Daily Archives: July 24, 2006

City of Peoria, Kellar Branch

Carver asks city to reimburse $41,000 in shipping costs

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As I mentioned last Friday, Carver Lumber has filed its report to the Surface Transportation Board regarding the service it has been receiving via the newly-built western spur. You can read their letter here (84KB PDF file).

They give a lot of details, but the basic facts are these:

  • Deliveries that used to take 1-2 days via the Kellar Branch hauled by Pioneer Industrial Railway (PIRY) are now taking 4-8 days via the western spur hauled by CIRY — a 400% increase in delivery time.
  • The cost of delivering rail cars via the western spur is double what it cost for PIRY to deliver the same cars via the Kellar Branch.

Slower delivery, higher costs. But here’s the kicker (emphasis mine):

As I believe the STB knows, service to Carver via the Kellar Branch was interrupted due a CIRY [Central Illinois Railroad Co.] runaway/derailment/collision during their first delivery attempt to Carver forcing us to transload material for a period of nearly 5 months […] resulting in costs to date of $41,605.10 which neither the City or CIRY have been willing to reimburse. We are currently seeking the aid of independent legal counsel in an effort to collect these costs. […] [W]e believe the City of Peoria is obligated to provide Carver Lumber with sufficient rail service, and that the disruption in rail service experienced by Carver Lumber should be compensable.

The city, which has $60,000 to spare for decorative garbage cans, millions for a museum, and no limit to TIF districts for local developers, is unwilling to reimburse $41,000 to Carver Lumber — a local business for over 60 years — for increased shipping costs that were the direct result of the city’s own negligence and unwillingness to enforce its contract with CIRY. And the city wonders why it’s perceived as not being business-friendly.

Carver further states they have “tried to work with both the City of Peoria (CIRY) and the Union Pacific to address the issue of guarantying minimum levels of service and rate stability to no avail.” That’s a far cry from Public Works Director Steve Van Winkle’s November 10, 2004, letter to Carver Lumber that stated (emphasis mine):

This letter is, in part, to tell you that the City has no intention of discontinuing service over the Kellar Line until the western connection is fully operational. These two projects are currently timed to coincide well. In the event that either is delayed, the City assures you that it will make an adjustment in the timeframe so that there is no interruption of your rail service. We will not discontinue service over the Kellar Line until the western connection is fully operational.

As for the ability of the City to intercede on your behalf should issues of service andlor cost arise in the future, we call to your attention that we have contracted with DOT [parent company of CIRY] for service from the West. Article 14 of that contract specifically provides that DOT shall pick up and deliver cars within 24 hours after being notified by the UP that the cars have been placed on the Peoria Pioneer Spur. The City stands ready and willing to enforce all aspects of its contract with DOT and with the Union Pacific Railroad. The City has the ability, under its agreement with DOT, for all legal remedies up to and including termination which would allow the City to replace their service with another company.

CIRY never did make a successful delivery over the Kellar Branch, thus service was discontinued before the western spur was completed, resulting in the $41,000 in extra shipping costs.  Furthermore, their deliveries have been taking 4-8 days instead of the 24-hour turnaround promised by the city and specified in CIRY’s contract. Yet not only does the city not enforce their contract, which CIRY has demonstrably breached in most egregious manner, it won’t even reimburse Carver for the results of that breach of contract!

Carver concludes their report by asking that the Kellar Branch be reinstated and that Pioneer Railcorp be allowed to provide service over it, due to CIRY’s “demonstrated inability, and stated unwillingness, to provide service over the Kellar Branch.”

Peoria Public Schools

School board meeting tonight at 5:30

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Peoria Public School District 150 will be meeting tonight at 5:30 to discuss the new school for the Woodruff High School attendance area. You can join them at 3202 N. Wisconsin Ave. and let your voice be heard, or you can watch them on cable channel 17.

I’ll be on a date with my wife tonight, so I’m afraid I won’t be able to attend. The options were The Fish House and a movie, or the school board meeting. Can you believe she chose the former?

Of course, I’ll tape the meeting for later.

UPDATE: I was mistaken about the TV coverage — they only broadcast “regular” school board meetings, and this one is a “special” meeting. So, you’ll have to go in person if you want to see it. I guess I’ll have to read about it in the paper tomorrow….

City Council, City of Peoria, Peoria Civic Center

City to consider another consultant for Civic Center hotel

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On the council’s agenda for Tuesday night is a request to hire yet another consultant to determine whether Peoria needs a hotel connected to the Civic Center. This one costs $21,000 and will look at demand for hotel rooms, what impact the proposed Civic Center hotel would have on existing hotels, and the quality of existing hotel space downtown.

According to Paul Gordon’s column in the Journal Star yesterday, every one of the requests for proposals for a new hotel connected to the Civic Center said such a hotel would require public assistance, such as a TIF district. I’m no business genius, but that would indicate to me there is not enough demand for hotel rooms to make a new hotel profitable.

If there’s not enough demand for a new hotel, and if a new hotel were built with the help of public money, what kind of an impact do you expect that would have on other downtown hotels? The new hotel could leverage its room rates on the taxes the other hotels are paying. Is that fair?

The last criterion is the most curious: the quality of existing space. What purpose does this serve, exactly? And how is quality going to be measured? And suppose the consultant finds that existing hotels don’t meet these quality standards? Would that be used as a justification for building a competing hotel with the help of public funds? Why not use those public funds to help the existing hotels instead?

I think the RFPs speak for themselves, and this consultant is unnecessary. Until a hotel can come into Peoria, attach itself to the Civic Center, and be profitable under the same conditions as Peoria’s other hotels, we don’t need one. The city shouldn’t waste its money on the hotel or the consultant.