 Vt. at 272. Consistent with its earlier decision in Hill v. Western Vermont.Railroad, 32 Vt. 68 (1859), the court deemed the railroad to have acquired only an easement and not a fee, but nevertheless concluded that the railroad had the sole and exclusive possession of the land while in the exercise of that easement, "so to keep it as to exclude all probability of any accident resulting from any outside interference with such possession." Troy& Boston R.R. v. Potter, 42 Vt. at 276. With few exceptions the Vermont cases are consistent in holding that, practically without regard to the documentation and manner of acquisition, when a railroad for its purposes acquires an estate in land for laying track and operating railroad equipment thereon, the estate acquired is no more than that needed for the purpose, and that typically means an easement, not a fee simple,estate. The trial court fully and correctly analyzed the matter; it hardly needs further elaboration. We find no error in the trial court's analysis and conclusion, and it is http://www.B.georgetown.edu/Fed-Ct/Circuit/fed/opinions/93-5067.html 10/7/98 Preseault v. U.S. Page 8 of 59 affirmed. Determining the provenance of the third parcel, C, derived from the Manwell tract, tests the above stated proposition even further. The operative instrument is a warranty deed, dated August 2, 1899, from Frederick and Mary Manwell to the Railroad. The deed contains the usual habendum clause found in a warranty deed, and purports to convey the described strip of land to the grantee railroad . "[t]o have and to hold the above granted and bargained premises . . . unto it the said grantee, its successors and assigns forever, to its and.their own proper use, benefit and behoof forever." The deed further warrants that the grantors have"a good, indefeasible estate, in fee simple, and have good right an to bargain and sell the same in manner d form as above written . . . ." In short, the deed appears to be the standard form used to convey a fee simple title from a grantor to a grantee. But did it?At the outset it should be noted that the resolution of this issue will not moot the question of the Government's potential liability for its action in creating the recreational trail, since, as held above, the A and B parcels unquestionably involved conveyances of easements and not fee simple estates, and thus the question of a taking of the Preseaults' property remains to be decided. The issue of ownership of Parcel C does go to the question of damages, however. As noted earlier, if the Manwell transfer was a conveyance in fee simple, the Preseaults would have acquired no interest in that strip of land, and can claim no damages for its later use as a recreational trail. At trial, the Preseaults argued that, although the Manwell deed purports to grant a fee simple, the deed was given following survey and location of the right-of-way and therefore it should be construed as conveying only an easement in accordance with Vermont railroad law. The Government responded that, while it was true that survey and location of the railroad's right-of-way had occurred, no "formal" eminent domain proceedings had taken place, and therefore.the deed should be taken at its face as a conveyance in fee simple. Each side cited Vermont cases to support its position. The trial court, after reviewing and discussing at length the cases and other relevant materials, concluded that "[u]nder well-settled Vermont law, the property interests in the parcel . . . conveyed following survey and location by warranty deed, amounted to [an] easement[] . . . ." 24 Cl. Ct. 'at 830. r Our independent review of the state of Vermont law on this issue leads us to conclude, despite some uncertainties in the matter, that the trial court is correct. Part of the problem is that the Vermont cases that seem most on point are quite old. Assuming the Vermont courts would follow its precedents, a fair assumption, the probable.outcome is that, despite the apparent terms of the deed indicating a transfer in fee, the legal effect was to convey only an easement. Two cases, from among others, will illustrate why. In Hill v. Western Vermont Railroad, 32 Vt. 68, the railroad had a contract with one Josiah Burton to purchase some land for railroad purposes. The bond, or contract, entered into before the railroad had surveyed their right=of--way called for Burton to convey such lands"as shall be required" for the company's road. Plaintiff, a creditor of the railroad, attempted to levy on a part of the land potentially subject to the contract. The railroad defended against the levy by arguing that the tract at issue was not needed by the railroad for its purposes, and thus Burton could not have been made to sell it to the railroad. Since, it was argued, the claimed land was not subject to contract enforcement, it was not subject to the levying creditor. The Vermont Supreme Court held for the railroad. The court observed that.railroads acquire needed land either by order of a designated public body(through the exercise of eminent domain) or by consent of the landowner, although even in the latter case"the proceeding is, in some sense, http://www.1l.georgetown.edu/Fed-Ct/Circuit/fed/opinions/93-5067.html 10/7/98 Preseault v. U.S. Page 9 of 59 compulsory." Id. at 75. Thus, [i]n either mode of appropriating land for the purposes of the company, there is this implied limitation upon the power, that the company will take only so much land or estate therein as is necessary,for their public purposes. It does not seem to us to make much difference in regard to either the quantity or the estate whether the price is fixed by the commissioners or by the parties. Id. at 76. The court held that the estate which Burton was to convey would be"a mere easement for a particular use," and under the governing statute would not be subject-to a levy. Id. at 77. Ten years later the Vermont Supreme Court decided Troy& Boston Railroad v. Potter, discussed above. As'noted, the right-of-way in that case had been surveyed and located, but there was some dispute over whether a conveying document had been properly executed and recorded. The court held that, regardless of the recording question, the survey and location of the road is what constitutes the taking of the land over which it was laid. Id., 42 Vt. at 272. Consistent with Hill, the court deemed the railroad to have acquired only an easement and not a fee. Thus it is that a railroad that proceeds to acquirea right-of-way for its road acquires only that estate, typically an easement, necessary for its limited purposes, and that the act of survey and location is the operative determinant, and not the particular form of transfer, if any. Here, the evidence is that the Railroad had obtained a survey and location of its right-of-way, after which the Manwell deed was executed confirming and memorializing the Railroad's action. On balance it would seem that, consistent with the view expressed in Hill, the proceeding retained its eminent domain flavor, and the railroad acquired only that which it needed, an easement for its roadway. Nothing the Government points to or that we can find in the later cases would seem to undermine that view of the case; the trial court's conclusion that the estate conveyed was an easement is affirmed. We thus conclude that fee simple title to all three parcels in dispute remained with their original owners, subject only to the burden of the easements in favor of the Railroad. Those titles passed through various hands, coming to rest eventually in the hands of the Preseaults, where they lay in' . 1986 when the public recreational trail was created by the Government's action. r 2. The Impact of Federal Legislation The United States argues that the property interests in Parcels A, B, and C at the time the Preseaults acquired them are defined not by the original conveyances, as understood pursuant to state law, but by the evolving enactment and implementation of federal railroad law between 1899 and the date (1980 for parcels A and B; 1966 for parcel C)the Preseaults acquired the parcels. As a consequence, says the Government, when the Preseaults bought the land whatever rights might have existed in prior owners regarding possession following abandonment of the easements no longer existed, those rights having been modified or abolished by the Federal Government's plenary authority over rail operations. There are several flaws, both of logic and of law, in this argument. There can be no denying that the Federal Government, beginning as early as 1920, has occupied the field of regulation of interstate railroad operations; preempting any pattern of conflicting state regulation. See, e.g., Transportation Act of 1920, ch. 91, 41 Stat. 456 (1920); Rail Revitalization and Regulatory Reform Act of 1976, Pub. L. No. 94-210, 90 Stat. 31 (1976)'("4-R Act"); 49 U.S.C.. §§ 101 et seq. And there can be no question that if the Federal Government wishes to create a national network of public recreational biking and hiking trails, it is within its power to do so. See Preseault II, 494 U.S. 1. And that power includes the power to preempt state- created property rights, including http://www.1f.georgetown.edu/Fed-Ct/Circuit/fed/opinions/93-5067.htm1 10/7/98 Preseault v. U.S. = Page 10 of 59 the rights to possession of property when railroad easements terminate. Id. However, as Justice O'Connor succinctly pointed out in her concurring opinion, having and exercising the-power of preemption is one thing;being free of the Constitutional obligation to pay just compensation for the state-created rights thus destroyed is another. Id. at 22. The 1899 conveyances of Parcels A, B, and C established state-created rights in the owners of the underlying land to have unfettered possession upon the termination of the railroad's easements. If those rights were subsequently and sub rosa destroyed by Federal legislation,prior to the acquisition of the properties by the Preseaults, when did it happen? Could the Transportation Act of 1920 by itself have done it?Not very well. The passage of that Act, which in essence gave the ICC regulatory power over the conduct of railroads, including the establishment and cessation of service to any given community, in and of itself terminated no easements. The Act did not purport to address the rights of private property owners; indeed, it affected railroad operations themselves only with regard to future conduct and then only upon the issuance of individual orders of the ICC. And indeed, no change in the service use of Parcels A, B, and C occurred until 1970, some fifty years after enactment of the original Act. If in 1920 the then-owners of these parcels had brought suit against the United States for a taking as a result of the enactment of the Transportation Act of 1920, it is difficult to imagine that any court Would have granted them an award. The owner would have had to argue that the taking was a regulatory taking, since no actual physical occupation by the Government happened until fifty years later. But that was not a likely argument in 1920. The concept of regulatory takings as we know them today was not yet born; Justice Holmes did not utter his famous statement about regulation that"goes too far" until two years later. Furthermore, enactment of broad general legislation authorizing a federal agency to engage in future regulatory activity is not the type of government action that alone supports a taking claim. See, e.g., Hodel v. Virginia Surface Mining&Reclamation Assn, 452 U.S. 264 (198 1) (provisions of Surface Mining Control and Reclamation Act prescribing performance standards and authorizing variances for land development, including provisions prohibiting mining in certain locations, did not, on their face, r violate the takings clause). If Congress intended the 1920 Act to have such an effect, contrary to all established assumptions about general legislation, and with the result of directly obligating the Government to a potentially enormous liability of unknown dimensions for takings throughout the United States, there surely would have been some indication of that intent in the legislative history, if not in the legislation itself. The Government points to none, because none exists. The same problem prevails with regard to the enactment in 1976 of the 4-R Act, which contained authorization for the ICC to order a railroad, proposing to dispose of an unneeded right-of-way, to first offer it for sale for"public purposes." 49 U.S.C. § 10906 (1994). And even if the 1983 Rails-To-Trails Act was part of the evolving history pre-Preseault (which it was not since their ownership of all three parcels was vested by 1980), that Act also requires an administrative decision to apply the law to any given unused easement. Until the ICC makes the administrative decision to convert an unused right-of-way to a trail, rather than simply permit abandonment, and finds an appropriate public agency to operate the trail, a landowner's suit fora taking would run afoul of established requirements for exhaustion of administrative remedies. See; e.g., Hodel, 452 U.S. 264; Williamson Country Regional Planning Comm'n v. Hamilton Bank, 473 U.S. 172 (1985). Thus any property owner who was prescient enough to allege a regulatory taking following the enactment of the Transportation Act of 1920, in addition to having some doctrinal explaining to do, http://www.1l.georgetown.edu/Fed-Ct/Circuit/fed/opinions/93-5067.html 10/7/98 Pr'eseault v. U.S. Page 11 of 59 presumably would have been met by an equally prescient Government with the defenses of absence of ripeness and failure to exhaust administrative remedies. The Government attempts to evade this legal morass by not identifying any specific event that destroyed these property rights created back in 1899, but by instead invoking the broad concept that "background principles" define property rights, suggesting that there is nothing to preclude the use of federal law.as well as state law in selecting the relevant "background principles." In support of this broad principle the Government relies heavily on phrases extracted from the Supreme Court's recent decision in Lucas v. South Carolina Coastal Council, 505 U.S. 1003 (1992). But Lucas provides no such support. The background principles referred to by the Court in Lucas were state-defined nuisance rules. Id. at 1029-32. In Lucas the Court took the position that if the State of South Carolina wished to control what it considered undesirable conduct by property owners (in that case building a house on beachfront property), a regulatory agency's order preventing the conduct was non-compensable under the Fifth Amendment if the imposition did little more than echo similar constraints available under the State's traditional nuisance law. In other words, the State could impose non-compensable restraints on property owners either through court-ordered injunctions or administrative agency orders, so long as either were within the scope of established state law principles of common law nuisance, principles which inhere in every property owner's title. Id. Nothing in Lucas suggests that the background principles of a state's property law include the sweep of a century of federal regulatorylegislation, and indeed much of what the Supreme Court said then, as well as in Preseault II, about property rights indicates to the contrary. Nor is there any suggestion in this case that the Preseaults' use of their property could be considered in any way to be a public nuisance under traditional nuisance concepts,justifying the intervention of state authorities. The Government cites two recent cases by this court, M& J Coal Co. v. United States, 47 F.3d 1148 (Fed. Cir.), cert. denied, 116 S. Ct. 53 (1995), and California Housing Securities. Inc. v. United States, 959 F.2d 955 (Fed. Cir. 1992), as evidence that.federal regulatory law generally modifies state property rights, and renders conflicting state-created property rights unenforceable and r noncompensable. In M&J Coal we held that the Government, in enforcing the provisions of the Surface Mining Control and Reclamation Act of 1977, could require a coal mine operator to mine in a manner that prevented surface subsidence, and thus prevent harm to the interests of third parties. We rejected the companies' contention that enforcement of these'safety standards took their property in violation of the Fifth Amendment. In California Housing, we upheld the right of federal bank regulators, in the course of enforcing the federal regulatory framework governing the banking industry, to seize the books and papers and occupy the premises of a bank that was subject to an enforcement action. In both cases what was at issue was the reasonableness of the Government's actions in enforcing the law. Since no one has a property right to violate otherwise valid laws controlling social conduct, the claims that enforcement of the law, found to have been conducted reasonably under the circumstances, constituted a taking under the Fifth Amendment were unavailing. In the Preseaults' case, the occupation of their property by the Government was not in pursuance of an enforcement action to correct prohibited conduct on their part, unless it can be said.that their desire to enjoy their private property without sharing it with the public falls under that rubric. This argument, that the Preseaults' title somehow incorporates the federal transportation regulatory statutes enacted since the 19th Century, was made by the Government to the trial court, and again in http://www.1l.georgetown.edu/Fed-Ct/Circuit/fed/opinions/93-5067.html 10/7/98 Preseault V. U.S. Page 12 of 59 its opening brief before the original panel, based on a different-theory than the Lucas"background principles" concept presented to the in banc court. It is unclear whether the Government intended to abandon the earlier theory, but since it was the one accepted by the trial court in holding for the Government, it warrants examination. The argument goes as follows. These regulatory statutes governing railroad operations, at least the original statute enacted in 1920 authorizing ICC jurisdiction, were on the books when the Preseaults began buying the parcels at issue. As a consequence, the Preseaults should have anticipated that at some time in the future the Government might exercise its general regulatory powers in a way that could frustrate the Preseaults' interest in obtaining the land free of the easement upon its abandonment by the railroad. Thus the Preseaults could have no"reasonable expectations"that they would ever get the property free of the encumbering easement even if the railroad ceased to use it. Absent such an expectation, the Preseaults cannot complain that anything was taken from them;the title acquired by the Preseaults in effect has been modified by the history of federal regulatory enactments. Support for this novel notion is found in two sentences lifted out of context from the Supreme Court's decision in Loretto v. Teleprompter Manhattan CATV Coro., 458 U.S. 419 (1982), which ironically is the decision that definitively established the rights of a property owner to compensation whenever there is a physical taking, even a relatively minor one. In Loretto, Justice Marshall, writing for the Court, said: "We affirm the traditional rule that a permanent physical occupation of property is a taking. In such a case, the property owner entertains a historically rooted expectation of compensation . . . ." Loretto, 458 U.S. at 441. The Government reverses the order of the sentences, as if it read, "If the property owner has an expectation of compensation, then a permanent physical occupation of property is a taking." In effect, the Government argues that Loretto stands for the proposition that an owner's.property rights are defined by what the owner might (should?)have believed the law to be at the time she acquired her property, and that that belief makes it so. But what Justice Marshall clearly said was that a physical occupation of one's property by the Government, that is, a taking of a recognized property interest, invokes a general expectation of r compensation..The Government's reading reverses the sentences, standing the law on its head. They read it to say that an owner's subjective expectations of keeping or losing her property under various possible scenarios define for that owner the extent of her title. Just the reverse is true. It is the law- created right to own private property, recognized and enforced by the Constitution, legislation, and common law, that gives the,owner an historically rooted expectation of compensation. The expectations of the individual, however well- or ill-founded, do not define for the law what are that individual's compensable property rights. This issue of title and ownership expectations must be distinguished from the question that arises when the Government restrains an owner's use of property, through zoning or other land use controls,.without disturbing the owner's possession. Placing restraints on an owner's use of her property invokes the regulatory takings issue, rather than the question of the Government's physical. occupation of private,property, and both factually and legally raises significantly different issues. In the regulatory taking cases the owner's reasonable investment-backed expectations have been held to be relevant to the question of whether a regulatory imposition goes too far in constraining the owner's lawful uses of the property. E.g., Penn Central Transp. Co. v. City of New York, 438 U.S. 104, 124 (1978). As the Supreme Court makes clear, these two quite different situations call for quite different analyses. The Government's attempt to read the concept of"reasonable expectations" as used in regulatory takings law into the analysis of a physical occupation case would undermine, if not http://www.1l.georgetown.edu/Fed-Ct/Circuit/fed/opinions/93-5067.html 10/7/98 Preseault v. U.S. Page 13 of 59 eviscerate, long-recognized understandings regarding protection of property rights; it is rejected categorically. The trial court erred in accepting the Government's effort to inject into the analysis of this physical taking case the question of the owner's"reasonable expectations." Under the governing law of the State, the Preseaults, successors in title to those who owned the property when the easements were created, owned the same title and interest as they, and are entitled to the same protections the law grants. D. The Scope of the Railroad's Easement We turn then to the question of whether the easements granted,to the Railroad, to which the Preseaults' title was subject, are sufficiently broad in their scope so that the use of the easements for a public recreational trail is not a violation of the Preseaults' rights as owners of the underlying fee estate. Both the Government and the State argue that under the doctrine of"shifting public use"the scope of the original easements, admittedly limited to railroad purposes,is properly construed today to include other public purposes as well, and that these other public purposes include a public recreational hiking and biking trail. Under that theory of the case, the establishment in 1986 of such a trail would be within the scope of the easements presumably now in the State's hands, and therefore the Preseaults would have no complaint. On the other hand, if the Government's use of the land for a recreational trail is not within the scope of the easements,then that use would constitute an unauthorized invasion of the land to which the Preseaults hold title. The argument on this issue assumes that the easements were still in existence in 1986, and for purposes of this part of the discussion we assume they were. As an initial matter, we have found no Vermont case, either in this century or the last, and the parties point to none,in which the Vermont courts establish or apply something called the"shifting public use" doctrine..The statement in the dissent that"Vermont common law includes the `shifting public use' doctrine as part of its law concerning the abandonment of easements" appears to be without, support in any opinions of the Vermont courts. Thus the legitimacy of that phrase in the context of r Vermont law, as well as its meaning, remain unclear. What is the case is that early opinions of the Vermont Supreme Court gave railroads broad scope to "do any act upon the land conducive to those public uses for-which their charter was granted." Connecticut&Passumpsic Rivers R.R. v. Holton, 32'Vt. 43, 47-(1859). In Brainard v. Missisquoi Railroad, 48 Vt. 107 (1875), the court held that a railroad company that purchased a plank road- company oadcompany and replaced a plank road with a railroad maintained the right to an easement granted to the plank road company. The court held that the land did not"revert" to the owner of the fee estate, and that he was entitled to damages only for his loss of access to a public highway. As discussed previously, the Rutland-Canadian Railroad Company was incorporated by Act.of the Vermont legislature solely"for the purpose and with the right of constructing, maintaining and operating a railroad for public use in the conveyance of persons and property by the power of steam or otherwise." The Act of incorporation specified that the corporation"may receive, take, hold, purchase, use and convey such real and personal estate as is necessary or proper in the judgment of such corporation, for the construction, maintenance and accommodation of such railroad as aforesaid, and its structures and appurtenances, and as the purposes of the corporation may require . . . ." And, as explained earlier, the governing documents, in the case of Parcels A and, the Commissioners' Award, in the case of Parcel C, the Manwell deed, do not themselves contain defining language, but http://www.1l.geo rgetown.edu/Fed-Ct/Circuit/fed/opinions/93-5067.html 10/7/98 Preseault v. U.S. Page 14 of 59 instead incorporate the purposes specified in the incorporation Act. The question thus is whether an easement acquired for such specifically described purposes may be read broadly enough to include a public recreational biking and hiking trail. That precise issue has yet to be presented to the Vermont court. In the absence of a Vermont case on point, we must seek the answer in traditional understandings of easement law, recognizing as we must that Vermont follows and applies common law property principles. The easements involved here are express easements, meaning that the scope of the easements are set out in express terms, either in the granting documents or as a matter of incorporation and legal construction of the terms of the relevant documents. "The extent of an easement created by a conveyance is fixed by the conveyance." 5 RESTATEMENT OF PROPERTY § 482 (American Law Institute 1944). In a leading treatise on the subject, the authors state the general rule to be"[w]hen precise language is employed to create an easement, such terminology governs the extent of usage." JON. W. BRUCE AND JAMES W. ELY, JR., THE LAW OF EASEMENTS AND LICENSES IN LAND 8.02[1], at 8-3 (rev. ed. 1995). The general rule does not preclude the scope of an easement being adjusted in the face of changing times to serve the original purpose, so long as the change is consistent with the terms of the original grant: It is often said that the parties are to be presumed to have contemplated such a scope for the created easement as would reasonably serve the purposes of the grant. . . . This presumption often allows an expansion of use of the easement, but does not permit a change in use not reasonably foreseeable at the time of establishment of the easement. RICHARD R. POWELL, 3 POWELL ON REAL PROPERTY § 34.12[2] (Patrick J. Rohan ed., 1996). Applying this•test, courts have held that an easement for water flow to a fulling-mill included the right to water.flow to a later-established corn-mill which replaced the earlier mill, Luttrel's Case, 4 Rep. 86 (1601); and that an easement for a vehicular way, granted at a time when horse and wagon was a r common means of transport, would permit use of motor vehicles instead when the latter became common, see Matteodo v. Capaldi, 48 R.I. 312, 138 A. 38 (1927); Diocese of Trenton v. Tom an, 74 N.J. Eq. 702, 70 A. 606 (1908). Bernards v. Link, 248 P.2d 341 (Or. 1952), is a good example of the application of the test. The question was whether an easement fora logging railroad, granted to defendant's predecessor, would permit the substitution of a logging road for trucks, when the logging industry had moved to the use of such vehicles. The owners of the servient estate did not claim that the new use had subjected their property to any additional servitude, but that the new use constituted an abandonment of the original easement. The court reviewed the history of transportation in the logging industry, noting that the use of logging trucks and of logging roads had been an evolutionary development in the Northwest's logging industry: "[i]mprovements in trucks and the inexorable demand for lower cost of operation have made the logging road the successor to the logging railroad in divers places." Id. at 346. The court stated that [t]he evidence renders it clear that the paramount purpose of the parties was to enable the grantee to bring to Carlton, over the right of way described in the deed, the logs which were being produced near Tillamook Gate. . . . [W]e do not believe that the grantor intended to restrict the grantee to the specific type of equipment which was then in use. http://www.1l.georgetown.edu/Fed-Ct/Circuit/fed/opinions/93-5067.html 10/7/98 Preseault v. U.S. Page 15 of 59 Id. at 351-52. The court concluded that the use of logging trucks, after logging railroads became obsolete, was within the proper scope of the easement. When the easements here were granted to the Preseaults' predecessors in title at the turn of the century, specifically for transportation of goods and persons via railroad, could it be said that the parties contemplated that a century later the easements would be used for recreational hiking and biking trails, or that it was necessary to so construe them in order to give the grantee railroad that for which it bargained?We think not. Although a public recreational trail could be described as a roadway for the transportation of persons, the nature of the usage is clearly different. In the one case, the grantee is a commercial enterprise using the easement in its business, the transport of goods and people for compensation. In the other, the easement belongs to the public, and is open for use for recreational purposes, which happens to involve people engaged in exercise or recreation on foot or on bicycles. It is difficult to imagine that either party to the original transfers had anything remotely in mind that would resemble a public recreational trail. Furthermore, there are differences in the degree and nature of the burden imposed on the servient estate. It is one thing to have occasional railroad trains crossing one's land. Noisy though they may be, they are limited in location, in number, and in frequency of occurrence. Particularly is this so on a relatively remote spur. When used for'public recreational purposes, however, in a region that is environmentally attractive, the burden imposed by the use of the easement is at the whim of many individuals, and, as the record attests, has been impossible to contain in numbers or to keep strictly within the parameters of the easement. As the BRUCE&ELY treatise noted, "[a]n easement created to serve a particular purpose ends when the underlying purpose no longer exists," BRUCE& ELY, supra, 10.03[1], at 10-12, and"when an easement for railway purposes is found, it is generally considered to end when it is no longer used for the stated purposes," id. 1.06[2][d]; at 1-48. In the language of the old English courts, to allow this change would-permit"a substantial variance in the mode of or extent of user or enjoyment of the easement so as to throw a greater burden on the servient tenement." Bernards v. Link, 248 P.2d at 347. Most state courts that have been faced with the question of whether conversion to a nature trail falls r within the scope of an original railroad easement have held that it does not. Lawson v. State, 730 P.2d 1308 (Wash. 1986) (in banc), is an example of a case practically on all fours with the case before us. The Burlington Northern Railroad Company petitioned the ICC for permission to discontinue rail service over a certain right-of-way. King County requested the ICC to determine that the right-of-way was suitable as a public recreational trail, and to require that it be offered for sale for public purposes. The ICC did so under its Rails-To-Trails authority,*and King County acquired the right-of-way from the Railroad. The property owners who owned the underlying fee estates sued in Washington State court for a declaratory judgment that this was an unlawful taking without just compensation. The trial court held for the County. The Washington Supreme Court, in banc, reversed. The Court stated the common law rule to be that when a deed conveys a right-of-way for railroad purposes only, upon abandonment by the railroad of the right-of-way the land over which the right-of-way passes"reverts" to the reversionary interest holder(the owner of the fee estate)free of the easement. The court then stated: In addition to outright abandonment of a right of way,-there may be a change in use of the right of way which is inconsistent with the purpose for which the right of way was granted. Where the http://www.1l.georgetown.edu/Fed-Ct/Circuit/fed/opinions/93-5067.htm1 10/7/98 Preseault v. U.S. - Page 16 of 59 particular use of an easement for the purpose for which it was.'established ceases, the land is discharged of the burden of the easement and right to possession reverts to the original land owner or to that landowner's successor in interest. Id. at 1312. The court went on to hold that a hiking and biking trail is not encompassed within a grant of an easement for railroad purposes, citing cases from Illinois and Wisconsin, and concluded that "[a]pplying common law principles, we hold that a change in use from`rails to trails' constitutes abandonment of an easement which was granted for railroad purposes only. At common law, therefore, the right of way would automatically revert to the reversionary interest holders." Id. at 1313. The court went on to hold that a state statute which purported to prevent the ripening of the reversionary interest upon abandonment was unconstitutional as applied to the vested property rights of the plaintiffs"insofar,as it purports to authorize King County to acquire without payment of just compensation existing reversionary interests which follow easements for railroad purposes only." Id. at 1316. The.Court thus concluded that"King County cannot acquire the [ ] right of way from Burlington Northern without payment of just compensation to the reversionary.interest holders. If the County takes this right of way and commences to build a recreation trail, it does so in violation of the constitution." Id. Accord Schnabel v. County of DuPage, 428 N.E.2d 671 (Ill. Ct. App. 1981); Pollnow v. State Dep't of Natural Resources, 276 N.W.2d 738 (Wis. 1979); see also National Wildlife Fed'n v. ICC, 850 F.2d 694 (D.C. Cir: 1988) (rejecting ICC argument that rails-to-trails conversions will never constitute a taking, and remanding for further consideration especially regarding easements limited to railroad use and when railroad restoration"not foreseeable"). A few courts, under the particular terms of an easement or in light of a special statute, have held otherwise. In Washington Wildlife Preservation, Inc. v. State, 329 N.W.2d_543 (Minn. 1983), plaintiffs were a group of property owners representing interests wishing to protect wildlife and other natural resources from the adverse impacts inherent in a public recreational trail. A nine mile long strip of land had been acquired in 1884 and 1885 by the original grantee railroad from a number of property owners. Thirteen or more deeds were involved.,In 1980 the successor railroad conveyed the r land to the State for a recreational trail. There were a number of issues in the case, including what was the estate conveyed in each of the deeds, the exact scope of those grants that were easements, and whether public recreational trails were consistent with the scope of an easement for use by a railroad. The court with little analysis declared that use of such a right-of-way for a recreational trail is consistent with the purpose for which the easements were originally acquired, public travel, and that such use imposes no additional burden on the servient estates. The court specifically pointed out that "[w]hile the grantors were undoubtedly aware that a railroad would be constructed on the land, none of the deeds limit the use to railroad purposes." Id..at 546. Furthermore, said the court, even though abandoned for railroad purposes, the easements were not abandoned for public travel purposes, including travel by hikers, bikers, cross-country skiers, and horseback riders. See also Rieger v. Penn Central Corn, No. 85-CA-11, 1985 WL 7919 (Ohio Ct. App. May 21, 1985) (general purpose of trail, public travel, is within scope of prescriptive railroad easement). Cf. Barney v. Burlington Northern R.R., 490 N.W.2d 726 (S.D. 1992) (noting that use for recreational trail of railroad easement granted by federal statute comes within definition of"public highway,"thereby precluding abandonment under 43 U.S.C. § 912). For reasons peculiar,to the particular circumstances, these few cases depart from the well established common law rules governing easements, and carry little persuasive authority. Given that the easements in this case are limited by their terms and as a matter of law to railroad http://www.fl.georgetown.edu/Fed-Ct/Circuit/fed/opinions/93-5067.html 10/7/98 Preseault v. U.S. t, �� Page 17 of 59 purposes, we are unable to join the dissent's effort to read into Vermont law a breadth of scope for the easements that is well outside the parameters of traditional common law understanding. The concept of"shifting public use" must be anchored in established precedent, or it becomes little more than speculation about what a hypothetical Vermont court in 1996 might do. Our responsibility here is to apply established law, not to make new law. If a dramatic reinterpretation,of the scope of the established terms by which railroad easements were historically granted is to be imposed upon Vermont and the parties to this case, it should not be at the hand of a.federal appellate court.. E. Abandonment Even assuming for sake of argument that the Government and the State are correct and that the so-called"doctrine of shifting public use"is available to permit reading the original conveyances in the manner for which they argue, there remains yet a further obstacle to the Government's successful' defense. The Preseaults contend that under Vermont law the original.easements were abandoned, and thus extinguished, in 1975. If that is so, the State could not, over ten years later in 1986, have re- established the easement even for the narrow purposes provided in the original conveyances without payment of the just compensation required by the Constitution. See, e.a., Loretto, 458 U.S. at 441. It follows that if the State could not in 1986 use the parcels for railroad purposes without that use constituting a taking, then it surely could not claim the right to use the property for other purposes free of Constitutional requirements. See Preseault 1, 24 Cl. Ct. at 835 (concluding that a"shifting public use" doctrine could not apply because of discontinuity of use of the easement by State between 1975 and 1985). We have established that the effect of the turn-of-the-century transfers regarding Parcels A, B, and C was to create in the transferee Railroad an easement carrying the right to exclusive possession of the surface of the strips of land described in the conveyances for the limited purposes of railroad use, and to leave in the original owners of the property their fee simple estate, subject to the easement. An easement is not a possessory estate of freehold, but merely gives the easement holder-a right to make use of the land over which the easement lies for the purposes for which it was granted. See 7 THOMPSON ON REAL PROPERTY§ 60.02(c),(d) (David A. Thomas ed., 1994). ' r Typically the grant under which such rights-of-way are created does not specify a termination date. The usual way in which such an easement ends is by abandonment, which causes the easement to be extinguished by operation of law. See eg nerally RESTATEMENT OF PROPERTY§504. Upon an act of abandonment, the then owner of the fee estate, the"burdened" estate, is relieved of the burden of the easement. In most jurisdictions, including Vermont, this happens automatically when abandonment of the easement occurs.Dessureau, 132 Vt. at 351, 318 A.2d at 653; see Preseault 1, 24 Cl. Ct. at 831, 835-36; State v. Preseault, No. 5474-87 CnC, slip op. at 5, 7 (Chittenden Super. Ct. Feb. 7, 1992), affd on reconsideration(Chittenden Super. Ct. July 15, 1992). Vermont law recognizes the well-established proposition that easements, like other property interests, are not extinguished by simple non-use. As was said in Nelson v. Bacon, 113 W 161, 32 A.2d 140, 146 (1943), "[o]ne who acquires title to an easement in this manner [by deed in that case] has the same right of property therein as an owner of the fee and it is not necessary that he should make use of his right in order to maintain his title." Thus in cases involving a passageway through an adjoining building (Nelson), or a shared driveway(Sabin v. McAllister, 116 Vt. 302, 76 A.2d. 106 (1950), overruled in part on other grounds by Lague v. Roma, '152 Vt. 499, 568 A:2d 357 (1989)), the claimed easement was not extinguished merely because the owner had not made use of it regularly. http://www.1l.georgetown.edu/Fed-Ct/Circuit/fed/opinions/93-5067.html 10/7/98 Preseault v. U.S. Page 18 of 59 Something more is needed. The Vermont Supreme Court in Nelson summarized the rule in this way: "In order to establish an abandonment there must be in addition to nonuser, acts by the owner of the dominant tenement conclusively and unequivocally manifesting either a present intent to relinquish the easement or a purpose inconsistent with its future existence."Nelson, 32 A.2d at 146 (emphasis added); see also Lague 152 Vt.'at 503, 568 A.2d at 359; Barrett v. Kunz, 158 Vt. 15, 604 A.2d 1278 (1992). The record here establishes that these easements, along with the other assets of the railroad; came into the hands of the State of Vermont in the 1960s. The State then leased them to an entity called the Vermont Railway, which operated trains over them. In 1970, the Vermont Railway ceased active transport operations on the line which included the right-of-way over the parcels at issue, and- used the line only to store'railroad cars. In 1975 the Railroad removed all of the railroad equipment, including switches and tracks, from the portion of the right-of-way running over the three parcels of land now owned by the Preseaults. See 24 Cl. Ct. at 822. In light of these facts, the trial court concluded that under Vermont law this amounted to an abandonment of the easements, and adjudged that the easements were extinguished as a matter of law in 1975. Again, as,was the case with determining the nature of the title conveyed by the Manwell deed, we are compelled to rule on the consequences of a state of facts occurring some years ago, based on the law of Vermont, law that.must be extracted from cases none of which are directly on point. Under Vermont law, "the question whether there has been an abandonment . . . is one of fact,"Lague, 152 Vt. at 503, 568 A.2d at 359 (citation omitted), and"[t]he fact that the question relates to a right of way taken by a railroad company does not make it one of law," Stevens v. MacRae, 97 Vt. 76, 122 A. 892 (1923). The underlying facts regarding this question are undisputed. As noted, Vermont denominates the question of abandonment as one of fact. The parties are in dispute over whether an abandonment occurred. Does this preclude summary judgment?We think not. Abandonment, though a fact question under Vermont law, is a factual conclusion based on inferences to be drawn from the undisputed evidence regarding the historical events. Nothing would be gained by requiring a further proceeding at the trial level, since the parties had full opportunity to establish all relevant underlying facts. Trial would not enhance the court's ability to draw factual inferences and conclusions. Nor, " since this is a nonjury matter, does permitting the trial judge to rule on summary judgment have the effect of denying a party the right to have the issue decided by jury. In light of the facts before her and the arguments presented by the parties, the trial judge arrived at the conclusion that the facts meet the test of Vermont law, in that they manifest, conclusively and unequivocally, the requisite intent or purpose of the Railroad to abandon the easement in 1975. Although the trial judge held several evidentiary hearings, and in her two opinions in the case discussed the facts extensively, in response to the motions before her she denominated her decision a summary judgment, rather than a decision on the merits following trial. Our task, then, given an extensive factual record,,is to review on appeal of a.summary judgment a disputed factual conclusion reached by the trial court. Obviously, if there is a genuine dispute over a material evidentiary fact, summary judgment is precluded. If the disputed factual issue is one of ultimate fact, calling for a factual conclusion, and on. appeal,summary judgment is deemed appropriate as is the case here, the question arises as to how much deference should be accorded the trial judge's conclusion. The Supreme Court in its leading case on summary judgment, Andersony. Liberty Lobby, 477 U.S. 242(1986), did not directly address the question. In other Circuits the question remains to be decided. The Fifth Circuit recently reviewed its cases on the question, without resolving whether such a conclusion is reviewable for http://www.1l.georgetown.edu/Fed-Ct/Circuit/fed/opinions/93-5067.htnil 10/7/98 Preseault v. U.S. U ' Page 19 of 59 clear error under Rule 52, Fed. R. Civ. P. See United States Fidelity& Guaranty Co. v. Planters Bank &Trust Co., 77 F.3d 863, 865 (5th Cir. 1996).No case in this court has resolved the question. Cf. Loglan Inst., Inc. v. Logical Langgage Group, Inc., 962 F.2d 1038, 1040(Fed. Cir. 1992) (summary judgment affirmed); Amhill Enterprises Ltd. V. Wawa, Inc., 81 F.3d 1554, 1562 (Fed: Cir. 1996) (summary judgment of no literal infringement affirmed under the clearly erroneous standard of review);Lemelson v. TRW, Inc., 760 F.2d 1254 (Fed. Cir. 1985) (summary judgment found inappropriate and case remanded for trial). We need not determine this issue for all time and for all cases. The question to be decided here is what was the intent or purpose of the Railroad in 1975, when, for all practical purposes, it ended railroad operations on this easement. It is enough, under the circumstances of this case and given the fullness of the factual record before the trial judge, as well as her carefully-considered analysis, that we here accord her traditional deference for factual determinations, and test her judgment against the usual standard of clear error. To do less would embroil this court in determining factual matters more intensively than customary'for appellate courts, a position for which appellate courts are ill-equipped. As noted, in 1970 the Vermont Railway ceased using the easement for active transport operations and used the tracks solely to store railroad cars, as the only freight customer serviced on that portion of the line had moved from the area. In 1975, Vermont Railway removed the rails and other track materials from the segment of line crossing the Preseaults' property. In the 1985 proceedings before the ICC, the State of Vermont and Vermont Railway filed a Verified Notice of Exemption(Corrected) dated December 16, 1985, in which they stated that no local traffic has moved over the line for at least two years and any overhead traffic on the line can be rerouted over other lines and that no formal complaint filed by a user of rail service on the line (or a State or local government entity acting on behalf of such user)regarding cessation of service over the line either is pending with the Commission or any U.S. District Court or had been decided in favor of the complainant within the two-year period. Preseault 1, 24 Cl. Ct. at 823. The State sought approval from the ICC for a 30-year lease with the r City of Burlington, indicating that the State fully recognized that railroad operations had ceased on the easement, and that none were contemplated in the foreseeable future. Although events occurring after 1975 cannot change the.consequences.of the facts then.in place, these later.declarations confirm the conclusion that the purpose of the Railroad's actions leading up to the;track removal in 1975 was to abandon this stretch of rail line. The Government and the State argue that there are facts inconsistent with that determination, but we. are not.persuaded that any of them significantly undercut the trial court's conclusion. For example, when the Vermont Railway removed its tracks in 1975, it did not remove the two bridges or any of the culverts on the line, all of which remained"substantially intact." That is not surprising. The Railroad was under no obligation to restore the former easement to its original condition. Tearing out existing structures would simply add to its.costs, whereas the rails that were taken up could be used for repairs of defective rails elsewhere on the line. It is further argued that, since the rail line continues to operate to a point approximately one and one-third miles south of the Preseaults' property, it is possible to restore the line to full operation. The fact that restoration of the northern portion of the line would be technically feasible tells us little._ The question is not what is technically possible to do in the future, but what was done in the past. Almost immediately after the tracks were removed, members of the public began crossing over the http://www.1l.georgetown.edu/Fed-Ct/Circuit/fed/opinions/93-5067.htm1 10/7/98 Preseault v. U.S. Page 20 of 59 easement. Perhaps illustrating the difficulty in getting government paperwork to catch up with reality, or perhaps indicating that revenue collectors do.not give up easily, the State of Vermont and Vermont Railway, asthey had done before the removal of the tracks, continued to collect fees under various license and crossing agreements from persons wishing to establish fixed crossings. In January 1976, the Preseaults executed a crossing agreement with the Vermont Railway which gave the Preseaults permission to cross the right-of-way. In March 1976, the Preseaults entered into a license agreement with the State and the Vermont Railway to locate a driveway and underground utility service across the railroad right-of-way. As late as 1991, 985 Associates(through Paul Preseault) paid a$10 license fee to"Vermont Railroad" (sic), presumably pursuant to one of the 1976 agreements. The Preseaults paid"under protest."Much of this activity suggests that, initially at least, the adjacent property owners decided it was cheaper to pay a nominal license fee to the State than to litigate the question of whether the State had the right to extract the fee. In view of all the contrary evidence of physical abandonment, we find this behavior by the State's revenue collectors unconvincing as persuasive evidence of a purpose or intent not to abandon the use of the right-of-way for actual railroad purposes. One uncontrovertible piece of evidence in favor of abandonment is that, in the years following the shutting down of the line in 1970 and the 1975 removal of the tracks, no move has been made by the State or by the Railroad to reinstitute service over the line, or to undertake replacement of the removed tracks and other infrastructure necessary to return the line to service. The declarations in the 1985 lease between the State of Vermont, Vermont Railway, and the City of Burlington, which refer to the possible resumption of railroad operations at some undefined time in the future are of course self-serving and not indicative of the facts and circumstances in 1975. Other events occurring after 1975 are also of little probative value. As noted, there are no Vermont cases addressing directly the state of facts presented here. Several cases did deal with railroad rights-of-way and the question of whether there had been an abandonment. In Stevens v. MacRae, 97 Vt. 76, 122 A. 892 (1923), the issue was the location on the defendant's farm, acquired from the original grantor, of the plaintiffs right-of-way for ingress and egress. That right-of-way had been granted earlier with relation to a piece of the farmland sold to " plaintiff. The deed to the plaintiff stated that the right-of-way was on the grantor's"other lands." There was also a railroad easement running through the farm. Since the ingress easement under the terms of plaintiffs deed was to be on the grantor's"other lands," the court stated that that part of the property over which the railroad easement ran, and was still owned by the railroad, would not be considered part of those"other lands." It had been some years since the railroad easement had been used by the railroad, but, consistent with the general rule, the court stated that mere non-user did not terminate the railroad's rights, and in absence of a factual finding of abandonment, the court could not say that the railroad right- of-way was part of the grantor's"other lands." In Stag v. Vermont Central Railroad., 27 Vt. 39 (1854), the question was whether the railroad owed the landowner the value of the right-of-way the railroad initially surveyed over his land, but then decided not to use in favor of a different alignment over nearby land. The court held that [t]hat change in the line of their road, however, will operate as an abandonment of their former survey on the plaintiffs land, so that the company can no longer claim any right or interest in the land itself, or to any easement growing out of it, in consequence of that survey having been made. Id. at 43. As a result, the railroad was not liable. http://www.1l.georgetown.edu/Fed-Ct/Circuit/fed/opinions/93-5067.html 10/7/98 Preseault v. U.S. Page 21 of 59 Perhaps the closest case to the matter before us is the relatively recent case of Proctor v. Central Vermont Public Service Corp., 116 Vt. 431, 77 A.2d 828 (1951). In that case, the landowner brought an action in trespass against the electric company for, inter alfa, maintaining its wires and poles over plaintiffs land without legal authority. The electric company had placed them along an old right-of-way belonging to a railroad, and claimed that it thus was entitled to use the right-of-way for electric distribution purposes. One question, then, was whether the right-of-way had been abandoned. The court addressed this issue by paus[ing]but briefly over the matter of abandonment. Removal of the tracks twenty-three years before this suit was brought, absence of tracks since their removal, and nonuse for railroad purposes for twenty-five consecutive years is conclusive that the premises were abandoned for railroad uses not later than the time that the tracks were removed. Much citation of authority would be superfluous . . . Id. at 830. Proctor makes clear that it is no more difficult for a railroad to abandon an easement than any other owner of one. It is simply a question of determining whether, on the facts, there was sufficient evidence of either an intent to relinquish the easement or of a purpose inconsistent with its future existence. Nelson, 32 A.2d at 146. (The court ultimately held that since Vermont statutes expressly provided for electric transmission as part of a railroad right-of-way, the original compensation paid the landowner's predecessors in title included that indemnification, and the landowner had no cause of action.) The trial judge in this case, after extensive recitation of the undisputed facts, and after reviewing cases such as Proctor, concluded that as a fact the Railroad had effected in 1975 an abandonment of the easement running over parcels A, B, and C. Even without giving the trial judge the deference due her, our review of the facts and circumstances leading up to the events of 1975 persuades us that the trial judge is correct. When we accord the trial judge due deference with regard to this factual determination, there is hardly a basis for finding clearly erroneous her conclusion that an abandonment of the easements occurred. The dissent chooses to de-emphasize the important facts that the trial judge, and we,find controlling, and to emphasize other, less important, facts. We find the dissent's r argument as well crafted as the argument can be made, but nevertheless unpersuasive. Furthermore, contraryto where the dissent places its emphasis, we find the question of abandonment is not the defining issue, since whether abandoned or not the Government's use of the property for a public trail constitutes a new, unauthorized, use. We affirm the determination of the trial court that abandonment of the easements took place in 1975. That determination provides an alternative ground for concluding that a governmental taking occurred. E. THE TAKING The Preseaults had acquired Parcel C, the Manwell Parcel, in 1966. At that time it was still subject to the railroad's easement. In 1975, following the abandonment by the railroad of the easement across Parcel C, the Preseaults owned Parcel C in fee simple free of the encumbering easement. The Preseaults acquired Parcels A and B in 1980. At that time the easement had been extinguished for five years;the parcels they purchased were in fee simple, again free of the encumbrance. Ten years later, in June 1985,-the State of Vermont Agency of Transportation,joined by the Vermont Railway, as lessors, and the City of Burlington as lessee, entered into a lease by which the lessors purported to lease the former right-of-way over Parcels A, B. and C to the City of Burlington for use as a bicycle and pedestrian path. A month later the Preseaults and several neighbors filed a petition http://www.lLgeorgetown.edu/Fed-Ct/Circuit/fed/opinions/93-5067.html 10/7/98 Preseault v. U.S. -' Page 22 of 59 with the ICC (now the Surface Transportation Board)for a determination of exemption from the jurisdiction of the ICC and for a certification of abandonment of the rail line. (The Vermont Railway had never sought ICC approval before abandoning operations on the line.) The State of Vermont intervened in the ICC proceeding, and petitioned the ICC to permit Vermont Railway to discontinue rail service and to transfer the right-of-way to the City of Burlington for use as a public trail. The authority for such action was section 8(d) of the National Trails System Act, 16 U.S.C. § 1247(d), an act establishing a nationwide system of nature and recreational trails. To comply with the ICC's procedural requirements, the State and Vermont Railway formally acknowledged that the line was no longer used by the railroad, and that there had been no formal complaint by users regarding the cessation of service. The ICC in a January 1986 Order authorized Vermont Railway ex post facto to discontinue service, and approved the agreement between the State and the City of Burlington for trail use of the former right-of-way. Subsequently,the ICC denied the Preseaults' reconsideration motion, acknowledging that trail use"will conflict with the reversionary rights of adjacent land owners, [and noting that this] is the very purpose of the Trails Act." Vermont &Vermont Ry.Discontinuance of Service Exemption—In Chittenden County. Vt., 3 I.C.C.2d 903, 908 (1987). In due course an eight foot wide paved strip was established on the former right-of-way over Parcels A, B, and C. The path is some 60 feet from the Preseaults' front door. On each side of the Preseaults' driveway, where it crosses the easement, two concrete posts and one metal post were installed to block automobile traffic. The city also erected two stop signs on the path and built a water main under and along the path. The Preseaults have been unable to build on the land under the easement or to construct a driveway connecting their land through Parcels A and B to the nearest public street. The path is used regularly by members of the public for walking, skating, and bicycle riding. On warm weekends up to two hundred people an hour go through the Preseaults' property. People using the path often trespass on the Preseaults' front yard. On one occasion Mr. Preseault was nearly run over by a cyclist as he walked across the path. r In her concurring opinion in Preseault II, Justice O'Connor made the point that: [t]he scope of the Commission's authority to regulate abandonments, thereby delimiting the ambit of federal power, is an issue quite distinct from whether the Commission's exercise of power over matters within its jurisdiction effected a taking of petitioner's property. . . . The Commission's actions may delay property owners' enjoyment of their reversionary interests, but that delay burdens and defeats the property interest rather than suspends or defers the vesting of those property rights. Any other conclusion would convert the ICC's power to pre-empt conflicting state regulation of interstate commerce into the power to pre-empt the rights guaranteed by state property law, a result incompatible with the Fifth amendment. Preseault 11 494 U.S. at 22 (O'Connor, J., concurring) (citations omitted). Thus, if the Preseaults have interests under state property law that have traditionally been recognized and protected from governmental expropriation, and if, over their objection, the Government chooses to occupy or otherwise acquire those interests, the Fifth Amendment compels compensation. The record establishes two bases on which the Preseaults are entitled.to recover. One, if the easements were in existence in 1986 when, pursuant to ICC Order, the City of Burlington established the public recreational trail, its establishment could not be justified under the terms and within the scope of the existing easements for railroad purposes. The taking of possession of the lands owned by the http://www.li.georgetown.edu/Fed-Ct/Circuit/fed/opinions/93-5067.html 10/7/98 Preseault v. U.S. Page 23 of 59 Preseaults for use as a public trail was in effect a taking of a new easement for that new use, for which the landowners are entitled to compensation. As discussed previously, some courts consider that the establishment of a use outside the scope of an existing easement has the effect of causing an abandonment, and thus termination, of the existing easement. See, e:g., Lawson v. State, 730 P.2d 1308 (Wash. 1986). Either way, the result is the same—a new easement for the new use, constituting a physical taking of the right of exclusive possession that belonged to the Preseaults. Two, as an alternative basis, in 1986 when the ICC issued its Order authorizing the City to establish a public recreational biking and pedestrian trail on Parcels A, B, and C, there was as a matter of state law no railroad easement in existence on those parcels, nor had there been for more than ten years. The easement had been abandoned in 1975, and the properties were held by the Preseaults in fee simple, unencumbered by any former property rights of the Railroad. When the City, pursuant to federal authorization,took possession of Parcels A, B, and C and opened them to public use, that was a physical taking of the right of exclusive possession that belonged to the Preseaults as an incident of their ownership of the land. The Government argues that, since it was the City that actually established the trail, the United States should not be considered the responsible actor. If a taking occurred, says the Government, it was the City and the State who did it. In Hendler v. United States, 952 F.2d 1364 (Fed. Cir. 1991), the U.S. Environmental Protection Agency issued an Order which, among other things, authorized and directed the State of California to enter upon the land of the Hendlers, disregarding their objections, and establish monitoring wells. The State did so. In response to the Hendlers' takings claim against the United States, the Government argued, inter alfa, that it could not be held responsible for what California did since the state could have entered under its own authority, and did not need the EPA Order. We rejected the argument. We pointed out that pursuant to the Government's Order California entered on the property and dug and serviced deep wells. When California acted pursuant to the Order, it acted under the aegis of the United States, and its actions were, for purposes of takings liability, the actions of the United States. That it could have acted on its own was immaterial. r In the case before us there was a similar physical entry upon the private lands of the Preseaults, acting under the Federal Government's authority pursuant to the ICC's Order: That it was for a valued public use is not the issue. We have here a straightforward taking of private property for a public use for which just compensation must be paid. As previously noted, when the Preseaults and other affected landowners first sued in the Vermont state courts for a determination of ownership rights as between themselves and the Railroad (then owned by the State), the Vermont Supreme Court held that it was without subject matter jurisdiction since the matter was exclusively one within federal control. Trustees of the Diocese of.Vermont v. State, 145 Vt.-510, 496 A.2d 151 (1985). In the subsequent litigation against the Federal Government, the Federal Government never denied its role, and indeed, as was previously explained, in arguing the case before us staked its position on the grounds of total federal control over railroads and railroad rights-of-way. Both the State and the Federal Governments were fully invested in the effort to create this public trail. It would be absurd to deny the Preseaults their Constitutional rights on the grounds that the State has concluded.it was the Federal Government who did it, and the Federal Government has concluded it was the State. In sum, the Government cannot now point its finger at.the State and say"they did it, not us." As in Hendler, when the Federal Government puts into play a series of events which result in a taking of private property, the fact that the Government http://www.1l.georgetown.edu/Fed-Ct/Circuit/fed/opinions/93-5067.html 10/7/98 Preseault v. U.-S. : Page 24 of 59 acts through a state agent does not absolve it from the responsibility, and the consequences, of its actions. A final argument made by defendants is based on a 1982 state statute which authorizes, indeed instructs, the State to retain any unused railroad rights-of-way it owns for future transportation uses, and in the meantime to use them for other public purposes not inconsistent with future transportation purposes. That is what the State purports to have done, and presumably would have done with or without the statute. Defendants argue that the statute makes the action proper.: One can hardly fault the State government for complying with its law. However, the statute does not say that such actions are without consequences to the property owners, nor does it say that the property owners will not, or must not, be compensated for such actions. The statute is in fact wholly silent on the question of compensation. Obviously the State could not simply by enactment of a statute immunize itself from the salutary provisions of the Fifth Amendment. The issue is not whether the State or Federal governments had the power or obligation to do what they did, but whether the Constitution requires that just compensation be paid as a consequence. The existence of the statute thus adds nothing to the Government's defense. SLWMARY AND CONCLUSION It is important to understand what we here decide, and what remains to be dealt with in future cases. The plenary regulatory authority that the Federal Government exercises over the activities, such as cessation of service on a particular rail line, of interstate rail carriers under the Government's Constitutional powers pursuant to the Commerce Clause, U.S. Const., art. I, § 8,,is not here challenged. But the exercise of that authority does not dispose of the question of the compensability of state-defined rights of private citizens who own land subject to an easement for railroad use. When state-defined property rights are destroyed by the Federal Government's preemptive power in circumstances such as those here before us, the owner of those rights is due just compensation. r We do not hold that every exercise of authority by the Government under the Rails-to-Trails Act necessarily will result in a compensable taking. Obviously if the railroad owns the right-of-way in fee simple, there is no owner of a separate underlying property interest to claim the rights of the servient estate holder. And even if an easement rather than fee title is the nature of the property interest held by the railroad at the time of the conversion to a public trail, if the terms of the easement when first granted are broad enough under then-existing state law to encompass trail use, the servient estate holder would not be in a position to complain about the use of the easement for a permitted purpose. Whether, at the time a railroad applies to abandon its use of an easement limited to railroad purposes, a taking occurs under an ICC order to"railbank"the easement for possible future railroad use, and allowing in the interim for use of the easement for trail purposes, is a question not now before us. We offer no opinion at this time on that question. We conclude that the occupation of the Preseaults' property by the City of Burlington under the authority of the Federal Government constituted a taking of their property for which the Constitution requires that just compensation be paid. Neither the Government nor the State of Vermont have demonstrated a valid reason why the Preseaults are not entitled to what the Constitution mandates. The judgment of the Court of Federal Claims, holding the Government not liable, is reversed. The matter is remanded to that court for further proceedings consistent with this opinion. http://www.1l.georgetown.edu/Fed-Ct/Circuit/fed/opinions/93-5067.htm1 10/7/98 Pfeseault v. U.S. ® Page 25 of 59 REVERSED AND REMANDED United States Court of Appeals for the Federal Circuit 93-5067,-5068 J. PAUL PRESEAULT and PATRICIA PRESEAULT, Individually and as Partners of 985 Associates, LTD., a Vermont Limited Partnership, and 985 ASSOCIATES, LTD., Plaintiffs-Appellants, c V. THE UNITED STATES, d Defendant-Appellee, ; �l and THE STATE OF VERMONT, Defendant/Cross-Appellant. RADER, Circuit Judge, concurring, with whom LOURIE, Circuit Judge,joins. I too would reverse the Court of Federal Claims' holding that the Government is not liable he uncompensated taking of the Preseaults' property. I write separately, however, to hi ght the issues upon which I believe this case turns. r As an initial note, this court took this case en banc to determine whethe ederal or state law defined the Preseaults' property rights. The decision of the court determine a nature of the Preseaults' property rights through the application of Vermont law. Theref e, this court has properly selected the well from which it can draw its interpretive law. In this court's panel opinion, the majority held that f deral transportation law preempts Vermont law in establishing when possession of the right-of- everts from the State to the Preseaults. Preseault v. United States, 66 F.3d 1167 (Fed. Cir.), drawn, 66 F.3d 1190 (Fed. Cir. 1995). The majority of the panel held that federal law provide background principles" -- in the instant case pre-1979 federal ICC law --that change the pr erty rights held by the Preseaults' and place additional conditions on the abandonment ofAhe railroad easement beyond those rooted in Vermont law. Id. The vacated opinion allowed thefe ,ral involvement in railroad regulation to dictate the nature of the Preseaults' property interes Because this alteration of rights required the Government to provide just compensation, I dissented. While federal legislation may alter the terms of the Preseaults' property rights defin�and created by state law, it cannot do so without giving just compensation. See Kaiser Aetna v. United States, 444 U.S. 1642 178-80 (1979). Certainly, the.Federal Government has the power to apdct legislation that affects the Preseaults' right to freely use or possess land. But the Governmentcannot use this power for uncompensated, piecemeal usurpation of the rights of property http://www.1l.georgetown.edu/Fed-Ct/Circuit/fed/opinions/93-5067.htn 1 10/7/98 29726 SERVICE DATE-LATE RELEASE OCTOBER 30, 1998 EB SURFACE TRANSPORTATION BOARD DECISION STB Finance Docket No. 33666 BELT LINE DIVISION OF TACOMA PUBLIC UTILITIES—OPERATION EXEMPTION— IN PIERCE,THURSTON AND LEWIS COUNTIES,WA [REQUEST FOR WAIVER OF 49 CFR 1150.42(e)] m Decided: October 30, 1998 By petition filed October 23, 1998,Belt Line Division of Tacoma Public Utilities (Belt Line)seeks waiver of a portion of the requirements of section 1150.42(e).1 On October 23, 1998,Belt Line, a Class III rail carrier,filed a verified notice of exemption under 49 CFR 1150.41 to operate approximately 131.5 miles of rail line(the line) owned by the City of Tacoma,WA(City),in Pierce, Thurston,and Lewis Counties,WA: (1)between milepost 2192.0, at Tacoma, and milepost 17.7, at Chehalis;and(2)between milepost 2192.0, at Tacoma, and milepost 64.2, at Morton. The lines have been operated previously by Tacoma EasternRailway Company(TE).2 In the notice, in an effort to comply with 49 CFR 1150.42(e),Belt Line certified that its annual revenues exceed$5 million and that it had, as of September 23, 1998, served the national offices of the labor unions representing the employees on the line with a copy of a notice of 1 Under 49 CFR 1150.42(e),"If the projected annual revenue of the rail lines to be acquired or operated,together with the acquiring carrier's projected annual revenue,exceeds$5 million,the applicant must,at least 60 days before the exemption becomes effective,post a notice of applicant's intent to undertake the proposed transaction at the workplace of the employees on the affected line(s) and serve a copy of the notice on the national offices of the labor unions setting forth the types and numbers of jobs expected to be available,the terms of employment and principles of employee selection,and the lines that are to be transferred, and certify to the Board that it has done so." 2 The Board recently granted the City's application under 49 U.S.C. 10903 permitting the discontinuance of operations by TE over the line. See Tacoma Eastern Railway Company—Adverse Discontinuance of Operations Application—a Line of City of Tacoma_in , Pierce. Thurston and Lewis Counties,WA, STB Docket No.AB-548(STB served Oct. 16, 1998). i STB Finance Docket No. 33666 intent to carry out this transaction.' Belt Line also certified that it posted this notice at the workplace of the employees on the affected lines on September 23, 1998. Belt Line stated in its notice that it expected to consummate the transaction as soon as possible following the effective date of its verified notice of exemption. As evidenced by its petition,Belt Line believes that section 1150.42(e)would permit . consummation to take place 60 days after September 23, 1998(the day it served and posted the notice). However,the regulation provides that the exemption only becomes effective 60 days after the certification to the Board. Although the notice was posted on September 23, 1998,Belt Line did not certify that fact to the Board until October 23, 1998. Thus, absent action by the Board, the transaction may not be consummated until December 22, 1998. Belt Line seeks waiver ofthe 60-day Board notice period and seeks to have the balance of the 60-day notice requirement waived,so that consummation ofthe transaction can go forward on or after October 30,,1998. Belt Line points out that the adverse discontinuance application filed on June 23, 1998,made clear the City's intention to substitute the Belt Line for TE as operator of the line. Belt Line further notes that the filing of the application was well known throughout the local community and to existing employees of TE. Belt Line states that its employees are currently represented by national labor organizations,whereas none of TE's employees are represented by any national rail labor organization.' Belt Line says that the City's concern that responsive and reliable. service be introduced on the line at the earliest possible date provides support for granting the waiver request. Belt Line also says that the City is concerned that further deterioration in service or deliberate disruptive action may occur now that the Board has approved the adverse discontinuance of TE's operations over the line.' Belt Line's waiver request will be granted. The purpose of 49 CFR 1150.42(e)is to ensure that rail labor unions and employees who would be affected by the transfer of a line are given sufficient notice ofthe transaction before consummation.' Belt Line has provided sufficient notice ' Belt Line notes that,because there are no TE employees who are represented by any national rail labor organization,it was not obligated to serve those organizations but did so voluntarily. a Belt Line indicates that TE's President,Mr.Berntsen,may be the only employee of TE. ' In a letter filed October 29, 1998,TE states that it opposes the petition for waiver and requests that the Board not act before TE files a reply, due on or before November 12, 1998. The notice requirement is for the benefit of affected employees and their representatives and not for a carrier opposed to the transaction. Thus,we question TE's standing to oppose the waiver and will not delay our decision given the record in this case. 6 See Acquisition of Rail Lines Under 49 U.S.C. 10901 and 10902--Advance Notice of (continued...) 2 STB Finance Docket No. 33666 under the circumstances in this case. Therefore,we will accept Belt Line's October 23 certification to the Board and will waive the remainder of the 60-day requirement under 49 CFR. 1150.42(e). This action will not significantly affect either the quality of the human environment or the conservationofenergy.resources. ` It is ordered: 1. Belt Line's petition is granted to the extent described above. 2. This decision is effective on its service date. By the Board, Chairman Morgan and Vice Chairman Owen. Vernon A Williams Secretary 6(...continued) Proposed Transactions, STB Ex Parte No. 562(STB served Sept. 9, 1997). 3 29723 SERVICE DATE-OCTOBER 30, 1998 SEC SURFACE TRANSPORTATION BOARD DECISION STB Finance Docket No. 33654 BELT LINE DIVISION OF TACOMA PUBLIC UTILITIES—OPERATION EXEMPTION— IN PIERCE,THURSTON AND LEWIS COUNTIES,WA Decided: October 28, 1998 On August 27, 1998,the Belt Line Division of Tacoma Public Utilities(Belt Line) filed a verified notice of exemption under 49 CFR 1150.31 to operate approximately 131.5 miles of the City of Tacoma,WA,rail line in Pierce, Thurston, and Lewis Counties,WA: (1)between milepost 2192.0, at Tacoma, and milepost 17.7, at Chehalis; and(2)between milepost 2192.0, at Tacoma, and milepost 64.2, at Morton. The lines have been operated previously by Tacoma Eastern Railway Company. By letter filed October 23, 1998,the Belt Line,acting by its counsel,requests that the notice of exemption be withdrawn. The request will be granted and the proceeding will be dismissed. It is ordered: 1. The request to withdraw the notice of exemption is granted and the proceeding in STB Finance Docket No. 33654 is dismissed. 2. This decision is effective on its date of service. By the Board,Vernon A.Williams, Secretary. Vernon A. Williams Secretary OCT-23-1998 10:26 `STTS PATTERSON MINES P.01 } Law Offices' ` jjp_ JL J! S PAT ERSON &MINES, n s. 800 Financial Center 1215 Fourtlb Avenue Seattle,W gton 98161-1090 Pax- 206-3053 Phone: 206-292-9988 i I FAX COVER SHEET TO: Ken GarMann FAX NO. : (360) 458--4348 OF: Cityof yelm FROM `: Stephen L. Day OUR FILE: 57820001 i RE: 2nd Draft NO. OF' PAGES (INCL. THIS PAGE) : 4 DATE: 10/23/98 Please call (206)292-9988 (Ext. 557) if you do not receive any of these! pages or if there is a problem. PLEASE DELIVER MMBDIA'I"ELY. 140TE Ken, here is the 2nd draft incorporating the items we discussed this morning. We need Charlie to give us accurate milepost numbers. Sandy Mackie needs to make sure we are a.k. in -*mso of municipal law and Yelm policy. He should especially scrut'inize the RAC funding and audit portions. THE INFORMATION CONTAINED IN THIS FACSIMILE COMMUNICATION IS PRIVILEGED AND/OR CONFIDENTIAL INFORMATION INTENDED ONLY FOR THE USE OF THE INDIVIDUAL OR ENTITY NAMED IASOVE. IF THE READER OF THIS COVER PAGE IS NOT THE INTENDED RECIPIENT, YOU ARE HE"BY NOTIFIED THAT ANY DISSEMINATION, DISTRIBUTION OR COPYING OF THIS COMMUNgCATION OR THE INFORMATION CONTAINED HEREIN IS STRICTLY PROHIBITED. IP YOU HAVE RECEIVED THIS COMMUNICATION IN ERROR, PLEASE IMMEDIATELY NOTIFY US BY -kELEPHI4NE (206) 292-9988, AND RETURN THIS FACSIMILE TO US AT THE ABOVE ADDRESS VIA U.14. POSTAL SERVICE. THANK YOU. i I i I OCT-23-1998 10:26 'SETTS PATTERSON MINES P.02 i RESOLUTION NO. A RESOLUTION To state the guiding principles for the acquisition and use and operational oversight of the Yehn Branch of railroad currently owned by the Burlington Northern Santa Fe Railroad Company; to create a Rail Advisory Committee to advise the city on the use, operation and development of the Yelm Branch; and to provide guidance to the Director of Public Works on how to proceed; and WBEREAS, The Burlington Northern Santa Fe Railroad (BNSF) currently operates over a railroad corridor called the Yehn Branch Line which extends from Milepost near Lakewood on the north to mile post _ in the City of Yehn on the south and has indicated its interest in discontinuing rail service over a part of its Yelm Branch; and WIjEREAiS, The City of Yelm has indicated its interest in acquiring all property interests now held by the BNSF in the Yelm Branch Line for general public welfare, economic development and investment purposes; and WHEREAS, The City of Roy has expressed its interest in participating with the City of Yehn in setting public policy for the use and development of the Yelm Branch, insofar as such use operation and development affects the City of Roy; and WOEREAS, The Yelm Chamber of Commerce has actively been supporting, the public acquisition of the Yehn.branch; and BE lT RESOLVED BY THE CITY COUNCIL OF THE CITY OF YELM, TIE MAYOR CONCURRING: Sedion 1. The Council endorses the following guiding principles in acquisition, operation and development of the Yelm Branch Line: The presezvation and vitality of businesses located along the Yelm Branch Line should be preserved, and additional businesses should be encouraged to locate along the line. The- exploration and development of commuter rail and other passenger uses in conjunction with development of the 'Yelm Branch Line. i All BNSF property interests in the Yehn Branch Line Should be acquired by the City. The' interests of the City of Roy and its citizens will be considered in any use or development of the Yelm. Branch line, and appropriate interlocal agreements or i I 982940186/10ZM/10n/ i i OCT-23-1998 10:27 BETTS PRTTERSON MINES P.O3 • t contracts may be entered into by the two Cities to achieve and carry out mutual interests. Section 2. [Nisqually Valley] Rail Advisory Committee. A Rail Advisory Committee is established to assist and advise the City of Yelm in acquiring, operating and developing the Yelm Branch line. (a) : The Committee shall be composed of the Mayor of Yelm, the Mayor of Roy, or their designees, and two persons appointed by the City of Yelm and one person appointed by the City of Roy, to serve at the pleasure of the respective appointing Mayor: : (b) The committee members will receive no additional compensation, except that the Committee may by majority vote reimburse any travel or administrative expenses of the appointees out of the administrative fund established herein. (c) Administrative fund. The [Nisqually Valley] Rail Advisory Committee may receive up?to 1/2 of 1% of any rents, profits or other payments received by the City of Yelm for-use or uses of any part of the Yelm Branch. This fund to be created annually as Part of the operating budget of the Department of Public Works, and its use shall be subject to ,review and audit. Section 3. 71e Director of Public Works shall: (a) Negotiate the acquisition of the Yelm Branch Line and appurtenant property with appropriate BNSF officials and submit to the council a proposal for such acquisition. (b) Aevelop in consultation with the [Nisqually Valley] Rail Advisory Committee created herein, and submit to the 'Council for approval, a proposed rail policy which will encourage and promote freight and commuter rail service, pro'v'ide for safe and economical development and use of all property in the acquired Branch Line, and prepare a prudent and business-like property management plan for the acquired property. The Director of Public works shall assist the [Nisqually 'Valley] Rail Advisory Committee in preparing a budget. (c) Create a proposed bid requirement to solicit appropriate offers from competent rail operators to contract with the City for engaging in common and conoact carrier freight rail service over the Yelm Branch Line. The qualifications for �a contract rail operator should emphasize financial responsibility and rail i 982940186/102398/1003/ 2 • I I OCT-23-1998 10:27 BETTS PATTERSON MINES P.04 r operation experience, and ability to meet current rail customer's transportation requirements. (d)Develop an Operating Agreement which the City may use to engage the serOices of a competent rail operator, or operators, ensuring that such agreement Will!provide an operator or operators who will meet the reasonable service requests of businesses who desire common carrier rail service, that the City will remain in overall control of the properties, and that such operators will be able to bear the full expense and risk attendant with such rail operations. (e) !Develop a program of active oversight of future rail operations and other property uses in the Yelm Branch.Line to ensure all such users are in compliance with contract, safety and public use requirements. (f) Prepare and file on behalf of the City any documents necessary to carry out the;acquisition and operation of the Yelm Branch Line with the Surface Transportation Board, the Federal Railroad Administration, the Washington Utilities and Transportation Commission, the Washington Department of Transportation, the Association of American Railroads, or any similar agencies or organizations. Section 4, The Council supports all progressive and safe uses of the acquired property which willbenefit the general public and directs the Mayor to explore all reasonable oppiortunities for the Yelm Branch line to yield a return on the City's investment; Provided, however, that such uses must be consistent, and not interfere, with the general acquisition purpose of providing freight and passenger rail service, so long as there is a reasonabld demand or potential need for such services. i I 482949186/1023IS/1003/ 3 I I • I TOTAL P.04 TRANSMISSION VERIFICATION REPOT � I TIME 10/29/1998 15:03 DATE DIME 10/29 15:02 FAX NO./NAME 9436150 DURATION 00:01:31 PAGE(S) 05 RESULT OK MODE STANDARD ECM TRANSMISSION VERIFICATION REP( TIME 10/29/1998 14:54 DATE DIME 10/29 14:52 FAX N0./NAME 2539229781 DURATION 00:01:58 PAGE(S) 05 RESULT OK MODE STANDARD ECM October 22, 1998 Mr. Ken Garmann Public Works Director City of Yelm P.O. Box 479 Yelm, WA 98597 RE: Burlington Northern Santa Fe - Yelm to Lakeview acquisition Dear Mr. Garmann: Wilcox Farms, Inc. is extremely supportive of the work you have done as the lead agency in acquiring the BNSF line from Yelm to Lakeview. As a user of services on this line (approximately 500 cars per year), we are concerned about future service and feel the City, as owner, will ensure long-range quality customer service. This letter formally gives the City of Yelm permission to communicate to the BNSF that Wilcox Farms agrees with the plans for the City to acquire the short line railroad. We look forward to supporting the City both financially and with my involvement in the future. Sincerely, c Barrie Wilcox WILCOX FARMS, INC. 40400 Harts Lake Valley Rd. S., Roy, WA 98580 (360) 458-7774 FAX (360) 458-6950 p OCT-22-1998 11:48 BETTS PATTERSON MINES P.01iO4 iAwOffim BETTS PATTER ON &MINES, P s. SW FinanoaI Center 1215 Fourth Avenue Seattle,W#shington 98161-1090 Vex. 206-343-7053 Phone: 20,6.292-9988 FAX COVER SHEET TO: Kgn CQMLa FAX NO.; 60 458424 8 OF: Cffiy�f Yelm FROM: Stephan La OUR FILE: 57920001 RE: ProposedR 1 ti NO. OF PAGES (INCL. THIS PAGE): 4 DATE: 70 8 Please call (206)292-9988 (Ext. 557) if you do not receive any of these pages or if there is a problem. PLEASE DELIVER YM bIA'1'ELY: (_} NOTE: I have finished a draft - its probably much more than we need for this first session, and splitting out some of the operational and future planning for another resolution later might make some sense. I have some blanks that need to be filled in. Let me know if this is on the right track. l will send a copy to Sandy Mackie, also. cc: Sandy Mackie (360) 943-8320 TrIE INF04MATION CONTAMD IN THIS FACSIMILE COMMUNICATION IS PRIVILWED ANA/OR CONFIDENTIAL P1 FORMA71ON INTENDED ONLY FOR THE USE OF THE INDIVIDUAL,OR EN=NAMED,qg0VE- MUM READER OF THIS COVER PAGE IS NOT THE INTBNDED RECIPIENT,YOU ARE HEREBY NOTIFIED THAT ANY DISSEMINATION, DWRIBUnON OR COPYING OF THIS COMMUNICATION OR THE INFORMATION CONTAINED HpREIN L4 STRICTLY PRORWITE;D. IPYOU HAVE RECEIVED THIS COMMUNICAITON IN ERROR,PLEASE IMMEDIATELY NOTIFY US BY TELEPHONE(206)292-9988,AND RETURN THIS FACSIIMI=TO US AT THE ABOV8 ADDRESS VIA U.S.POSTAL SERVICE. THANK YOU. r OCT-22-1998 11:48 BETTS PATTERSON MINES P.02/04 RESOLUTION NO. A RESOLU'T'ION to state the guiding principles for the acquisition and use and operational oversight of the Yelm Branch of railroad currently owned by the Burlington Northern Santa Fe Railroad Company; to create a Rail Advisory Committee to advise the city on the use, operation and development of the Yelm Branch; and to provide guidance to the Director of Public Works on how to proceed: and WHEREAS, The Burlington Northern Santa Fe Railroad (BNSF) currently operates over a railroad corridor called the Yelm Branch wbich extends from Milepost near Lakewood on the north to mile post in the City of Yelm on the south and has indicated its interest in discontinuing rail service over a part of its Yelm Branch: and WHEREAS, the City of Yehn has indicated its interest in acquiring all property interests now held by the BNSF in the Yelm Branch Line for general public welfare, economic development and investment purposes; and WHEREAS, the City of Roy has expressed its interest in participating with the City of Yelm. in setting public policy for the use and development of the Yelm Branch, insofar as such use operation and development affects the City of Roy; WHEREAS, the Yelm Clamber of Commerce has actively been supporting the public acquisition of the Yelm branch; and BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF YELM, THE MAYOR CONCURRING: Section 1. The Council endorses the following guiding principles in acquisition, operation and development of the Yelm Branch Line: The preservation and vitality of businesses located along the Yelm Branch Line should be preserved, and additional businesses should be encouraged to locate along the line. All BNSF property interests in the Yelm Branch Line should be acquired by the City. The interests of the City of Roy and its citizens will be considered in'any use or development of the Yelm Branch line, and appropriate interlocal agreements or contracts may be entered into by the two Cities to achieve and carry out mutual interests. 9829401861./102298/1107/ i i OCT-22-1998 11:49 _ BETTS PATTERSON MINES P.03iO4 Section 2.,Nisqually Valley Rail Advisory Committee. A Rail Advisory Committee is established to assist and advise the City of Yelm in acquiring, operating and developing the:Yelm:Branch line. (a); The Committee shall be composed of the Mayor of Yelm, the Mayor of Roy, or their designees, and two persons appointed by the City of Yelm and one pion appointed by the Citv_n_ f Roy, tosere ie ur of the respective appointing Mayor: ' ' vv v►ti 3' J yea w— fjw.a. 04,1F fit- 2<qC (b);The committee members will receive no additional compensation, except that the-Committee may by majority vote reimburse any travel or administrative expenses of the:appointees out of the administrative fund established herein. (c)• Administrative fund. The Nisqually Valley Rail Advisory Committee may receive up* to 1/2 of I%of any rents, profits or other payments received by the City of Yehn for use or uses of any part-o`fhe Yelm Branch. This fund to be created annually as part o e operating u ge o e Department of Public Works, and its use shall be subject to review and audit � _ Section 3. ,The Director of Public 'Works shall: (a) Negotiate the acquisition of the Yelm Branch Line and appurtenant property with appropriate BNSI~ officials and submit to the council a proposal for such acquisition. VPL&I (b) .Develop in consultation with the Nisqually Rail Advisory Committee created herein, and submit to the Council°for approval, a proposed rail policy which will encourage and promote freight and commuter rail service, provide for safe and economical development and use of all property in the acquired Branch Line, and prepare a prudent and business-like property management plan for the acquired property. The Director of Public works shall assist the Nisqually 'Valley Rail Advisory Committee in preparing a budget. (c) Create a proposed bid requirement to solicit appropriate offers from competent rail operators to contract with the City for engaging in common and contract carrier freight rail service over the Yelm Branch Line. The qualifications for a contract rail operator should emphasize financial responsibility and rail operation experience, and ability to meet current rail customer's transportation requirements. (d) Develop an Operating Agreement which the City may use to engage the services of a competent rail operator, or operators, ensuring that such agreement willprovide an operator or operators who will meet the reasonable service 9829401861102298/1107/ 2 i 1 OCT-22-1998 11:49 BETTS PATTERSON MINES P.04iO4 requests of businesses who desire common carrier rail service, that the City will remain in overall control of the properties, and that such operators will be able to bear the full expense and risk attendant with such rail operations. (e) Develop a program of active oversight of fixture rail operations and other property uses in the Yelm Branch Line to ensure all such users are in compliance with contract, safety and public ' requirements (f),Prepare and file on behalf of the City any documents necessary to carry out the:acquisition and operation of the Yelm Branch Line with the Surface Transportation Board, the Federal Railroad Administration, the Washington Utilities and Transportation Commission, the Washington Department of Transportation, the Association of American Railroads, or any similar agencies or organizations. Section 4.1he Council supports all progressive and safe uses of the acquired properly which will benefit the general public and directs the Mayor to explore all reasonable opportunities for the Yelm Branch line to yield a return on the City's investment; Provided, however, that such uses must be consistent, and not interfere, with the general acquisition purpose of providing freight and passenger rail service, so long as there is a reasonable demand or potential need for such services. 982940186j1a2298/1108/ 3 TOTAL P.04 LE 0674: ePN 6WAIW'v C � October 21, 1998 f p Mr. Ken Garmann Public Works Director City of Yelm P.O. Box 479 Yelm, WA 98597 RE: Burlington Northern Sante Fe - Yelm to Lakeview acquisition Dear Mr. Garmann, Wilcox Farms, Inc . is extremely supportive of the work you have done as the lead agency in acquiring the BNSF short line from Yelm to Lakeview. As a user of services on this line (approximately 500 cars per year) we are concerned about future service and feel the City as owner will ensure long-range quality customer service. This letter formally gives the City of Yelm permission to communicate to the BNSF that Wilcox Farms agrees with the plans for the City to acquire the short line railroad. We look forward to supporting the City both financially and with my involvement in the future. Sincerely, Barrie Wilcox D tJ to ry el?mm c�P Y7A rjair �, l g�L con-3 FEEL F-avz -TO 14st M" i_j's (i/1-m-r y 499 LVLkj ,bc-t-21 -98 09 : 09A Wi -1--x Fay-n-is Inc a-- 458 6950 P . 01 Post 11' FUx Note 7671 Dat 01(A V � pnc a�' From CE) October 20, 1998 Cita of Yelm Yelm, WA 98580 Dear Sir: s it) frij M Wilcox Farms. Inc. i" of the work you have done as the 1(�,ad avency acquiring the BN Santa Fe line from Lakeview to Yelm- Chis elni.H lis letter formally gives the City of Yelm permission to communicate to the BN (h ' with the plans for the City to acquire the railroad line, and we look forward to sup, City both financially and with my involvement in the future. Sincerely, Barrie Wilcox 10-21-98 10 : 38AM Pol J "pect's-fiouse was perform i anti" the help of the Thurston County Sheriff's.office resulting m—an ad- ditional arrest and the discoveryO more narcotics. Dunnam .warned.against„a pew- drug ewdrug called.ecstasy.He said all ley - els of law enforcement are deeply'. �Y interested in the drug because of it, Pno�otiynyrandeY� having .been, linked to'-several deaths in Europe. t" Railroad stud :y _ y m-Edwards Street session; to be. held, ,at Roy� a Community s ter:, , .. The:Yelm and Rby city councils santewill meet jointly Tue§day,Novem- r ber 9�at 7 p.m.;to,hear a presenta tion by Burlington Northern/Santa, " update tleif �disasterG y plans bNovember 25, Fe representative, Steve Day•con- y the;requirements'of the cerning the possible sale of the a :mag ;vrluch clearly;: BNSF��short line between Yelm nergency gas, water and; .and.Lakewood: . _shut off; will de"signate Yelm Public Works Director Ken �f system dor garetts wtio Garmann .said,Yelm will��be the ddren out of school, es lead,agency in the proposed acqui- parent/student check' .sition.He said the next step will be 1 checkout-system once to,forma Railroad Advisory.Com- # �l has been"evacuated ands' mittee which will function similar d: ly to the.;Yelm Parks�Advisory. monthly firer drills an Committee. He said Mayor Kathy earthq�uakpdrills hoQls ate vYoxking to com Wolf will'appoint two members to IrM.s ent intruder plan that the.board from both communities. vide~`signets:fobthe'YPD.. ;They Will:provide;inputthroughout t Said the lanthe acquisigo or process pIat►, tq�f cep an,uitruc�err Fadditional hr inforhnation, side-aitd� oiitsiila�of`tfiej "please coiitactGamenn at 458= lye pian°also required that 8499. 1s� device' an et►acuauon : . Tf you need special accoinilloda- re and signal to keep the" tions to.attend or,participate in'the meeting,'please contact Roy City Clerk l3etty Garrison at(253)843 lease seed:DfsBst+�r C .a sill—, Railroad Railroad Committee Meeting Yelm Area Chamber of Commerce P.O. Box 444, Yelm WA 98597 (360) 458-6608 Yelm/Roy Economic Development Yelm to Lakewood Shortline Committee Railroad Committee Meeting October 16, 1998 Prairie Hotel Conference Room 1:00—3:30 p.m. Committee Members Present: Yelm Area Chamber of Commerce P.O: Box 444 Yelm WA 98597 360-458-6608 Joe Williams, President Jim Arthur, Economic Development Committee Chair Cecelia Jenkins, Executive Director Miles Sand & Gravel P.O. Box 130 Auburn WA 98071 253-833-3700 Lisa Kittilsby, Owner Brad Barton, Operations/Maintenance Wilcox Farms 40400 Harts Lake Valles Rd., Roy WA 98580 360-458-7774 Barrie Wilcox, Owner Yelm Prairie Development Company, P.O. Box 661 Yelm WA 98597, 360-458-0834 John Thompson, Office Management City of Yelm P.O. box 479 Yelm WA 98597, 360-458-8499 Ken Garmann, Public Works Director City of Roy, P.O. Box 700,Roy WA 98580 253-843-1113 Joel Derefield, Mayor David Evans& Association, 3700 Pacific Hwy E Ste 311 Tacoma WA 98466, 253- 922-9780 Charlie Burnham, Engineer(railroad engineer/planning) Betts Patterson&Mines PS 800 Financial Center, 1215 Fourth Ave Seattle WA 98161- 1090. 206-292-9988 Steve Day, Attorney(specialist—railroad law) Page 2 -Railroad Committee Meeting, October 16, 1998 Meeting Called to Order Chairman Joe Williams called the meeting to order at 1:00 p.m. Grant Monies Update Mr. Ken Garmann gave an update on the status of the grants that had been applied for to support the railroad project. The Regional Planning's Policy Board had reviewed and supported the proposed grant. All of the members present at the meeting had voted `yes'. On November 6h the Regional Planning Council will review the proposal for final approval. The grant total is $400,000.00. There has been no opposition voiced at this time, and the grant monies are available to fund the allocations. The next step would be for the Regional Planning Council, after adopted,to forward the proposal/grant to the Regional Transportation Committee. Once the grant has been obligated there usually is no time limit on expenditures, but we would want to move forward with the project. It takes one or two months to get funds through the D.O.T. process. It was noted that Charlie Burnham wrote the initial grant, and the City staff embellished, signed and turned it in. Results of Conference with City Attorneys It was reported the meeting between the Yelm and Roy City attorneys had not taken place yet. Steve Day indicated the two attorneys had held general discussions, and will be talking again next Tuesday. It sounds like Yelm will take the lead, and find a way for Roy's needs to be met. It's important the process be done correctly so that it does not preclude the use of public funds. He felt the two attorneys would work out an agreement. Structure—How Do We Get There? The committee discussed the structure of the plan, and future steps. Steve Day felt it was important that the attorneys come to the next meeting with a proposal. Joe Williams expressed concern that the needs of Miles Sand and Gravel and Wilcox Farms be met in the process. The discussion of Public/Private sectors working together was discussed. Lisa Kittilsby shared information she had gained through researching other communities involved with similar railroad operations. The community of Wenatchee was cited as an example. Lisa indicated she wanted to make sure that whatever agreement is reached will work for a long time. If the Cities are unable to put a plan together,Miles Sand and Gravel will buy the line. How Do We Acquire the Line? Charlie Burnham reviewed the points involved in acquisition of the line: • Which party is most appropriate for the roll? Page 3 -Railroad Committee Meeting, October 16, 1998 • Which vehicle best fits operating plan?Public owns/Private operation ... • Public monies important. • Federal monies along way. • Two separate areas (issues)—operation and ownership. Cities legal owners and two entities work closely together. Brad Barton indicated the private side needs to step forward with a plan. Charlie Burnham stated it might make sense for Miles Sand and Gravel to be the prime operator, because they would be the largest user. The additional area would be the possible operation of a dinner train. Steve Day reported the railroad will donate to the public, but not private. The committee discussed common carrier rights, and the obligation to serve and protect shippers. Ken Garmann reported the City of Yelm does not want to operate the railroad, but they do want to maintain service. The City will need to find an operator as soon as they acquire the line. Brad Barton indicated that Miles Sand and Gravel wants to look at operating the line themselves. The group discussed deferred maintenance ... the maintenance of assets. Steve Day—One Way to Move Forward: • City of Yelm Purchase • Operate through qualified operator • Advisory Board appointed by Mayors • Need to get a Resolution Joe Williams— Side Agreement: • Side agreement with Miles Sand& Gravel and Wilcox Farms. • Private side comes_up with the operators. • Reimbursement by State to move forward. • Yelm/Roy come up with Resolution. Joe Derefield—Lead/Ownership: • Yelm will lead. • Roy wants protection, but not ownership. The group discussed the Resolutions, which would place the City of Yelm as the lead, and include Roy in the mix. The purchase of the railroad was discussed. Currently the railroad has not replied. It was agreed that Ken Garmann will prepare a draft letter from the City of Yelm indicated they . want acquisition of the line. Letters were sent to stop the sale of the line, but letters have Page 4 -Railroad Committee Meeting, October 16, 1998 not been sent about purchasing the railroad line. Supporting letters from Wilcox Farms and Miles Sand and Gravel were discussed. Resolution's Wording: • The Seattle Resolution was cited as a starting point. • Purpose (state in resolution)—Legislation • Railroad Advisory Board • Speak as an Advisory Board to the City • Legislation defines limits of agreement Charlie Burnham indicated you could make exclusive operation. Bonding, requirements, car set(so Miles gets cars they need or want)get written into the proposals. A lot of changes are made in proposals before finalized. Steve Day asked if it was Miles Sand and Gravel's intent to hire-an operator?Lisa indicated they would be hiring a qualified operator. Ken Garmann indicated he couldn't see why the Cities would not want to contract with Miles Sand and Gravel. Brad Barton..asked if the Cities would have to go out for operation? Charlie Burnham indicated it would be put out as a proposal ... operation-plan, bonding etc. as a package. The important aspects are the protection of the industries and Cities. Lisa Kittilsby indicated she wouldn't be opposed to another providing operation, if quality was guaranteed. Joe Williams stated he was hoping for some income stream. Part of the proposal would need to address compensation issues. A discussion was held regarding the Cities role in terminating an operator that was not providing adequate service. The Advisory Board would recommend to-the City, with legislation being written clearly to protect the interests of those involved. Conflict of interest was discussed. Steve Day indicated that he didn't see any conflict of interest. Future marketing and profits were discussed. The reduction in cost for users as the usage increase's was discussed. The following items were highlighted: • Grant dollars • Resolution with City of Yelm (include users and City of Roy) • After Resolution is adopted start true negotiations. • Decide how Advisory Board is structured. Page 5 -Railroad Committee Meeting, October 16, 1998 • Develop and operating plan(can happen same time as negotiations) • Board to continue on ... Mayors appoint. • Wilcox&Miles authorize City of Yelm to negotiate with/for them. • Read Resolution I'and trade letters. • It was agreed to meet Monday,November 9"'—Roy City Council meeting. • 7:00-7:30 p.m. —work session; 7:30 - council meeting (Community Center) • Joe will introduce program • Steve& Charlie will present graphics • 7:30-8:30 p.m. — Committee meeting (upstairs in Court House/above City Hall) The meeting adjourned at 3:10 p.m. aaenkins -- - r 'Row O L Y M P I G AIR POLLUTION CONTROL AUTHORITY 909 Sleater-Kinney Rd. S.E., Suite 1 • Lacey,WA 98503 October 29, 1998 Kathryn M. Wolf,Mayor City of Yelm — - - -PO fox 4-79----- - - - - - Yelm WA 98597 Re: Freight Access by Rail (FAR) Corridor Dear Mayor Wolf: Olympic Air Pollution Control Authority(OAPCA) is pleased to indicate its endorsement for the concepts expressed in the Letter of Intent for the Transportation and Community and System Preservation Pilot Program. Jude Wilcher, Senior Planner for Thurston Regional Planning Council,provided a good overview of the intent of the program. Some of my staff and I have further reviewed the Letter of Intent and applaud the work of your public works director, Ken Garmann and those who have worked with him in the development of this pro'ect. OAPCA supports their further pursuit to acquire planning grant funding. OAPCA strongly supports any project which will maintain or reduce air pollution levels in the greater South Puget Sound region,particularly in the rapidly-growing Lacey, Olympia, and Tumwater communities. Not only does the project address reduction of costly future investments —_-_— -- for i=5 expa�is�or�, rt prooposes-diversion-o Cilsi,-c.g-rani�c si t operations out CfCCngL'St: LiTvaTl.-- -- areas. The bonus is the potential for increased high capacity rail passenger service in the region. Ultimately, the implementation of all of these strategies would seem to equate to improved air quality. OAPCA does have two concerns which should be noted in the pre-planning process: ■ The potential of greater train traffic in downtown Olympia may increase exhaust emissions if vehicles are forced to wait extensive periods at crossings. Any increase in carbon monoxide (CO) air pollution in this region would be a problem because National Ambient Air Quality Standards for CO have already been threatened in recent years in the Lacey area. --more-- (360) 438-8768 • 1-800-422-5623 • E-Mail OAPCA @ wln.com • Home Page http://www.wln.com/-oapca FAX (360) 491-6308 ;.1 Wolf--2 ■ OAPCA cannot make any financial commitment to this project now or in the future because the Air Pollution Control Account which funds core grant activities for local air pollution control authorities has been dramatically depleted in recent years by transportation-oriented activities. OAPCA wishes to be kept abreast as the next steps of this program are developed. OAPCA thanks Ms. Wilcher for considering our agency as a supporting partner for this program. Sincerely, Charles Peace OAPCA Executive Director CP:cw cc: Jude Wilcher, Thurston Regional Planning Council-Senior Planner Robert Moody, OAPCA Air Quality Specialist II cAcplettenoap IF, Chamber Of ¢� PO Box 444 Yelm, Washington 98597 (360) 458-6608 AGNENDA Orgah!zWbftaHAeetMg Yelm to Lakewood Short line 16 October, 1998 1 :00. Welcome, Introductions, Chairpersons Orientation Joe Williams 1:10 Grant Monies Update Ken Garmann 1^20 Results of Conference with City Attorneys Stephen Day ®j 1p C55 . � 1 :30 Discussion / Decision on Form ®f Organization ALL 2:00 Break "2:10 Discussion of Financial Issues.1 ALL 2:30 Assignment of Creation of Pro-Forma TBA 2:50 'Discussion, Restatement of Consensus ALL List of Differences & Concerns 3:15 Schedule Next Meeting? ALL 3:20 ADJOURN R A1C L)C�n� �.�Ps i f�l� v7d� �� P)5'i ��9 itit—CIN aark 1 Request• ��oa�Rdo_o��rt menral [%///' � ,:QUEST �R OOb1NA E Ordinance 0. OR RESOLUTION lesolution•: �ti84 Approved Council Request Date: 10-25-94 Date: Submitted Or Sponsored BY Phane/Extension Requesting Deportment/Division/Program N. Forster 5138' City Manager' s Office t preparation of an�gV-EM ¢Resolution(indicate which)is requested for the City Council meeting of Tuesday Summary Title:(A brief sentence,as it will appear on the Council Agenda)' r Enter into an operating agreement withThe Tacoma Eastern Railroad Company to provide freight and excursion service on the City' s rail line from Tacoma-National-Morton-Chehalis - Background Information:(Why is this request necessary?) Comments: In 1993, the City advertised for- Request for Proposals for excursion and freight railroad services on the City' s rail line. Selection was based on excursion and freight railroad experience including .maintenance and operation,marketing for freight and excursion with bus services , equipment availability and financial plan. A selection -team composed of -a representative from the National Park Service, Port of Tacoma, Executive Council for a Greater . Tacoma and City staff interviewed and' selected Tacoma Eastern Railroad in conjunction with Grayline of Seattle. Gst all material available as backup information for the request and indicate where filed: Leon of Document Source Documents/Bcckup Material Funding Source:(Enter amount of funding from each source) Fund Number&Name: Federal S State S City S Other S Total Amount If an expenditure.is it budgeted? O Yes ON.o Where? Org# Acct Approved os to Avchcoility of Funds / 'Director of Finance CIIvGr/D for Utilities Accrovc Deccrtment Director/utility Division Aecroval Co Req. #5058 1. RESOLUTION NO. 'aa»�• / WHEREAS the City of Tacoma proposes to purchase the former 1 2 Chehalis Western Railroad right-of-way from the Weyerhaeuser Company, 3 pursuant to Resolution No. 32725, and 4 WHEREAS, pursuant to a request for qualif"nations,_the City has 5 considered the qualifications and has interviewed applicants to be an operator g for the proposed railroad line, and pursuant to said process, the Tacoma 7 Eastern Railway Company was selected to.be the operator, and 8 WHEREAS the City of Tacoma and the Tacoma Eastern Railway g Company have negotiated terms of an operating agreement providing for the 10 Tacoma Eastern Railway Company to operate as the operator upon the 11 Tacoma Eastern Railway, to include all of the former Chehalis Western 12 Railroad now owned or to be acquired by the City, for a term of 20 years, with 13 responsibilities for maintenance and operation of the railroad, with capital 14 improvements to be made by the City, and for the payment of certain 15 revenues to the City, and other terms and conditions as further,described in 16 that"Operating Agreement between City of Tacoma and Tacoma Eastern 17 Railway Company"; Now, Therefore, 1g BE IT RESOLVED BY THE COUNCIL OF THE CITY OF TACOMA:. 19 That the proper officers of the City of Tacoma are hereby authorized 20 and directed to•execute that"Operating Agreement between City of Tacoma 21 and Tacoma Eastern Railway Company,"for the purposes hereinabove set 22 forth, said agreement to be substantially in the form of the agreement, a true 23 copy of which is on file in the office of the City.Clerk and by this reference 24 25 26 I ✓ ' res5058.doc-]CK/iw i j' r � ala®�• 1 incorporated herein. 2 AdoptedDEC "0 3 Mayor 4 Attest City Clerk 5 res5058.dac JCKltw 6 Approved as to form and le ality. 7 9 f Assistant City Attomey 10 11 . 12 13 14 15 16 17 18 19 r 20 21 22 23 24 25 26 -2- j res5O58.doc-JCKttw it �Yd C, INAL OPERATING AGREEMENT BETWEEN CITY OF TACOMA. AND TACOMA EASTERN gAM,WAY COMPANY ade and entered into as of the 30th day O i December,referred t o�as "and THIS AGREEMENT, m "City," and between City of Tacoma, a Washington municipal corporation, l , a Washington corporation,hereafter referred to as the Tacoma Eastern Railway Company "Operator." REAS the City owns, leases, or otherwise controls the right-hal saY, track,WesternRalroad, also structures WHE , of a strategically located line of railroadrn comp adn extend formerg the Chehalis Fife (Tacoma Junction), known, in parE. as the Tacoma E on hereinafter "Railroad"), Frederickson: �Sorton,National,Maytown, and Chehalis,Washington . and is in need of a shortline operator to operate and maintain the Railroad; and desires to WHEREAS, the Railroad is in need of extensive rehabilitatiokeand Clty s andards enabling ultimately provide a railroad infrastructureex e rfreiging ht and Class Train to the Mountain" passenger excursion Operator to carry out common operating responsibilities under this Agreement; and the Ci and surrounding communities would obtain economic etourismtand he WHEREAS; tY establishment of common carrier freight, excursion, and Train to the Mountain" operation erience and expertise in railroad management, WHEREAS, the Operator has exp Tacoma as an independent' and maintenance and is willing to Provide s services andmaintenance oft e Railroad; and contractor in the management, operation, WHEREAS the Operator agrees to operate and maintain the Railroad as a common carver shortline railroad operation. City and Operator agree to the following terms: �. DEFEVITIONS: "Project Line" and "Railroad" mean the railroad right-of--way, track, and structures of the former (Railroad)� between Fife/Tacoma Jct.,National,Morton and Chehalis, Chehalis Western Railroad all located N;fin Pierce,Lewis andThurston Washington, over which rail freight and provided pursuant to thi Agreement. excursion pas-miner services arebe P ' Specifically, between mile posts (MP): et�z e�n MP 2192.01 (-1.s9) at Tacoma Jct..and MP 2193.76 (0.0) at Tacoma B MP 0.0 at Tacoma and MP 67.0 near Morton Between MP 0.0 at Park Jct. and MP 3.5 near National OPERATING AC-REEMENT BETWEEN CITY OF TACOMA AND TACOMA EASTERN RAILWAY COMPANY- 1 Between MP 0.0 at Frederickson and MP 38.0 at Maytown Between MP 0.0 at Maytown and MR 18.2 near Chehalis "Rail Corridor" means the lands owned or controlled by City of Tacoma, upon which the Railroad is located. "Rail freight service" means the rail service to be provided by the Operator as more fully described in Section 3 of this Agreement. "FRA Track Class and safety standards" are as defined in Title 49,US Code of Federal Regulations, Part 213, and as amended. "Track" shall mean the track structure and all appurtenances thereto, including, but not limited to, rail and fastenings, switches, bumpers, ties, ballast, roadbed, embankments, signals, bridges, trestles, cul er-u, drainage facilities, or other structures necessary for support of the track structure, including, but not limited to, any and all materials and facilities required in connection with construction, renewal, maintenance, and operation of said track structures and all appurtenances thereof. "Railroad Enterprise Account" means a City account established and dedicated to receiving, disbursing, and accounting for all funds relating to the maintenance and operation of the Track. The City's obligations under this Agreement relating to maintenance and operation of the Railroad are limited to funds available in this account, and-third-party funds as they may become available. "ICC" shall mean Interstate Commerce Commission. "WUTC" shall mean Washington Utilities and Transportation Commission. "FRA" shall mean Federal Railroad Administration. "AAR" shall mean Association•of American Railroads. 2. THE TER%L- r • This Agreement is for a term of twenty-five (25)years beginning on December 30, 1994, and terminating on December 31, 2019; and unless either party notifies the other of termination, shall continue thereafter on a year-to-year basis until terminated by either party by written notice given at least six months in advance.'. 3. RAIL SERVICE STANDARDS: A. Operator agrees to provide to shippers or receivers connected to or on the leased property, rail freight services, including railroad cars, switching,,line-haul, and other related services as are customarily provided to similar industries using rail service in accordance with ICC OPERATING AGREEMENT BETWEEN CITY OF TACOMA--- AND TACOMA EA-STERN RAILWAY COMPANY-2 requirements. The Operator will provide and keep the Railroad reasonably supplied with rolling stock and equipment so that,the business of the same shall be encouraged, developed, and preserved, and that the same shall at all times be done with safety and expedition, and the public accommodated in respect thereto, and that all future growth of such business, as the same may arise or be reasonably anticipated, shall be provided for,and secured, and that all reasonable efforts shall be used to maintain, develop, and increase the business of the Railroad. The Operator shall be solely responsible to set rates and prices to its customers consistent with ICC regulations and good business practices. D. Compliance with Applicable Laws. In performance of this Agreement, the Operator shall comply with all federal laws, state laws, municipal ordinances, orders, rules, and regulations, including, but not limited to, those pertaining to railroad right of ways and railroad operations, social security, income tax withholding, industrial insurance, workers compensation, fair employment practices, and unemployment compensation, including such as may be promulgated by the ICC, WUTC, or other regulating agencies. The Operator shall defend, protect, and s Ve harmless the City from and against.all claims, suits, actions, liabilities, loss, damage, and ex--pense arising from any failure of the Operator to comply with the same. The Operator shall maintain its status as an ICC regulated common carrier during the term of this Agreement. The Operator will be responsible to comply with laws and regulations relating to railroads as administered by the FRA, including those outlined in 49 CFR 209 through 245, (Rev. Oct. 1993) and as amended. C. Rules of Operation. The Operator shall order and direct movement of trains over the Railroad under such reasonable rules and regulations customary among railroads of similar type. All rules, regulations and orders, and interpretations and.applications thereof shall be reasonable, fir and just as between the Operator and other operators that the City permits to operate on the line. The Operator shall not permit any of its employees or the employees of other operators to operate trains or engines on the Railroad until they have qualified under applicable operating rules and regulations of appropriate regulatory authority. The.Operator shall use reasonable and customary care, skill and diligence in maintaining and repairing the roadway, tracks,'structures and appliances of the track. D. Picking ul).wrecks. Should any locomotive, car or caboose in-the train.of either the Operator or another operator admitted to the track be derailed or damaged while being run or operated upon the Railroad, the Operator shall arrange pick-up and removal of the same; provided, however, that the Operator shall permit third-party operators to re-rail their own locomotives. cars and cabooses where no wrecking derricks or on-track equipment is required; and further proti-ided, that re-railment expenses incurred by Operator for third party re-railment OPERATING AGREEMENT BETWEEN CITY OF TACOMA ANn TACOMA EASTERN RAILWAY COMPANY- 3 shall be reimbursable by the third party, and Operator may bill third parties involved. 4. MAINTEv-,NCE OF THE RAILROAD: A. General restionsibilities. The Operator,in cooperation with the City, will immediat ly determine the extent of rehabilitation needed to begin safe and revenue-producing operations o segments of the track agreed to by both parties. The City will provide initial funds to begin a rehabilitation program to implement a strategy intended to eventually bring the entire line up t FRA Class If track standards. All capital improvements shall be at the discretion of the City, d subject to appropriation of funds. The Operator will be responsible to perform all ordinary maintenance and repair necessary and appropriate to permit safe operations of rail freight and passenger excursion service. The cost of the following items shall be reimbursable to the Operator by the City, subject to available budget in the City's Railroad Enterprise Account, an subject to paragraph 4.C, below: (1) all public road crossings; (2) electric highway grade crossing warning signals, including the installation and power for illumination and grade crossing signals, (;) signs along the right of way; (4) vegetation control; (5) surface water drainage control; (6) cleanup from public dumping; (7) bridge structural repair and maintenance; and (8) right-of-way fencing. The Operator shall provide the City advance cost estimates of the foregoing to allow the City to plan with respect thereto. The City, at'its option, may elect to perform any of the above item with its own or other work forces. When repairs that are the City's financial responsibility shall require urgent attention t at could be a hazzrd to,public safety(such as highway grade crossing"warning signals),then the Operator is authorized to immediately notify the City and arrange prompt repair of such item 5 and to bill the City for the reasonable cost thereof. ' Where the City's Railroad Enterprise Account does not provide sufficient funds to pay for_ the cost of the above-listed items, in that event, the Operator shall have the opportunity"but of be obligated to perform at its own expense any of the above work that the City cannot reimburse. The Operator's performance of such work, from time to time,would not reduce or eliminate the City's obligation to reimburse for these items for future work as funds become available in e Railroad Enterprise Account or from other sources, such as grants,which may become avail 3ble to the City. NI-here a shortage of funds is projected, the Operator will prioritize the work necessary to be performed, to assure that safety-related work receives first -- it OPERATING AGn =__MENT BETWEEN CITY OF TACOMA AND TACOMA EASTERN RAILWAY COMPANY-4 1 . I ,.tea__,_.cneTorr�G hoc JCK_meW-01106195-2:47 PM priority. Nothing in this agreement shall preclude the City or the Operator from entering into agreements with other agencies or entities for obtaining funding for the Railroad. Provided, however, that if the Operator is an applicant for funds, any conditions which would attach to the Railroad as a condition of obtaining such funds would be subject to approval by the City Manager. B. Repair and Maintenance Plans. Projected prioritized improvements and other repairs shall be made in accordance with plans submitted to the City biannually by the Operator to coincide with the City of Tacoma budget cycle, which plans shall be subject to review and, approval by the C_itY- The plan may be amended by mutual agreement between budget cycles as the need arises- The City, in cooperation with the Operator, shall undertake an initial survey to determine the service life of existing bridges and structures, to incorporate into the plans.a schedule for capital improvements to replace structures as may be'necessary. Where anticipated revenues from operations will be insufficient to meet conditions of this Agreement to maintain tracks to FRA standards, the parties shall meet to amend the plans to accomplish the necessary compliance. The Operator's plans shall also be designed to provide for: (1) the cost of maintenance and operation of the Railroad; (2) a reasonable reserve for replacement and reconstruction of the Track, (3) a return on investment to the Operator and appropriate fee.to the City. The Operator will carry out the terms of the approved plana The parties shall negotiate in good faith for the allocation of available resources,to accomplish these requirements and the other purposes of this. Agreement. It is understood that this Agreement imposes no obligation on the City to appropriate generalfunds for the maintenance or rehabilitation of the Railroad, it being the intent that the Railroad be operated in the manner of a self-sufficient entity. However, the City will make reasonable effort to secure grants and appropriations from available private or government sources for purposes of upgrading and making capital improvements to the Railroad. C. Ordinary maintenance and repair. The City anticipates obtaining grants and funds to rehabilitate the Railroad•to meet or exceed FRA Class H standards within five years of the-date of this Agreement: Once the Railroad has,been rehabilitated to meet or exceed prescribed FRA Class II standards, the Operator, subject to items of work assumed by the City, shall perform or cause to be performed normal day-to-day track.maintenance of rail and ties and all routine maintenance and improvements necessary and appropriate to permit safe and efficient operations of rail freight and passenger excursion service, in order to keep the operated portions of the Railroad at a•minimum of FRA Class H track safety standards. This includes, but is not limited to: OPERATING AGREEMENT BETWEEN CITY OF TACOMA ` AND TACOMA EASTERN RAILWAY COMPANY- 5 (1) All public road crossings; (2) Electric highway grade crossing warning signals; (3) Signs and road surfaces along the right of way; (4) Vegetation.control; (5) Surface water drainage control; (6) Railroad communication equipment; (7) Track and roadbed repairs and renewal; (8) .Ditching and culvert work necessary to preserve the roadbed; (9) Maintenance of road crossing signs; (10) Bridge, trestle, and abutment maintenance. D. E--rraordinaly repairs. City of Tacoma and Operator agree that Operator maintenance responsibilities do not extend to catastrophic damages to land or project property which are caused by act of God or vandalism, nor to retrofit, reconstruction, modification, or improvements to track or facilities because of changes in applicable public law or regulations. Parties agree that, in the event cf such extraordinary damage or legal requirements, they will work together to restore rail senice as soon as possible as required by the Operator's ICC-mandated common- carrier obligarions under this agreement, subject to available funding. It is expressly understood that the ter "extraordinary repairs" is intended to include repairs made necessary by the caving in m of embankments, the sinking of fills, loss of a bridge from casualty, or repairs made necessary by similar unforeseen causes. E. Track Rehabilitation. The Operator agrees, at the request of the City, for separate consideration, to perform planning, engineering, or Track rehabilitation or repair services to upgrade or improve any portions of the Track that the City may elect to improve as a capital improvement_ In such event, the Operator and the City will negotiate the scope of work and terms and conditions under which the Operator shall produce the result requested by the City. 5. SALVAGE:. Where the Operator replaces Railroad materials in kind, using the Operator's own funds, the salvage material removed from the Railroad,where it is surplus to the needs of the Railroad and has no-foresee ble future use, may be retained or disposed by the Operator. Otherwise, all. salvage materials removed from the Railroad shall be stockpiled for future use of the Railroad. In the event that salvage materials have not been replaced by Operator's funds and have no foreseeable fun- re use and are surplus to the needs of the Railroad,then the same shall be subject to sale in accordance with the sale of surplus materials under the Tacoma Municipal Code. The City and Operator shall work together to effect disposal of waste materials generated by necessary maintenance of the Railroad. I OPERATING AGREEMENT BETWEEN CITY OF TACOMA AND TACOMA EASTERN RAILWAY COMPANY-6 . A7 ou - I. 6. IMPROVEMENTS: All improvements to the project line shall become the property of the City. Provided, however, upon termination of this Agreement, as to any capital improvements installed by use of the Operator's.oR-n funds, which have been requested by the City for installation(for example, a new spur track, a building, etc.), the City shall pay in cash the undepreciated value of such capital improvements (calculated at normal accounting standards for such depreciation). Where improvements have been installed with Operator's funds and for the convenience of the Operator, the City shall have the option, at its discretion, upon termination of this Agreement, to pay in cash the undepretiated value of such improvements or forego the purchase of all or portions of such improvements. For those latter improvements not purchased by the City, the improvements shall be, at the Operator's option, either abandoned in place or removed from the project line and the Track restored to not less than its original condition at the Operator's expense within 180 days of termination of this Agreement. 7. AUDITD,G AND RECORD KEEPING: The Operator shall keep financial records using Generally Accepted Accounting Principles and ICC Uniform System of Accounts approved by the City of Tacoma Director of Finance. The City of Tacoma Director of Finance may at any time during regular working hours enter the premises of the Operator to inspect all records of Operator contained therein. The Director of Finance shall have access to any and all records relating to railroad activities regardless of where they are located, and-the Operator shall promptly make and release copies of such records to the Director of Finance. It is mutually agreed that the Director of Finance shall limit disruption of normal day- to-day operation of the Operator in obtaining such records and, except in the case of criminal allegations, originals of Tacoma Eastern Railway Company documents shall not be removed from the Tacoma Eastern Railway premises. Nothinq in this Agreement shall be construed to require Operator to divulge any information which would be in violation of the Interstate Commerce Act or related federal regulations, or Operator's trade secrets or proprietary information. S. LIABILITY AND PROPERTY DAMAGE INSURANCE: For the period of this Agreement prior to closing of the City's purchase of a portion of the line from Weyerhaeuser Company, Operator agrees to carry liability and property damage insurance, including a Railroad general liability policy, covering its operations in an amount initially not less than Seven--L%Mon Dollars ($7,000,000.00), protecting City, Weyerhaeuser, and Operator. The City, its officers and employees, and the,Weyerhaeuser Company and its officers, agents, and employees, shall, during this period, be additional insureds. Copies of OPERATING AGREEMENT BETWEEN CITY OF TACOMA AND TACOMA EASTERN RAILWAY COMPANY-7 Certificates of all policies are to be given to the City, and, during this period, to Weyerhaeuser Company. For the remainder of this Agreement after closing date of the City's purchase of a portion of this line from Weyerhaeuser Company, Operator agrees to carry liability and property damage insurance covering its operation in an amount not less than Seven-Million Dollars ($7,000,000.00), protecting both the City and the Operator. The City, its-officers and employees, shall be an additional insured. Copies of Certificates of all policies are to be given to the City. The followins clause shall be made a part of said policies: "It is meed that, in the event of material change or cancellation, this company shall give thirty (3 0) days written notice to the City, addressed to: City Clerk,Room 220, 747 Market Street, Tacoma Washington 98402." Weyerhaeuser.Company shall be given similar notice during the portion of this Agreement prior to closing of purchase by City of the portion of the Railroad under purchase agreement dated August 12, 1994. When 'Train to the Mountain" passenger excursion operations commence on the Track, the limits of insurance coverage for said passenger operations shall be increased initially to an amount not less than Ten Million Dollars (S 10,000,000). Biannually, the amounts of insurance shall be subject to review by the operator and the City's Risk Manager, to conform insurance requirements to the reasonable needs to protect the City and Operator from liability claims. The in-;:;Lirance required hereunder shall name the City, the Operator, and their respective officers, dire:.-tors, employees, agents, assign as additional insureds (the "Additional Insureds"), shall contain a severability of interest clause, and shall be primary and noncontributory to any other liability- coverage of any of the Additional Insureds. The Operator shall furnish to the City a certificate of insurance in form and issued by insurers acceptable to the City, evidencing compliance ti;nth the foregoing requirements and stating that the insurer will provide thirty (30) days' advance-"-ritten notice of cancellation or material alteration of such policy. 9. FEES A---\]D TAXES: Operator shall be responsible for the payment of and bearing the costs of all required fees, permits, licen_ses,•and taxes necessary to operate and maintain the Railroad, including income taxes, business and occupation taxes, sales taxes, and any applicable excise taxes. City shall assist and cooperate in application for permits and licenses required by state and federal agencies. City of Tacoma shall pay any applicable real property assessments or taxes. OPERATING AGREEMENT BETWEEN CITY OF TACOMA- AND TACOMA E kSTERN RAILWAY COMPANY- 8 j e•d7 PM 10. HOLD ILARMLESS/INDEMNITY: In addition to the insurance requirements described in Section 8, Operator does release, indemnify, defend and save harmless City, its officers, employees and agents from and against any and all liabUhi , loss, damages, expense, actions, and claims incurred by City, its officers, employees and agents asserted or arising directly or indirectly on account of or out of the performance of services by Operator pursuant to this Agreement. In making such assurances, Operator specifically agrees to indemnify and hold harmless City from any and all bodily injury claims brought by employees of Operator and expressly waives its immunity under the Industrial Insurance Act and Federal Employers Liability Act or other similar acts as to those claims which are brought against City. City shall release, indemnify, defend and save harmless Operator, its officers, employees and agents, from and against any and all liability, loss, damages, expense, actions, and claims incurred by Operator its officers, employees and agents asserted or arising directly or indirectly on. account of acts or omissions of the City and/or arising by the use for non-railroad purposes of any portion of the Project Line or Railroad, such as public utility purposes or non-Operator operated public rail tram-it services as outlined in Section 45 of this Agreement, as later mutually agreed to by Operator and City under separate agreement. 11. FINAlI CLAL: A. Operation during early years. Since both parties realize.that the railroad is in need of extensive repair and rehabilitation at a considerable cost to the City, the Operator will pursue a robust but prudent business strategy focused on generating as much common-carrier freight revenue traffic as feasible on the railroad. It is mutually understood that the Operator, in order to safely and effectively carry out its obligations under this Agreement, must cover operating expenses from freight revenue and passenger excursion revenue. It is further anticipated that, during the eari`• years under this Agreement, the City will,provide capital funding to upgrade the trackage, or portions thereof, to FRA Class II standards, and that earnings from the Railroad will not be fully developed. ,B. Financial arrangements—to December 31, 1999. The Operator shall remit to the City a fee equal to five percent (5%) of net income, annually for the preceding calendar year, commencing April 1, 1996, for calendar year 1995. For purposes of this Agreement, "net income" is defined as net pre-tax income, determined under generally accepted accounting principles, and in accord with ICC Uniform System of Accounts. The parties agree that this fee shall be subject to review during the last quarter of 1999, to be adjusted, if necessary, to conform to actual performance in revenue generation and expenses of operating the Railroad. At that time, and every fire Sears thereafter during the term of this Agreement, the City reserves the right to renegotiate the calculation of the Operator's fee to be paid to the City, not to exceed OPERATING AGREEMENT BETWEEN CITY OF TACOMA ANDTACOMA.EASTERN RAILWAY COMPANY- 9 twenty-five percent (25%) of net income, to ensure that the Gity obtains a reasonable fee for Operator's use of the Railroad, but giving consideration to the revenues generated from the Railroad operation covering (a) variable costs incurred by the Operator due to its duties pursuant to this Agreement, (b) the costs of maintenance and operation of the Railroad, (c) a reasonable return to the Operator on the Operator's capital and other investments to perform its duties under this Agreement, giving consideration to the profitability of the enterprise, (d) a reasonable reserve to be determined by the City, upon consultation with the Operator, for replacement and reconstruction of the Railroad, and (e) any ancillary benefits enjoyed by the City from the operation of the Railroad. 12. WAGE AND HOUR COMPLIANCE: Operator shall comply with all applicable provisions of the Fair Labor Standards Act and any other legislation affecting its employees and the rules and regulations issued thereunder insofar as applicable to its employees and shall at all times save City free, clear and harmless from all actions, claims, demands and expenses arising out of said act and the rules and regulations that are or may be promulgated in connection therewith. 13. SOCIAL SECURITY, RAILROAD RETIREMENT AND OTHER TAXES: The Operator assumes full responsibility for the payment of all payroll taxes, use, sales, income, business and operation, excise or other forms of taxes (not including real property taxes or assessments), fees, licenses, excises, or payments required by any City, federal or state legislation which is now or may be-during the term of this Agreement enacted as to all persons employed by the Operator and as to all duties, activities, and requirements by the Operator in performance of the work pursuant to this agreement and shall assume exclusive liability therefore, and meet all requirements thereunder pursuant to any rules and regulations that are now and may be promulgated in connection therewith. 14. UTILITIES .Operator agrees to pay directly, or by mutual agreement of the parties, pay to City, all utility or utility related charges, or any other expenses which relate directly or indirectly to the providing of or discontinuance of utilities to the railroad properties, except as modified by this Agreement. City agrees to pay directly those utility charges related to the illumination and signalization of public road crossings along the project line. 15. hii DEPENDENT CONTRACTOR: Operator, including its directors, officers, employees, agents or other representatives is an independent contractor and in no way shall be deemed to be an affiliate, partner,joint venturer or associated in any manner whatsoever with City except as an independent contractor under OPERATING AGREEMENT BETWEEN CITY OF TACOMA AND TACOMA EASTERN RAILWAY COMPANY- 10 the terms of this Agreement. _ 16. AS SIGiN ENT: This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. Operator's rights hereunder shall not be assignable whether by way of assignment, sublease, license or otherwise, directly or indirectly without City's prior written consent, which consent will not be unreasonably withheld as to any parry which is qualified and capable of assuming such rights. Changes in the Operator's majority ownership or voting control shall require City's prior written consent as a condition of continued operation under this Averment. However, nothing in this Agreement shall prohibit Operator from contracting or subcontracting engineering services, maintenance or repair-work, equipment leasing, passenger excursion operations, and similar activities customary and appropriate to the routine operation and maintenance of a railroad and to Operator's obligation under this Agreement. 17. EXCLUSIVE OPERATING RIGHT: Operator shall have the exclusive right to provide rail service on and over the project line during the term.of this Agreement subject to those operating rights given to the Weyerhaeuser Company, under the City purchase agreement of August 12, 1994, and as may be given to a second operator . who invests S 1 million or more in bringing closure to the purchase transaction with Weyerhaeuser Company.. The Operator will be consulted for its concurrence in the terms and conditions of agreement ti�ith such second operator. The Operator shall be responsible for obtaining any requisite operating authority under Interstate Commerce Commission regulations for its operations described under this Agreement. Operator is also responsible for obtaining any permits necessary pets and authority from the State of Washington or any other necessary operating permits from any agency. The Operator shall have the right to approve the use of the Railroad right-of-way for non- railroad purposes by third parties; provided that such approval shall not be unreasonably withheld where the use would not interfere with railroad operations. 18. UNLAN%TUL USE OF PREMISES: Y The Operator agrees to make no unlawful, or improper use of said premises, or any portion thereof, and during said term or any extension thereof, to comply with all statutes of the United States and/or all ordinances, rules, regulations and laws of other governmental authorities. 19. MANAGEt�ENT AND CONTROL: Except as otherwise provided herein, Operator exclusively shall control, manage, administer, OPERATING AGREEMENT BETWEEN CITY OF TACOMA AND TACOMA EASTERN RAILWAY COMPANY- 11 and supervise the Project Line and all operations thereon. Operator shall have the exclusive right to adopt and promulgate rules and regulations governing access to, use, and operation of the railroad property, provided any such rules or regulations affecting rail freight service shall be lawful under federal and state statutes and consistent u;Zth regulations adopted by Operator for other rail freight facilities owned or operated by Operator- As part of its responsibilities, the Operator shall maintain all appropriate railroad interchange agreements, tariffs, charges, and other appropriate governmental, regulatory, or commercial a=erments. Any use of the City's real or personal property by the Operator for other than railroad purposes shat require City approval. In addition, the City shall require that the Project Line's general appearance be kept up and that the property shall not become a nuisance to the adjacent communities- Operator shall not be responsible for public dumping or pre-existing environmental damage or debris on the Rail Corridor. The Cin and the Operator shall notify each other of all complaints received or repo s issued concerning operational issues associated with the line. The Operator will be required to keep accurate records of injury or accident associated with the line, and records of every such incident shall be delivered to the City in a timely manner. The Circ• reserves the right to use the right-of-way for public utility purposes, provided such uses do not interfere with the operation of the rail line, in the judgment of the Washington Utilities and Transportation Commission, or in the judgment of a mediator or an arbitrator jointly selected by the City and the Operator should the Washington Utilities and Transportation Commission decline to render a decision. The Operator shall manage and control agreements and permits affecting the Railroad Corridor invo1N-!ftg utility crossings, billboards, fencing, and-other uses of or encroachments upon the Railroad right-of-way by third parties. The Operator will review issues relating to such . r agreements and assist the City in resolving the same. The Operator will negotiate renewals of such permits and recommend to the City any new terms and conditions.' The Operator will maintain records of such permits and agreements, and assist and advise the City in its issuance of future permits. In consideration therefor, the Operator shall receive and retain during the first five years of this Agreement the fees payable under those permits or agreements, if any, as Inco e. At the initial fire vear review under this Agreement, such fees shall be subject to further allocation between the City and the Operator as agreed between the parties. The Operator will advise the City regardinq encroachments upon the Track to the extent the Operator becomes aware of the same, and recommend to the City, when necessary, administrative or legal action OPERATING Ac—RE=HENT BETWEEN CITY OF TACOMA AND TACOMA EASTERN RAILWAY COMPANY- 12 vAib:l2gtslEASTRt,,FR-6-JCK:mew-01/06M-2:47 PM t to.protect the City's interest in the Railroad. Subject to approval by the City of a standard form of permit, the Operator shall be authorized to issue or renew such of said permits as shall be subject to termination by Operator or City on not more than ninety(90) days' notice. 20. CONSTRUCTION OR DEVELOPMENT PERMITS: Construction and/or development permit fees generated by City requests to perform rehabilitation work or new construction shall be paid by the City. 21. SAFETY AND OTHER INSPECTIONS: . Operator shall allow City access to all documents related to inspection of the project line, rail corridor or rolling stock. Operator shall permit and provide for inspection of the Railroad property by the City. 22. CONDITION OF PREMISES: The Operator agrees that it has examined the Railroad and acknowledges the present condition of the Railroad, and acknowledges that the City must, subject to funding, immediately begin a track rehabilitation program in order to improve the efficiency of rail operations on the Railroad. 23. E 12V1EDLkTE SUSPENSION OF TRAIN OPERATIONS: Upon emergency notice from the City's designated representative (which may be verbal) to Operator, Operator shall immediately suspend the movement of trains and motive power when in the judgment of the City's designated representative operation of trains or motive power would be or has been unsafe. Operator shall also immediately suspend operation of trains and motive power if its liability insurance should lapse or be canceled for any reason. The City's designated representative may order Operator to suspend train and motive power operations for reason of ge in the event Operator does not take such action itself. lapsed or canceled insurance covera Operation of trains and motive power by the Operator shall remain suspended until corrective action has been taken or insurance coverage is reinstated. Suspension of operations for safety reasons shall be ordered when operations would not be in compliance with applicable federal railroa4 safety regulations or rules and regulations of the State of Washington. .The City's designated representative shall take reasonable action in an attempt to verify the existence of unsafe conditions prior to the suspension of operations on the project line or any part thereof. Provided, that where suspension is ordered by the City for reason of noncompliance with applicable federal railroad safety regulations or rules and regulations of the State of Washington, and if such vioIation(s) is not established, the City will be liable to pay to Operator losses incurred by Operator from such wrongful suspension. OPERATING AGREEMENT BETWEEN CITY OF TACOMA AND TACOMA F—ASTERN RAILWAY COMPANY- 13 7Z 24. UNIFORM CODES: The Operator agrees not to violate any provisions of the Uniform Fire,Building,Plumbing, T P given building, structure or Electrical, or Mechanical Codes which are applicable to any gi improvement. 25. LIENS: The operator agrees to keep the Railroad corridor and its improvements s on of theeOfrom all erator,liens ed by any act or orris and the P every kind and description caused or incurr operator shall not have the right or authority to incur anemechanics',iny laborers' cloudthe that P Y would be binding against the City's interest in said premises, of the Railroad real estate. 26. NON-TR-A�TSFER: ated if The operator agrees that this Agreement may, at the option of f a b'b judicial process,e forthwith r(2) if P (1) this Agreement or the F,h transfer tf the he Operator otherwise a than as herein provided, or(3) if the the Operator shall attempt to Operator shall be adjudicated bankrupt. 27 WAIVERS OF DEFAULT: No waiver of any default by any party hereunder shall be implied from any omission by the other art or parties to take any action on account of such default if such default cfied insists or is an express party P . and no express waiver shall affect any default other.than the default p waiver, and then only for the time and to the extent the t in be-coOnenstrued Od as a more r waiver. vers of any a subsequent covenant, term; or condition of this Agreement shall no or condition. breach'of the same covenant, term, 28. SURRFNDER OF PREMISES: The Operator agrees at the expiration of'the term, of this Agreement or any sooner termination of Agreement, to quit and deliver up Railroad premises to the City, in the same order and tis Ag hAgreement, - condition as the premises now are, or as may hereafter o her una void unavoidable casualties excepted. excepting reasonable use and wear thereof, fire and 29. TERMI\ATIONFOR MATERIAI-DEFAULT: sum payable to the City, or if either party shall fail to cure any If the Operator shall fail to pay any P Y 30 days of written notice,the other party may elect to terminate material default within thirty( ) Y this Agreement upon sixty(60) days written notice to the other, which notice shall OPERATING AGRE=MENT BETWEEN T1 COMA AND TACOMA EASTERN RAILWAY COMPANY w iMmew-01106/95-2:47 PM state the grounds therefor, with specificity. Provided, however that-where a default is not reasonably subject to being cured.within said 30 days, the defaulting party shall commence the cure within said 30 days, and shall thereafter diligently proceed to effect the cure. The parties shall have such other rights and remedies as are provided by law and including the right to specific performance under this Agreement, which may be asserted during the pendency of any dispute hereunder pro-,zded the moving party shall demonstrate irreparable harm in the absence of specific performance. This provision does not limit the parties' rights to seek damages or enforce any other rights available under law or at equity pursuant to Section 40 hereof. Anything herein to the contrary nomithstanding, except and subject to Section 23 hereof, neither party hereto shall have any cause of action against the other parry hereto for lost business or loss and damage of any kind resulting from interruption or delay to its business. Any termination of this Agreement shall not relieve the defaulting party from any liability which may have attached or accrued prior to or at the date of termination. 30. TERMS, ATION FOR FINANCIAL HARDSHIP: Operator.may terminate this Agreement based on unreasonable financial hardship. "Unreasonable financial hardship" is defined for the purposes of this Agreement as a reduction of freight customers or other revenue-generating activities which make it financially not feasible to continue operation of the railroad at the minimum levels established in this Agreement and by federal, state and local la-ws and regulations, or by the requirements for maintenance, repairs or improvements beyond the revenues available to dedicate to such purposes. In no event shall the City be obligated or expected to provide financial support to the Railroad from its General Fund. It is ' ultimately intended, after rehabilitation and FRA Class H Track and Safety Standards are achieved with City Enterprise Account funds, that funding for the Railroad, as well as railroad operations, shall originate from revenues generated from Railroad operations, and as may be supplemented from special grants received from third-parry governmental or private sources for purposes of capital improvements to or maintenance of the Railroad. The Operator's intent to terminate the Agreement under this section shall include seven months advance notification to allow the City to secure a nev, Operator or abandon the railroad under the requirements of the Interstate Commerce Commission and other applicable federal, state and local laws and regulations. 31, NOTICES: Any notices herein provided to be given by Operator to City shall be deemed to be delivered if mailed by cerdfied United States mail addressed to City at: City Manager 747 Market St.,Room 1200 Tacoma, WA 98402. Notices herein to be given by City to the Operator shall be deemed to be OPERATINGAGREEMENT BETWEEN CITY OF TACOMA AND TACOMA EASTERN RAILWAY COMPANY- 15 -- _.. delivered if mailed by certified United States mail addressed to the Operator at: Tacoma Eastern Railway Company P.O: Box 4 Tacoma, WA 98401 32. EXPIRATION WITHOUT FAULT: City and Operator agree that this Agreement shall expire on December 31, 2019, unless otherwise extended, modified, or terminated hereunder. Other provisions of this Agreement notwithstanding, should the City fail to become the owner of the entire Railroad under a.pending purchase and sale agreement with the Weyerhaeuser Company, dated August 12, 1994, then, in that event, this Agreement shall terminate in accordance with the City's rights under the Weyerhaeuser Purchase and Sale Agreement. In the event of such early termination, the City shall cooperate and assist the Operator in arranging cancellation and termination of ICC and other legal obligations assumed by Operator by reason of commencing common carrier rail service under this Agreement: 33. ENVlRON3,sENTAL PROTECTION: The Operator shall comply with all applicable environmental laws and regulations as they pertain to both present and future operational activities of the Operator only, and shall indemnify and hold the City harmless from its violation of any environmental laws or regulations. 34. SECURITY FOR BORROWING: The Operator shall not encumber the value of the Railroad property as security or collateral for any loan or other borrowing. This Agreement shall be considered personalty to the Operator, and the Operator shall not be deemed to have an interest in the real estate of the City. However, the Operator mai- seek advice from City as to appropriate alternatives for debt financing. This shall not prevent the Operator from using its rights under this Agreement as collateral for operating loans or advances. 35. CAPTIONS: The headings of the several paragraphs contained herein are for convenience only and do not define, limit, or construe the contents of such paragraphs. 36. SEVERABILITY, APPLICABLE LAW: The invalidity or unenforceability of any provision hereof shall not affect or impair any other provisions. The laws of the State of Washington and the United States shall govern the validity, OPERATING AGREEMENT BETWEEN CITY OF TACOMA AND TACOMA EASTERN RAILWAY COMPANY- 16 „rti•��f�FASTRNFcc�docJCK:mew 01/06/95 2:47 PM performance, and enforcement of this Agreement. _ 37. AMENDtifENT: No term or provision of this Agreement may be changed, waived, discharged, or terminated orally but only by an instrument in writing executed by both the parties to this Agreement. 3S. VENUE STIPULATION: This Agreemeri has and shall be construed as having been made and delivered within the State of Washington and the laws of the State of Washington shall be applicable to its construction and enforcement_ Any action in law, suit in equity, or judicial proceedings for the enforcement of this agreement or any provisions hereto shall be instituted only in the Pierce County Superior Court, or, if in federal court, in the Federal District Court for the Western District of Washington, Southern Di-.,-i.-:::on. Any suit or action shall be stayed if either party demands mediation or arbitration under Section 40 hereof, provided such demand is made within the time allowed for answering the complaint to such lawsuit. 3 9. ENTIRETY: This Agreement and the attachments hereto contain the entire Agreement of the parties and supersedes any and all prior agreements or oral understandings among the parties. 40. MEDIATION/ARBITRATION: Mediation of Disputes. In the event of any disputes of the City•and Operator arising under, out o£ in connection with or in relation to this Agreement, the parties shall attempt to settle the dispute by selecting a neutral person to act as mediator. Upon the selection of the mediator, the parties shall participate in the mediation process established by the mediator. If the dispute is noL resolved by mediation within five days after the completion of the mediation process, the rn-rter shall be submitted to arbitration as provided below. Arbitration of Disputes. Any dispute or controversy arising under, out of, in connection with o.F in relation to this Agreement, or any breach hereof, shall be determined and settled by arbitration to be held in Tacoma, Washington, in accordance with the commercial arbitration rules of Judicial Arbitration and Mediation Services ("JAMS"). the American Arbitration Association ("AAA") or such other organization the parties select as a neutral arbitrator. The arbitration shall be conducted before a single arbitrator selected-from a panel of seven arbitrators provided by JAMS, AAA, or other entity that may be conducting the arbitration. From the panel of s--,%-en arbitrators.originally selected, each party may strike three names. The arbitrator shall be the sole remaining person named, or if more than one person remains and the parties do not agree on one of the remaining persons, then JAMS, AAA, or the other entity that OPERATING AGz==.MENT BETWEEN CITY OF TACOMA AND TACOMA E=.s T ERN RAILWAY COMPANY- 17 may be conducting the arbitration shall select the single arbitrator from the list of remaining persons. The arbitrator shall make its decision and award according to the terms and provisions of this Agreement and the applicable law, and such awards shall set forth findings of fact and conclusions of law of the arbitrator upon which the award is based in the same manner as is required in a trial before a judge of a superior court of the State of Washington. The parties shall have the right to discovery, provided, however,that neither party may take more than three depositions without the approval of the other parry or the arbitrator. Judgment upon the award may be entered in an appropriate court of the State of Washington. 41. NONDISCRE IINATION/EQUAL OPPORTUNITY: The-Operator shall not discriminate against any employee or applicant for employment because of race, creed, color, sex, age, national origin, or physical or other motor handicap, unless based upon bona fide occupational qualification. The Operator will take affirmative action to ensure that applicants are employed and employees are treated during employment, without regard to their creed, race, color, sex, age, national origin, or physical or other motor handicap. The Operator shall comply with the applicable provisions of city, state and federal laws pertaining to the implementation of affirmative action programs, and the prohibition of discrimination based on race, color, national origin, ancestry, creed, religion, age, sex, or marital status, or the presence of. any sensory, mental, or physical handicap, unless based on a bona fide occupational qualification reasonably necessary to the normal operation of the Railroad. 42. OBSERVANCE OF LAWS, PUBLIC RULES AND REGULATIONS: Operator shall at all times during the term of this Agreement comply with all applicable laws, rules, regulations and orders promulgated by any governmental entity having jurisdiction in the matter for the protection of persons or otherwise, and if any failure on the part of Operator so,to comply thereRZth shall result in any fine, penalty, cost or charge being imposed or assessed on or against the City, then Operator shall promptly reimburse and indemnify the City for or on account of such fine, penalty, cost or charge incurred on account thereof, and shall, upon notice thereof being given to Operator by the City, defend any such action free of cost, charge or expense to the y City. 43. CONFLICT OF INTERESTS: No officer or-agent of the City who exercises any function or responsibility in connection with the carrying out of this Agreement, nor any member of the immediate family of any such officer, employee or agent, shall have any personal financial interest, direct or indirect, in this Agreement, either in fact or in appearance. Operator shall comply with all federal,state, and OPERATING AGREEMENT BETWEEN CITY OF TACOMA AND TACOMA EASTERN RAILWAY COMPANY- 18 wlib.l2gtslEASTRNFZR.doc-JCK:mew-01106195-2:47 PM City conflict-of interest laws, statutes and regulations as they shall apply to all parties and beneficiaries under this Agreement as well as to officers, employees or agents.of the City. 44. AGREENfEN"T TO BE CONSTRUED LIBERALLY,NOT FOR THE BENEFIT OF THIRD PARS: This Agreement shall be construed liberally so as to secure to each party hereto all of the rights, privileges and benefits herein provided or manifestly intended. Except as herein otherwise specifically provided, this Agreement and each and every provision herein is for the exclusive benefit of the parties hereto and not for the benefit of any third party. 45. PUBLIC R_-'�M TRANSIT: During the term of this Agreement, all or portions of the line may become suitable for public rail transit purposes, either directly or under contract to a public agency. The City shall provide to the Operator the first opportunity available to the City to provide a proposal to meet the specifications of any agency requesting such service. Provided that if the Operator cannot or chooses not to provide public rail transit services to the specifications of the requesting agency, the Operator shall cooperate with the City to permit the use of the rail line for public rail transit through contract, interlocal agreement; or otherwise, with adequate compensation to the City and Operator, in an manner not inconsistent with the common carrier rail freight and "Train to the Mountain" passenger excursion obligations imposed on the Operator by the Interstate Commerce Commission and/or this Agreement. 46. "TRAIN TO THE MOUNTAIN": It is a material consideration of this Agreement that the Operator, in a joint proposal with Gray Line of Seattle, a subsidiary of Holland America Line-Westours, Inc. proposed to institute a rail passenger excursion service over the line owned by the City from approximately Tacoma to National, in reply to the City's request for proposals under Specification No. G-057-92. It is expected that, following rehabilitation of the Track to FRA Class H Standards between Tacoma and the terminus point for the "Train to the Mountain,' that Gray Line will assist the Operator and enter into an aareement to provide the passenger trainexcursion operation, in substantial conformance by both City and Operator with that proposal, dated January 26, 1993. In the event. that Gray Line fails to enter into such an agreement substantially fulfilling the terms of the proposal, then, at the City's discretion, this Agreement would be subject to renegotiation or termination, following notice to the Operator and opportunity, within one year thereafter, to undertake and perform the "Train to the Mountain" services itself, or to substitute a party in the place and stead of Gray Line. If there are changes in public law or regulations or in market conditions which materially affect the anticipated implementation of the "Train to the Mountain" operation, the City will not arbitrarily terminate this Agreement. OPERATING AGREEMENT BETWEEN CITY OF TACOMA AND TACOMA EASTERN RAILWAY COMPANY-- 19 i 47. CITY CONTACT: _ r The Tacoma Eastern Railway Company's single point of contact for all issues concerning the City's railroad is: Tacoma City Manager 747 Market Street,Room 1200 Tacoma, WA 98402 The City Manager may elect to appoint a "Railroad Representative" to act on his or her behalf. IN WITNESS WIEREOF, said parties hereunto set their hands in duplicate and affixed their signatures as of December 30, 1994. CITY OF TACOMA OPERATOR TACOMA EASTERN RAILWAY By COMPANY, (a Washington Corporation) Ray E. Co Jr /�/� City Manager BY �' Edward M.Berntsen President and General Manager Counte sig ed Peter utt opp Finance Dir ByCl.LI� l Nan Forst Assistant t ity Manager By i v Andre fic s Risk anager Attest: Approved_as� or Y By Ge 1 .Birk, City Clerk �Jo/11 C.Kouklis Chief Assistant City Attorney OPERATING AGREEMENT BETWEEN CITY OF TACOMA AND TACOMA EASTERN RAILWAY COMPANY-20 wAih•%anfrT-ASTRNRR-doc-JCK:mew-01/0619&2:47 PM P�ea'Chamber of Comae PO Box 444 Yelm, Washington 98597 (360) 458-6608 AGNENDA Organizational Meeting Yelm to Lakewood Short line 16 October, 1998 1:00 Welcome, Introductions, Chairpersons Orientation Joe Williams 1:10 Grant Monies Update Ken Garman 1:20 Results of Conference with City Attorneys Stephen Day 1 :30 Discussion / Decision on Form of Organization ALL 2:00 Break 2:10 Discussion of Financial issues. ALL 2:30 Assignment of Creation of Pro-Forma TBA 2:50 Discussion, Restatement of Consensus ALL List of Differences & Concerns 3:15 Schedule Next Meeting? ALL 3:20 ADJOURN a Yelm Area Chamber of Commerce P.O. Box 444, Yelm WA 98597 (360) 458-6608 Yelm/Roy Economic Development Yelm to Lakewood Shortline Committee Organizational Meeting October 6, 1998 Prairie Hotel Conference Room 1:00—3:30 p.m. Committee Members Present: Yelm Area Chamber of Commerce P.O. Box 444 Yelm WA 98597 360-458-6608 Joe Williams, President Jim Arthur, Economic Development Committee Chair Cecelia Jenkins, Executive Director Miles Sand & Gravel, P.O. Box 130, Auburn WA 98071, 253-833-3700 Frank Miles, Owner Lisa Kittilsby, Owner Brad Barton, Operations/Maintenance Wilcox Farms 40400 Harts Lake Valley Rd., Roy WA 98580 360-458-7774 Barrie Wilcox, Owner Yelm Prairie Development Company P.O. Box 661 Yelm WA 98597, 360-458-0834 John Thompson, Office Management City of Yelm P.O. box 479 Yelm WA 98597 360-458-8499 Ken Garmann, Public Works Director City of Rom P.O. Box 700, Roy WA 98580, 253-843-1113 Joel Derefield, Mayor David Evans & Association 3700 Pacific Hwy Ste. 311 Tacoma WA 98466, 253 922-9780 253922-9780 Charlie Burnham, Engineer (railroad engineer/planning) Betts, Patterson&Mines PS 800 Financial.Center, 1215 Fourth Ave, Seattle WA 98161- 1090, 206-292-9988 Steve Day, Attorney(specialist—railroad law) Page 3 -Yelm to Lakewood Shortline Committee, October 6, 1998 • Proportionately owned by the Cities of Yelm and Roy • To Promote business development; economic growth; to improve the environment and encourage a quality of life along the rail corridor A discussion was held regarding the industrial area using rail, and how it would help boost the economic development of the area. The increased usage would also open doors to transporting by rail to the Puyallup and Kent areas. City of Roy—Project Perspective (Joel Derefield) Joel Derefield,Mayor of Roy, presented their perspective on the project: • Will the railroad try to cutback(Roy-Lakewood) services further? • The City of Roy would like a say in what the land is used for ... zoning. • Question—Profit making business? • Will the Cities incur financial responsibilities or revenue? • What are the legal issues surrounding the proposal? The City of Roy is not looking for any profit, but would like to have a voice in the process. The City of Roy wants: • To make sure the line will stay open. • Wants the railroad to have a viable future. • Wants to maintain access to the City of Roy. • Wants to know legally what they can do. • Want to save the water tower for historical purposes. • Want access to the right'away(center strip of town). The property where the water tower is located is owned by the railroad, but the City of Roy owns the tower. The Burlington Northern Railroad would like the tower moved back from the tracks. The City wants to preserve the tower for a park area, with historical information. The rest of the land provides the core of downtown parking for local businesses. The businesses depend on the parking space. The City would like grass and landscaping(open park area). The former Roy Chamber of Commerce leased out spots to vendors during the Roy Rodeo. There are insurance and legal issues surrounding the sub- leasing of the land. The City's current lease is $500.00 per year for the land: There is no revenue for the City of Roy. At one point there was discussion of the Burlington Northern Railroad putting up a fence around the land. So far that has been blocked. The City would like to run a water main down that side of the highway for future development at some point. Page 4-Yelm to Lakewood Shortline Committee, October 6, 1998 Miles Sand & Gravel—Proiect Perspective(Frank Miles) Frank Miles, owner, presented the perspective of Miles Sand& Gravel: The land was purchased because the railroad was there. The company has been unsuccessful in putting together a shipping agreement. The Miles Sand& Gravel.Company wants: • This proposed agreement to be successful. • Wants to move freight north on the line. • Very much wants the railroad to succeed. • Would like to buy the railroad. • Would like very much to operate the line. • Would see advantages for the Cities to own the line. • Would like to get our trucks off the highways. • Didn't originally plan to operate the site until 2010. • Problems—restrictions on hours of operation (noise factor and hauling constrains) - The exploding growth of Pierce Co. and Yelm area have been good for the business. Wilcox Farms—Proiect Perspective Barrie Wilcox) Barrie Wilcox, owner, presented the project perspective for Wilcox Farms: • In 1974 Wilcox Farms investigated shipping by rail and signed a ten-year lease with Burlington Northern for the Roy line. There were three tracks in Roy at the time. The original lease was $500.00, with a ten-year lease agreement signed. • The business usage of the railroad has been growing every year. • The facility is there in Roy, and very good to use. • The railroad has helped to make Wilcox Farms very competitive. • Need to keep the railroad in Roy. • If it were going to be shut down, Wilcox would want to buy. • Very comfortable with the way the committee is proceeding. • Question—What kind of organization? • Will the Board of Directors be policy setters? • Want to make sure it operates efficiently. • Feel the Board should not be a real large group, but needs a cross-section of representation. .. Page 5 -Yelm to Lakewood Shortline Committee, October 6, 1998 • Want to be active in the future of the rail line. • Wilcox Farms is committed to the efforts of this group. Committee Leadership—Joe Williams Joe Williams informed the group that he could step out of the leadership role, and was comfortable with whatever forum the group wanted for future meetings. He was comfortable with however the committee was structured. The roles of private business and the municipalities were discussed. The group concurred that they liked the way the committee was currently structured, and they wanted Joe to continue in his current role. The committee recessed at 1:45 p.m. Chairman Joe Williams called the meeting back to order at 1:55 p.m. Steve Day,Attorney Steve Day reviewed some of the legal issues for the committee: • What do you own? - track, switches, rails - quit claim deed - railroad easement - land reverts to adjoining property owners that gave easements if not used as a railroad. - Must be used for railroad purposes. The rails to trails law was passed to help maintain the corridor in the event of a national emergency (national security) could be reinstated to a railroad line. • Railroads are trying to maximize their land sales. • Will lease if they can. • The threat of fencing property is a way of getting more lease money. • Railroads don't pay attention to local concerns. • Format—need to speak to the railroad with one voice. • Seen good intentioned efforts fall apart when more than one voice speaking to the railroads. • What are you buying? - Operations ... there are groups that would want to operate. - You need operators that are responsive to businesses' needs • Railroad will set rate for long-hauls ... short-lines tie in with connection • Short-lines operators are allowed to register with a variety of long hauls. • Recent arbitration agreement with Short-lines and their operation rights was highlighted. Page 6 - Yelm to Lakewood Shortline Committee, October 6, 1998 • Concerns: Cities and Businesses ... agreement. • Each Roy and Yelm have attorneys ... really need to talk. • State law allows cities to own properties without restriction. • Concern: Old bridge (capital expense)—exposure • Operators—insurance/bond before allowed on line. • Write into agreements if you want to operate. • You can have more than one train on line ... need one person to operate. • When Railroad sells they will most likely grant some as gifts and take some money. They will give the City good will and take as tax deductions. • Seattle signed a 30-year agreement ... would not recommend going into a 30-year agreement with anyone. (referred to Surface Transportation Board;Tacoma) • If you purchase—file with Surface Transportation Board. • Contract with Burlington Northern to operate until you get yours in place. • Watch land ... try to take all the land with it. The railroad will try to see what they can carve out and sell. • It is best to acquire as much of the corridor as you can. Make as wide a corridor as possible. • Railroad is out checking the deal out. We need to contact: - Fort Lewis - McChord - Lakewood The open access issue was discussed. The possibility of a direct connection in the area with Amtrak in 2/3 years was discussed. It was noted that the Mayor of Lakewood is the past Post Commander of Fort Lewis. Lakewood is currently looking at annexing Fort Lewis. Joel Derefield indicated the City of Roy is strongly opposed to parts of the annexation. Jim Arthur asked if Burlington Northern could preclude Union Pacific? A discussion was held regarding legal barriers in the contractual agreement. The committee would want to make sure that they are out of the agreement. Consensus • Everyone's best interest if- - City of Yelm and Roy are owners. - Wilcox and Miles—businesses don't lose control. - Miles wants to operate their own. Page 7 - Yelm to Lakewood Shortline Committee, October 6, 1998 • City Attorney's to meet ... • City Attorneys, Miles& Wilcox meet ... • Committee Point Person with Railroad—Charlie Burnham -Will meet with attorney and then at point will pass to business concerns. • It was noted of how important it is that the businesses are part of this committee. The Railroad will try to control, but freight shippers will have an impact. Frank Miles asked where the military fit? • Military traffic concern. • The Fort will try to stay neutral. • Military will want to maintain the railroad service. • Burlington Northern will want to control pricing and access. • Military will have obvious security concerns. • Army freight is 1000-2000 cars per year. Their freight is organized and easy to ship, but it is heavy. • Some part of the agreement needs to speak to maintenance. A fund needs to be established to maintain the track. The heavier six-axle cars are harder on the track. • The business of Miles & Wilcox would more than supply enough business to justify the retaining of the line. Potential shippers would be attracted once established. • McChord and Fort Lewis would use. • It was noted that at one point Weyerhaeuser had shipped fertilizer bags from the Roy area, and many years ago Silva Seed had used the line. Will need a record of any industries that have use the rail services in the last 4/5 years. • There is a potential of 100 cars per year to Yelm as a start. Committee: • Business Development that would come out of the process. • Wilcox, Miles& Cities continue to work on negotiations. • Offer good services at reasonable rate. • The word will spread that there is a group of people putting together a plan. A discussion was held about what type of entity to form ... Economic Development Committee—Public Development. Page 8 -Yelm to Lakewood Shortline Committee, October 6, 1998 It was highlighted that it is important to avoid precluding the availability of public: grants, low-income loans, and FEMA money (kept City of Tacoma's line going). It is important that it be set up right. It needs to be a public entity. The second level operation may be private. The Private sector is protected in the wording of the agreement. DOT money ... State Essential Rail ... public funds cannot go to private businesses. Representatives from business will be on the Board that sets the policies, but it needs to be a Public Entity. Finances: - operating would get rents and money - Capital Fund established (bridges) - Pay back private partners - Yelm/Roy can enter into a joint agreement (legal) It was noted that the State Department of Transportation is interested in continuing the line, and Burlington Northern knows they want the line to continue service. Point of Information: Thirty percent of railroads are operated by short-lines, rather than first class. There is a movement towards the resurgence of rail because the highway capacity is diminishing. Frank Miles noted that any shipments they could get off the highways would be tremendous for their firm. The potential for commuter use was discussed. The possibility of the military personnel living in the area commuting to Fort Lewis by rail was discussed. Ken Garmann stated, "this committee was on the cutting edge of the railroad movement." Charlie Burnham—negotiations: • organization set-up • business plan - how will work - revenue forecast • Some ideas for negotiations: - try to get them to donate whole thing - establish value ($18-$20,000 Lakewood to Roy ... approximately $18,000 a mile) - salvage value: $10— 12,000 per mile; ties are in good condition - bridge of Nisqually a bit of a challenge - Salvage estimate= $250,000 rails and ties - It is a fairly good line. Page 9-.Yelm to Lakewood Shortline Committee, October 6, 1998 The committee discussed financial.support for staffing. The first financial support came from 1/3 —Port of Olympia; 1/3 —Prairie Development Company; 1/3 -City of Yelm. A discussion was held regarding the second portion coming from: '/a -Miles; 1/4 ., Wilcox; '/a - City and '/a - Port of Olympia. Charlie Burnham will put together a scope of the project's requirements/expenses, and give it to Ken Garmann. Joel Derefield indicated that after the figures are formulated he would take it to the City Council to see what part they would be able to fund. He would need to meet with the Roy City attorney. Ken Garmann reported that Mayor Wolf wanted to keep the avenue open for future participation between the two cities, if Roy was unable to participate at this time. The development of future sidings was discussed. Branch lines with development potentials are very valuable, particularly as trucks get tied up on the freeways more and more. A discussion was held regarding the land available in Yelm's industrial zone. The landowners agreed to $1.00 per foot 12/24 months ago. Ken Garmann reported the Public Works square footage was appraised at $1.50 per square foot. Recent appraisals were discussed. Barrie Wilcox and Frank Miles both they appreciated the Chamber's role in facilitating the committee. They would like to keep the process the same. An attempt will be made to have the attorney's meet prior to the next committee session. A package will be put together for Miles Sand & Gravel and Wilcox Farm's owners' review. In closing the committee talked about the benefit of being able to end the trips (make changes) in the Dock Street yard in Tacoma. An attempt will be made to try and negotiate the possibility. It was noted a lot depends on who your operator is. The Railroad is not going to scrap the line ... that is not going to happen. At a future point another letter writing campaign will be launched.. Next meeting: Friday, October 16, 1998, 1:00 p.m., Prairie Hotel Conference Room. Chairman Joe Williams adjourned the meeting at 3:30 p.m. ce is Jenkins, o mittee Secretary 13iJ THE WASHINGTON ASSOCIATION OF RAIL PASSENGERS presents A TECHNICAL CONFERENCE ON PACIFIC NORTHWEST RAIL NETWORK DEVELOPMENT: A PRIVATE SECTOR APPROACH University Plaza Hotel 400 N.E. 45" Street Seattle, Washington 98105 15 October 1998 8:00 AM Registration and Refreshments 8:20 AM Welcome Tony Trifiletti, Washington Association of Rail Passengers 8:25 AM Introduction of Keynote Speaker Chuck Mott, Washington Association of Rail Passengers &Keynote Speaker J. Mitchell, Burlington Northern Santa Fe Railway cific Northwest Rail Needs airman: Lloyd Flem, Washington Association of Rail Passengers Lil Capacity Requirements y Stephens, Burlington Northern Santa Fe Railway Plans and Impacts of State Program Ken Uznanski, Washington State Department of Transportation Transit and Facility Needs David Beal, Sound Transit Demographic Growth in the Cascadia Corridor Bruce Agnew, Discovery Institute Bruce Chapman, Discovery Institute F � e 1 :30AM scadia Corridor Development Chairman: Michele Gransgaard, Center for Eco-tourism ortheast Corridor Analogy Tony Trifiletti, Washington Association of Rail Passengers 'kkidership and Facilities Kurt Laird, Amtrak West tCom aseadia Corridor Development Needs White, Transit Safety Management HDR Studies of the Corridor Dale Muellerleile, HDR Engineering Noon Lunch: Wallingford Room Luncheon Speakers ,.-ATister Sawers, Bank of America Capital Markets et Micolini, Bank of America Capital Markets 1:30 PM Rail-Port Cargo Interfaces Chairman: J. Craig Thorpe, Washington Association of Rail Passengers Duwamish Studies Mike Mariano, Transystems lqo- Edward Switaj, City of Seattle ort of Tacoma Rail Infrastructure Needs . . Paul Chilcote, Port of Tacoma _, au ort of Grays Harbor Leonard Barnes, Port of Grays Harbor Puget Sound & Pacific Short Line Tom Foster, Puget Sound & Pacific Railway 3:00 PM Financing Mechanisms and Requirements Chairman: Ken Uznanski, Washington State Department of Transportation 1�Public-Private Partnerships Bob Cowan, Washington State Department of Transportation Alameda Corridor Financing Sherilyn Anderson, Paine Webber Hanford Project Site Development Dick Thompson, Port of Benton Ben Bennett, Port of Benton Overall Financing Mechanisms Hal Cooper, Transystems Corp. 4:30 PM Conference Summary ' Chuck Mott, Washington Association of Rail Passengers . 1. x � • � � E F� � 3 4 `v< AccessYOM .Duwamish rr F�S?yzt� tZie'SeattZeA�ea October 15, 199$ u Passenger R41 10 Y g f Qn- , Ed s3a, Manager SeaTrans E a �� 1VLke 1'4�arlanQ RVP, Tra»Sysfems �� , -� , �� s eP c ve- t� P �- —�- � Un�i�rsi , 1 gg Vas ing 6, N T?Ad�4 STEAK s ' x i,r a`rrcr��/r fi :b _,.w..�.. �.r �� e in P,eo l �d Goods lOZo�iri yin the North/Duwainish Industpial Area _ A"A QWccess Duwam�sh -, 1 �ackgrQund and F1ndings Mgno • 5 df-u and Ne ?v Directions Swzta� ` , .� € Vof - .. • ,. ponsars- 04i3Of S'eattlelPo t of Seattle at POWARO ,-ice l v r: wxi• T V its! AGO F +.I 1 t What is,Access T3uwamish about (' • Y Enhancrn C`onnectxonslo the Idl. Reducing Ciflicts i • fTinprovng Safety Y • �Addres§ung r w_ FosteringEononiic Vitality r S !>Ys�l'�E�AY'�,� t �. dH^:. N'�ya.ts m' .� i t 5^r`" �➢�, -% P w..«.a.w...a.e.u...✓_.exs ..�..s,....3nw��+.+s.re.L.�'n:W:.w.v..neF�lw.�.m�r'Wea-H wc.y'�"6w�2.awL" �u.ta.Cm i<i."-'�. { K� drivers- to Access I)uv�a>lriish r £ 47. 1 tans ortati ncon Access ` 'Industnal/Manuf in'g%Legacy :. dicu,ktion" A, E)lolving 6,ses� Safety — 'Regional..Focus Train/Rail Crossings Statewide Realities ,� Intermodal Hubs/ Capital Projects F 'Centers�,. Deferred Mantenance r� E 2 ( - 1 3 Understanding the problem and Defining Solution Sets �- A Collabo�r�ttve Proees lcapitA Solutions y .. Opddti6nal Improvements W" nal Inst �tutieges ..,. a Chan r , L 9 S S r. wn...-ec�t..udwvw....buw .wue.Yivaz�nxauuw�w.•.a•.wv.hwuK.a.r..w.s_.... �.x.«aa,4:,.�'t>�' ..wcw....w.£:.&�v:a f Y.. T Functional Areas of rveus : and'Intermdat Highways and Arber>< Spokane Street a s . Mainline Rail , � 8 Off MainlineRail ," • ,UpperLevel/Viaduct : Port Connections Surface Level - ( A staging Area Access—'-- — 'Arterial Systemi 4 Passenger Rail Stadiums5st ,• Accommodation Freeways ; Truck � Transit � � — TSM T S banal Cobrdmattor ' _r x Z. "2 �' � :a}•� Signage " '} f '13„`3 �'� Dnver Information s� Rael Crossing Signal 1 TQA/J y f t t S� Y �4O & 4LTM.N;7A 3 ._ a... k Access .ww,-a ish guided by Four (4) Tra isportatiOn Strategies u � Separ`ate Modes"-Conflict Management i " �'" �_ • Improve CirculatiCongestzon " anagenent •t Enhance aperauons Keep Things Moving Restore Infrastructure Protect Investments g. E 4 l 3 ` .__— � "�.• .try 5 /��. "'. Economic 1VVtessage of.Access Duwamish { ! • Basic Factor Realities and masks " �'�._."Gridlock North Duv ax ish, an Vltat"ity '` Econ+omic.Enguie for 4 the State y 3g y > :;Competitiveness PartCompetition and Growth x _; Points 4 Coordination.Ai dd l. olla, oration o " 5 Access luuwamish So Was Outreach • a Stakehold� Inde-dews Community., gs Open Houses • 'Bu' siness Group Y Mtgs. : u • Business Surveys ' on Street Trucking . , M. Surveys p • 3Focused Group h,. a..} x � , s We Heard font the `ublic CougestaonLtvelrhoods I7nderutilized Routes Threatened .Make Better Ilse of What we Have:' . Safety Laes and�Turns Construction�- Port Term als ours unrelzabilaty too Limited anlae7�orfx _ Canvenaence Fctcrlrnes � "` Delays- Toa ommm� p • Regulations -Ineffective Anticipaii rY' 1Veed PrQactrve Planntng for t„ • Cotrtmuters W Seattle Future , s Expand Focus 0 ator�ed kTravel 'Souththe 5 ieav' � „ �TtV..' 4tr.'�aYEP4/XS $, •�,....w...,.�...��z„...n.. -�e✓ z� �a ��,�Z�,°�5:? �•�� T�'.1a.X dv.,...v?�`�� x�L�coo��a J� r.�°a �ro�F'� �„ � ✓.r 5 r t ` e Heardif /777777 fr� m the Truckers • Poor Pal-lc t • E�erit Traffic Headaches • 'Lack of Key Left Turns, eg , S 1 olgatel4th • Potential�1kelT'ruck�A►cciclents�: �. �� • Terminal Gate Delays � � ,� , , E � d k fi e-D efine&a "Plan" for FreghtMobYhty the First but -BSc-+ening Process Sponsorship Public Acceptance a. �easabllrty CC. ,.. � • relative Effectiveness � :; � :... GoalAcfite'vement • Program Scope tAD) - x V5, 6 i' -- Second,Cut_-Criteria/ Screening Led /to, onsensus Improvemeut 'P'rograim' SecondCut,C rteria: Screenin` Process r , g x a' Capital C ost 70+ Y y Traffic Implications 30+ n Rail Implications "the 15°' � E �° S'E S �Sa _ Environmental � � e Z S i 1 {mai'n' g P x � k ^r "' ✓ Impler, .entatzon Tune : .w»,•✓ 2 . 9 s ir t ....��..�......�a.....F..,. .�.x«.,.:,...�.....:o-«..�:�.r..�.:.�,�so�s�ts:.a...«.�s.............a«�...,...,�............�.......,...��..,�is�»,..,... d��.�✓." xw,a � 5 Near Term�rovemen 4 y 4 3 r m._I ^e q w f t� Defined and IViapped . �� TImrnedie anti AdditionalSystem Enhancements�s3s-�so� ` z �IyIAC I�gh Pnorrty � a' SpokaneStreet'{$s9m) Intersection Improvements , E Marginal Way ts22j SeparatedDike: aeihfies ' $... SR 519,Phase 1 tsiovmj'' `< Pavement Rehab�htation' x z Driver,Infolfsi ria e ` Incident lVlanagement M% Rail Aceess s rSlgnaIS 5 7 7,117, 7771'- 063 l i` SSS and t entail ,/t A cess Duwamish rs getting people together on common Ir �'� ��strategies-and priorities to �, tnf�uencelsecure funding for serving i mobility needsNbf the project urea ,Status sand new directions... ^ '�✓W' "gyp P.....«....«.u.....ru.,.».�.<...,,.,....•...........:_...ra..a.... ..o-aa � .,......�u...... E .� �'��+a!'�T/'l��✓��/�s��.:_ ^ wyt......�N.w.,.✓".«vL'".�mv�.�......' Y yT,� � f'sN.'2 tk O N 0 M.l T A N S>.9 9 `�l ect Goals ' Identifyhe Full Range of � ' Trans o taton Needs I Get stakeholders to Agree on a �rlorYtles f E ffi '4 3 ' De�elop� unding Partnerships �" t b .J � sir �'.-".�' E ��•t�� r �� 8 f w^TMt^:^^'r�r'�'m•' "^" „"rvx"' + ^r +,tt•-Esc«-+�• L wt i Project l�espo� dedo Need fore �ncrease�l;Revenues to �cidress Nees _ SEATRAN Revenue History loss f I M[Mo- 3 �; '5842 Requl[ed Levei to lAamtnin Infmstru ctuie b Mnke,T-a rgeted,lmprovements o Fm IL F41, F1 ME pt a a tr £ it0 { ♦ � 1 t1a l t w raet un law lett utt un lltt ,ass Isaa rsn ran 1991 uw vat vw rnr r �� p to�tr1 eiey 1 J ��,�� mak, � 'F a o w spar w�7 w.a✓4=r o y MajorsPraject ar�nponents are FASTS �� CorrYdor� in Beattie FST corridor �'- �,1 r Partnershi of Local, Port . 'tate'd dl"'."", Railroad gists �"'1 .....1 2 $trs" 3 � � t Package of Railroad Grade Separation and P(go Access Protects from Ta .a L ¢ S S EV Brett , , �i` C o," �-� l �Wa,3i d`'3' _¢'g �,� 4r • u-c 7 �,-N s .9`� _<...,,..,'.�,�.� .mss. '��s ,..:..�....e.�.,6L>..r-�.,w?,., F � ...•k, :<r':. �� 9 i �.. Sp®kane St�ree viaduct $5911 �; R k •`` Upgrade Existing structure E� � r Seismlc�' i oad Strengthening � 3 • �u�l� 29 Fo�►t Parallel��aduct tarp `�� Allow _ t Adequate Lane Widths � r � � � Shoulders Acceleration and Deceie&d Lanes 3 ¢ -`-` • � Phase I Under�Constructican � � �"�� y Existing RX Uracluct lmprovements�.`s e k1l T, € East Marginalay Ramps $22ND, Southbound,Om Ramp and Northbound off Ram Crossing East 1VIarginal Way f , t �a Crade-Separ�tion;hve�r��th � ITn on Pacif jhrbor,island. Lead Rail Track t y 3 � A' '�oJecAm PIVI ki tXT1b ?- �y IN i 10 r 7 3 < S1Z 519 Inte14, rmOdsal Access � $1091lZ� 4 ` s Grade Separates SR 519 (Royal'BroUE, f V�ay) from the BNSF 1dlainline Tracks Phase I Constructs Structure at Atlanik istreet 5 R S Direct Eastbound Connection toll 9a and,-,"l 5 i I yyf <d� wed E. • Project includes Roadway T 'O`vements to E Terminal �e under Design by WSDfJTl- Se .. Oth`er Trrro�eents Status East Margi 'al W Truck Emphasis,Route/ -Bikev ay ; t • Signage Impr®vements E 2"'-... W7ay"A"CIlity z �. • Signal I�npx° ►ve�n'ents; i.e.9 lSt South --M3 E �- Paving.. t t s 3 y s k ix —52 11 } �at's Iot in the Area? \ fort Terminal E ns�on in west Seattle and Harbor Is1 nd (T 5 and T 18} New Baseball and lelew Football Stadiums/ '` �� xhYbitio 'HA ' Ferry 'TeririinallService,Expansivn `a F • Ing Street Station Improvements r • Sa�und Transit/Light and Commuter z v ,d, i ~. 4� �. � X i4. F✓ X` 5umy - a �.,,,:,., E* �*s3 A �✓ � � ~��' sem' a� S -•`3'"/s ,'+ G 4 N D 1. 4 fA N...IT�A.a.Fx':H h rs..a.�w..wvw.wam...n�..u..«..awl'..`.:`.s:+...�C.w=ataa'� wmwu:.w.eco�µ9�a-a' .e<.w......F...ww✓wiS.C.+�h Ssaz�imtiw�....m-,.¢.ws�.Mru..a..vx.«�.«..0 Y..�.z.v...,e. h� a 3 Funding Strategies • IFAT Coridor Partnership`Goal :. : Z5% Federal Funding 3' 10% Lead Agency/Loca1 Funding 3€ 10% Port Fundin Yy g %R, Rib' dT 50% State�'unding: f s v 12 K tate and ng 0 tins; e E Y• R+ gularState°Fundingppropriat ©ns f: u - y _ • Pass through Federal Funds; Lev National f" highway ystem Funding k' 7 E �� • Refei'endtum, ,, T im„�r a gp M � r r �� ✓ aY'' rte,.,a€ .� � � w„ •,,,, a TEA-21, �Pr®mise df TEA 21 �s Increased Fund�ug \ f6r, Freig t 1lZobility t Increases.Fund ng to Wash- '51 ington,by 3$%R National Trade,Corridors(I S/FAST%SR395 ; •' °�ut . . Bi 't increases go,Directly WSDQT, or into Programs that Can Note; d the Fast Corridor Type Pr��ects! gq MR 13 7T' w r .. Wh"di Ar j Funding t ptions `s Patnershipslinclud�ng Railroads`and p'ravate Sector a d State 7 = Increased Local Funding r 77, } �-* Federal Discretionary Programs National Trade Corridors $'7i(1M 0 Federal Set A�Side (Demo Fua�ds}' ! E x s �- $16 m Ilion or�Seattle'TAST Corridc� - $ as,, een Secured egionalyTEA 21�Funds � � �P�� t s �� T�w►S�F►vrs �' r ~ <� Evaluatang;future proJects addtlonl grade separations to the south (Lander Holgate) connections from SR 519 Alaskan to Way Viaduct possible grade crossing at""Broak,Street ` s • Identifying Benefit to all,modes, mclud�n, ra t sryit(%ing operations,rail speeds 14 d —777-7 .��.ccess�Duwamsh-- R",I lemefidhg EAST in the Seattle area; 4., d ORE! "- /rgetfingpeo le to ether on comnwn strategies and pr°torittes to tofZuence/ secure funding,for serv��a mobila needs " •f } 3 t gg �° <5 `�s 2 zz 3g 15 r yP # PRIVATE SECTOR FINANCING of the RAILROAD INFRASTRUCTURE DEVELOPMENT in the STATE OF WASHINGTON AND THE PACIFIC NORTHWEST Prepared by Hal B. H. Cooper, Jr., Ph.D. Senior Project Engineer Transystems Corporation 11715 N.E. 145th Street Kirkland, Washington 98034 for Presentation to the Technical Conference on the PACIFIC NORTHWEST RAIL NETWORK DEVELOPMENT: A PRIVATE SECTOR APPROACH Sponsored by the Washington Association.of Rail Passengers University Plaza Hotel Seattle, Washington October 15, 1998 b , A13STRACT The State of Washington has been and is a real leader in the devel- opment of rail transportation infrastructure for freight and passenger transport. The State of Washington is now attempting to deal with dramatic increases in transportation demands and needs with limited budgetary financial resources. The limitations in public sector funds are mandating that other- financial resources and mechanisms be consid- ered, including from the private sector. The present Referendum 49 on the November 1998 ballot may provide the starting point for private sec- tor financing mechanisms through its use of bonded debt infrastructure funding. However, the Referendum 49 funds will be primarily for roadway improvement projects and not for railroad construction, although the con- struction of at least some grade separation projects is provided for. Railroad infrastructure financing through the private sector mech- anisms may be more easily attainable than roadway financing as the res- ult of the rights-of-way already being privately owned and operated. It is possible that long term low interest bonds and/or loans can be arranged for the financing of railroad infrastructure projects with the assistance of commercial or investment banks. These private sector debt or equity financing mechanisms may become very suitable in the future to fund those railroad infrastructure projects demonstrating positive rates-of- return-on-investment, sufficiently rapid payout periods, and governable risk levels. The ability to provide governmental guarantees or sufficient assets collateralization enhances the attractiveness of private sector financing of freight and passenger transportation projects. The present paper provides for a series of possible railway infrast- ructure project financings in the State of Washington through the mechan- isms and auspices of the private sector. The two main projects which may be amenable to private sector financings include portions of ther new Cascadia Corridor line from Vancouver to Eugene to emphasize passengers and the Cross-Cascades Corridor between Seattle and Spokane for freight. There are several other projects which may be amenable for the private sector financing initiatives to include the proposed Cascade Foothills Corr.. idor, the Eastside commuter-passenger corridor, the proposed Eastside light rail transit project, and a proposed intercity rail electrification net- work. The estimated capital cost of these candidate private sector rail project financing is $16.5 billion over a 1 ,560 route mile distance. 2 INTRODUCTION The State of Washington has become a real leader in transportation policy development in the United States within the past ten years. The State of Washington has led the way in the development and implementat- ion of improved rail passenger service in the Pacific Northwest Corridor within the past five years(Ref. 1 ). No small part of the credit in achieving this level of success in improving rail passenger service can be given to the continuing efforts of the Washington Association of Rail Passengers. The Washington Association of Rail Passengers feels that one part of this continuing leadership responsibility lies in hosting this conference .to help define the future role of the private sector in financing railroad transport— ation infrastructure projects for moving freight and passengers. The State of Washington has also been leading in transportation in somewhat less desirable ways within the past ten years. The level' of its population has increased from 5.0 million in 1990 to 5.7 million today, and is expected to reach 6.0 million by 2000 with the continuing economic growth, as shown in Figure 1. A byproduct of this population increase has been an even more rapid increase in personal trips within the State from 170 million in 1990 to 215 million in 1998. The population has been incr- easing at a rate of 1 .5 percent per year while the traffic level has been increasing at a rate of 3.0 percent per year in the same period. The rate of traffic growth has been double that of population increase throughout the State, and has been even greater in the Puget Sound area. . The Puget Sound area now is a leader in both freight and.passenger traffic congestion in ways which are most undesirable for its economy and lifestyle. The Puget Sound area has now become the fourth most .congested urban region in terms of traffic delays per .capita, which has been increasing at a rate of nearly 9.0 percent per year. The passage of the Regional Transit Initiative on the 1996 election ballot represents one effort by the Puget Sound area to begin to address urban congestion. In addition, the Puget Sound area has also been experiencing severe increasing problems with port, road and rail congestion in the main port areas of Seattle and Tacoma. These congestion problems are threatening to erase its heretofore lower cargo transit times -by rail to the Midwest. The recent efforts to establish'the 70 mile long FAST Corridor,from Ever- ett to. Tacoma is a parallel attempt to reduce freight traffic congestion. Figure 1 ` POPULATION GROWTH " TRAFFIC INCREASE IN THE _ ATE . OF WASHINGTON A. Population Increase EXPECTED TRENDS IN DEMOGRAPHIC POPULATION T14CREASE IN THE STATE OF WASHINGTON 1 1` 1, 1 i, Cascadia Corridor all 0 �1 G G 0 9 g 7 State of t•:ashington 0 6 m _ a a 0 4 3 0 E- 0 1990 1995 2000 2005 2010 2015 2020 2025 2030 Calendar Year B. Transport Increase ESTIMATED INCREASES IN INTERCITY PASSENGEK YRleS.IN THE STATE OF WASHINGTON. 1960-2020. m Estimates Based on Information Supplied by the State of Washington, Department 30( of Transportation, Olympia, Washington. leased on Trip Lengths of Greater than F � 50 Miles in Length on a One Way Basis. 0 W v 250 Total State . 0 Maximum /- ♦f� 200 / ♦ Eastern �,hingtn1` F 150 `♦ Minimum N i m ' ♦♦ Western Washington 100 J J 50 J e O 1990 2000 2010 2020 1960 1970 1980 Calendar Year r _ 4 BACKGROUND There are several constraints which will limit the ability of the Puget Sound area and the State of Washington to solve their freight.and passenger transportation if the present trends continue without changes. The most serious problem involves the lack of sufficient funding to meet all of the expected transportation needs, which is partially a result of the present gasoline tax structure. The existing per gallon tax on gasoline is fixed and does not rise with inflation, and is falling behind each year in being unable to meet the needed roadway construction and maintenance. A recent estimate is that the State of Washington could even face the need to spend up to $125 billion in the next 30 years for an all-road option. The Referendum 49 measure on the November 1998 ballot provides a means for $1 .9 billion in transportation improvements to be built over six years to be amortized over up to 30_years. Most of these transportation improvements are for roadway improvements, but there are some grade separations to be built to enhance freight traffic flows. This ballot init- iative unwittingly .has set the stage for private sector participation in transportation infrastructure financing by establishing long term debt repayment as a suitable funding mechanism. The long term private sector financing mechanism is especially suitable for funding of rail projects. The need to reduce congestion is a primary goal of transportation infrastructure financing, as shown in Figure 2(Ref. 2). Without major efforts to achieve remediation, average freeway travel speeds will be reduced by 50 percent over the next 20 years. An additional problem is that roadway maintenance costs are also increasing, especially as the result of increasing truck weight Limits. The gradual increase in truck weight limits will result in severely increased road maintenance costs in the future with increased truck traffic, as noted in Table 1.(Ref. 3). In addition, the parallel costs of roadway construction and mainte- nance are much greater than for railways based on equivalent distances and capacities, as shown in Table 2. A double track railway line will occ upy less than 50 feet of right-of-way and be able to transport as many tons of cargo and number of passengers as a 8 to 12 lane freeway with a 150 foot width. Furthermore, the railroad line can be electrified so as to eliminate the need to burn imported petroleum as an energy source and also prevent direct emissions of air pollutants along the corridors(Ref. 4). Figure 2 PROJECTED INCREASES I ,IRBAN TRAFFIC CONGESTION HIGHWAY MAINTENANCE NEED A. Traffic Congestion ESTIMATED EFFECT OF IIICREASIIIG TRAFFIC CONrESTION ON HOTORIST TIIJE DELAYS IN HASIIIIIGTON 4 ErLlm.il,:u hared on Illf", dLloll SU supplied Iry Lho State nL Hash- . a Ing Lon Department o[ TrausporL- o atlon; Olympia, Washington, 1990. r the Puget Sound Counties. 0 7 0 3 40 0 m N , C6 �1�a •' !._ d .' a 2 _ + 3 0 �. 4 B •�� W U b U n� Avera a Vehicl= c +� e 20 > Speed � d b E E, Traffic Congestion Delay Time '� .>c b ,l ° l 0 10 19G0 1970 1900 1990 2000 2010 2020 l:a luu.lnt t'r.au B . Highway Maintenance ESTIMATED IMPACT OF ALLOWABLE TRUCK WEIGHT LIMITS ON ANNUAL ROADWAY MAINTENANCE COSTS FROM BLAINE TO VANCOUVER, WASHINGTON ALONC THE INTERSTATE 5 WESTERN WASHINGTON CORRIDOR 80 m 130,000 Lb Limit-Canada d ,'n 70 ------- 105,000 Lb Limit-NAFTA a / 0 80,000 Lb Limit-Present 0 c 60C- 50C- 40C_ 0 /• 50 / I �. G u 40 !'. C.. U i n j 30C- >' 0>. 200 ra A 0 c 10 moi' m 0 c c 1990 1995 2000 2005 2010 2015 2020 Calendar Year Table I 6 ESTIMATED INCREASES 1N ROADWAY MAINTENANCE COSq vNITH TRUCK WEIGHT LIMITS Weight Allowable Automobile Maintenance Limit Truck Weight Maintenance Cost Burden Requirement Pounds Equivalents �/Gross Ton-Mile Existing 80, 000 9, 6.00 8 . 22 NAFTA 105 , 000 20, 000 17 . 10 Canada 130, 000 41 , 600 35 . 36 Mexico 180, 000 173 , 100 153 . 87 Table 2 COMPARATIVE ESTIMATES OF THE ECONOMIC COSTS AND THROUGHPUT RATES FOR INTERSTATE HIGHWAYS AND RAILROAD OPERATIONS IN WESTERN WASHINGTON Overall Specific Units Interstate Railroad Category Factor Employed Freeway Line Economic Capital Cost Million $/Mile 150 - 200 15 - 25 Operating Cost $/Mile/Year 150, 000-250 , 000 25 , 00.0-50, 000 Capacity Passengers People/Day 290 , 000 460 , 000 Freight Tons/Day 720, 000 1 , 200, 000 l 7 FINANCING There is growing recognition of the need to develop an alternative means for the financing 'of transportation infrastructure projects. There have been innovative efforts by the State of Washington to develop mech- anisms for public-private partnerships to finance transportation infrast- ructure projects. ' Unfortunately, these efforts to date have focused prim- arily on the construction- of toll roads and bridges in existing highway cor- ridors where there is severe congestion. The public at large has been res= istant to the idea of toll road construction in the State of Washington on the publically-owned highway network to date. A very different situation exists with railroads where the right-of- way is already owned by private companies. In this case, the passenger merely pays for a ticket to ride while the freight pays a unit hauling fee. Private sector .financing may therefore be much more amenable to railway infrastructure construction than is roadway construction because of the already private sector ownership ,as well as the generally lower capital costs on a per mile and per capacity basis. The major economic factors which govern the ability to provide the private sector financing of railway infrastructure construction projects include the initial capital cost, the operating and maintenance costs, the expected revenue generation, and the risks associated with each. The pro- ject financial viability can then be evaluated in terms of the net present worth, the internal rate of return on investment, and the project payout period. A particularly important factor in determining the future econo- mic viability of railway infrastructure projects is the traffic growth rate as it impacts the ability to repay debt or bond financing instruments, as shown in Figure 3 for proposed. national railroad electrification(Ref. 4). It is not generally appreciated but railway infrastructure projects are frequently profitmaking for passenger transport as well as for freight. As examples, the Japanese Shinkansen high speed rail passenger project from Tokyo to Osaka showed an internal rate of return on investment of 23 percent per year with a payout period of 11 years. The French TGV high speed passenger train project from Paris to Lyon showed a rate of return on investment of 17 percent per year and paid off its loans within 9 years as shown in Table 3. Similar levels of profitability can be displayed by future rail projects in Washington, as shown in Table 4(Refs. 5,5,7). Figure 3 g EFFECT OF FINANCI METHOD AND FREIGHT TRAFF, ..DENSITY ON THE PROJECT PAYOUT PERIOD AND PATE OF RETURN ON INVESTMENT FOR A PROPOSED NATIONAL RAILROAD ELECTRIFICATION NETWORK-26 , 000 MILES . A. Project Payout Period 25 _ „•,•••••...;;;;Conventional Private Financing Public Utility Revenue Bonds 2 _ .s-W w Federal 4R-511 Loan - Federal Low Interest Loan L ♦, saw ♦♦ T —10 an IN QJ 6 _ 5 _ 0 0 10 20 30 40 50 60 70 Su Freight Traffic Density - Million Gross Tons/Year B. Rate of Return on Investment 30 . I I 1 1--- s 25 , _- ,0S �I ,1 A 20 , G! a, r m V r L ° r d 15 r C � r v E E N cu r C 10 010 its l Federal Low Interest Loan sol 5 :: ' Federal 4R-511 Loan c f/ xl�i Public Utility Revenue Bond Conventional Private Financing J / 0 0 10 20 30 40 50 60 70 rreicrlit Tr•arfic Dr:nslly - Million Gras,.; Tom../Year ESTIMATED FINANCIAL FORMANCE OF ALTERNATIVE 1' 4 SPEED RAIL PROJECTS Irttemal External Payout HIGH SPEED SPECIFIC INTERCITY Rate of Retum Rate of Retum Period TRAIN CORRIDOR %I Year %1 Yar Year Japanese Tokyo-Osaka 23 28- 11 Shinkansen French Paris-Lyon 17 23 9 TGV Paris-Tours 12 15 13 Table 4 EXPECTED FINANCIAL PERFORMANCE OF FUTURE WASHINGTON RAIL PROJECTS RETURN ON PAYOUT TRANSPORTATION INVESTMENT PERIOD PROJECT %PER YEAR YEARS Rail Freight Service 15-20 10-15 Rail Passenger Service 5-10 15-20 Sea-Tac Third Runway Unknown Unknown 10 FRENCH TGV There are two projects which can be used as guideposts for future railroad infrastructure financing in the State of Washington. These two projects are the construction of. the French TGV high speed rail line from Paris to Lyon in France, and the Alameda Corridor project now being built in southern California. The French TGV:is an example of a future passen- ger transport project while the Alameda Corridor project is an example of a freight transport project. These two projects will be described in the following paragraphs of this paper. A third project employing both mixed freight and passenger serivice on the .Northeast Corridor has already been descibed by Mr. Anthony Trifiletti(Ref. 8). The French, TGV high speed rail passenger line runs for on the 265 mile route from Paris to Lyon in southeastern France, as shown in Figure 4. The railroad line was built as a completely new facility as the result of its passenger traffic expanding beyond the capacity of the existing service. An additional reason that the French TGV was built by electrifi- cation was to reduce France's previous overdependence on oil imports so that nuclear energy could be used as the propulsion source. The ridership was able to.be expanded considerably by being able to penetrate the air and auto travel markets in this heavily travelled corridor, as shown in Figure 5. In addition, there were a number of additional trips which would not have otherwise been taken without the high speed train which are called discretionary, and amount to between 17 and 3 5 percent of the total. As a result, the railroad captures up to 85 percent of the combined air and rail market between the two cities with the onset of the TGV. The French TGV has shown a considerable increase in passenger traf fic revenue generation since it began operation in. 1981. The revenues in- creased from $230 million per year in 1981 to nearly $800 million in the 1990 year according to earlier estimates. At the same time, the expenses increase only from $250 million per year in 1981 to $450 million per year in 1990, according to the estimates, as shown in Figure 6, that have been exceeded by the actual performance. The project infrastructure was fin- anced by the issuance of bonds guaranteed by.the French National .Railway in the amount of $1 .1 billion with an approximately 8.0 percent per year interest rate with a 20 year repayment period that were repaid in an 11 year period. The $500 million rolling stock was a direct purchase item by the French government from the equipment suppliers. Figure 4 LOCATION OF THE CONVENTIONAL RAILROAD LINE FROM TOURS TO BORDEAUX IN FRANCE. ENGLAND nglish Channel Tinne_ B ussels BELGIUM Lille Charles de Gaulle $sy irport GERMANY Paris s M z asb rg Le Mans Airpor Nancy Rennes Macon Tours Mulhous Dijon Base Nantes FRANCE SWITZERLAND Geneva Lyon ry Bordeaux Valence ITALY Avignon ax Nice To ouse Montpellier Bayon arseille Beziers SPAIN Perpignan 12 r Figv.re 5 i PROJECTED INC:z' ES IN PASSENGER TRAFFIC BETWEEN r�,:IS AND LYON, FRANCE 15 w AIR X10 AUTO TGV U W OTHER RAIL 0 1975 1980 1985 1990 CALENDAR YEAR ESTIMATED RIDERSHIP SOURCE INCREASES ON THE TGV LINE FROM PARIS TO LYON 60 50 TOTAL RIDERSHIP }, DISCRE- TIONARY a 40 0 W a ROMAIR 0 0 30 20 FROM AUTOS 10 FROM OTHER RAIL 0 I 1980 1985 1990 CALENDAR YEAR Figure 6 ESTIMATED INCOME AND EXPENSE FOR TIE TGV LINE FROb9 PARIS TO LYON 800 Data obtained from Ref. 28. 1981 DOLLARS 700 600 REVENUE INCOME c:) 500 r-, 400 0 •r��■ H .��•• EXPENSE 0 300 oou 200 100 AViORTI ZATION 0 1980 . 1985 1990 CALENDAR YEAR • w . 14 ALAMEDA CORRIDOR The Alameda Corridor project in southern California is -intended for freight transport from the ports at Long Beach and Los Angeles over the 22 mile route to downtown Los Angeles, as shown in Figure 7(Refs. 9,10). The Alameda Corridor consists of locating railroad tracks in the center median of the Alameda Street from:the port area to the railroad yards at the southeast part of the downtown of Los Angeles. The Alameda Corridor is intended to eliminate up to 200 rail-road grade crossings so that train movements do not interfere with street traffic. The Alameda Corridor has four roadway lanes on the west side of the railroad tracks for through truck movements and two lanes on the east side for industrial access. The main part of the Alameda Condor project is a new 15 mile long trench in which the railroad tracks are located, as illustrated in Figure .8. This trench is 50 feet wide and 30 feet deep for the location of the two railroad tracks. The elimination of grade crossings will. make it possible. for freight trains to travel the route in as little as one hour as compared to the present four hours with minimal safety hazards. , The numbers of trains passing along the Alameda Corridor is expected to increase from 50 per day in 2002 to as many as 150 per day by 2020 with the progressive increase in containerized and bulk cargo traffic passing through the ports. The estimated capital cost of the direct construction of the Alameda Corridor is approximately $1 .9 billion. The estimated capital cost break- down for the Alameda Corridor project is presented in- Table 5, which has a listing of port, local and state funds plus the port bonds. There is also an additional $300 million in interim construction interest which will actually be absorbed by the Federal loan of a $400 million face value. The Federal loan then in effect becomes a $700 million loan for the period. The estimated $600 million in port bonds to be issued by Long Beach and Los Angeles are on expected terms of 6 to 7 percent per year interest over a 20 year repayment period. The Federal loan is based on the 30 year U.S. Treasury bond rate at 7 to 8 percent per year, which has recently been reduced with the decline in interest rates. The financing for the project has a unit fee structure based on loaded and empty containers plus bulk cargo fees. Expected revenues for the project are expected to increase from $100 million in 2001 to $200 million in 2020, as shown in Figure 9. The rate of return on investment is expected to be 11 percent per year. Figure 7 i5 MAIN RAILROAD AND,_ AD FEATURES ALONG THE ALP,;__ _')A CORRIDOR ROUTE . OEM P HOLLYWOOD � r , An•- slog SP Mission ALHAMBRA SP neon Ear on Yard � an It Ho 11 yl.-,rood aawe AFrgym BNSF Hobart Rer Y rd Line. Santa Monica Freeway OS Pomona Fr NGEL East- Yard astYard UP NSF P San Die;o Freeway N� NSF Blue Line VERNO Long Beach reet-iay os Ange , INGLEWOOD tern.ti SOUTH i r aor t. entur� SP GATE eewa y Santa Ane Frei.-a} Gr?-tt Line ` SE • Freeway NORWALK ArtesiaRedondo TORRANCE Freeway Fre 7m-ray ?amongg • Rivee_ach LAKEKOOD Alameda Corridor CARSON Freeway San ri.el ardor r . Grade Separation Frees. Freeway already Completed UP Grade Separation ;ender Lpominquez Construction Yard Long TC`rF Yard— Grade Separation Proposed irport BNSF Major Rail Freight Yard Existing Railroad Line LONG San Digo BEACH ee ay '"'Transit Line in Operation "OO Transit Line under Construction Interstate Freeway Port of SAN Lon- PEDRO Beach Port of os Angeles Figure 8 . PROPOSED VERTICAL SECTION PROFTLE FOR THE ALAMEDA CORRIDOR PROJECT Depressed Railway Section Alameda Street Depressed Center Surface Alameda Street West Side Railway Trench Spur East Side Four Lanes Two Tracks Track Two Lanes Artesia Freeway to Washington Blvd. (15 Miles) At Grade Railway Section Alameda Street Center Surface Rail Alameda Street West Side Railroad Line Spur East Side Four Lanes Two Tracks Track Two Lanes Terminal Island to Artesia Freeway (7 .Miles) 17 i Table 5 CAPITAL EXPENSE REQUIREMENTS AND OPERATING FEATURES OF THE ALAMEDA CORRIDOR PROJECT UNDER ALTERNATIVE CONFIGURATIONS' SPECIFIC FUNDING BASE CASE DOUBLE TRACK DOUBLE TRACK PARAMETER SOURCE SINGLEEXIS TRACK SEPAIRATIONS TH NO WITH SEPARATIONS Capital Cost (Million $) Port Contributions 400.00 400.00 400.00 Port Revenue Bonds 0.0 600.0 600.0 State and Local Funds 0.0 143.0 143.0 MTA Contributions 0,0 0.0 350.0 Federal Funds 0.0 0.0 400.0 Total Expense 400.0 1,143.0 1,893.0 Unit cost(Million$/Mile) 18,2 52.0 86.0 Railroad Expense3 0.0 25.0 50.0 Railroad Features Number of Tracks 1 2 2 Grade Crossings 31 28 0 Grade Separations 7 10 39 Average Train Speed 20 35 40 (Mile/Hour) 150 Track Capacity 40 100 (Tralns/Day) 1 Transit Time(Hours) 4 2 Year Completed _ 2005 2001 Route Length(Miles) 22 22 22 Signaling system ABS CTC CTC ATC Notes: 1. Capital cost factors are.based.on 1995 constant dollars. 2. Abbreviations for signaling systems are as follows: ABS=Automatic Block Signals; ATC=Automatic Train Control; CTC=Centralized Traffic Control. 3. Estimated signalling and communication system cost to be paid for separately by the freight railroads. Figure: 9 PROJECTED INCREASES IN ANNUAL REVENUES AND DEBT SERVICE EXPENSES FOR CONTAINERIZED CARGO 35c- 3.5 %/Year Traffic Grovt''i Rate 1995 Constant Dollar Basis rrd 30 Container Service Fee a Coverage Service Fee. LO Ratio $/Container t� b 7 25 1.00 11 . 75 70 16 . 75 C , O Reven e Service_ Service Fee-1.00% CR Generation _ 20C Fee Coverage Ratio/100 0! to Net a Income 15 o( Contingency Reserve v Fund - C�i 10C_woo - a ' Port Revenue Bond Debt Service rr ' C 5 Z Federal Loan Interest Payments (Corridor Operation & Maintenance 2000 2005 2010 2015 2020 2025 , 2030 Calendar Year co 19 STATE NETWORK There will be major expenditure required for transportation infrast- ructure improvements within the next 20 to 25 years in the State of Wash ington. The recently appointed Transportation Task Force by Governor Gary Locke has identified as much as $125 billion worth of transportation infrastructure-related expenditures over this period, primarily for roads. The total railroad infrastructure-related expenditures during this period could become as much as $15 to 25 billion, or 15 to 20 percent(Ref. 11): The main Washington state railroad network has its main corridors in both. the north-south and east-west directions, as illustrated in Figure 10(Ref. 3). The major north-south route is the so-called "Cascadia Corri- dor" connecting Eugene, Oregon with Vancouver, British Columbia over a 450 mile route by way of Portland and Seattle. This route has already been receiving significant capital investments with the objective of dev- eloping a future high speed rail corridor on an incremental basis. It is planed to reduce travel times between Portland and Seattle or Vancouver and Seattle to two hours or less by the year 2010, as shown in Table 6. The plans for the western Washington or Cascadia Corridor are based largely on increased passenger service between cities and also in the fut- ure with commuter rail service. The plans for the eastern Washington or the Cross-Cascades Corridor are somewhat less developed and are more contingent on increased freight service instead of passengers. The estim- ated capital cost .of the western Washington corridor is $2.5 billion by the year 2010, as noted in Table 7(Ref. 12). The estimated capital cost of the eastern Washington or Cross-Cascades Corridor is $3.5 billion between Seattle and Spokane by way of the Stampede Pass route. .The total cost of constructing both corridors is approximately $6.0 billion by .the year. 2010. The above capital cost estimates are based on a continuing series of incremental improvements to achieve a gradual increase in train speeds and a progressive reduction in travel times. The expected improvements in order to achieve these travel improvements are listed in Table 8 for the respective routes. These improvements are based largely on enhancing the rail passenger service so as. to increase train speeds and to reduce travel times. These improvements will also achieve the increasesd in capacity required to expand rail freight service in the future with special concern for intermodal container and trailer movements to reduce roadway wear. rt-juiLU PRESENT AND FUTURE( ILROAD NETWORKS IN THE STf� OF WASHINGTON PRESS T TRACKCONE URA TTON OF THE HATH RATLROAD LINES ACROSS ASTERN WASHTNGTON �OVanco 13RTTTSH COLUKBTA Q� rn3 a WASHTNGTOY Orovi1le. 100, O Colvil e mak ovnt Vegnoq--'� O evpor v e Stevens / Pass Chelan / Tunnel Sgokane n Neve Hrem o 1 eney S. Eohrat Odessa H:natchee Q � Ro i ♦ u5 n StamPea_ HER-♦pCgCCecn Pass 0c'- Tunnel Ell2nshurg Lia � ren - -- 0 m? Rafoond onnell Pullman Yakima Hanfor esa Sunnyside iA Toppenish r P co alla Longview ennewick Walla 9�Double Track Mainli Single Trac': Hainlin Vancouve Wis r Boardman- endleton Other Railroad Lines Portlan_ The OREGON '--'-Abandone•_ Rail Line nalles FUTURE TRACK CONFTGURA ON OF HE RAIN RAILROAD LINES ACROSS EASTERN WASHTNGTO PROPOSAL O BRTTTSA COL T D lai Sumas HASHT*1GTON Oroville �l3e0ingh G Oma e?4 t V rlington Har Snohomish Chelen Sk ko sh Spo`san o din as C evue Steven dair Davenport Pass Tunnal yenatc5ee nhrata -envy (L 2n a w ter Odessa Ros is es ;ton Au. ;Rlme II Hoses aran Ellensburg Lake Lind dean mpi• Roy ello onne Fullman Ra mond ainier Centralia Yakima unnysida Toppenis Ian a o Lonvievalla elso � R nn2vick Walla i Doable Track. Haiali alama � Woodlandoldendale � = Sinjlo Track Haialine �� Hinkl, Vancouv- Boardman —Other Railroad Lines Arlingtonndletoa eggs V_ 4 --Proposed Railroad Line Portland OREGON a Grande 21 Table 6 PROPOSED IMPLEMENTATION SCHEDULE FOR INCREASED TRAIN SPEEDS AND REDUCED TRAVEL TIMES FOR ENHANCED RAIL PASSENGER SERVICE IN WASHINGTON STATE TRAVEL INTERCITY UNITS Year of Implementation PARAMETER CORRIDOR EMPLOYED 1995 2000 2005 '2010 Travel Time Seattle-Portland' Hours 3.9 2.4 2.1 1.6 Seattle-Vancouver Hours 4.2 3.1 2.6 2.1 Seattle-Spokane Hours 8 5.2 4.4 3.2 Train Speeds Maximum Miles/Hour 79 90 110 125 Average Miles/Hour 47 60 75 90 Maximum/Average - 1.68 1.5 1.47 1.39 Route Distances Seattle-Portland Miles 185 - - - Seattle-Vancouver Miles 155 - - - Seattle-Spokane Miles 315 - - - Table 7 PROPOSED CAPITAL COSTS AND IMPLEMENTATION FOR RAIL LINE IMPROVEMENTS FOR ENHANCED RAIL PASSENGER SERVICE IN WASHINGTON STATE INTERCITY SPECIFIC UNITS Year of Implementation CORRIDOR PARAMETER EMPLOYED 1995 2000 2005 2010 Portland Capital InvestmentMillion$ 50 250 1,250 2,500 Seattle Vancouver Unit Cost Million$/Mile 0.15 0.75 3.7 7.35 Seattle Capital Investment t Million$ <10 700 1,500 3,500 Eastern Washington Unit Cost Million$/Mile 0.03 2.25 4.75 11.1 Total Capital Investment' Million$ 60 950 . 2,750 6,000 Corridors Unit Cost Million$/Mile 0.09 1.45 4.2 9.15 Notes: 1.Based on allocation of 30 to 40 percent for passenger service and 60 to 70 percent for freight service. 2.Based on allocation of 20 to 30 percent for passenger service and 70 to 80 percent for freight service. 3.Exclude major grade separation construction projects in the Pugel Sound area. Tables 8 SUMMARY FEATURES OF THE STEPWISE PHASED IMPLEMENTATION PLAN FOR INCREMENTAL IMPROVEMENTS IN THE WESTERN & EASTERN WASHINGTON INTERCITY CORRIDORS TO ALLEVIATE THE RUNWAY CAPACITY CONSTRAINTS AT SEA-TAC AIRPORT Time Western.Washington Corridor Eastern Washington Corridor Northern California Corridor Frame Portland-Seattle-Vancouver Seattle-Spokane &Eastern Washington Southern California Corridor 1996-2000 Buy 4 New Trainsets for Service Start up Stampede Pass Line for Freight Start second Coast Starlight Train via Klamath Falls Build Tukwila Station for Sea-Tac Airport Start Sea-Tac Passenger Service for Wenatchee Begin second Track Construction in Willamette Valley Construct Prarie Line Bypass Line Start up Stampede Pass Line for Passengers Upgrade Existing Trackage from Bend to Klamath Falls Start Bellevue-Tukwila Line Make signal&track improvements on Line Begin Upgrading of Siskiyou Line from Eugene to Upgrade Bellevue-Tukwila Line Start Yakima River Canyon Line Medford to Ashland to Weed,California Make Signal&Track Improvements Start construction of Ellensburg-Lind Line Add second track to Rosevalde-Redding Main Linc Start Nonstop Train Service from Start double-tracking of Lind-Spokane Line Upgrade Existing Coast Line from San Jose to Glendale Seattle to Portland via Tukwila Start Seattle-Ellensburge-Yakima Service Start Bellevue-Portland Service Start Sea-Tac Airport Rail Connector Construction 2000-2005 Buy 4 Additional Trainsets Complete construction of Ellensburg-Lind Line Upgrade Willamette Pass Line Eugene to Chenult Upgrade Bellevue-Tukwila Line Complete construction of Stevens Pass Improvement Upgrade and Rebuild Sacramento Canyon Line Construct Olympia Connector Line Start construction of Stampede Pass new Tunnel Add second track to Klamath Falls-Weed Line Make Signal&Track Improvements Upgrade signals for Auburn-Lind-Spokane Line Begin Construction of Siskiyou Mountain Tunnel Start Upgrade Bellevue-Snohomish Double-track Stampede Pass access lines Begin Construction of Tehachapi Mountain Tunnel Line for Vancouver Service Start construction of Renton-Maple Valley Bypass Line Add second track through San Joaquin Valley Line Start Third Main Track on Seattle Complete construction of Lind-Pasco-Moses Lake Line from Bakersfield to Sacramento to Portland Corridor Line Complete renovation of Stevens Pass Line Start Double Tracking of Seattle Start Seattle-Yakima-Pasco Rail Line Service to Vancouver Corridor Line Complete Sea-Tac Airport Rail Connector Construction Start Bellevue Main Terminal Begin Improvements to Idaho and Montana Rail Line Nonstop Seattle-Vancouver Service 2005-2010 Buy 4 Additional Trainsets Add second main track to Ellensburg&Lind Complete Reconstruction of Siskiyou Line Route Construct Lake Samish Bypass Line Add second Main Track to Moses Lake-Lind-Pasco Line Complete Construction of Sacramento Canyon Line Rebuild Eastside Rail Line Start direct rail service from Sea-Tac Airport to Moses Complete Construction of Siskiyou Mountain Tunnel Start Sea-Tac Airport Connector Lake Airport and Spokane Airport Complete Construction of Tehachapi.Mountain Tunnel Complete Third Main Track from Complete construction of Stampede Pass Tunnel Complete Reconstruction of the Coast Line Route Seattle to Portland Corridor Start rail passenger service to Pullman from San Jose to Glendale Complete Double Tracking of the Extend rail passenger service to Coeur d'Alene, Seattle to Vancouver Corridor Sandpoint,Bonners Ferry and Whitefish. Expand Track and Signal Upgrading Continue improvements to Idaho and Montana Rail Line Expand Nonstop Train Services Complete construction of Renton-Maple Valley Bypass Start Eastside Railroad Tunnel Line 2010-2020 Full High Speed Rail Operation Increase to Full High Speed Rail Operation Increase to Full High Speed Rail Operation 150 miles/hour for Passenger Service 185 milesthour for Passenger Service 180 miles/hour for Passenger Service 90-rniles/lrour for Freight Service 90 miles/hour for Freight Service 90 miles/hour for Freight Service N. N 23 CASCADIA CORRIDOR The Cascadia Corridor has been extensively studied in the past, and has already been reported by Mr. Trifiletti(Ref.* .8). This corridor extends over the 450 mile route from Vancouver, British Columbia to Eugene, Ore- gon, as shown in Figure 11 (Ref. 1.3). This corridor is presently a double track route from Everett to Portland, and is primarily single track from Everett to Vancouver, and from Portland to Eugene. The train traffic density along this route ranges from less than 10 per day to as many as 70 per day over the Columbia River bridge and at the entrance to Vancouver. a The Cascadia Corridor is perhaps the one with the highest per capita mobility in the United States, as shown in Table 9(Ref. 14). . The per capita mobility factors in the Cascadia Corridor are sufficiently great that the number of trips taken is comparable to several other intercity corridors with much larger populations. The main problem with the personal mobil- ity factors are that about'95 percent of the total trips are taken by auto- mobile, as shown in Table 10. The extensive economic interlinkage of the major cities of the Cascadia Corridor is manifested by major highway use and its resultant environmental and energy and land use impacts. . The extensive automobile transport in the Cascadia Corridor makes it possible for extensive intermodal diversion to take place to the rail mode for both commuter and intercity trips. The intercity rail, passenger traffic was approximately 500,000 in 1997, and is expected to exceed the 600,000 per year mark in 1998. With modest improvements, the rail pass- enger ridership is expected to reach nearly two million per year by 2020. However, with more extensive improvements much higher penetrations in passenger ridership are possible, as shown in Figure 12(Ref. 15). . It may be possible for passenger ridership levels'to exceed six mill- ion per year with travel times below two hours between the major cities along with increased long distance rail commuter service. The total rail penetration of the intercity passenger market can exceed 20 percent for average train speeds of 125 miles per hour in the future; as shown in Fig ure 13. These ridership penetration levels are based on minimal induced ridership, and will then increase with discretionary trips(Ref. 15). It is even possible for the rail passenger system operating in the Cascadia 'Cor- ridor to show an operating profit, as shown in Figure 14. The potential for long term profitability increases with express mail and package service. Figur_ 17 24 TRACK CONFIGURATION '&-i-QUIREMENTS FOR THE PACIFI`,__ .<<[ORTHWEST RAIL CORRIDOR. Mission couver DB1 in Sumas lin Be ham {, d0 g Wickersham as . Mt ernon A!:'l ington O sville E t Snohomish Stevens onroe Pass Tunnel ea-Tai S t Skykomish irpo:. C.�ton a Aubur LesterStampede Aberdeen umner Pass i umclaw Tunnel oy rift Tenino Centralia Chehalis Astori Longview Kelso St Helen Kalama Sa ltn Wishram Vancouv PortlandThe Biggs ive Dalles Tigar Oregon McMinnvill- city r_— Four Track Main Line Sale Three Track Main Line Albany Two Track Main Line Corvallis - Single Track Line Harrisburg 0 City or Town Eugene 0 Major Airport 25 Table 9 ESTIMATES OF PERSONAL MOBILITY IN SPECIFIC INTERCITY CORRIDORS IN THE UNITED STATES 'p 4 ::Intercity Distance: :.::;'Population Travel Freq:., , Personal Mobility:<:;>;:.: :< ° «; Comdor . Miles Million People' Trips/Day TripvW-Day Triys/Miles-Day:; Boston-New York- 450 35.7 163,800 4,588 365 Washington San Diego-Los Angeles- 550 25.5 213,700 8,380 390 San Francisco Houston-Dallas-Austin- 730 9.0 124,200 13,800 175 San Antonio Portland-Seattle- 330 7.5 155,300 20,700 470 Vancouver Note:MP is million people. Table 10 ESTIMATED MODAL SPLITS OF PASSENGER TRIPS IN THE PORTLAND-SEATTLE-VANCOUVER CASCADIA INTERCITY CORRIDOR Traver: :;-; .::>:::;;::;: Seattle-Portland:::` ::_; < :_;:;'>;_:Seattle-Vancouver: :.Cascada Corridor. :. :. Mode Pass/Day> Flights: ' -Piss/Day flights-a : :Pass/Day>:' ``:. _ .;Flights::: RAIL 695 0.7 370 0.6 1,065 0.7 AIR 4,900 5.1 1,655 2.8 6,555 4.2 BUS 325 0.3 220 0.4 545 0.4 AUTO 89,745 94 57,375 96.2 147,120 94.7 TOTAL 95,665 100 59,620 100 155,285 100 Population 5.2 Million 5.3 Million 7.5 Million (Million People) Mobility 18.4 Trips 11.25 20.70 (Trips/1000 People/Day) Density 530 395 470 (rrips/MileNay) Figure 12 26 EXPECTED EFFECT OF RtiL PASSENGER SERVICE IMPROVEMENTS ON THE MODAL DISTRIBUTION OF PASSENGER RIDERSHIP PATTERNS IN THE CASCADIA CORRIDOR 135 �3o Induced 126 Rai 120 116 110 106 100 86 90 Total Traffic 86 Wiz ` 8o z °a 76 D i ei lted U) 70 Q z ¢ 66 LU JrLN > 60 ¢ "- I 66 LU OIL 60 46 40 Auto 96 30 26 20 B u s 16 Air 10 6 0 1990 1992 1996 1997 2000 2002 2006 2010 2016 2020 2026 203(,) CALENDAR YEAR EXPECTED INCREASES IN THE PROJECTED RAIL PASSENGER RIDERSHIP IN THE PORTLAND-SEATTLE-VANCOUVER CASCADIA INTERCITY CORRIDOR 12 Total 11 --0 ACCELERATED BASIS Ridership $INDUCED RIDERSHIP 10 �—NORMAL BASIS —j{--NOHaNDUCED RIDERSHIP f d W —*—WRH NO IMPROVEMENTS induced yZ _ Ridership ccW W N o *!: 7 Dd W 2 WQ cc ~ 6 J w 5 4 Diverted 3 Ridership 2 Ridesaiip--Modest Improvement Ride hiD-N Impr veme 0 1190 1995 2000 2005 2010 2015 2020 2025 zo 30 - 27 F eu.re 1 3 EXPECTED EFFECT OF TRAINS SPEEDS ON MODAL TRAFFIC DISTRIBUTIONS IN THE PORTLAND-SEATTLE-VANCOUVER INTERCITY CORRIDOR A. Without Induced Ridership 100 90 so 70 so Auto MODAL RIDERSHIP SHARE-%OF 60 TOTAL 40 30 us 20 10 Rail A ' 0 0 46 s0 70 100 160 200 260 300 AVERAGE TRAIN SPEED-MILES/HOUR B. With Induced Ridership 100 I 90 s0 Auto 70 so MODAL RIDERSHIP SHARE-PERCENT OF 50 TOTAL 40 30 Bus 20 Rail 10 Air 0 0 50 100 150 200 250 300 AVERAGE TRAIN SPEED-MILES/HOUR 1 , Figure 14 ESTIMATED ANNUAL INCOME AND DEFICIT PROJECTIONS FOR RAIL PASSENGER SERVICE IN THE CASCADIA CORRIDOR PROJECT IN IN WESTERN WASHINGTON BETWEEN EUGENE AND VANCOUVER, B. C. +70 - �- Express Cargo Package Service +60 ----- Airport Shuttle' & Commuter Service ro --- Intercity Passenger-High Revenue & Expense >. +5 0 _- ——» — Intercity Passenger-Medium Revenue & Expense U) �4 Intercity Passenger-Low Revenue & Expenserq -1 +40 . 0 Combined Intercity Passenger , Commuter & Cargo +30 o +20 +10 W A 0 ---'"r Breakeven Point a, -10 -20 z -30 b -40 1995 2000 2005 2010 2015 2020 Calendar Year 00 29 CROSS CASCADES CORRIDOR The plans for the Cross Cascades Corridor to eastern Washington are not as advanced as for the Cascadia Corridor. The Cross Cascades Corridor development is based primarily on the hauling of freight as passenger .traf� fic volumes. will probably be only about half of those in the western Wash- ington corridor as the result of the lower population levels(Ref. 16). The potential for the development of the Cross Cascades Corridor will be much enhanced with the possibility of establishing a future intermodal trans- portation center with distribution facilities and manufacturing plants at the Hanford Site to the north of Richland, as shown in Figure 15. There has been a continuing increase in containerized cargo traffic through the Ports of Seattle and Tacoma in the recent past, as shown in Figure 16. The containerized cargo traffic has been increasing at a rate of 3.5 to 5.0 percent per year in the recent past. The recent problems in the Asian coutries have not so much reduced total cargo volumes as they have increased imports and reduced exports. It is possible that the increases in containerized cargo traffic will continue into the future, but land area availability in the Puget Sound region may force a shift to Grays Harbor as well as a new railroad tunnel at Stampede Pass, as shown in Figure 17. The present rail infrastructure' in the Puget Sound area has become severely strained in the past few years because of the continuing increase in cargo traffic volumes. Unfortunately, there has not been. a parallel new investment in rail and port infrastructure to match these traffic volume increases. Previous studies by the author and others have placed the total cost of infrastructure as being between $350 million and $4.5 billion, but these increases will largely be the responsibility of the public sector in the immediate Puget Sound area because of the jurisdictional situation. However, there is a considerable potential role for the private sec- tor in the Cross-Cascades Corridor because of the lack of major emphasis by the public sector to date. The initial reopening of the Stampede Pass line involved an investment by the Burlington Northern Santa Fe Railroad of approximately $125 million where an additional $45 to 50 million is needed to increase tunnel clearances to handle double stack container trains in the existing tunnel. However, a major investment of over $1 .0 billion may be needed in the future for.a new double track tunnel along with a major expansion of capacity with third party private sector funds. Figure . 15 RAILROAD NETWORK CONNECTIONS- BETWEEN THE PORT OF GRAYS HARBOR AND THE HANFORD TERMINAL SITE \ ('� � o � l 1 WASI11 NGTON Tonas';-jt Omar 0 zzano;lan rl i raj- ton Lala t WEhelan 13raw' is olurnhia Rt O nohvcr Stomie'1 evens Irl 13a Pass ri:l;;^� onroe arinj Tu n-1 b3rr::"i�l Chela Wilhc _ton i S%yl:orni sh En t i a orth 1,eavenworl-.11 Up Bend nlgl.as Coll Ic?c Port Wena tch?e City of S'ralto' nas'c.lt Adria T�gt� E,.:hrat Grays mta� 1 rIQor n numclaif Od^ss--f a St-amoedeCl- Moses y Ortinj Pass'. Ellam 'ho r,):! 11alce a l�eTunnel ' titan Airport R m_r r : .,gni Binier Ellensbur:j Roy, 1 City ':•; Centralia :J l ��. Power Wanapum Plant 13nv^rl 1 Lstl.:rnt Yakima lanfor , Wirilocil Ilanford Site C lumblaPower Wa ':�t`' Plant River all . ` t l l l '•� To1»ari 1:: nyst•13 0 0 2 _3Q � � is al �V - Grandview OREGON Kalama Mi 1 es ProssO asco. w,l1.a Kennewick, . SI: f1:=1ens Vancouv:.r •��,: .. c 31 Figure 15 EXPECTED INCREASES IN CARGO TRAFFIC AT THE PUGET SOUND PORTS : 1990 - 2020. A. Containerized Cargo Volumes 11 10- 9- Total 09Total Traffic m F c Other Ports 0 i Port of Tacoma 4 A fy- q y u c 3 A Y C 0 v 2 Port of Seattle A v O 1 f 0 1990 1995 2000 2005 2010 2015 2020 Calendar Year B. Total Cargo Quantities x.110 d Based on information provided by the ZZ 100 Port of Seattle, Seattle, Washington. L, 1995. and the Port of Tacoma, Tacoma. FWashington, and the Washington Public 90 Ports Association. Total Cargo V / V d 80 Wet = BlY c 70 / i 60 // Hulk e / Cargo 50 L 40 / u �/ C30 / / A / Container cy 20 Cargoes O a 4 A v 10 A 0 0 F 1990 1995 2000 2005 2010 2015 2020 Cal*ndar Year Figure I / -- ELEVATION PROFILE AND, EIGHT TRAFFIC FOR A STAMF PASS RAILROAD TUNNEL HORIZONTAL AND VERTICAL PROFILES OF THE.PROPOSED STAMPEDE PASS RAILROAD TUNNEL ROUTE I 11 take 1 Kachcelus � Kacress Ya),,lrn, Pass Lal.e i Cle Elum i CA SCADEI SUMMIT Esistin:j Tunnel(1.7 Miles) -- _ y_ Prnposed Tunnel(9.1 Miles) �l4tamp- Pass ' I i ..,y_ Pioposed 7'unn::l (7.6 `•filzs) � � Ydkim1 To Palmer \ ��} Eastn Iver � 4,500 �� Arbota Pass Le oTacoma pass To (�1e Im 0 41000 Ellensburg 3,500 _ 0 y > 3,000 `Existing Tunnel v J I Q== ( 1.7 Miles Long w 2,500 Proposed Tunnel -- - u 7.8 Miles Long -_____,__=�_❑i=c�cei=-T_ `_ Proposed Tunnel -- -__-- ,, 2,000 9.1 Miles Lon- 1,500 0 5 •10 15 20 25 EXPECTED INCREASES IN TRAIN TRAFFIC FREQUENCIES THROUGH THE CASCADE MOUNTAIN RAILROAD TUNNEL UNDER STAMPEDE PASS BETWEEN EASTERN AND WESTERN WASHINGTON FROM LESTER TO EASTON 220 200 Total A q 150 e aximum ra 4 F O / o ]00 � : /Medium e V 0 / FREIGHT V r inimum 50 w / m F 0 Fr i3ht PASSNGER L I . I Passen er 1970 1980 1990 2000 2010 2020 Calendar Year 33 CASCADE FOOTHILLS The Cascade Foothills Corridor previously existed in large part so that the outlying areas could be connected by rail service to serve wood products plants. However, with the recent passage of the North American Free Trade Agreement(NAFTA), there has been a large increase in truck traffic volumes across the Canadian border which go primarily to and from California. The result is that there has been a modest increase in traffic congestion and a major increase in roadway wear along the Interstate 5 route from Blaine_ to Vancouver, Washington(Ref. 17). 1t is proposed that a new 200 mile long single track railroad line be built from Sumas at the Canadian border to Tenino in Thurston County for the purpose .of providing a freight traffic bypass, as shown in Figure 18. The construction of this Cascade Foothills Corridor would be combined with the creation through action by the Washington State Legislature of an economic development zone where major transportation and distribution facilities would be located along a one mile wide strip. The concept of an economic developmenbt zone would require some modification of the pres- ent growth management policies, but would act to reduce urban traffic con gestion, and would resemble the Transportation Corporation used in Texas. This corridor would then become double track and electrified in the future, a shown in Figure 19. The Cascade Foothills Corridor would then be the location of a natural gas pipeline, a water supply pipeline, a truck tollway and an automobile roadway. This project would then interface in part with the proposed Interstate 605 freeway, although used primarily for the north-south through traffic movements. There would be main railroad yards built at Monroe, at Sumas, at Kanaskat, and at Tenino so that the total Cascade Foothills Corridor capital cost is $1 .0 billion. it is also planned that there would be direct rail access to the ports of Seattle, Tacoma, Everett and Grays Harbor. There would be the rebuild ing of the Maple Valley line for passenger and freight train movements to and from Seattle and from SeaTac Airport from Renton to Ravensdale. The Port of Tacoma would have a rebuilt line from Puyallup to Orting so that freight trains would not have to go through Auburn. The Puget Sound and Pacific Railroad line would be upgraded from Aberdeen to Centralia, and the Freight Access Route corridor from Tenino to Frederickson would be connected into the Cascade Foothills rail access corridor. J=+ PROPOSED ROUTE LOCATION ,^_-' THE CASCADE FOOTHILLS N`" T RAILROAD FREIGHT CCRP,IDOR BRITISH COLUMBIA -uamish Strait of _ 1 � Gaorgia 6 Vancouv O ope iss ' . . Nanai:ilo 1` _ CCzillitrad< tmn VANCOUVER •_4 aine L .`'r Sumas ISLAND - `_"_'""_""•__---•---�--... Cust r Noo..sac. What4om County I\-,�. Deming 00 d� e1Pir� m f• 14ASHINGTON 1� -- �•` Victoria !; c Searo Woolley S:{agit County 0 •` , •``'`6t�;rait / �.-r Mortborne t o Jud �2 Fuca .L-'• �Q �, Clallam County rlington -` Por Angeles Se_,aim , Snohomish County hi Macas } /C1an e . nohomish f1,0, County --•----- ,' onroe _/ Jefferson County Y - - - - - .-.Stevens Pa:: j Duvall +, ink -Count -•_- r- ------ a . CGrnatior. S - : sh --- Brei, for ! r Laavan Tcf -- -'-j Mason - < <11 City Grays Harbor i County snao ualmie . r County j North B2fid MoC, ;fps edar Fal s 1 ' - Ka:iaS:•=Ga R1ttltaS'\, Port of S�e1tr„ a. St- Grays Harbor! •� �* clot• L s a-, a,. E1 Lim. A ym=i Ortincy - r H a a �• •-�• E112rsbur Roar ; 9 C &M-polis a / - -11 ---- -- Ra r,crN• County 7 va!,i:,.a county! .aymoniCentralia Power Plant 't' en ralia Che.- lis Le. is Coup--y e Ell Pacific . County 1 Figure 19 CROSS. SECTIONAL CONCEPTUAL PROFILE OF THE CASCADE FOOTHILLS RAILROAD HIGHWAY CORRIDOR LINE Electricity Transmission Tower t Electrification Water Supply Catenaries Pipeline Freight; Railroad Tracks Automobile Truck Freeway Tollway ra y Wastewater Water Interceptor Drainage Sa%ier Pipeline Carbon I Petroleum atuDioxide _ :yogenic Fiberoptic Products NGasral pipeline Pipeline aeze Wall Telecommunication Super nducting PipeElectricity Pe pi line Cryogenic Barrier Cable Line Transmission Freeze Wall Barrier Cable U 36 EASTSIDE TRANSIT Nowhere in the State of Washington is rail passenger and freight service more needed-than on the Eastside of Lake Washington(Ref. 18). It was not possible for the Eastside to be included in the upcoming Sound 4 Transit commuter rail program from Everett to Tacoma as the result of f ' r the earlier negative vote influenced by the Bellevue business community. 4 However, it is possible that with private sector financing that some type of rail transit program could be undertaken on the Eastside in the near to intermediate future. This rail transit program could include a startup commuter rail program plus a more extensive light rail system to connect with the planned system in Seattle, and perhaps a monorail route. The first part of the rail transit network for the Eastside would be the startup of a 40 mile long commuter rail network from Auburn to Ever- ett by way of the 31 mile long existing Eastside line via Renton and Belle vue and Snohomish. Such a startup commuter rail service could be initia- ted at a cost of $150 to 250 million with 6 to 8 round .trips per day with 3,000 to 4,000 riders per .day. The expansion 'of this commuter rail sery ice to between 16 and 20 round trips per day would require an investment of $350 to 500 million with significant track and signal upgrading for a ridership of 8,000 to 10,000 per day. The further expansion of this rail line to handle intercity passenger trains with a tunnel under, Cherry Crest Hill and the Microsoft campus would cost between $1.5 and 1.8 billion, as shown in Figure 20. This cost would be much less than the expansion of the Interstate 405 freeway at an estimated cost of $4.5 to 7.5 billion. The possibility of constructing a light rail system for the Eastside would probably require a new line across the Lake Washington floating bridge from Seattle to Bellevue and Issaquah, as shown in Figure 21 . There would then need to be built a new fight rail line in a floating tun- nel which could either be built from Montlake to Medina or from Sandpoint to Kirkland with a configuration as shown in Figure 22. In view of the heretofore opposition to rail transit in Bellevue, the Kirkland route to Redmond would probably be the preferable one to start. The total cost of the light rail system for the Eastside would be 25 to 35 'miles long with an estimated capital cost of $2.2 to 3.5 billion. The comparative costs and impacts of alternative means for crossing Lake Washington are presented in Table 11 . The possibility of turnkey privatization financing for the Eastside rail system should be considered under Sound Transit. F g=? 20 37 PROPOSED 1- 'LROAD LINE CONFIGURATION ruR THE EASTSIDE Marysvi11 � Main Eastside Railroad Line Pacific Northwest Rail Corrido WHIDBEY ISLAND ~� Other. Existing Railroad Lines Future Rail Commuter Line E ERETT Abandoned Rail Line to Rebuild MuYilteo Boeing Manufacturing Plant M� Microsoft Corporation Campus Paine Snohomish Field Cathcar onroe L nn;rood� � y Maltby dmonds Suttle Ballard Tunnel ` Woodinville Duval t Ballard edmond �. Bei..Pvue -arnation SEATTLE / ReG:;ond Tunn`1 i Bellevua I Seattle . �, Terminal Tarmina Fall City BE EVUE 1 � �noaualmie Sea-Tac ssagu�3,�� e Airror • �' nnydale � Piston, ATorth Bend • Renton Tukwila Maple ASHON -�' C--dar ISLAN Valley"�- •r"/ Falls �R av,-.ns6a1e a� r , 1 rr , , rr � r ' r i ■ r � 1 ■ � 1 � 1 r 1 ' 1 , � � r 1 r l � � i A � ■ A � ■ ■ 1 1 1 ae l�11111 :�:- r•` �C SEs>.� Art FLI IIII.�:.v. ',��. �. �;�ra�) II! EFF �!!!� 111•,�� ,,�+ . . -. ^l�:a �. ; �' �.��F"�'� � 5■� 'i ,:,�r i1 � � .� d� 1+ �f � - tea" PPNI �:F �� =.t' u�. t � �� . �� .i■��IA� -.Y � u. • . • YF� � c �' 1 t �=� iiGi�'�'='vir'z`—�a'. R'titLAI r: `,■ rn r ■ n:�no�. �1 Y�" f• •��7 �� 1 a. �' .��r r. - r. u■ r.rr�::" •q r Ili, 1� '�t •�,��lfAA all " r .3d� ■ i�.. � �E��'j��l�� ■�f•�' ��c�. ��• .Wig 'M' a .�`\rYlll�, `i. %YIY i •t� .IV7, p�.�i t All Ga. --r. 1 �1W {.�&T�• + Q��..^t �• � .��. M�' ®aA�re(�,,,�.� �y'I�t�A' �\ •ids I;; .f� , A i.u_r.>, i■��p{/fiEi�� t�/p7 La,�3]] ?3 � �� C! pep± �� r 'iG • . . • �+A ,� I!Ali UrclZa LI j J�77 �li ^`JIF'�� t:�a ��A ` r�• '3 ��. ��Y7 C�II��-■1:4S7i17��11tM�■■r.�rp ,r;Sl� s; v .■� ■■ c t- t� ■ try r I • ��■■el 10116 r��1.6� �■ � pM iE . ��Z �I ■■��10, �i iA ]a■ /11lI��■A MA or .Y7:{i■YJ. ��F E 1• �{ .s�iIN t9Ia !I Ls *.J.�i�■��i!�►f�� vr`n�= n 7C• a.0 ■ e■�.i1r►1a�F I y� 0 ;�- r:fi■ _ .�.?r�'�;••��%co�o;0,;�:�!��I/u�r..w e_e■ �� WE M�� AI3�.��13 p�%g��J�''irt_i.l't ij�F:ll■V'I_ E1141 " �©YJ Gi1YJA /F�1. F■��.. - ® 6 1 ar ■i ei 1*31-le-125J. MOM ' "`r �E El • .- �� SEE . ffil INN WE 3W F14, � �n..� r■ • abs .:� �� /��E 1\C77j: �7 'r��l�t`l`� �II! ��'�`.•�r e7 �,.`.�� t��,`.�I y� � �� Figure 22 VERTICAL CONFIGURATION PROFILE FOR A SUBMERGED FLOATING TUNNEL UNDER THE SURFACE ' OF LAKE WASHINGTON FOR AN ELECTRIFIED DOUBLE TRACK LIGHT RAIL LINE FROM SEATTLE TO THE EAST SIDE t Subway Station Subway Lake Station Washington t rJe Floating Surface Tunnel Excavated Tunnel Tunnel" V Anchor Cables w - �o Table 1. 1. PRELIMINARY ESTIMATE OF THE COMPARATIVE ECONOMIC AND ENVIRONMENTAL IMPACTS FOR THE ALTERNATIVE CROSSING OPTIONS ACROSS LAKE WASHINGTON IN THE STATE ROUTE 520 CORRIDOR FROM MONTLAKE TO MEDINA Specific Units Floating Bridge Alternative Floating Tunnel Alternative Factor Employed Roadway Railroad Roadway Railroad Traffic Capacity Passengers/Day 100,000-150,000 '150,0.00-.ZO,000 100,000-150,000 1.50,000-250,000 Cap iLal Cost Million $/Mi1e 125-200 70-100 175-300 80-125 Debt Service3 Million $/Mile/Year 10.5-22.0 5.7-11. 3 15.0-33.0 6.6-13.7 Maintenance Cost Million $/Mile/Year 2.0-3.0 0. 1-0.2 2.0-3.0 0.1-0.2 Energy Cost Million $/Mile/Year 2.0-4.0 0.2-0.5 3.0-6.0 0.3-0.6 AnInu�al . CosL-2 Million $/Mile/Year 14.5-29.0 6.0-12.0 19.0-40.0 7 .0-14 .5 Cost Effectiveness Pass-Mile/Mil. $-Day 4 750-800 .3,570-4 ,500 500-570 3,125-3,600 Pass-Miles/$ SpentS 1.89-2.52 13.68-15. 21 1.36-1.92 11.33-13.03 Implementation Time Years to Complete 7-10 5-7 10-15 3-5 Public Protest Level Nondimensional Substantial Moderate Substantial Minimal Environmental Siting Nondimensional Substantial Moderate Substantial Minimal Problem Difficulty Ventilation System Required for Option None None Major System . Small System Air Pollutant Emissions Tons/Mile/Year 400-700 None 400-700 None Noise Generation Decibels 75-80 65-70 None None Surface Water Runoff Mil. Gal/Mile-Year 18-24 5-6 None None Surface Oil Contam. Relative Degree Significant Negligible None. None Right-of-Way Width Feet 150-200 40-50 None None Land Use Required Acres/Mile on Land 18-24 5-6 2-4 1-2 Petroleum Consumption Gal /Mile/Day 5,000-8,000 None 5,000-8 ,000 None Notes : 1 . Capital costs are based on 1996 constant dollars . 2 . Annual costs are for the extrapolated summation of maintenance , energy and debt service costs . 3 . Debt service annualized, cost estimates are based on long term tax-exempt revenge bonds . 4 . Cost effectiveness parameter based on capital cost of facility in total . 5 . Cost effectiveness parameter based on annualized cost of operation of facility . 0 41 ELECTRIFICATION A future if' not immediate need for the Washington state rail trans- portation network is the possibility of electrification for operational, environmental and energy reasons. The planned 25 mile long light rail transit system in the Seattle area plus the two mile section in.Tacoma wiil be electrified as an inherent part of their operation. In addition, a future monorail system from West Seattle to Lake City which could then be extended to Bothell and Woodinville around the north end of Lake Wash- ington would also be electrified as an inherent part of its operation over 28 miles. The possibility. of electrifying the commuter and intercity rail road lines will require further study over the network shown in Figure 23. It is proposed to electrify the main north-south Cascadia Corridor in western Washington over the 450 mile long route from Vancouver, British Columbia to Eugene, Oregon. This route is presently double track over the 215 mile distance from Everett to Portland, but would eventually need to- be all double track. Large parts of this route would ultimately need to be _ three and even four tracks. 'This route would probably become the first to be electrified with passenger service a major consideration. The electric power required for this electrified operation would come from the central- ly located Centralia power plant near Centralia, Washington with future train traffic levels of as many as 100 to 120 per day. The average power demands of this electrified railroad operation would range from 150 to 250 megawatts, with peak loads of up to 450 megawatts(Ref. 19). The main railroad line across the Cascade Mountains from Seattle to Spokane would eventually become double track and be electrified over its entire 325 mile distance. This railroad line would also have 160 miles of spur line electrification from Beverly to Hanford and Pasco plus to Moses Lake with a power plant at Hanford. The electrification of this railroad line would facilitate handling 75 to 120 trains per day which would be primarily freight while eliminating any diesel smoke problems in the new Stampede Pass tunnel. An additional advantage. of electrification is that it would then become more economically beneficial to operate higher fre- quencies of shorter trains so as to minimize electric utility peak load demand charges instead of labor costs with fewer longer diesel trains (Ref. 19), and also reduce port congestion.. The average electric demand loads would range from 250 to 350 megawatts across this line with peak demands of up to 500 megawatts with high freight train traffic densities. Figure 23 PROPOSED ROU'T'E .NETWORK r0-R ELEICTRIFIED PASSENGER AND FREIGHT RAILROAD SERVICE IN WASHINGTON STATES . Crartbrook Vancouver hilliwactc i112lTIS11 COLUMBIA i31a to Sumas Bell (ln1glt. 111 ` WASIIINGTON Send )oir►L V Grant IDAHO County Coeur EV L- L MonSpokane roe Air ort d ' A e e e 1 2 (Jena tchee i 1 1 Sc Al Sea'l'ac 1 1 Airport EphraL •�"r��'�" aw Moses ttr� llensburg••• i, �j♦ 1 � t ()I.yytpia SLatnpedes� Moscow ti ralia Pass *AV Yakima `� Pullman . Cheha 1 i s Ilan f 1 i,ongcasco.view Richland 1 Pend le Lori . 1 Vitnt,:nuvt!r 1 PorLiand "2214=1 Fu Lure NeLwork ExLensions Salem Iliglt Speed Railroad lines Ol;her. Existing .1(a.il bines QnLaro 110se . Albany New or Rr_bui1L- Rail Lines ii ,+ Major Regional Airports ORRGON , ® r, Coal Fired Power Plant �, 43 CONCLUSIONS There is a significant future role. for private sector financing of rail transportation projects in the State of Washington. These future railroad ` transportation projects comprise 1 ,560 miles of line with an estimated capital cost of $16.5 billion, as listed in Table 12. These future railroad transportation infrastructure projects have a variety of sponsors with the leadership generally coming from the private sector. The Washington State Department of Transportation Js the primary public sector partic- ipant in the intercity freight and passenger projects while the Central Puget Sound Regional Transit Authority is the main participant in urban -transit projects. The Burlington Northern Santa Fe Railroad is the primary railroad right-of-way landowner for most of these projects.- The rojects.-The main financing for private sector turnkey privatization projects is likely to be third party funding organizations. The Burlington Northern Santa. Fe Railroad and perhaps others can be the repayment organizations for the financing of freight transport projects through unit operating fees such as' now proposed in the Alameda Corridor project in southern Califor- nia. The repayment of passenger rail projects will be by the assessment of unit fees on ticket purchases. It is likely that the initial revenues from passenger services will not be able to cover expenses, but will likely be at a later time at a net profit to the operator. The ability of freight service with high value intermodal express mail and packages to help cover costs will likely assure the difference between profit and loss. The State of Washington can assist the implementation of turnkey privatization railway projects through support and incentives. It may be necessary to establish an agency which provides financial guarantees so that private sector lenders can have assurance of repayment of bonds and. loans. It is also likely that the large investment and commercial banking organizations can play a major role in the financing of these rail infrast- ructure projects in conjunction with the private sector. The fostering of industrial and commercial developments along railroad lines can then also increase traffic bases of freight and passengers. One expenditure which the public sector can undertake to dramatically improve the overall econ- omics. of these rail projects is through the construction of grade separat- ions at railroad-highway crossings to- reduce delays and accidents. The possibility-of building and operating an existing or new electric power plant can provide initial revenues for railway development projects. Table 12 44 PROPOSED CANDIDATE LIST OF RAILROAD INFRASTRUCTURE. PROJECTS FOR PRIVATE SECTOR FINANCING IN THE STATE OF WASHINGTON Project Primary Distance Capital Cost Sponsor or Description Purpose Miles Million $ Participants Cascadia Corridor Passengers 450 2 ,500 WSDOT, BNSF, UPRR Freight ODOT, BC Gov' t & 3rd Party Private Cascade Foothills Freight 200 1 , 200 WSDOT, BNSF, Ports Corridor Bypass PS&P Railroads City 3rd Party Private Cross Cascades Freight 325 3 ,500 BNSF, Other Rail , Corridor Passengers WSDOT, Ports , City, 3rd Party Private Hanford Extension Freight 160 700 BNSF, UPRR, Other, Passengers WSDOT, Ports, City . 3rd Party Private Intercity SubTotal 1 , 135 7 , 900 Eastside Commuter Rail Passengers 30 500 BNSF, WSDOT, RTA 3rd Party Private Cities., Counties Eastside Intercity Passengers 30 1 ,300 WSDOT, Amtrak, BNSF 3rd Party Private Eastside Light Rail Passengers 35 3 ,500 RTA, Cities , . 3rd Party Private Monorail ' Passengers 28T 1s;..t30fl ' Seattle , RTA, Countl 3rd Party Private Urban Transit SubTotal 93 6 , 300 Intercity Electrification Freight 1 ,465 2, 300 BNSF, UPRR, Other Passengers WSDOT, Ports , City Electric Utilities 3rd Party Private SubTotal Electrification 1 ,465 2 , 300 Total All Projects 1 , 560 16,500 45 REFERENCES 1. Agnew, B. in Hathorn, C., "Cascadia Report: The Ties that Bind," Wash- ingtonCom, vol. 4, no. 9, pp. 49-51 , September 1993. 2. Cooper, H.B.H., "Prepared Testimony on the Draft Environmental Imp- act Statement of the Regional Transit System Plan for the Puget Sound Metropolitan Area," Prepared for the Municipality of Metropol- itan Seattle, Seattle, Washington, November 23, 1992. 3. Cooper, H.B.H., "A Current Progress Report on the Rail Passenger Sys- tem Development in the Pacific Northwest Region," Proceeding, Qf jbe-Annual Meetin _Qf ft Transportation Research Forum, Montreal, Quebec, Canada, October 16-18, 1998. 4.. Cooper, H.B.H., and Buck, R.J., "Energy and Economic Benefits of Nat- ional Railroad Electrification in the United States," Proceedings of .qhs, IWW International Conference on Energy Use Management-Be- yond _bg Energy ri i : Opportunityn 1Cha lenge, Held at the Inter national Congress Center, Berlin, Germany, October 26-30, 1981. 5. Cooper, H.B.H., "Rebuttal Responses to the November 6, 1995 Submiss, ions by the Port of Seattle and the Washington State Department of Transportation from the Expert Arbitration Panel Information Req- uest on the Demand/System Management Issues for the Sea-Tac Air- port Capacity Expansion," Presented to the Expert Arbitration Panel of the Puget Sound Regional Council, Seattle, Washington, November 20, 1995. 6. Cooper, H.B.H., "Report of the Joint Committee on Rail Passenger Ser- vice in Texas to the Texas State House of Representatives," Prepared for State Representative Al Edwards, Chairman, Interim Report to the 68th Texas Legislature, Texas House of Representatives, Austin, Texas, December 1 , 1982. 7, Based on Technical Information Obtained from the Seminar on Rail- way Tracks and Signalling Sponsored by the Agency for Technical and Economic Cooperation and Development(ACTIM), Republic of France, Paris, France, October 5-16, 1981 plus following Communications based on information Published in Revue Generale de- Chemin -de Eer r 7 i � 46 (General Review of Railways), Paris, France, Various Issues, 1984 to 1992, inclusive. k, 8. Trifiletti, A.M., "The Northeast Corridor: A Brief History and Comp- "` arson to the Cascadia Corridor," Presented to the Technical Conf- erence on the Pacific Northwest Rail Development: A Private Sector Approach, Sponsored by the Washington Association of Rail Passen- gers, Seattle, Washington, October 15, 1998. 9. Flanigan, J., "Alameda Corridor Project: Remaking L.A. Into the New City of Big Shoulders," Los Angeles Times, Wednesday, November 15, 1995, p. D11. 10. Cooper, H.B.H., "Technical and Economic Description of the Alameda Corridor Project," Report Prepared for ICF Kaiser Engineers, Inc., Seattle, Washington, December 30, 1995. 11. Personal Communication with Mr. Charles R. Mott, President, Wash- ington Association of Rail Passengers, Seattle, Washington, Septem ber 1998. 12. Cooper, H. B. H., "Prepared Testimony, on the Passenger Ridership Div- Potential for the Railroad Passenger Service Alternative to the Sea-Tac' Airport Runway Capacity Expansion,' Prepared for the Expert Arbitration Panel, Puget Sound Regional Council, State of Washington on behalf of the Regional Coalition for Airport Affairs, Normandy Park, Washington, May 3, 1995. 13. Cooper, H.B.H., "Preliminary Feasibility Study on the Technical and Economic Features of the Duwamish Corridor Project for the Rail- road Freight Infrastructure Development in the Puget Sound Area," ICF Kaiser Engineers, Inc., Seattle, Washington, September 25, 1996. 14. Cooper, H.B.H., "Prepared Testimony on the Recommended Actions on on the Railroad Passenger Service Improvements for the Airline Pass enger Ridership Diversion in Lieu of Sea-Tac Airport Runway Capac- ity Expansion," Presented to the Expert Arbitration Panel of the Pug- et Sound Regional Council, Seattle, Washington, October 30, 1998. 47 15. "High Speed Rail Passenger Service: Western Washington Corridor Economic Feasibility Study: Summary Report," Prepared for the Washington State Legislative Transportation Committee, Olympia, -Washington by Parsons Brinckerhoff Quade and Douglas, Inc., and the Washington State Transportation Center, Seattle, Washington, 1984. 16. "High Speed Ground Transportation Study: Final Report," Feasibility Study Prepared for the High Speed Ground Transportation Steering Committee, Washington State Department of Transportation, Olym- pia, Washington by Gannett Fleming, Inc., Seattle, Washington, Oct- ober 15, 1992. 17. Cooper, H.B.H., "Freight and Passenger Transportation Needs for the East. Side of Lake Washington," Presented to the Woodinville Chamber of Commerce, Woodinville, Washington, May 12, 1998. 18. Cooper, H.B.H., "Rail Transit System Development Needs on the East Side of Lake Washington," Presented to the Greater Redmond Cham- ber of Commerce, Redmond, Washington, November 11 , 1998. 19. Cooper, H.B.H., Martin, T.J., and Mumm, R.D., "Phased Implementation Program Plan for the Railroad Passenger Service Improvements in the'State of Washington,", Washington Association of Railroad Pass- engers, Seattle, Washington, January 20, 1992. 20. Cooper, H.B.H., Rister, M.F., and Piland, D.C., "Effect of the Maximum Train Size on the Economics of Electrified Railroad Operation," Proc- in _f.tel g ColloqUium Q1 Jb& Rationa . UW Qf Flectrica F.ry foLTraction Purpose, Sponsored by the International Union of Rail- ways, Office of Research and Experiments, Vienna, Austria, October 21-221 1.981 . THE NORTHEAST CORRIDOR : A BRIEF HISTORY AND COMPARISON TO THE CASCADIA CORRIDOR Presented to the: Technical Conference on Pacific Northwest Rail Development: A Private Sector Approach Sponsored by the: Washington Association of Rail Passengers P.O. Box 70381 Seattle, Washington 98107 Held at the: University Plaza Hotel _ 400 N.E. 45th Street Seattle, Washington 98105 Prepared by: Anthony M. Trifiletti Washington Association of Rail Passengers 20148 Bagley Drive N. , #Z-301 Shoreline, Washington 98133 15 October 1998 INTRODUCTION The Northeast Corridor stretches from Boston to Washington, a distance of 441 miles, and is owned by the National Railroad Passenger Corporation (Amtrak) . Its tracks are used by Amtrak, the Massachusetts Bay Transit Authority, ConnDOT' s Shore Line East service, Metro North, New Jersey Transit, the Southeast Pennsylvania Transportation Authority, Maryland Rail Commuter service, and Conrail. Upon the partitioning of Conrail, both CSX Transportation and the Norfolk Southern Railroad will have trackage rights on the corridor for freight trains. Although today it is owned and maintained by an arm of the United States government, the Northeast Corridor was built by privately owned railroads and assembled by the great Pennsylvania Railroad over a twenty year period. ASSEMBLING THE CORRIDOR The Pennsylvania Railroad (PRR) did not build the Northeast Corridor from Washington to New York in one great burst of effort. Rather, it acquired the work of smaller railroads and filled in the gaps over time. Looking north from Philadelphia, Pennsylvania Railroad president J. Edgar Thomson had seen his price advantage over the New York Central evaporate as his trains were routed onto Philadelphia & Reading and Central of New Jersey trackage in order to reach the harbors of northern New Jersey. His solution was to assemble a consortium of railroads to provide easier access from the west. In 1862 Thomson negotiated an agreement. with both the Philadelphia & Trenton and the United Canal & Railroad Companies of New Jersey. The PRR then constructed a line to bridge the gap from its main line at Zoo Junction in Philadelphia to the P&T connection at Frankford Junction. Looking south, the PRR had a route from Philadelphia to Baltimore via the Pennsylvania town of York, courtesy of the North Central Railroad, which it had leased in 1861. This was a circuitous way to reach Baltimore, and there was as yet no direct link to Washington. In 1867 the railroad joined forces with the new Baltimore & Potomac. Linking up with the Alexandria & Washington and the Alexandria & Fredericksburg railroads, both of which were PRR subsidiaries, a line was built from Baltimore to Washington. A half-mile tunnel in Baltimore, connecting with the North Central in 1873, also provided access to the tracks of the Philadelphia, Washington & Baltimore, which had been in business since 1838. The PRR now began running its trains on this more direct route and acquired a controlling interest in the PW&B in 1881. With this last link the Pennsylvania Railroad's Northeast Corridor was now complete, running contiguously from Washington to Jersey City. In addition a two-track cutoff ran from Trenton to Downingtown, thus permitting westbound freight traffic from the harbors of New Jersey to bypass Philadelphia entirely. In an era when every railroad operated its own private navy, the Pennsy ferried passengers and freight across the Hudson from Jersey City. But there was still no way to get a train into New York City itself. 2 OVER OR UNDER THE HUDSON Gustave Lindenthal' s 1884 plan for a Hudson River bridge was killed by the War Department because of the location of its piers within the river' s navigable channel. Lindenthal returned in 1889 with a bigger and better design which was chartered by Congress in 1891. However, the $100 million price tag scared off the smaller railroads, and the PRR could not afford to go it alone. The Panic of 1893 rendered the issue moot. The biggest problem with building a tunnel under the Hudson was the fumes generated by steam locomotives. The successful electrification of the Baltimore & Ohio' s Howard Street tunnel in Baltimore in 1895, however, opened the way for consideration of a tunnel under the Hudson. In 1901 Pennsylvania Railroad president Alexander Cassatt visited his famous artist sister, Mary, in France. While in Paris, Cassatt toured the recently opened Gare du Quai d'Orsay, the first fully electrified railroad station in the world, with its long tunnel by the Seine. Finding his inspiration Cassatt decided to go under the Hudson. In 1905 Cassatt applied the lessons of Paris and began electrification of the Long Island Railroad, acquired five years earlier, which permitted him to put large portions of its right of way through Brooklyn underground. Cassatt contracted with the architectural firm of McKim, Mead & White to design a new railroad station in the heart of midtown Manhattan and chose the Baths of Caracalla and the Basilica of Constantine in Rome as his models. Pennsylvania Station was to be more than a railroad depot; it was to be a monument. In 1906 Alexander Cassatt announced his plan to extend the Northeast Corridor to Newark, bore a two-track tunnel under the Hudson, build his magnificent new station, then bore a four-track tunnel under the East River to Queens to link up with the Long Island Railroad. A further line over Long Island Sound at Hell Gate would connect with the New York, New Haven & Hartford Railroad and permit direct routing to New England. All of this would be electric--thanks to one of America' s great railway disasters. A massive accident in the Park Avenue cut in 1902 had prompted the burghers of New York to ban the operation of steam locomotives within the city. In response, by 1906 the New York Central had electrified its main lines north of the city and had brought electric rail to Grand Central Station. The New Haven had always been the primary carrier between New York and Boston and had used Grand Central since its opening in 1871. The New Haven now electrified its four-track main line from Woodlawn to Stamford, and it bravely announced future electrification to New Haven and even Boston itself. While electric rail did in fact make its way to New Haven soon upon the heels of its arrival in Stamford, the catenary was not to reach Boston for another 93 years . The combined electrification was a tremendous success. But it generated capacity problems which necessitated building a new Grand Central Terminal, designed in several decks for underground electric operation. 3 Besides, the New York Central could not permit the Pennsy to have the only monument in midtown Manhattan. Pennsylvania Station opened its doors in 1910. Electric locomotives replaced steam at Manhattan Transfer, a location in the New Jersey meadowlands which would be remembered by a generation of rail travelers as the place from which they had first seen the spires of Manhattan. Electrics hauled trains through the Hudson River tunnels into Penn Station, which also served the Long Island Railroad. LI•RR trains used the East River tunnels to Queens, and PRR trains also used them to reach Sunnyside Yard and the Hell Gate Bridge for through-routed New England service. THE PHILADELPHIA EXPERIMENT As far back as 1894 the Pennsylvania Railroad had electrified some of its southern New Jersey operations to try out the new technology. By 1911 congestion at Philadelphia' s Broad Street Station necessitated either expansion of that overworked facility or electrification of its commuter lines. But the Pennsy ran smack into the key problem of the early electrical age: there was no interconnecting power grid, no standard of phase, frequency or voltage, and no desire on the part of electric utilities to service the unbalanced load requirements of electric railways, especially with the shortage of investment capital. However, consolidation of the 26 companies generating electric power in Philadelphia under the umbrella of the Philadelphia Electric Company permitted the Philadelphia Rapid Transit Company to shed its traditional image of political football and model of inefficiency and shut down its generating stations, buying power instead from Philadelphia Electric. Following this trend the Pennsylvania Railroad signed an agreement with Philadelphia Electric in 1914 to provide power for the electrification of its Paoli line. In 1915 the self-propelled multiple-unit MP54 's entered Philadelphia railroad lore. Upon establishing electric service to Paoli, faster acceleration permitted the "Red Rattlers" to shave 10 minutes off the steam schedule for this line. In spite of the $4.2 million price tag, the Pennsy felt it had made a worthwhile investment. Electrification had permitted an 8% increase in capacity at Broad Street Station, the equivalent to adding two tracks. The railroad now decided to electrify the remainder of its commuter lines in Philadelphia. WILLIAM WALLACE ATTERBURY In 1927 the Pennsylvania Railroad signed a 20-year contract with Philadelphia Electric in which the utility pledged to supply all the electricity the railroad needed for present and future operations in the utility' s territory. This deal was to spur efforts to wire the Northeast Corridor. That year a feasibility study of electrifying the corridor noted that AC traction would increase track capacity, lower maintenance costs and simplify operations. Electrification would pay for itself by reducing the costs of operation and attracting more freight and passenger traffic. It was neither the Baltimore & Ohio nor the New York Central 4 that frightened the Pennsylvania Railroad; it was cars, trucks and buses. The PRR was in outstanding shape in 1928. It had issued no bonds since 1921, and none were scheduled to mature until the late Thirties . Capital improvements had been funded directly out of operating revenues, and its funded debt had been steadily reduced. The deal with Philadelphia Electric provided an unlimited amount of cheap power. The railroad was ready for electrification. On November 1, 1928, PRR president William Wallace Atterbury announced his company' s intent to electrify the Northeast Corridor from New York to Wilmington. The main line from Philadelphia westward would also be electrified past Paoli. Eventually, catenary would be extended south to Washington and west to Pittsburgh. The estimated cost was $100 million. The National Coal Association was most upset. Seeing the conversion from coal to electricity as an industrial trend, the association had attempted to convince the railroad to upgrade its steam locomotives instead. It also pointed out that inasmuch as the PRR hauled 10% of the nation' s coal, the railroad was cutting its own throat by going to AC traction. Rebutting these arguments, the railroad pointed out that the resultant growth in electric power would increase the demand for coal because most power plants were coal fired. The Crash of 1929 did not deter Atterbury in the least. Although the railroad saw a reduction of revenues, it cut expenses accordingly. Thus it had little trouble selling $60 million worth of 44-year, 4-1/2% bonds. Not content with the current rate of expansion, in 1931, during the darkest days of the Depression, Atterbury accelerated the schedule and announced that electrification from Wilmington to Washington would be made part of the current project. This was to be complete by late 1934 and bring the price tag up to $175 million. On the heels of this announcement the Pennsylvania Railroad sold another $50 million worth of 4-1/2% bonds. This was not a surprise, for the Pennsy was considered to be one of the best managed companies in the world. But by the end of 1931, even the most draconian cuts in wages, employment and maintenance were not enough to prevent the railroad from being forced to go to Wall Street once again. This time there were no takers. _ The PRR went to the Reconstruction Finance Corporation in 1932 and asked for a $55 million loan, but the RFC balked at the sum. Trying another tack, Atterbury suggested that if the railroad could come up with half the sum from private sources, would the RFC match the loan? The RFC readily agreed and backed a loan for $27.5 million for 3 years at 6%. But the railroad was unhappy with the rate, and the RFC would not reduce it unless the PRR was willing to divulge the salaries of its officers and directors and agree to reduce their pay accordingly. Rather than acquiesce to government interference, Atterbury paid back the entire loan. All work south of Wilmington stopped. 5 In 1933 Harold Ickes of the Public Works Administration discussed PWA funding of the Northeast Corridor electrification with President Franklin Roosevelt, who thought it a fit object for government loans. By the end of that year, the Pennsylvania Railroad had accepted a loan of $77 million at 4%. Electrification moved on, and so did William Wallace Atterbury: the president of the Pennsylvania Railroad died in late 1934. On January 28, 1935, the railroad ran its first electric train, a special flyer, on the Northeast Corridor from Washington to New York. At the dedication ceremony, Harold Ickes gave all the credit to Franklin Roosevelt, making no mention of William Wallace Atterbury, dead barely a month. But Atterbury' s work spoke eloquently on its own that winter day: the train, pulled by a new GG1 electric locomotive, averaged 74 mph and clocked 102 mph in Maryland. Electrification not only produced higher speeds but greater carrying capacity, for the new GG1's ascended grades with little or no loss in speed. Passenger revenue rose, and the railroad decided to electrify its adjacent freight lines, among them the Trenton to Downingtown bypass. The main line west of Philadelphia was electrified as far as Harrisburg in 1938. A comparison of steam versus electric locomotion showed that the electrics had less downtime and cost less to run and maintain. But the greatest payoff came in World War II when wartime freight traffic rose 40% over pre-Depression levels. So many passengers rode the Northeast Corridor that it was difficult to find enough cars to carry them all. But AC traction prevented the logistical nightmares that had plagued the railroad during World War I. There was no need to reroute trains, and there were no backups in the yards. Electrification withstood the war years with hardly any sign of strain. DEATH AND RESURRECTION In 1947, the. Pennsylvania Railroad decided to convert from steam to diesel power rather than wire its lines west of Harrisburg. Following the war, the railroad began a long decline with decreasing revenues and increasing costs. In an act of "interstatesocialism, " the United States government began cris-crossing the nation with freeways, in effect subsidizing the trucking industry. Cities, states and Federal authorities began building airports, in effect subsidizing the airline industry. But no - one subsidized the railroad industry until the High Speed Ground Transportation Act of 1965, when the government aided the Pennsylvania Railroad in developing a fleet of 160 mile per hour cars, the Metroliners, for Northeast Corridor service. By this time, in an act of corporate vandalism, the railroad had torn down Pennsylvania Station in New York, a grave lapse of foresight. In 1968 the Pennsylvania Railroad merged with its longtime arch-rival, the New York Central; two years later the combined railroad filed for bankruptcy. What happened in the Seventies can be best described as a regional industry-wide collapse. The New Haven, picked up by the Penn Central in 6 1969, died with its new parent. Also dead were the Reading, Lehigh Valley, Jersey Central, Boston & Maine, and Erie Lackawanna. The Penn Central and other carriers were merged by the Federal government in 1976 into the Consolidated Rail Corporation (Conrail) . which began bleeding money as badly as its predecessors. By the Eighties, massive divestment and abandonment of unprofitable lines had made Conrail healthy, and the railroad was turned over to Wall Street in 1986. Today both CSX and the Norfolk Southern are splitting Conrail and returning competition to the Northeast for the first time in nearly thirty years. The Northeast Corridor fell into the hands of Amtrak. Over the years Amtrak was to turn the corridor into its greatest success story, a genuine showpiece of modern railroading and the closest thing to European-style passenger service in North America. The last grade crossings were eliminated, welded rail replaced jointed rail, concrete ties replaced wooden ties, and new rolling stock replaced the old Pennsy stock. Under Amtrak, heating, air-conditioning and scheduling finally became reliable. THE NORTHEAST CORRIDOR TODAY The Northeast Corridor (Figure 1) is four tracks wide for much but not all of its length. Table 1 shows corridor track configuration. Amtrak shares the corridor with commuter services run by a number of state and regional authorities and with Conrail freight service. Table 2 shows where these shared rights apply. TABLE 1 - TRACK CONFIGURATION RANGE TRACKS Boston to New Haven 2 New Haven to New York/Penn Station 4 New York/Penn Station to Newark 2 Newark to Baltimore 4 Baltimore to Washington 3 7 TABLE 2 - SHARED RIGHTS RAILROAD SHARED RIGHTS Massachusetts Bay Transit Authority Boston to Providence (none) Providence to OId Saybrook (CT) Shore Line East Old Saybrook (CT) to New Haven Metro North New Haven to New York New Jersey Transit New York to Trenton Southeast Pennsylvania Transportation Trenton to Philadelphia to Authority Newark (DE) (none) Newark (DE) to Perryville (MD) Maryland Rail Commuter Perryville (MD) to Baltimore to Washington Conrail: CSX and Norfolk Southern Boston to Queens (NY) (none) Queens (NY) to Jersey City Conrail: CSX and Norfolk Southern Jersey City to Washington There is a severe bottleneck from Newark through the Hudson River tunnels to Penn Station where New Jersey Transit and Amtrak share trackage rights and where the Long Island Railroad shares platform rights. From Newark, where four tracks constrict into two, Amtrak shares the line with NJT' s Trenton Line, North Jersey Coast Line, and-- since the 1996 completion of the Kearny Connection--the three electrified lines of the Morris & Essex division. Because of this, only a limited number of M&E and North Jersey Coast trains run to Penn Station--the remainder go to Hoboken--and they are standing room only. Penn Station' s platforms are restricted to nine-car trains, and that further limits mobility. Conrail has trackage rights on the Corridor even though it ceased using the catenary in the Eighties. Freights, however, do not use the Hudson River tunnels, but either use the New York Cross Harbor car floats or travel up the western side of the Hudson to a bridge south of Albany where they cross to New England. Increased freight traffic has forced Amtrak to restrict Conrail' s use of the corridor to off-peak hours, and more recently Amtrak has suggested that Conrail find another route for its freight trains. The CSX has a route paralleling the Northeast Corridor from Washington to Philadelphia, and Conrail has a route between Philadelphia and northern New Jersey via NJT trackage. While freight moves easily between New Jersey and Staten Island, a rail tunnel between Staten Island and Brooklyn, last suggested during World War I, is once again under serious discussion. 8 The destruction of the original Penn Station will be finally be corrected as Amtrak converts the Farley Post Office into a facility similar to Washington' s Union Station. Once again the Big Apple will have a railroad station worth of its name and ego. The $1.2 billion Northeast High Speed Rail Improvement Project, intended to prepare the New York to Boston segment for 150 mph service, is in its final stages. This mammoth project includes: (1) realignment of 127 curves; (2) undercutting, raising or eliminating 146 bridges, 57 of which will be rebuilt; (3) elimination of most grade crossings; and (4) electrification from New Haven to Boston. NORTHEAST CORRIDOR VERSUS CASCADIA CORRIDOR The two corridors are nearly the same length, with the Northeast Corridor logging in at 441 miles and the Cascadia Corridor at 454 miles. There, however, the similarity ends. The Northeast Corridor traverses some of the most densely populated territory on the continent, with densities comparing to heavily congested parts of Europe and even Japan. Some 35. 8 million people call this corridor home, while only 7.5 million people reside in the Cascadia Corridor. New York is six times the size of Seattle, and other cities along the Northeast Corridor are vastly larger than their northwest counterparts, with the single exception of the Baltimore-to-Portland comparison. Table 3 and Figure 2 show these relationships. TABLE 3 - POPULATION (In millions) CITY NORTHEAST CASCADIA CITY CORRIDOR CORRIDOR Boston 4.2 1.9 Vancouver BC New York 18. 1 2.9 Seattle Philadelphia 5. 9 Baltimore 2.4 1.8 Portland Washington 3. 9 0.3 Eugene _ Intermediate 1.3 0.6 Points Total 35.8 7.5 Growth from 1970 to 1990 in the two corridors, however, shows a very different picture. The population centers of the Northeast Corridor showed an anemic growth rate of 4.4% while the communities of the Cascadia Corridor grew a robust 42. 6% during the same period (Figure 3) . 9 Despite population differences, travel frequencies in the corridors are remarkably similar. The Northeast Corridor' s 163, 800 trips per day are only slightly ahead of Cascadia' s 155, 300 trips per day (Figure 4) . Upon factoring in population, though, a very different picture emerges. Mobility, measured in trips per 1000 people per day, shows Cascadia residents to be much more mobile than their Northeastern counterparts. While the Northeast Corridor registers a mobility level of 4 .59, the Cascadia Corridor measures 20.7 (Figure 5) . Cascadians -travel four times as much as their Northeastern counterparts because of the greater integration of the economies of their cities. Cascadians also have a mindset about distance that is very different from Northeasterners. Travel Density, measured in trips per mile per day, shows that Cascadians take longer trips than their Northeastern counterparts (Figure 6) . Things are farther apart out here. The key is how those trips are taken. Modal share in the two corridors is very different, with 89% using their automobiles in the Cascadia Corridor as opposed to 57% in the Northeast Corridor (Figure 7) . However, Amtrak has shown what high-speed passenger rail can do in a congested corridor, for fully 22% of all intercity trips in the Northeast Corridor are handled by rail, as opposed to just 1% in the Cascadia Corridor. That both corridors are congested is beyond dispute. Interstate 95 from Washington to Boston is saturated. The New Jersey Turnpike, thirty years ago, built separate truck lanes in the northern part of the state that are now running at full capacity. Highways parallel to the Northeast Corridor are badly overloaded with trucks, which in itself bespeaks the need for improvements to freight rail. Interstate 5 in the Cascadia Corridor is showing the same signs of overload. When gauging damage done to roadways by trucks, the measure of wear by weight is riot geometric, but exponential to the fourth power. CONCLUSION The Cascadia Corridor, due to rapid growth, is becoming more like the Northeast Corridor over time. Geography is destiny, and the proximity of Cascadian ports to the markets of northeast Asia portends future economic and population growth, possibly of explosive magnitude. This growth will change the way both people and goods travel in this corridor, and this will require major rail improvements to keep the ports of Cascadia competitive with their neighbors to the south. _ It is not farfetched to say that in another generation Seattle may well become Manhattan with Madrona trees. Infrastructure tends to create its own demand. Just as building highways guarantees more cars and trucks on the road, major improvements to rail infrastructure guarantee that more people and goods will move by rail. It is this philosophy that must guide the planners and builders of future transportation infrastructure in the Cascadia Corridor. If you build it, they will come. 10 REFERENCES 1. Schafer, M. and Solomon, B. , Pennsylvania Railroad, Andover Junction Publications, Osceola, WI, 1997. 2. Bezilla, M. , Electric Traction on the Pennsylvania Railroad, 1895- 1968, Pennsylvania State University Press, University Park, PA, 1980. 3. Del Vecchio, M. , "Rush Hour for New Jersey Transit, " Trains, pp. 33-41, August 1998. 4. Vantuono, W.C. , "High Speed Rail: Finally on a Fast Track," Railway Age, pp. 41-46, April 1998. 5. "High-Speed Ground Transportation for America, " U.S. Department of Transportation, Federal Railroad Administration, Washington, DC, September 1997. 6. Goddard, S.B. , Getting There, Harper Collins Publishers, New York, NY, 1994 . 7. Cooper, H.B.H. , "Summary Review of the Response Comments by the Port of Seattle and the Washington State Department of Transportation to the Information Requests of the Expert Arbitration Panel on the Phase II Demand/System Management Issues for the Sea-Tac Airport Runway Capacity Expansion, " Presented to the Expert Arbitration Panel, Puget Sound Regional Council, Seattle, WA, 30 October 1995. B. Cooper, H.B.H. , "Prepared Testimony on the Passenger Ridership Diversion Potential for the Railroad Passenger Service Alternative to the Sea-Tac Airport Runway Capacity Expansion, " Presented to the Expert Arbitration Panel, Puget Sound Regional Council, Seattle, WA, 3 May 1995. 11 \ r83ston-NH Pk1Sy�� WtA �Y1 'L3�263 Q60 oston I��T� al x Windsor Loc Pe East J Provide H Pro ' -Fall River- Warwick, I-MA MSA f 1 4,644aysvrlle ` A CT _ R! PA Hsi CT PM - 72$? u s s Nassau-SuItk NY PMSA _-..� � r� /1�70 '`�� -'`•`" ,212 r ew rty NY F Y 1 f ` pec p S69tm TvTreift 85.437 ��'F� la - r., sir .a �7 ir-�„N ``•- cS i� _ - . PA-NJ PMSA 952.929 V \ erryville Ell Ba ,Mb PMSA eE'een Northeast Corridor u "s A 'I 47478 E irntrak . . re N1 D Rely _ a ' w 5 i Notes: ..- t �} , ' ` , Population estimates are for July 1996 from the U.S.Census Bureau. MSA=Metropolitan Statistical Area 1 DE t PMSA=Primary Metropolitan Statisticalrea A 1 s �i ✓ Wria Jct ashincrton DC r Vi z, y r"x j k g 9 V�ashirgton D C.r TrID-VA-V4V PMSA str. a.>;'ff Copyrilm ght 1998 DeskMap mExecutive Center Inc.Irx.3636 ExecutiCenCenterDr.Suite 150 j /4,563,123 �' .+ •�, t• p -=k-y'`' -_,_`- �• = ;_'ATX 78731 (512)346-9330 http:/Iwww.deskmap.com FIGURE 2 POPULATION - NORTHEAST vs CASCADIA CORRIDOR ® : ii+'rl:i i..$`/. N is%$fryi::. i 15 .•i. . : k .` ... 10 . . : {t:: : i: ..n:. »'.a...'t .::.....:is Y f' f� .+......r::: .}u:: i. ib::i 5 ..::.i:.:.: ��.::.:. .:: .... :i:.i:.i::i:.iiii:. ............ ----------- . ....................................:.......... nr. :i 0 (Millions) Northeast Cascadia BostonNancouver New York/Seattle Philadelphia Baltimore/Portland Washington/Eugene FIGURE 3 GROWTH RATE - NORTHEAST vs CASCADIA CORRIDOR 50 r _ :: ...... 40 k v ':: 30 . f :.:.: :........:is :: ..... .. :. ... :::.iii;{•:::: .:::::::.:::::::::..:................ ............. -. ....................... .......:::v._::: -. :. nUf: .................... ................ .:: .yt ............. : fx.- SSffi 10 :.: :.. f.' :..... . ::::.. 0 • (Percent) Northeast Cascadia G rowth FIGURE 4 TRAVEL FREQUENCY - NORTHEAST vs CASCADIA CORRIDOR 200000 N : { ::t.. ......:..::.:.....:.. . :� ` n . . :3 >3 i x150000 vs . N { tiµ v : } < r fa Yv:. 100000 `...vA .; .......-::-iixn::::::.w::.w:. .. :'i. .. .,.z. . .�..... .... S i} i; �`:v��i:�:.'sv iiyk•: 'v '-Jin{ «z3 50000v: :.xr n.:rj:..r k ::. k 0 (Trips per day) Northeast Cascadia FIGURE 5 MOBILITY - NORTHEAST vs CASCADIA CORRIDOR 25 — ..................... ......... . . ........:.:....:.. .:..: ars . 20 ............... :;t+A• .. .. �- .: 15 :..,:. 10 ::::.:.:::.::::::::._::._.:..._::.:::.:::::::._::::... :r. :.:: :: ........ ::n:.....:::.:. ............ ......... :..i:.':: .......... ::::.. YY-...... ......:::......::: ............ ................ bv: .. .. ..... .vv:J}viv--;v-:{. ................. ::.:::.:v::...... .:v:. ...................... :......................:.......v..... .. :: ::::::::::. 5 0 (Trips per ay) people per day) Northeast C�asCadla day) FIGURE 6 TRAVEL DENSITY - NORTHEAST vs CASCADIA CORRIDOR ::: :. ..:..:.:...........:.....:.:::::..:...:::::::.. 500 :. :::.:: :1 ] >7...................... ]33 .............. ............................. .v.... >:. ... .. :`::.::-:::-::::-:::-:-:-`-.-:: .:.3 ,ti ;::... ::;:.;.:.... .v: _ :::: 4 ..::.,.... 00 >.:. : ;:::::::: rfY ::..:.. ::. .... . ::.::..:::::;> ..:. . :a :..: 3 300 :: rv: ; :i `.,. 3 .:3 ON i3 200 -. :.. 100 — . ... .... .... ;PP0 (Trips per mile per day) Northeast Cascadia 0 ii 'e Northeast Cascadia . �v�9 ..�...._... M...JJ.. ARMS tQ 89 4 _:. ::. ..... ......-:::..... IN .............. ........... .:: ..... .. .... ............. ...................................................................................................... ................. ..... ......-,... ............. ....... kai .:.......................................................... .......................................... ----..--...-rr t:}}.. � ............:..........................:....:................::..::::.....:.:..................:.:............ .... ..:':•-:':::..::is C:'{. ... ;=_ my %i>if q ol HEM : ii! viii;:•>.�:::::::::.�::::::::::........ ...:::... ::-.::::::.�:..: �::::::.`::': ::`...::_:.,..;::::..:.,{...,...::...:::.., .a F ^^ V':+ .-'rliiii'' . �� 'ii�{i. �.::::n:•:::::n•:::r.v: - "-" ': .. .,::.ii?T?S:.?>: ........v:::.i:.}: :-}:':.'::.':.'".:..;.. 4kr� ..........'4 iiiiiiiiiviii::�:^ii};vi}:i:::y:•ii'ri:vi'r?i}ii}ii}'riiiiJi:;:�iiiii ii:4:�i':v<i'i vv}iiii?ii}iii}:---?:iiii:i�ii'r}}i}}iiii}}?}i?}iiii}}r:ift.. r.r -''<:i:rT$j:•;. ." :'�' :.� .. rii� :::::::::::�:w.v:::m:.vv::::....:...:....n•:x::::ti{tiLS:::r::::::n�::::.'v:::.................................................... .....r....... ......v:::::.v::::::::::::w::::::w:::::::::::::::v:::{•:.r:..r.w.v::::::::::::::.�.�.vnv::.v:::::::::::.�::::: ::::v.....:r vv:::....... .. � �i iiiiiir:•ii �:{4..};•{4.4}::•::::}::::::::::::.:::::::::::::::,:.:::::::.�:.�:::::. r.i;isi:.;:?{.i:{.;:{.i:.i:.i:.;:?::is.}{{.}.i:.}:.i:.}:?.i.:.:+_:::: -:::::::.::::}. ,. :f Y: v.4rr i:R:'{'it;;::{:i'{'.... .;i.,•.ii r. .... .... ........................... ..{.::::.�::::::.. ...-.......-.................... ........-..................... .>.:,-,. .,: .. - .::}}>;{;:n:iisi::i;}iii:ifii: r.....-n.::: :.::r::r:r:.v::.v:::rr::::4.;::. t ::.. : i::•::?{;•r::•::::::.: }:.......... i.....�::......... . ..: i. l:i il:::iiii:.'•''i iii} :'r}v. Ono .....}.....??-}:-i}}:-}}}:'vii:?:.}:::: {.. •i:{4}''n'i�v: _ ii:{in::}:i'i::+viiiiiiiiiiii:iiiiiiii:iiiiii}i:'r,:ii:" iii:>.i?L'si:?i....... ....i:i ii{`+• r•:�:C is FIGURE 7 MODAL SHARE - NORTHEAST vs CASCADIA CORRIDOR Stephanie Conners From: Flim4449@aol.com To: conners@yelmtel.com Subject: Re: Subscription Date: Friday, August 28, 1998 5:31 PM In a message dated 8/28/98 10:00:15 AM Pacific Daylight Time, conners@yelmtel.com writes: << Hi, would like to subscribe to Flimsies...... please let me know what I am to do? e-mail: conners@yelmtel.com thank you. stephanie>> Hi Stephanie You may sub by sending me a check payable to Flimsies Northwest!-for$21-for, one year;or-$40-for-2-years. Please note our sub rates and cover price will nse after th`e next issue. I also take Visa, MC and Discover. Phone is (530)892-9609, mailing address is: FNW PO Box 7261 Chico CA 95927-7261. Thanks for your interest! Bill Shippen � l Page 1 PURCHASE ORDER Of TIiF pjp PO NUMBER -YPE r� CITY OF YELM F 4 D SERODUCT RVICE ERV!CE� P.O. BOX 479 ------- THIS - PURCHASE ORDER NUMBER MUST APPEAR YELM, WA 98597 ON ALL INVOICES, DELIVERY SLIPS, BILLS OF LADING,AND CORRESPONDENCE. (360) 458-3244 FAX (360) 458-4348 ORDER DATE DATE RE6UIRED YELM 01W7 WASHINGTON VENDOR --- ----- ---- -- - - SHIP TO DEPT HEAD INT VENDOR. NAME -....... - ---- —._— NAME DEPARTMENT ADDRESS- ---- -- ----- -------- - -- ADDRESS----- - ------ -- C"" _ --_-. —. _. STATE --"--....__- ZIP ...__ .-- CITY .-------_—._— STATE _ ORDERED BY A 1 1 cnTION: PHONE: ATTENTION: PHONE: SPECIAL INSTRUCTIONS: RECEIVED BY DATE ELEM ITEM NO DESCRIPTION PROJECT 'ACTIVITY UNIT PRICE AMOUNT I i VENDOR INSTRUCTIONS 1. INVOICE FINANCE DEPARTMENT 2. P.O.NUMBER MUST APPEAR ON ALL PACKAGES AND CORRESPONDENCE 3. IMMEDIATE NOTIFICATION IS REOUIRED FOR PARTIAL SHIPMENTS -.__—__._-_._- -- -"' -''-- • + AUIHONI;{FD SIGNATURE DATE 10/02/1998 13:25 350-458-8501 7AI-LIAMS/P.DE4 PAGE 01/01 _ _ ! n -------� ----------- -'-----------' -- ---------�=--~'- �� --- ----'''~'-~-�-- -------------- ........ 71 PURCHASE ORDER P.O.NUMBER TYPE �4 CITY OF YELM ❑ PRODUCT 4N. 0 0 7 2 ElSERVICE P.O. BOX 479 THIS PURCHASE ORDER NurNBER MUST APPEAR YELM, WA 98597 oN',Att rNvolcEs, bELIVEaY stlPs Bitts of LADINGANDCORRESPONDENCE (360) 458-3244 FAX (360) 458-4348 ORDER DATE YELM 0 t.E17 WASHINGTON VE"DOR /] SHIP TO DEPT HEAD tNT.';, LENDOR. NAME OCA `-- / / / / ADDRE S Z !?10 I ADDRESS DEPARTMENT CITY Dr ' L7 STATE _ ZIP CITY STATE ZIP CJ ORDERED BY ATTENTION: PHONE: ATTENTION: PHONE: SPECIAL INSTRUCTIONS: 4S k �pN .-.,-.,RECEIVED,':BY -:'DATE'#•: # FUND DEPT ACCOUNT OBJ ELEM 13SUB OTY ITEM NO Y DESCRIPTION PROJECf ACTIVITY UNIT PRICE AMOUNT A ml a 3p cc to( I Sig a VENDOR INSTRUCTIONS 1. INVOICE FINANCE DEPARTMENT 2. P.O.NUMBER MUST APPEAR ON ALL PACKAGES AND CORRESPONDENCE (f 3. IMMEDIATE NOTIFICATION IS REQUIRED FOR PARTIAL SHIPMENTS AUTHORIZED SIGNATURE DATE What is the problem? Washington is ideally situated as the In Washington: U.S, port closest to Asia's growing Z W < markets: Japan, Korea, Russia. o a Q ,0 • Traffic jams waste $3 million Shipments both to and from our ports N0 z o a business° dollars each day save time and money. However, J- � Z Q °' Q c Li traffic congestion will cause us to lose o -�' j Traffic in ten years will that advantage. Soon, Los Angeles' increase 50%: freight-dedicated Alameda Corridor A highway capacity only 2% will negate our time advantage— our profits, -- Trucking delays cost us - valuable international tr to improveco CO Building highways c 3 privately o 4 times as much as ' din Washington's c ent r acilities are i owaedd-er ivate —enterprise. As we look t a ate `:: Is Rail the sold e, but... / automobile and truck co e ion, .:.. . ...... additional track makes sen ut is-it - - '� • Our rail lin already runt reasonable to expect the Ta yer:to ;:.;:y full capa a for it? >::... .. p pay �, V�``# • Expansio i C Who pays, then? 0 '`'� • Fundin cal/will are One possibility is a stakeholder C � in short ly ' approach. Businesses, govern ents Q m °' and organizations invest in — d,--- ti Q LL x < H benefit from — improved an o o Z ° m 2 ,= The Solutio I expanded rail infrastructure, ith a Hp r Y ° r m LL long-term pay-back built i A public- o A public-pri ership private partnership allow overn- �• where Busine overnment ment to invest while bu ' esses and �+O ` '` y and Taxpayers �� VV�rI passengers benefit fr improved a :.: ::::.:.......... ::.... wo ; : >::..:..:::...................... ....:.:::::. � traffic flow. tai:•':.:' '•`:•::<:::;;;:':�r:ii: Join us on Will it work? o : ® October 15 3 0 ::.....:.:....::..:.:::... �. The N ast Corridor was built 130 s ago by private capital for just to hear the the kind of explosive growth that the 5 Q Rail Solution Pacific Northwest is experiencing V 04 today. The lessons are clear: come hear the experts! The Washington Association of 8:00 am Registration and refreshments REGISTRATION FORM Rail Passengers is proud to present 8:30 am Keynote: D.J. Mitchell, Burlington Northern Santa Fe: Pacific Northwest Rail Please reserve space for____attendees. A Technical Conference on Infrastructure Needs enclose payment of$30 per person,which includes lunch and dessert,as selected below. 9:00 am Pacific Northwest Rail Needs Pacific Northwest Panel: Ray Stephens, Burlington Northern Santa PLEASE TYPE OR PRINT Fe; Ken Uznanski,Washington State Department Rail Network of Transportation; David Beal,Sound Transit; Name n EN f�(�►M til n1 Bruce Agnew, Discovery Institute; Capacity, Company 0-17V O L IM Development. transit,regional planning&demographic Title growth. Address V ASF-, W, city (=_1 M, 1n/A 195-9`7 A Private Sector Approach 10:30 am Cascadia Corridor Development State,Zip y_ Panel: Dale Muellerleile,HDR Engineering;Tom Telephone �� S Thursday October 15 1998 White,Transit Safety Management; Gil Mallery, Facsimile _ (� Amtrak,Tony Trifiletti,WashARP; Development e-mail �� `(78:00 am to 5:00 pm needs,existing studies,ridership trends, compar- Lo h In ison with the Northeast Corridor as a model for Cascadia Corridor. Luncheon Menu Dessert (choose one) (choose one) 4 12:00 pm Luncheon Speaker:Seattle _Top Sirloin _New York Cheesecake ed „fe10 Mayor Paul Schell (invited) Puget Sound Region Infrastructure _Blackened Snapper _Champagne Tort Pasta Primavera XChocolate Layer Cake _ 1:30 pm Rail-Port Cargo Interfaces The Washinator�a�� ^+� - "`-" Panel: Paul Chilcote, Port of Tacoma; Leonard Pass Barnes, Port of Grays Harbor; Mike Mariano, Make checks payable to: Washington J �� Transystems Corporation; Edward Switaj,City of once Association of Rail Passengers Of CITSeattle;Tom Foster,Puget Sound &Pacific gl Railway; Port facilities in Cascadia Send to: Washington Association of Rail 1II 3:00 pm Financing Mechanisms and Needs Passengers Conference Coordinator toge Y Panel: Dick Thompson,Port of Benton;Jerry Ellis, Anthony M. Trifiletti mod 0 1 Washington State Department of Transportation; 20148 Bagley Drive North, Z 301 Sherilyn Anderson,Paine-Webber, Hal Cooper, Shoreline, Washington 98133 tial fO Transystems Corporation;Alameda Corridor, all m I Hanford Project,public-private partnerships& Questions? call: (206) 440-9451 bicyclI A potential financing models. e-mail: tonytrifQmsn.com Educd ��`- Ed uc ,1 4:30 pm Summary and Conclusion For further information check the ronme ou � - 1 Chuck Mott,President,Washington Association WashARP website: (� D !of Rail Passengers http://www.trainweb.com/washarp prese I lines if -.,-.:„y,=,,-a,9iC7 passenger transportation. 10/01/1998 13:32 360-`)P-8501 WILLIAMS/P.D PAGE 01/02 WILUAMS IBRO,ADCA.STMG, INC 701 Pivirie Park Lane. ate J ROB=5210 Yehn,Wa 98597 ) 458-M FAX(JW)4584MI Date: /0-vt7 To: 6V 6&R Xil Frcm: c-L7-669^AeK_ Re: 41C 6u& Nmnber of pages including this Mme Remarks: 10%01/1998 13:32 360-4---9501 WILLIAMS/P.DE! --- PAGE 02/02 WILUMMS BRomucftsT11N.0 um 'I•. , ..rf .-rte„• •moi ,' .; - . - , To:Lisa,1CJttilsby,•Wad.$art6,Jr el. axe old,i ern` xzx�ann, Byrn Frmlce Data.5 t�bor3071998'' ge• S `;Mfg g;, 'tYes a ,:()ctob►e'r 4;?'9 ,1.00 FI19�., tiYe�Totcl;Corifore�nce Rodin ;r ` Th. �rou'folr crnxiiug to thm rneleti ig,iast nigat'.(9/29/9g): '�i�e're oft'ty a v asltive;' :start. W�nbw' ust begin`td eca t att a r�that,ca`n be tet&rcd 6,B.N. r ! ' "1. � ;• P se bxiu►g'to;tbe zne i five to ten m�utu presahtation on how y�o�+.;=".• ,' � �' what ox�z re ectAve prga[ t'On .,�s to-make'if t'klil*this raid r6ad,6b $ zatxiari could wror 1, 3' ., ti work and vdhat like tci` ake.ix woitC '. , ' L cook forward to seeing Yr u.there. Ul if you h Ve�tty:quBstiogS. j _ sem:, `'.itay,Al�•d.� 1• :�; , �•.. • � '` , ' ,'`• �- ' •;, ., ,,. Chante Bwlx�nha - t lte�a pay ` i �7 f . • (//rIf(RnhF�B!'OBQCCi4 'Jam. 'WdNT R,OL YS4 j � , . 7.oY�ra�la�wk.LAne;c�ullu� ��1` 5$90 ;7/�i�,`�iF� 9�97,3�a'•9.�8•�.�3 iI• �, , Pea Chamber of 7� r PO Box 444 Yelm, Washington 98597 (360) 458-6608 24 September, 1998 Mail Spur Committee Participants Re: Notice of Meeting Dear Participant: Thank you so much for your past participation. It is time to meet and answer all our questions in regard to the Rail Spur issue. Toward that end I have provided you with a agenda for the next Rail Spur meeting. Also enclosed is a brief biog. of our legal advisor who has been retained by the City of Yelm. Steve will be with us on the 29th to assist with any questions you might have. I look forward to seeing each-of you on Tuesday,September 29, 5:45 PM, at the Prairie Hotel conference room. This looks to be a very,important meeting, please mark your calendar. 'Sincerely, -� OF J.S. Williams President Yelm Area Chamber of Commerce Rail Spur Agenda Tuesday, September 29, 1998 Prairie Hotel Conference.Room 5:45 PM 5:45 —Welcome, Call to order, Introductions 5:50 — Project background & Synopsis of July & 7th meeting 6:00— Synopsis of Dialogue to B.N. 6:45 — Q&A by Charlie Burnham of Davis Evans and Associates, Inc. along with Stephen L. Day" of Betts, Patterson & Mines, P.S. 6:45—Wrap Up t3F'.1'IS MAP PATTE•R$ON Stephen L. Da I MINES,1-5. Email sday.@bpmlaw.com Attorney Profiles 1' racl �c� C)�-.crihtir;n Practice areas:Transportation and Logistics. Cases Stephen L. Day joined Betts, Patterson&Mines as a director and as head of the firm's Transportation and Logistics Law Memberships Practice Group in 1995. Education & Admissions E X P e r! P n c e Publications He was formerly regional counsel for the Interstate Commerce Commission and directed its litigation and enforcement programs throughout 13 western states. He personally litigated both civil and criminal cases and directed a staff of litigation' attorneys. Mr. Day's responsibilities included rail abandonment litigation, enforcement of trucking insurance requirements, administration of freight loss and damage claim litigation,and general oversight of the truck and rail transportation industry. During his ICC career, Mr. Day served as an attorney advisor and railroad trial attorney in Washington, DC; as a trial attorney in Atlanta; and senior trial attorney in Seattle; as regional director in San Francisco; and as regional counsel for the ICC's Western Region. "(Full Biography on Stephen Day can be obtained @ www.bpmlaw.com) Vol It ,'Z;"5` .�' ._ '• %'rad - .. ,e5 Snohomish Clallam. o k � . B------ NSF. 22Jefferson . L = T 702 asap RD Port King CLI Mason Gra s Harbor12 : o a s Aherdeen,� Monte O 01 ,eT VISpp Pierce !; ,o 19.0, �) ZJTE. ` ThLirstOII 12t s Geutralia } I-A�Wls a Pacific � 2iDO ��J� /-` or , kum- � Cowlitz Ska.mania (4101 Freight Access by Rail (FAR). Corridor UP-Union Pacific USG-United StaIb6L Govt TE-Tacoma Eastern W CO-Weyerhaeuser Co. BT-Ballard Terminal CMER-.Curtis Milium and Eastam BNSF-Burlington Northam PSAP-Puget Sound and Pacific �. FAR Corridor. 1o 0 10 Miles Ci o Yelm N 4 105 Yelm Avenue West YELM P.O. Box 4.79 WASHINGTON Yelm, Washington 98597 - (301-458.3314 - August 25, 1998 Mr. Anthony M. Trifiletti - Washington Association of Rail Passengers Conference Coordinator 20148 Bagley Drive North, Z 301 Shoreline, WA_ 98133 RE: Rail Registration Dear Anthony, Enclosed is, the completed registration form for Ken Garmann, Public Works Director, for the:conference scheduled October 15., '1998. 'I have enclosed a copy of the purchase order for the registration feed a check will be forthcoming. If you have any questions in this regard, you may contact my office,at(360).458=8410. Sincerely, City of Yelm Step anis"Conners JL-CYCWP ry �, Lie WA-STAT-UN - WA ST 47.76.240, Rail preservation program ------------ Excerpt from page 40319 follows ------------ 47.76.240. Rail preservation program The state, counties, local communities, ports, railroads, labor, and shippers all benefit from continuation of rail service and should participate in its preservation. Lines that provide benefits to the state and local jurisdictions, such as avoided roadway costs, reduced traffic congestion, economic development potential, environmental protection, and safety, should be assisted through the joint efforts of the state, local jurisdictions, and the private sector. State funding for rail service, rail preservation, and corridor preservation projects must benefit the state's interests. The state's interest is. served by reducing public roadway maintenance and repair costs, increasing economic development opportunities, increasing domestic and international trade, preserving jobs, and enhancing safety. State funding for projects is contingent upon appropriate local jurisdiction and private sector participation and cooperation. Before spending state moneys on projects the department shall seek federal, local, and private funding and participation to the greatest extent possible. (1) The department of transportation shall continue to monitor the status of the state's mainline and branchline common carrier railroads and preserved rail corridors through the state rail plan and various analyses, and shall seek alternatives to abandonment prior to interstate commerce commission proceedings, where feasible. (2) The utilities and transportation commission shall intervene in interstate commerce commission proceedings on abandonments, when necessary, to protect the state's interest. (3) The department of transportation, in consultation with the Washington state freight rail policy advisory committee, shall establish criteria for evaluating rail projects and corridors of significance to the state. (4) Local jurisdictions may implement rail service preservation projects in the absence of state participation. (5) The department of transportation shall continue to monitor projects for which it provides assistance. CREDIT(S) 1998 Electronic Update Formerly 9 47.76.130, enacted by Laws 1990, ch. 43, § 4. Recodified as 9 47.76.240 and amended by Laws 1993, ch. 224, §9 3, 15. Amended by Laws 1995, ch. 380, S 5. Copyright (c) West Group 1998 No claim to original U.S. Govt. works ISSUES: The proposed.Yelm lineacquisition is having an affect beyond preserving freight rail service to area businesses. It raises larger questions about the rail network in general, and the relationship to rail capacity to roadway congestion in the I-5 and U.S. 101 corridors. The I-5 corridor through Thurston currently experiences congestion, and can be expected to encounter more in the fixture. Of the total traffic, about. . 30% comprises truck traffic, most of which is traveling through, not to, the region. One proposal being considered to relieve the through-movement of trucks is providing a dedicated lane on I-5 just for truck traffic. New construction of an additional lane can cost approximately ten million dollars per single lanemile. A far less expensive alternative to relieve freight congestion is diverting road freight to rail freight facilities. If the costs to use freight rail facilities are attractive, then the shipping market will voluntarily move traffic off major roadways. As a result, roadway congestion could be relieved, traffic incidents between cars and trucks would diminish, and interstate maintenance costs would significantly decrease. TRPC staff are currently developing a concept called "The Freight,Access by bail (FAIL) Corridor". The concept includes connecting divested rail line segments into a single, high quality freight rail network from fierce County to Chehalis (see map). This new facility would have inherent advantages to the existing main BN freight rail line in serving freight traffic. It is located away from urban areas, resulting in higher.operating speeds and fewer crossings. It also reduces air emissions in areas with the poorest.air quality in the region. The long term implications of the FAR Corridor include a significant change in the feasibility of commuter rail from the Tacoma/ Seattle metropolitan area. Less traffic on the BN main line would reduce conflicts, between freight rail and commuter rail operations, which is.the primary objection to commuter rail service. The Yelm line would enable commuter rail service to better serve Fort Lewis and connect a rapidly growing suburban population to jobs outside the region. Commuter rail service can also dramatically enhance the goals of the Growth Management Act by offering core facilities around which high- density growth could develop. In this scenario, new development can be directed away from fringe suburban patterns to the existing urban areas, with the confidence that it can be supported by the transportation network. TRPC staff has contacted other entities that can be valuable partners in developing the FAR Corridor. To date, the Port of Olympia, Port of Tacoma, City of Tacoma, WSDOT Rail Office, WSDOT Olympic Region Office, the Department of Ecology, and PSRC have.been consulted and endorse the FAR Corridor concept at a staff level. BN and Puget Sound and Pacific Railroad have expressed an interest in improving rail freight operations fo'r the region. Staff is engaging as many and as diverse partners. as possible to optimize public and private funding opportunities. QUESTED ACTION: No action is required at this time. Staff will periodically update the Council on the progress of regional rail initiatives. The City of Yelm is submitting a special meritorious application for STP funding to support rail acquisition, which the Council will review on November 6. LETTER OF INTENT TRANSPORTATION AND COMMUNITY AND SYSTEM PRESERVATION PILOT PROGRAM SUMMARY INFORMATION: TYPE OF PROJECT REQUEST: Planning and Implementation PROJECT NAME AND LOCATION: Freight Access by.Rail (FAR) Corridor ORGANIZATION: City of Yelm KEY CONTACT: Ken Garmann, Public Works Director ADDRESS: P.O. Box 479 Yelm, WA 98597 PHONE/FAX/E-MAIL: 360.458.8499/360.458.8417/ conners@yelmtel.com ESTIMATED GRANT REQUEST: $150,000 Feasibility and Preliminary Engineering Study $19,000,000 Estimated Construction Cost PROJECT DESCRIPTION: The project is a partnered effort to rehabilitate abandoned rail facilities to Class 4 rail operation, and significantly improve.freight and passenger movement in the South Puget Sound region. The Cities of Yelm and Tacoma have purchased surplus rail line from Burlington Northern/Santa Fe to preserve rail access to locally significant port and industrial locations. Combined and upgraded,they offer an exceptional opportunity to improve rail and highway congestion in the I=5 corridor from Tacoma south toward the Portland environs. In the short term, freight traffic will'be diverted from congested major highways to more efficient rail facilities. -In the long term, this project fits into a greater concept of using four travel routes within the critical Pacific Northwest Cascadia Corridor to serve rail freight, road freight, rail passenger and road passenger traffic. PURPOSE and CRITERIA EFFICIENCY The FAR Corridor significantly improves efficient freight movement in the South Sound Region. It provides substantial relief to a single Class 4 main rail line threading through urban-areas.- It also enhances short line service to the Port of Olympia, which provides relief to other Puget Sound port facilities but suffers from poor rail linkages. Lastly, it frees other trackage for the Port of Tacoma to better perform rail/ship intermodal transfers at its Point Defiance location. r ENVIRONMENTAL IMPACT Interstate 5 from Tacoma to Chehalis currently must handle significant freight and people movement; in some portions, truck traffic constitutes over 30 percent of total traffic. This section of I-5 skirts Puget Sound, overcoming topography changes and traveling through river systems that support salmonid and . other sensitive species. In the absence of freight traffic relief, I-5 will require substantial capacity and operation improvements likely to cause further environmental impacts. By contrast, the FAR Corridor takes advantage of an existing facility which will not require further impacts to place into service. Further, it will improve air quality in the cities of Olympia and Lacey, by diverting existing rail freight operations from congested urban areas and potentiating high capacity rail passenger service from Seattle to the state's capital city. REDUCE COSTLY FUTURE INVESTMENTS One current proposal to address interstate congestion contemplates the addition of a dedicated freight lanes on I-5 for roughly 20-30 miles. Tor less than the cost of two lane miles of interstate construction in this area,the FAR Corridor will provide almost 55 miles of Class 4 rail facilities to which interstate freight shipping can be diverted. Additionally, adding dedicated freight lanes on I-5 would virtually preclude any plans to provide HOV lanes due to lack of space for more expansion. EFFICIENT ACCESS TO JOBS AND CENTERS OF TRADE A substantial number(20% and increasing) of area residents commute to jobs from Thurston and Pierce Counties to the greater Seattle/Tacoma metropolitan area. Relieving freight traffic on the single main line will allow the southerly extension of the RTA commuter rail project currently underway in Seattle and Tacoma. Commuter rail service would then link Seattle to affordable exurban areas, as well to numerous public sector jobs at the U.S. Army's Fort Lewis and to Olympia, Washington State's capital city. PRIVATE SECTOR DEVELOPIVIENT PATTERNS The FAR Corridor takes advantage of rail facilities originally used for timber harvesting. Industrial land uses shaped by the rail are still in-place and would greatly benefit from renewed freight rail access. Additionally, revitalizing the existing industrial base will result in more efficient use of existing areas and reduce the demand for industrial expansion elsewhere. Proposed commuter rail service along the current Class 4 rail would act as a catalyst for market-driven residential densification in the urban areas of Thurston County. By freeing up capacity on this line and potentiating commuter rail, the FAR Corridor promotes Washington State's adopted Growth Management policies for the region. NON FEDERAL RESOURCES/NONTRADITIONAL PARTNERS The FAR Corridor is being developed through a partnership including state, local and private sector entities.*Washington State Department of Transportation, the Port of Olympia, Port of Tacoma, City of Tacoma and the City of Yelm have endorsed the FAR Corridor concept . The Port of Chehalis, Burlington Northern Santa Fe Railroad and Puget Sound and Pacific Railroad have 'indicated an interest in augmenting freight rail service in the region. The specific role and contribution of each partner will be identified through a feasibility and preliminary engineering study. The study itself will be conducted with partner investments,possibly augmented with state High Capacity Transit funds. The study will be performed in program years prior to the proposed implementation date of FFY 2002. GEOGRAPHIC DISTRIBUTION The South Sound region of Washington State offers a unique opportunity to examine the impacts of adopted Growth Management strategies. As exurban development reaches out from the Seattle/Tacoma metropolitan area to the independent Olympia environs, the blending of growth and economic activities will be greatly influenced by the way common transportation needs and issues are addressed. Additionally,the FAR Corridor will engage industrial-based communities whose former role in the regional economy was substantial but now survive as-small rural centers. The revitalization of their facilities and services will present a case study which can be applied throughout the country. EVALUATION The efficacy of the FAR Corridor can be evaluated in the short term by measuring freight traffic: tonnage shipped on the existing Class 4 rail line; tonnage on the FAR Corridor; and changes in the percentage of truck traffic on I-5. Other short-medium measures can include an analysis of the change in amounts or types of freight shipped through the Ports of Olympia and Tacoma, and changes in shipping time. The long term benefits will accrue to land use changes in particular. Washington's Growth Management Act mandates not only land use policy, but measures of land use changes over time. As a result, the FAR Corridor's impact can be measured using,data generated for GMA, including the number and/or density of housing units near commuter rail service, and changes in the Thurston Region's industrial land use inventory. CONCLUSION The FAR Corridor represents an outstanding opportunity and outstanding value to improve freight mobility in the Puget Sound area. Its potential is clearly identified by the number and types of partners coming to the table. Together with Growth Management strategies, it also has the potential to shape future growth by the transportation connections the FAR Corridor can faciltitate. e , SLADE GORTON COMMITTEES: WASHINGTON APPROPRIATIONS 730 HART SENATE OFFICE BUILDING . (202)224-3441 BUDGET www.senate.gov/-gorton COMMERCE,SCIENCE, �5tates �5cnatc 'AND TRANSPORTAT`ION WASHINGTON,DC 20510-4701 ENERGY AND NATURAL RESOURCES- INDIAN AFFAIRS September 18, 1998 The Honorable Kathryn Wolf Mayor of Yelm P.O. Box 479 Yelm, WA 98597 - - Dear Mayor Wolf - I am writing in support of the City of Yelm's project proposal that will further transportation in Thurston County, using TEA-21, Section 1221 funding. It is my understanding the funding will be utilized to assist the City with the purchase, operation and maintenance of the Roy-Yelm Shortline from the Burlington Northern Santa Fe Railroad. The railroad project is clearly important to the business community of Yelm by providing the . opportunity to preserve and enhance a vital transportation link in Thurston County for both passenger and freight rail operation. The City of Yelm has already enlisted financial support for the project from a number of sources to provide matching funds for the grant. These other sources include the Porte of Olympia, Washington State Department of Transportation's Rail Program and the private.sector. I am pleased to learn.that the City of Yelm is taking proactive measures to preserve this section of rail and to further their economic development. I strongly support your grant application and hope it will receive the highest possible consideration. Sincerely, SLADE GORTON United States Senator 10900 N.E.FOURTH STREET 11120 GRAVELLY LAKE DRIVE So. 130 FEDERAL BUILDING 697 U.S.COURT HOUSE Box 4083 8915W.GRANDRiDGE BLVD- SUITE 02110 SUITE 18 500 WEST 12TH STREET W.920 RIVERSIDE AVENUE 402 EAST MAMMA AVENUE SURE M BELLEVUE.WA 98004 TACOMA,WA 98499 VANCOUVER,WA 98660 Sro"NE,WA 99201 YAKIMA,WA 98901 KENNEWICx,WA 99336-2125 (425)451-0103 (2531581-1646 (360)696-7838 1509)353-2507 (509)248-8084 (509)7B3-0640 PRINTED ON RECYCLED PAPER RAILROAD INDUSTRY AGREEMENT I. BACKGROUND On April 2 and 3, 1998,the Surface Transportation Board("STB") conducted two days of informational hearings to examine issues of rail access and competition in today's railroad industry. In Ex Parte No. 575, the STB described the areas of concern expressed by the Short Line Railroads: "Paper Barriers" -- Contractual obligations incurred when Short Line carriers acquired lines from larger, connecting carriers; Inadequate car supply; and Lack of alternative routings. The STB noted that private-sector negotiations were already underway and urged the parties to resolve these issues expeditiously. In order to promote a stronger rail industry,this Railroad Industry Agreement ("Agreement") is entered into by the Association of American Railroads ("AAR") on behalf of participating Large Railroads (Class I carriers as defined by the regulations of the STB who subscribe to this Agreement) and by the American Short Line and Regional Railroad Association ("ASLRRA") on behalf of participating Small Railroads (Class II and III rail carriers as defined by the-regulations of the STB who subscribe to this Agreement). II. DEFINITIONS AND OTHER NOTES For purposes of this Agreement and accompanying attachments, the following apply: "Access" means interchange, intermediate switching, or haulage (or trackage rights at grantor's option); No new Access to industries, shippers or receivers not now served is granted or created; all Access is Railroad to Railroad; Carrier providing interchange, switching, haulage,trackage rights, or other service will be entitled to fair compensation for use of its facilities and/or services; "New Traffic" means traffic that(1) is not now moving by rail (except for reasons of seasonality or unusual disruptions of shipping patterns outside the control of the Large Railroad, such as plant shutdowns) and(2) does not unreasonably negatively impact the Large Railroad. "Congestion Problem" means that Access to or through a terminal, or to or via a track 1 segment,need not be granted because incremental traffic caused by the New Traffic cannot be handled without causing unreasonable interference with the owner's operations. If the interference can be reasonably remedied by additional facilities and/or services,the carrier seeking Access is entitled to such facilities and/or services,provided it pays fair compensation; "Short Line" ("SL")is a Class III railroad; "Small Railroad" ("SRR" )is a Class II or III railroad; "Large Railroad" ("LRR") is a Class I railroad; "Non-Short Line" ("Non-SL—) is a Class I or II railroad; "Railroad" ("RR") is a Class I,II or III railroad. III.PRINCIPLES OF RELATIONSHIP The parties agree that this Agreement shall be guided by the following public policy principles: General Laws and regulations must be consistent with the fundamentals of rail economics. That was the genius of Staggers reforms such as permitting differential pricing, authorizing contracts and allowing most rates to be set by the market led to a rail renaissance. Private sector solutions are best. Railroads and shippers are better served with market based solutions. Parties should.turn to government only when the market cannot operate effectively and then only when private negotiations fail. U.S. freight railroads are the most efficient-in the world and wholesale changes in how they are regulated should not be made in the absence of compelling evidence of significant problems. American railroads form the world's most efficient rail system and contribute to the international growth and competitiveness of U.S. industry. It is not sound public policy to mandate major changes unless there are serious problems and proven alternatives. Large and Small Railroads are integral to the provision of rail service in the U.S. The business common to each is a collective effort for the benefit of both Large and Small Railroads and the railroad shipping public,made possible by the unique contributions of each. Small Railroads deserve fair and workable solutions. Wheri a Small Railroad has a legitimate grievance, the available remedy should be as fair, quick and inexpensive as possible,particularly for minor disputes. Arbitration should be 2 available to settle most matters. Paper Barriers Only legitimate "paper barriers" should be enforceable. Paper barriers are restrictions on interchange imposed by contract at the time of the creation of the Short Line._ Legitimate paper barriers are those that are designed as fair payment for the sale or rental value of the line that created the Short Line.— Such barriers should not restrict the Short Line's ability to develop New Traffic with another carrier if the selling or leasing Large Railroad can not or will not participate in the New Traffic. Excessive per car charges or other penalties imposed if a car is interchanged to another Large Railroad(other than legitimate paper barriers) are unreasonable and should not be permitted. Routing Alternatives and Access Rail networks should be operated to maximize the efficiency of the network for ALL its users. A law or regulation that requires a Railroad to put the needs of the few ahead of the overall needs of the network is not sound public policy. Both Large and Small Railroads are dependent on interchanges and manifest train schedules. A Large Railroad seller/lessor should not be able to block a Short Line's reasonable attempts to gain New Traffic that the Large Railroad cannot handle or for which it cannot offer a competitive package. The Short Line's attempt to gain New Traffic is not reasonable,however, if(1)the incremental traffic caused by the new business cannot be handled without causing unreasonable interference with the Large Railroad's operations; or(2)the Large Railroad is not adequately compensated for use of its tracks,yards and other facilities necessary to accommodate the traffic between the Short Line and another Railroad; or(3)the traffic of the Large Railroad is negatively impacted by such action.. Rail revenues, service and routing choices are intertwined. Railroads are networks that require huge amounts of capital investment in order to function most efficiently. A law or regulation that reduces a Railroad's ability to invest in infrastructure is not sound public policy. Car Supply Car supply is a problem of mutual concern to Small and Large Railroads. The answer should not lie in government regulation,but in private industry negotiation. IV. PRINCIPLES OF AGREEMENT 1. Car Supply Policy(applies to all participating Class I, II and III Railroads) A joint committee of senior representatives of Large and Small Railroads will meet to explore opportunities where they can work together to meet customers' car supply needs for 3 existing and new business. In general,this committee will examine a long list of potential cooperative policies and innovative programs that will enhance car supply within the bounds of sound business principles and appropriate return on investment. A detailed protocol for car supply is attached as Exhibit A. 2. Cooperative Service Actions (applies to all participating Class I, II and III Railroads) Large and Small Railroads agree to develop and implement Interchange Service Agreements ("ISA's") with each other to include standards for service and measurements to be used to manage improvement. Regular meetings between Large and Small Railroad corporate and operating personnel will be scheduled to resolve issues and improve service to customers. A more detailed protocol governing service is attached as Exhibit B. 3. Paper Barriers and New Routes (applies to participating Class I and III Railroads) a) General Premise: If the requested Access or routing helps the connecting Short Line and does not harm the Large Railroad, then the request should be approved as it will improve shipper rail service while strengthening the rail industry. b)Paper Barriers and New Routes: The Large and Short Line Railroads agree to work cooperatively to increase rail freight business. Joint initiatives designed to increase Short Line freight business under certain circumstances include,but are not limited to,waiver of contractual interchange restrictions and Large Railroad haulage of Short Line traffic. See Exhibit C (Examples 1-7). In other cases, Large and Short Line Railroads may voluntarily agree at any time to renegotiate the terms of sale agreements including, but not limited to, terms relating to limitations on interchange (legitimate paper barriers). The renegotiations of limitations on interchange shall include consideration of additional compensation due to the Large carrier reflecting changes to the economic and market assumptions made by the Large and Short Line carriers at the time of original sale based upon the limitations on interchange at the time of such sale as well as all other relevant factors. 4. Switching Heaw Axle Loads, and Certain Rate Policies (applies to all participating Class I, II and III Railroads) a) Switch Charges: i) General Premise: The Large and Small Railroads agree that, subject to (iii) and(iv) below, existing(or future) intermediate sad reciprocal switching charges between Large and Small carriers shall be comparable to existing(or future) charges between Large Railroads in similar circumstances and conditions. ii) Any intermediate (switching between carriers) or reciprocal (switching between customer and carrier) switch charges existing between Large and Small Railroads on or after the effective date of this agreement shall be comparable to existing charges between Large Railroads in similar circumstances and conditions. See Exhibit D (Examples 8 - 12). 4 iii) This provision will not grant reciprocal switch Access for any carrier to any industry for which Access is not otherwise provided. iv)This provision shall not apply with respect to any switch charges that are the subject of any administrative or judicial proceeding as of the date of this Agreement. b)Heavy Axle Loads: With the growth of heavy axle load rolling stock(286,000 lbs. or greater),the Large Railroads agree to proportionately increase the Small Railroad share of the increase, if any, in overall revenue for handling heavy axle loads to reflect tonnage in.situations where traffic is paced on a per-car basis for the Small Railroad.' c) Certain Rates Policies: i) General Premise: The Large and Small Railroads commit to provide market-based competitive pacingfor their customers, regardless of whether located on a Class I or connecting Small Railroad, that is non-discriminatory under similar circumstances and conditions: ii)Recognizing that the establishment of rate and service levels are matters of individual rather than collective consideration, assessment of market conditions upon which joint line price levels are based will reflect consideration of capital and/or operating savings for the Large Railroads resulting from services provided by the Small Railroads in the route. See Exhibit E for the sole application of this subsection(c), V. APPLICATION All sections of this Agreement apply to Large Railroads (Class I) and Short Line Railroads (Class III)that indicate their participation by individual subscription to this - Agreement. All sections of this Agreement except Section(IV)(30) -- "Paper Barriers and New Routes" apply to Class II Railroads that indicate their participation by individual subscription to this Agreement. All items provided for in this Agreement shall be binding upon all participating Railroads Any relief available to any party under this Agreement shall be prospective only. To the extent that relief is granted by an arbitrator pursuant to the terms of this Agreement, such relief shall be limited solely to the period-commencing on or, at the arbitrator's discretion, after the date that the subject arbitration proceeding was initiated. VI. ARBITRATION The participating Large and Small Railroads agree that if they have a dispute arising under Sections.(IV)(30) -- "Paper Barriers and New Routes" or Section(IV)(4) -- "Switching, Heavy Axle Loads, and Certain Rate Policies" of this Agreement that cannot be resolved through discussion and negotiation between the parties involved, the parties will submit any unresolved issues to arbitration under the auspices of the STB (Ex Parte No. 560). Such arbitration will be 1 Subsection IV (4) (b) , Heavy Axle Loads, shall not apply to Montana Rail Link, Inc. ; provided that this carve-out is without prejudice to the rights of Burlington Northern Santa Fe or Montana Rail Link, Inc. under their existing agreement. 5 based on the policies and principles of those sections of this Agreement, and to the extent applicable,the associated examples and exhibits, and will be binding on the parties. VII. SENIOR POLICY COMMITTEE A joint "Senior Policy Committee" shall be created to provide oversight, review;and, if applicable, non-binding recommendations on all matters relating to the relationship between Large Railroads and Small Railroads created by this Agreement and on all policy aspects and issues relating to the application and effects of this Agreement. This Senior Policy Committee shall be comprised of six members consisting of the Chief Executive Officers of the AAR,the ASLRRA,two Large Railroads (to be designated by the Large Railroads) and two Small Railroads (to be designated by the Small Railroads). It shall meet semi-annually and, in addition, at any time upon the request of any member of the Committee or upon notification from a participant of its intent to withdraw from this Agreement. VII. AMENDMENT AND TERM (a) The parties to this Agreement recognize that changes may occur which require modification of the terms of the Agreement. In the event of such changes, the parties agree that they will negotiate in good faith to modify appropriately the Agreement. (b) The initial term of this Agreement shall be for a period of five years After the initial term,this Agreement shall remain in effect for additional successive one-year terms; provided, however,that during any such additional term, any party to this Agreement may withdraw from participation in this Agreement, only if such party has first(i)presented the reason(s)for such withdrawal to the Senior Policy Committee and (ii)provided 90 days written notice to the AAR and the ASLRRA The parties agree to the policies,principles and procedures stated herein and to advise the Surface Transportation Board of this Railroad Industry Agreement. Individual Large and Small Railroads will indicate their acceptance of this Agreement by executing a separate document indicating their agreement to subscribe to and be bound by the terms and conditions of this Agreement. For the Large Railroads: For the Small Railroads: Edward R. Hamberger(AAR) William E. Loftus (ASLRRA) Date: Date: 6 LIST OF EXHIBITS Exhibit A: Car Supply Protocol(applies to all participating Class I, II and III Railroads) Exhibit B: Service Policy Protocol(applies to all participating Class 1, II and III Railroads) Exhibit C: Guidelines for Paper Barriers and New Routes (applies to all participating Class I and III Railroads) Exhibit D: Guidelines for Intermediate and Reciprocal Switching(applies to all participating Class I,II and III Railroads) Exhibit E: Guidelines for Certain Rate Policies(applies to all participating Class I, II and III Railroads) 7 DEFINITIONS AND OTHER NOTES "Access" means interchange, intermediate switching, or haulage (or trackage rights at grantor's option); No new Access to industries, shippers or receivers not now served is granted or created; all Access is Railroad to Railroad; Carrier providing interchange, switching,haulage,trackage rights, or other service will be entitled to fair compensation for use of its facilities and/or services; "New Traffic" means traffic that(1) is not now moving by rail (except for reasons of seasonality or unusual disruptions of shipping patterns outside the control of the Large Railroad, such as plant shutdowns) and (2) does not unreasonably negatively impact the Large Railroad. "Congestion Problem" means that Access to or through, a terminal, or to or via a track segment, need not be granted because incremental traffic caused by the New Traffic cannot be handled without causing unreasonable interference with the owner's operations. If the interference can be reasonably remedied by additional facilities and/or services,the carrier seeking Access is entitled to such facilities and/or services, provided it pays fair compensation; "Short Line" ("SL")is a Class III railroad; "Small Railroad" ("SRR")is a Class II or III railroad; "Large Railroad" ("LRR") is a Class I railroad; "Non-Short Line" ("Non-SL") is a Class I or II railroad; and "Railroad" ("RR") is a Class I, II or III railroad. 8 r Exhibit A CAR SUPPLY (Applies to participating Class I, II and III Railroads) Large and Small Railroads will explore opportunities where they can work together, consistent with the antitrust laws,to meet customers' car supply needs for existing and new business. A joint committee of senior representatives of Large and Small carriers will identify car types for which existing fleets (Railroad, shipper, etc.) are projected to be inadequate for current and future demand. Further,the joint committee.will examine the ability of Small Railroads to provide freight cars for their customers for the purpose of developing cooperative policies and programs to enhance the ability of the Small Railroads to have the use of more new and used freight cars. Return on investment will be a consideration. The joint committee will report its recommendations quarterly to the appropriate representatives of the Large and Small Railroads. Policies and programs to be considered to determine if they are feasible and mutually beneficial include,but are not limited to: TTX ownership and operation of general service cars Regional pools for specific car types operated by interested Railroads Joint ownership of equipment by Large and Small carriers Underwriting of Small Railroad ownership by a larger carrier Continued review of rate arrangements Refurbishment of older cars Improvement of transit and turnaround times Opportunity for Small Railroads to buy surplus cars from Large Railroads on a mutually beneficial basis Longer term bilateral agreements to facilitate equipment financing Private agreement to establish car hire rates 9 Exhibit B SERVICE POLICY (Applies to participating Class I, II and III Railroads) Most Small Railroads are dependent upon and serve merchandise traffic that moves in non-unit manifest or local trains. Therefore, frequency and reliability of both interchange and manifest train schedules are of critical importance to the ability of Small Railroads, as well as Large Railroads,to serve their customers and to grow traffic and revenue. To maintain a higher level of service, Large and Small Railroads agree to establish procedures for Small Railroad corporate and/or operating personnel and Large Railroad senior corporate and/or operating officers (all of who having authority within their respective companies to effect a resolution of service issues)to meet on a regular basis in order to review, among other items,train service and interchange priorities. Each Large Railroad and each Small Railroad connecting with a Large Railroad will develop and implement Interchange Service Agreements ("ISA's") with each other. These ISA's will include agreement on terms and standards to govern service and common procedures to measure interchange performance, manifest and/or local train performance, and car cycle time for the purpose of providing Small Railroad customers with the equivalent level of service provided to similarly situated Large Railroad customers taking into account factors such as volumes, commodities transported and locations. 10 Exhibit C GUIDELINES FOR PAPER BARRIERS AND NEW ROUTES (Examples 1 - 7) (Applies to participating Class I and III Railroads) 11 1 r1 Example 1 Paper Barriers Short Line "A" (SL "A")and Railroad "B" (RR"B")both connect with Large Railroad "C" (LLR "C")either in a common yard or terminal area. There is an opportunity for New Traffic that would originate on"A" and terminate on "B", or vice versa. There is no Congestion Problem. "C" must grant Access by either allowing "A" and "B" to connect directly or by handling the traffic between "A" and "B" within the yard or terminal. If existing movements between "A" and "B" are provided for by a reasonable intermediate switch charge published by "C", "A" and "B" are already deemed to have Access. • New irarfic No Congestion Problem C's yard or terminal SL "A" � RR r'B.. � �rrrrrr� rr�rrwrrr•*��r�r��r�ii�s�r>s�r>.�r>•�r� New Traffic O/D - New Traffic QID u = a = oc . 12 Example 2 Paper Barriers Same facts as Example 1, except there is a Congestion Problem. Large Railroad "C" may deny Access. • New Traffic • Congestion Problem y C's yard or.terminal (congested) SL ,.A,. RR "Hr New Traffic OID New Traffic O/D rr - oc - N 13 Example 3 Paper Barriers A legitimate paper barrier [see Section(III)(6)] resulting from a line sale or lease by Large Railroad "A" to Short Line "B" which restricts "B" from interchanging with Railroad "C" will be suspended to allow"B" to interchange New Traffic with "C" without penalty it, after request by "B", "A" does not establish a competitive package (rates, service and car supply) and "C" does. LRR"a"not interested in new traffic *No Congestion Probenr U New Traffic OID C" r $L B+. *�Une$ale or lease trorn "A")of 41 - ''•'�+�+�� New Traffic SID or j, — ■ 14 Example 4 Paper Barriers Short Line "A" can physically connect with Short Line "B" via Large Railroad "C's" yard or terminal but a paper barrier restricts "A" from interchanging with"B". "B" connects with Short Line "D" and "D" serves Customer "X" also directly served by "C". "A" and "D" wish to develop business with Customer "X" that is not New Traffic. "C" may deny Access. •trot New Traffic NewTrafficOfO C's yard or terminal Current route u �'i�► of traffic '- :: oil Customer "X" New Traffic 0!D 15 Example 5 PAPER BARRIERS Large Railroad "A"/Short Line "B" traffic for Customer "X" has been lost to truck. "B" and "C" had no role in causing the truck diversion to happen. "A" must grant Access to "B" and Short Line "C" through "A's" terminal or yard to redirect traffic to rail from truck(New Traffic). There is no Congestion Problem. ■ NewTialfit No Congestion problem ``.,` • Former route of traffic a+ I . ` +• I r as `. ",4's" Yard or Terminal +Fj ti Now Traffic Olb ,...r..r,�r�.�...(� ..........r..L.+ r� ; ........ ....................r.b,., .''O customerC" New Tra i O'!p SL „g,. dr IL; W. .x �J ■ ■ 16 Example 6 New Routes Large Railroad "B" must grant Access via haulage (or trackage rights at "B's" option) for New Traffic originating on Short Line "A" and terminating on Short Line "C", or vice versa, for distances up to fifty(50)miles along "B's" line of railroad connecting "A" and "C" as long as there is not a Congestion Problem. "B" is not obligated to provide equipment:,' Haulage (or trackage rights at "B's" option)maybe for longer distance by mutual agreement. If"B" does provide equipment, "B" is entitled to participate as a line-haul carrier in the rate if it so chooses. •New Traffic 1 •No Congestion Frudem •Short Line to Shall Line •50 Mile Haulage SL ,'A,' New Traffic or) 0a ■■■.Pra ■■■■� 1 i 1 f = . Distance < 50 .Wles 1 SL H . 611 uu■11141111 uuwnI � New Traffic O/D, i 1 17 Example 7 New Routes Large Railroad "B" must grant Access via haulage (or trackage rights at "B's" option) between Short Line "A" and Non-Short Line "C" to move New traffic handled by "B" for distances up to fifteen(15) miles along "B's" line of railroad connecting "A" and "C" as long as there is not a Congestion Problem"B" is not obligated to provide equipment. Haulage (or trackage rights at "B's" option)may be for longer distance by mutual agreement. •No Congestion?rahlei n •Ouirr J ine to Non-Short Line &15 Nth da Wage % LRR B" �l�lil r i�rr�r �!r rte!1!•t11 r Iii r ■I�r�u ■ OT?-�f* c 75 miles a New Traffic GA) J [� New' T.Iffic O!D 18 i Exhibit D GUIDELINES FOR INTERMEDIATE AND RECIPROCAL SWITCHING (Examples 8-12) (Applies to participating Class I, II and III Railroads) 19 l f Example 8 Intermediate Switching Charges Small Railroad "A" serves a terminal where Large Railroad "B." currently provides intermediate terminal switching between a number of carriers including Small Railroad "C". Small Railroad "C" serves the same terminal as does another Large Railroad. Assuming the operating conditions are similar, "A" and "C" should pay the same or similar charges as the other Large Railroad for receipt of similar services. a Terminal --------- LRR "0" provides switching # � . • . 2O y Example 9 Intermediate Switching Charges Small Railroad "A" serves a terminal, as do Large Railroad "B" and Large Railroad "C". "B" owns a share of the terminal switching company and "A" and "C" own no share of the terminal switching company. "A" and "C" may pay a higher per car intermediate switch charge than "B", reflecting its ownership interest. Assuming the operating conditions are similar, "A" and "C" should pay the same or similar charges for receipt of similar services. Partially owned by LLR "0' SRR "B" LIaR "C" ee1111eP-re* esar--1ssrM-Me®V®ra4eOTeram)inal ne+nmiPeenqnranuvnnennnnai&wn e � a�F q1F. 0 fb 4* 21 Example 10 Reciprocal Switching Charges Large Railroads "A" and "B" and Small Railroad "C" serve a terminal. No other Large Railroads serve the terminal. "A" and "B" charge each other$400 per loaded car for reciprocal switching within the terminal. "A" charges "C" $500 per loaded car, and "B" charges "C" $600 or more per loaded car. "A" and "B" must each charge "C" $400 per loaded car, assuming similar circumstances and conditions. 22 Example 11 Reciprocal Switching Charges Large Railroads "A" and "B" and Small Railroad "C" serve a terminal.No other Large Railroads serve the terminal. "A" and "B" have a system-wide reciprocal switching arrangement with each other that provides for a per-car charge less than or equal to $250 per loaded car. The charge(assessed by "A" and/or"B" to "C")for switching in this particular terminal exceeds $250 per loaded car. If 115%of the actual cost of performing the reciprocal switch service is greater than$250, "A" and "B" shall each charge "C" no more than said 115% of actual cost. If 115% of actual cost is less than or equal to $250, "A" and "B" shall not charge "C" more than$250 per loaded car. Nothing in this example prohibits a lower switch charge to "C" if such is mutually agreed to by "A" and/or"B" and "C. 23 Example 12 Reciprocal Switching harges In terminals containing multiple Railroads (greater than three),the carrier, on which the particular customer to be Accessed by reciprocal switch is located, must not charge a Small Railroad a charge that is higher than the highest charge to a Large Railroad or$250 per loaded car,whichever is greater. (The involved Large Railroads may be parties to one or more system-wide reciprocal switching agreements providing charges to each involved carrier of less than or equal to $250 per loaded car.) NOTE:Nothing in the provisions of Examples 10, 11 and 12 will grant reciprocal switch access for any carrier to any industry for which Access is not otherwise provided. 24 a R ` Exhibit E GUIDELINES FOR CERTAIN RATE POLICIES (Applies to participating Class I,II, III Railroads) In the event that a Small Railroad has only one Class I connection or a Large Railroad has rate making authority on behalf of a Small Railroad, and the Small Railroad is trying to generate New Traffic or is threatened with the loss of existing traffic, and the Small Railroad believes that the Large Railroad is not adequately reflecting the Large Railroad costs or relevant market conditions in a rate charged to a shipper of a comparable commodity located on the Large Railroad in close proximity to a similar shipper located on the Small Railroad(similar circumstances and conditions),then the Small Railroad can request the Large Railroad,within ninety(90)'days,to examine its costs and relevant market conditions and meet to discuss the matter. For purposes of this Agreement, a haulage agreement between a Large Railroad and a Small Railroad does not give the Large Railroad rate making authority on behalf of the Small Railroad. The Large Railroad shall study its costs and the relevant market conditions, on an annual actual total cost basis, from the area requested by the Small Railroad to the first crew change location common for the similar Small Railroad and Large Railroad shipments in question. This study shall include all costs relevant to this segment of the Large Railroad(including any savings attributable to the then present Small Railroad operations as well as including any applicable handling charges paid by the Large Railroad to the Small railroad as part of the costs incurred.by the Large Railroad)and shall consider the volume and seasonality of the traffic in question and capability of the Large Railroad, due to economies of scale,to reallocate assets and personnel during periods of slow demand. After the requested cost study has been completed,the Railroads shall meet to discuss the results. Terms of confidential transportation contracts to which both Railroads are not a party will not be revealed. Acting on the results of the study,the Large Railroad may choose to adjust one or more rates and/or charges or may elect to retain the status quo. The Small Railroad, if not satisfied with the result, may invoke arbitration under Section VI of this Agreement. Both parties and the arbitrator will treat all cost information involved in the arbitration as confidential. Particular rates charged to individual shippers or receivers in transportation contracts shall not be considered in arbitration under the terms of this Agreement. The arbitrator's decision can only deal with the rate complained of, that is, the joint Large Railroad/Small Railroad rate. If the arbitrator determines that the rate charged by the Large Railroad to the Small Railroad shipper improperly favors the shipper on the Large Railroad,then the arbitrator may order a reduction of the rate, but only to the extent needed to eliminate such favoritism. The rights provided in this Exhibit E reflect unique circumstances and create no rights for any third parties. 25 Rigg •`r LETTER OF INTENT L. TRANSPORTATION AND COMMUNITY AND SYSTEM PRESERVATION PILOT PROGRAM SUMMARY INFORMATION: TYPE OF PROJECT REQUEST: Implementation Grant PROJECT NAME AND LOCATION: Freight Access by Rail (FAR) Project ORGANIZATION: Thurston Regional Planning Council KEY CONTACT: Jude Willcher, Senior Transportation Planner ADDRESS: 2404 Heritage Court SW Suite#B Olympia, WA 98502 PHONE/FAX/E-MAIL: 360.786.5480/360.754.4413 / willchj @co.thurston.wa.us ESTIMATED GRANT REQUEST: $5,700,000 (30% of estimated project cost) FFY 2002 PROJECT DESCRIPTION: The project is a partnered effort to rehabilitate abandoned rail facilities to Class 4 rail operation, and significantly improve freight and.passenger movement in the South Puget Sound region. The Cities of Tacoma and Yelm have purchased surplus rail line from Burlington Northern/Santa Fe to preserve rail access to locally significant port and industrial locations. Combined and upgraded,they offer an exceptional opportunity to improve rail and highway congestion in the I- 5 corridor from Tacoma south toward the Portland environs. In the short term, freight traffic will be diverted from congested major highways to more efficient rail facilities. In the long term,this project fits into a greater concept of using four travel routes within the critical Pacific Northwest Cascadia Corridor to serve rail freight, road freight, rail passenger and road passenger traffic. y q. PURPOSE and CRITERIA EFFICIENCY The FAR Project significantly improves efficient freight movement in the South Sound Region. It provides substantial relief to a single Class 4 main rail line threading through urban areas. It also enhances short line service to the Port of Olympia, which provides relief to other Puget Sound port facilities but suffers from poor rail linkages. Lastly, it frees other trackage for the Port of Tacoma to better perform rail/ship intermodal transfers at its Point Defiance location. ENVIRONMENTAL IMPACT Interstate 5 from Tacoma to Chehalis currently must handle significant freight and people movement; in some portions, truck traffic constitutes over 30 percent of total traffic. This section of I-5 skirts Puget Sound, overcoming topography changes and traveling through river systems that support salmonid and other sensitive species. In the absence of freight traffic relief, I-5 will require substantial capacity and operation improvements likely to cause further environmental impacts. By contrast, the FAR Project takes advantage of an existing facility which wili not require further impacts to place into service. 'Further, it will improve air quality in the cities of Olympia and Lacey, by reducing freight operations through congested urban areas and potentiating high capacity rail passenger service from Seattle to the state's capital city. REDUCE COSTLY FUTURE INVESTMENTS One current proposal to address I-5 congestion contemplates the addition of a dedicated freight lane for roughly 20-30 miles. For less than the cost of six lane miles of interstate in this area, the FAR Project will provide almost 55 miles of Class 4 rail service. Adding a dedicated freight lane on I-5 would require a massive incremental cost to provide HOV lanes due to lack of space for more expansion. EFFICIENT ACCESS TO JOBS AND CENTERS OF TRADE A substantial number (20% and increasing) of area residents commute to jobs from Thurston and Pierce Counties to the greater Seattle/Tacoma metropolitan area. Relieving freight traffic on the single main line will allow the southerly extension of the 2.1-billion dollar RTA commuter rail project currently underway in Seattle and Tacoma. Commuter rail service would then link Seattle to affordable suburban areas, as well to numerous public sector jobs at the U.S. Army's Fort Lewis and to Olympia, Washington State's capital city. PRIVATE SECTOR DEVELOPMENT PATTERNS The FAR.Project takes advantage of rail facilities originally used for timber harvesting. Industrial land uses shaped by the rail are still in place and would greatly benefit from renewed freight rail access. Additionally, revitalizing the existing industrial base will result in more efficient use of existing areas and reduce the demand for industrial expansion elsewhere. Proposed commuter rail service along the current Class 4 rail would act as a catalyst for market- driven residential densification in the urban areas of Thurston County. By freeing up capacity on this line and potentiating commuter rail, the FAR Project promotes Washington State's adopted Growth Management policies for the region. NON FEDERAL RESOURCES/NON TRADITIONAL PARTNERS The FAR Project is being developed through a partnership including state, local and private sector entities. Washington State Department of Transportation,the Port of Olympia, Port of Tacoma, City of Tacoma and the City of Yelm have endorsed the FAR Project concept . The Port of Chehalis, Burlington Northern Santa Fe Railroad and Puget Sound and Pacific Railroad have indicated an interest in augmenting freight rail service in the region. The specific role and contribution of each partner will be identified through a feasibility and preliminary engineering study. The study itself will be conducted with partner investments, possibly augmented with state High Capacity Transit funds. The study will be performed in program years prior to the proposed implementation date of FFY 2002. GEOGRAPHIC DISTRIBUTION The South Sound region of Washington State offers a unique opportunity to examine the impacts of adopted Growth Management strategies. As exurban development reaches out from the Seattle/Tacoma metropolitan area to the independent Olympia environs, the blending of growth and economic activities will be greatly influenced by the way common transportation needs and issues are addressed. Additionally, the FAR Project will engage industrial-based communities whose former role in the regional economy was substantial but now survive as small rural centers. The revitalization of their facilities and services will present a case study which can be applied throughout the country.