The Village of Peoria Heights wants Pioneer to clean up the Kellar Branch, and they’re threatening to kick Pioneer off the line if things don’t improve in 60 days. They’ve retained the services of the firm of Vonachen, Lawless, Trager & Slevin, and sent this missive to Pioneer on March 31, 2008:

Dear Mr. Carr:

This law firm represents the Village of Peoria heights. Pioneer Railroad Corp. claims rights under an agreement signed on July 10, 1984. The Village of Peoria Heights is hereby placing Pioneer Railroad Corp. on 60-day notice of its default regarding the agreement presently in place between Pioneer Railcorp and the Village.

The Village shows no record of any yearly payments being made for use of the railroad tracks. The rental fee is $1.00 a year. To date, there is no record of this payment ever being made to the Village.

Pioneer Railcorp has also never supplied to the Village records on a monthly basis showing the information regarding the rail cars which have been moved through the Village. This would include “…the car number and initials, the shipper or receiver thereof; and the date of shippage, receipt of all revenue cars shipped or received by industries located on or adjacent to said tracks, including team tracks.”

Most importantly, Pioneer Railcorp is contractually bound to maintain drainage and correct drainage issues and problems along the tracks within the corporate limits of the Village of Peoria Heights. There is no evidence that these issues have ever been addressed by Pioneer Railcorp, leading to a decrepit and dangerous situation along the rail tracks in the Village. We are enclosing a report illustrating these drainage issues. This report was completed by Randolph & Associates, Inc. These issues are many, and have an extremely negative impact on the private properties surrounding the tracks.

These issues need to be addressed and corrected within 60 days of the receipt of this notice.

Per the default clause of the agreement signed on July 10, 1984, “The rights herein granted to the P&PU (Pioneer Railcorp) are expressly conditioned upon the performance by the P&PU (Pioneer Railcorp) of all and singular the covenants and agreements herein set forth to be performed by the P&PU (Pioneer Railcorp). In the event the P&PU (Pioneer Railcorp) shall default in the performance of any of its obligations hereunder, and such default shall continue for a period of sixty (60) days after the receipt of written notice thereof by certified mail, return receipt requested, from the CITY (Village of Peoria Heights), the CITY (Village of Peoria Heights) shall have the right at any time thereafter to terminate this agreement forthwith.”

In short, all of these drainage issues need to be corrected within this 6O day time frame, inspected and attested to by Randolph & Associates that ALL work has been completed, or the Village of Peoria Heights will send notice that the agreement is terminated, and that Pioneer Railcorp will be hereafter removed from using the Kellar Branch Rail Line for any reason, whatsoever. This also applies to the $1/year rental fee, and the reports showing the rail usage over the past 24 years by Pioneer Railcorp.

All of these listed areas need to be rectified within the 60 day time frame. Pioneer Railcorp has taken virtually no steps through the years to correct the drainage issues that have detrimental effects on the surrounding landowners. Pioneer is now on 60-day notice to have every real and potential drainage issue corrected, and verified by Randolph & Associates, along with submitting all information and monies which should have been on a timely basis through the years.

Sincerely,
VONACHEN, LAWLESS, TRAGER & SLEVIN
by M. Michael Waters

Now, before we consider the individual claims in this letter, let’s just remember that Peoria and Peoria Heights have maintained up until now that the 1984 contract expired under its own terms in 2004. Now the Heights is suddenly acting as if this contract is still in force. That potentially opens a big can of worms for them, since they are basically admitting they were in breach of contract during the years they kicked Pioneer off the line without cause and contracted with another rail carrier.

Also, it’s good to remember that the Surface Transportation Board has not taken a position on whether this contract is still in force. They’ve made it quite clear in their rulings that they don’t care if it’s in force or not. They’ve ordered that Pioneer be allowed to provide service on the Kellar Branch because that’s what they have deemed best for interstate rail transportation, and their ruling supersedes the City’s and the Village’s power to remove Pioneer from the tracks, contract or no contract. So the threat of removing Pioneer from the branch after 60 days is empty.

That said, however, the claims made in the letter are largely in error. They have three complaints:

1. Non-payment of lease fees. It’s easy to prove that the lease fees were paid. Here’s the receipt. They paid $6 in 1998, which would have paid them up through 2004. If the Heights didn’t get their fair share of that money, perhaps they should send a collection letter to the City of Peoria. Pioneer sent another lease payment check to the City in 2004, but it was returned to them with a strongly-worded response from City attorney Randy Ray who said, in part, “Please refrain from further attempts at payment to the City.”
2. Non-receipt of reports. The monthly rail car movement reports have also been made to the City of Peoria, at least through 2004, when the City said the contract expired and stopped taking Pioneer’s lease money — maybe longer (the City’s legal department is checking). [Update: City Attorney Randy Ray states that the last report was received March 16, 2004.] It seems to me that Peoria Heights needs to communicate with the City a little better (and vice-versa).
3. Non-completion of required drainage maintenance. Any maintenance issues not on the tracks or roadbed are the contractual responsibility of the City/Village, as a plain reading of the 1984 contract shows. That agreement was made originally with Peoria & Pekin Union (P&PU), then taken over by Pioneer in 1998. The pertinent clauses are 4(e) and (f). Emphasis in the following is mine:
   

   (e) The CITY shall be responsible, at its discretion, for performance of weed and brush control not on the roadbed which does not affect rail operations or safety. Unexpected and abnormal maintenance after January 1, 1986 which is over and beyond expected problems which would be rectified by normal preventive maintenance, and which is caused by unforeseen casualty other than railroad accidents, shall be repaired by the P&PU at the cost of the City not to exceed $10,000 in any calendar year. Prior to repairing any such damage, the P&PU shall consult with the CITY as to its plan to remedy the situation and the cost thereof.

   (f) The P&PU shall assume the responsibility for all maintenance of tracks, crossing protection, and roadbed including weed, brush, snow and ice control thereon, and normal yearly drainage control maintenance.

   As you can see, anything not on the roadbed is the City’s responsibility (or Village’s for the portion of the line within their municipal limits); the rail carrier only has responsibility for the roadbed and tracks to ensure safety.

   Now the Village has some legitimate complaints here about erosion under some of the ties and railroad ties lying in the ditches. Pioneer should take care of those issues. However, a majority of the Village’s complaints have to do with weed and brush control that is clearly the Village’s contractual responsibility to abate.

I wonder if the Village ever thought to simply ask Pioneer to help clean up some of these areas before sending them a threatening letter. Does all this bitterness and hostility achieve anything? As they say, you can catch more flies with honey than with vinegar.