Daily Archives: January 14, 2006

City Council, Illinois American Water

About that water buyout plan….

Even if I were in favor of the city buying the water company, which I’m not, I would still think this was a fool’s errand:

The City Council will vote Tuesday on whether to spend up to $50,000 to hire Clark-Dietz, a Champaign-based engineering firm, to represent all of the entities in discussions with Illinois American . . . Though [the franchise agreement’s] buyout option will resurface in 2008, some Peoria officials believe there may be a chance to buy back the waterworks before then and perhaps for less than the $220 million pricetag set by appraisers.

Note to city council: do a Google News search on “RWE American” and see what articles come up. You’ll find that cities in Kentucky, West Virginia, Tennessee and elsewhere have all looked into the possibility of buying a piece of RWE’s American Water Company. All have been rebuffed by RWE.

Lexington, Kentucky, has a familiar story. Back in December, their city council “approved setting aside $50,000 for the city’s water committee to do its work in examining the possible purchase of Kentucky American Water from RWE AG . . . Last week, the water committee decided to hire Coady Diemar Partners, an investment bank that provides strategic financial advice and corporate finance services, to guide the committee through the process.”

And for that money, they got this response from RWE: “The record is clear, that neither RWE nor American Water have expressed any interest in selling Kentucky American Water.”

Now, wasn’t that worth $50,000?

Not to be outdone, Peoria is also poised to spend $50,000 — perhaps up to $113,000 — to be told essentially the same thing.

I just don’t understand the council. Can’t they get it through their heads? RWE is not going to sell American Water Company in pieces. I think RWE has made that abundantly clear from the beginning. What part of their stance doesn’t the city understand?

I guess after dozens of years of ignoring Peoria residents on this issue, they’ve just become deaf to water-buyout opposition.

Kellar Branch

Pioneer appeals STB ruling

Pioneer Industrial Railway (PIRY) is appealing the Surface Transportation Board’s (STB) December 22, 2005, decision to allow the Central Illinois Railroad Company (CIRY) to discontinue service over the Kellar Branch. That ruling was to take effect January 22, 2006. Pioneer filed its appeal on January 12 in the U. S. Court of Appeals for the D.C. Circuit.

It’s getting hard to keep up with all the legal action taking place. Pioneer still asserts that its contract with the city to provide service on the Kellar Branch is still in force — they have litigation in state court to decide that issue. Then there are two actions they’re taking with the STB — first, they’re requesting a stay to keep the STB’s Dec. 22 decision from taking effect on Jan. 22. Second, they’re appealing the STB’s decision to the U. S. Appeals Court.

Pioneer has been trying to delay the city’s plans to turn the Kellar Branch into a trail for quite a while now. What’s different this time is they have a new ally of sorts. Up until now, Carver Lumber has not objected to the city’s plans to take out the branch and provide alternative rail service from the Union Pacific line to the west. But now they’ve broken their neutral stance because of numerous broken promises from the city, including their failure to continue providing rail service over the Kellar Branch until the new western spur is built.

Since the STB’s decision was largely based on the belief that no businesses on the rail line would be harmed if the Kellar Branch were closed down, Carver’s filing with the STB changes the complexion of the case.

In any event, the Park District and other trail enthusiasts had better not count on deconstructing the Kellar Branch rail line any time soon.