Carver Lumber finally received rail service again when Union Pacific dropped off three cars on the western spur and Central Illinois Railway delivered them to Carver’s loading dock on Thursday, March 16. Local blogger and train enthusiast David Jordan reported this event on the PeoriaRails Yahoo Group:

Central Illinois Railroad made its first revenue run today.

DRSX SW-9 #1207 pulled the three cars from Pioneer Jct. [where the western spur meets the Union Pacific line] and delivered them to Carver Lumber, restoring service to this customer for the first time in seven months, and becoming the first revenue freight train to operate on the former Union Pacific Pioneer Industrial Lead since the last boxcars were delivered to International Paper before closure in late 1995.

Boxcar BCOL 60384 is on spot by the unloading platform, centerbeam flat car TTZX 34700 was already unloaded by 4:00pm while the second boxcar, HS 3185, sits just inside the gate waiting to be spotted (still coupled to the TTZX car). A fourth car (TTZX 84700) is enroute . . . .

Central Illinois Railway (CIRY) never did provide service to Carver Lumber over the Kellar Branch as the city promised and CIRY’s contract stipulated. They attempted it once with insufficient equipment and ended up with a runaway train and a derailment. During the seven months they were without rail access, Carver Lumber had to ship their freight by truck, adding over $25,000 to their shipping costs.

You may remember that Carver Lumber reported this to the Surface Transportation Board (STB) and asked the Board to stay their order allowing the city to remove the Kellar Branch tracks. Carver wanted the order stayed until they started receiving rail shipments again and could get assurance that service via the western spur would be comparable to the service they used to receive from Pioneer Industrial Railway (PIRY) over the Kellar Branch.

Now that they’ve received their first shipment over the new spur, they will presumably be replying to the STB with their report on the adequacy of service they’re receiving. Rail experts speculate that Carver will be paying more for rail service due to the additional routing of shipments.

Meanwhile, PIRY has been busy filing multiple requests with the STB and litigation in state court and U.S. Appeals Court. The U.S. Appeals Court case is apparently on hold pending the Board’s decision on whether to lift their stay or reopen the proceeding that allowed service to be discontinued over the Kellar Branch.

So, expect this to drag out for a while.

Continue reading Kellar Branch Update: Western spur gets its first test →

Just in case you missed it, you can read it here.  It was, of course, about the Kellar Branch.  There have been several pro-trail letters to the editor lately, and I just couldn’t stand reading all the misinformation anymore.  I hope my letter will cause some people to reevaluate their support for turning a viable rail line into a trail.

One interesting fact:  the publishing of my letter is the first time the Journal Star has disclosed the amount of money Carver Lumber has lost (over $25,000) due to the city’s pursuit of this rails-to-trail debacle.

Let’s recap Central Illinois Railroad’s less-than-stellar operation in Peoria.

The Contract.  On April 27, 2004, the City of Peoria signed a contract with Central Illinois Railroad Company (owned by DOT Rail Service of LaSalle, Ill.) to replace Pioneer Industrial Railway as the common carrier provider on the Kellar Branch.  There was quite a bit of delay as Pioneer contested this with the Surface Transportation Board, but the City won their case, partially on the premise that “[t]here is no evidence that [Central Illinois Railroad Company’s] rail service on the Branch would be inadequate in any respect,” and Pioneer left the line in mid-August 2005.

Solicitation for Murder.  On May 12, 2005, the owner of DOT Rail Service, Donny Lee Gibson, was arrested and charged with a Class X felony solicitation of murder for hire. Gibson, 65, wanted to have his 28-year-old girlfriend killed before his wife found out about her.  He copped a plea this past Tuesday, pleading guilty to a Class 1 felony solicitation of residential burglary charge instead.  That’s punishable by four to fifteen years in prison.

Runaway Train and Derailment.  On August 27, 2005, the Central Illinois Railroad Company, on their maiden voyage up the Kellar Branch to make a delivery to Carver Lumber, lost traction and sent the load backwards down the line at 30 mph — dragging the “engine” with it (they didn’t actually use a real engine, but rather a Trackmobile which has insufficient power for the Kellar’s steep grade).  The speed limit for trains within the city is 10 mph.  The runaway train went through several grade crossings — including such busy streets as Abington, Madison, Jefferson, and Adams – endangering Peoria motorists. Miraculously, no one was hurt.  The runaway train derailed when it hit other cars parked near the switch that connects the Kellar Branch to the Tazewell & Peoria line (TZPR).

Breach of Contract.  Since the derailment, no shipments have been made to Carver Lumber by Central Illinois Railroad Company.  That puts them in breach of contract, as their agreement with the city specifically states:

Article 11. Level of Service. DOT shall pick up and deliver cars within twenty-four (24) hours after being notified by the P&PU that the cars have been placed on the Kellar Branch.

Carver, in its filing with the Surface Transportation Board this month, said they’ve been forced to have their lumber delivered via truck — at an additional expense of $25,000 — because no deliveries are being made by Central Illinois Railroad Company. 

City Response.  In a letter from Peoria Public Works Director Steve Van Winkle dated November 10, 2004, he assured Carver Lumber there would be no interruption in their rail service, and that if there was, “[t]he City stands ready and willing to enforce all aspects of its contract with DOT….”  He went on to say, “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.”

According to the contract, if Central Illinois Railroad Company does not perform its duties under the contract, and if that default continues for sixty days (two months) after receiving written notice from the city, the city can terminate the contract.  The derailment — the first instance of Central Illinois Railroad Company’s default — occurred in August 2005, a full five months ago. 

That means they’ve been in breach of contract for five months, costing Carver Lumber — a local business since 1946 — over $25,000 in extra shipping costs.  Why isn’t the city enforcing its contract with Central Illinois Railroad Company and fulfilling its promise to Carver that rail service would not be interrupted?

Why hasn’t the City of Peoria fired Central Illinois Railroad Company?

There are few things in today’s Journal Star editorial about the Kellar Branch that deserve a response:

The park district, unable to act, has watched about half of a $400,000 state grant evaporate.

It’s worth pointing out that the park district applied for that money prematurely–before going to the STB, building the spur, etc.  It’s their own fault that they jumped the gun and are paying the consequences now.

. . . the lumber company is temporarily shelling out more for truck service . . . 

This is the only reference, vague as it is, to the fact that Carver has incurred over $25,000 in additional costs for truck service. Why didn’t they put the numbers in their editorial?  They didn’t have any trouble mentioning the $400,000 grant the park district is concerned about.

. . . it has Pioneer to blame for blocking early construction.

Ah yes, it’s all Pioneer’s fault!  I’m not about to contest the fact that Pioneer did in fact delay construction, but they’ve been off the tracks since August 2005.  What’s their excuse for the past five months?  At least while Pioneer was delaying construction, they were making deliveries to Carver.  Now that construction is not delayed, Carver’s getting no shipments at all.

Besides that, this editorial leads people to the false conclusion that the reason Carver isn’t getting shipments is because the western spur isn’t finished.  That’s misleading.  The reasons they aren’t receiving shipments is because (a) Metroplex tore up a part of the line where the spur meets the Kellar Branch, so no trains can cross, and (b) the city’s carrier, Central Illinois Railroad, can’t get the rail cars up the steep incline of the Kellar Branch. And did I mention because they’ve never made a sincle shipment to Carver, they’re in breach of contract with the city?  I wonder what action, if any, the city is taking against them for that. 

Central Illinois Railroad and long-hauler Union Pacific have some physical stumbling blocks to sort out.

This is excessively vague. What do they mean by “physical stumbling blocks”? Do they mean the junction the city is building where the western spur meets the UP line that will only allow for cars to be dropped off by north-bound trains?  Or do they mean CIRY’s inability to secure trackage rights to run a train to the western spur on the UP line?

U.S. Rep. Ray LaHood, who has worked diligently to get the trail going, has again offered to help.

And by “help,” they mean “help the park district get its beloved trail.” It’s gotta make a business like Carver feel good to know their own congressman is siding against them.

As usual, the problems with the city’s carrier (CIRY) and contractor (Metroplex) are glossed over and the plight of Carver Lumber is minimized.

Somebody tell Bonnie Noble to put her sledgehammer away — the demolition of the Kellar Branch has been delayed.

The Surface Transportation Board today decided to stay the effective date of their decision to discontinue service on the Kellar Branch. The Board stated:

The Board’s decision granting CIRY’s petition for exemption was premised on the fact that the existing shippers on this segment of rail line would receive rail service in the future via a new western connection to the Union Pacific Railroad Company (UP) or by some other arrangement . . . . In its letters, Carver Lumber expresses concern about allowing CIRY’s discontinuance authority to go into effect because the western connection has not yet been completed. Carver Lumber also raises several issues regarding the western connection to UP that call into question the availability and practicability of that alternative when it is completed. Until these issues are resolved, it would be inappropriate to allow this discontinuance to become effective.

A stay of the effective date of the exemption is appropriate to allow time for the parties to provide additional information and for the Board to consider the issues presented in Carver Lumber’s filing. Accordingly, the exemption will be stayed pending further order of the Board. In the interim, CIRY and the City are directed to keep the Board informed of their progress in addressing and resolving the issues raised by Carver Lumber.

This Board’s decision was originally set to take effect January 22. That date has now been postponed indefinitely.

I know some of you are tiring of the Kellar Branch deal, but if you’ve ever wondered why Peoria has a reputation for being anti-business (or at least anti-local-business), one need look no further than this debacle.Carver Lumber is located on the Kellar Branch line and relies on rail transportation for shipping (it’s considerably cheaper than trucking).  They agreed to the city’s plan to turn the Kellar Branch into a hiking/biking trail on the condition that equivalent service be provided via a “western spur” that the city promised to build.  What the city has done is:

• Replace a reliable carrier (Pioneer Industrial Railway) with an unreliable and incompetent carrier (Central Illinois Railway)  which not only hasn’t made a single shipment to Carver yet, but endangered Peoria citizens with a runaway train and damaged the rail line with a careless derailment;
• Tear up a section of the Kellar Branch so that, even if CIRY were competent enough to get a load of lumber up the bluff, it couldn’t deliver it to Carver because the line is obstructed;
• Not completed the western spur as promised.

Now Carver is making a reasonable request of the Surface Transportation Board: stay the Board’s decision to discontinue rail service on the Kellar Branch until (a) the western spur is completed, and (b) service via the western spur has proven to be adequate for Carver’s needs.

The city’s response?  “That would not be appropriate.”

That’s what the city’s attorney Tom McFarland wrote to the Surface Transportation Board today.  He goes on to say, “It would not be appropriate to stay the Board’s decision for an indefinite time while the adequacy of service from the west is tested, and perhaps to overturn the Board’s decision if Carver Lumber deems that service to be inadequate.”

In other words, turning the Kellar Branch into a linear park is more important than maintaining a profitable business climate for a long-time, local Peoria business.

It’s actually worse than that.  The city has no agreement with Union Pacific to use their line to the west, despite the western spur they’ve connected to it.  So, by saying it’s “inappropriate” to stay the decision “until the adequacy of service from the west is tested,” what they’re really saying is they’re not willing to ensure Carver can receive any shipments at all via the western spur before they start ripping up the rails on the Kellar Branch!

And why is it they’re doing this?  For a hiking/biking trail.

Make no mistake, parks are more important than business in Peoria.

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.

I mentioned in my last post that Pioneer Industrial Railway (PIRY) also sent a petition to the Surface Transportation Board (STB). Here’s a copy of their filing (large PDF file). It’s a “petition for stay pending reconsideration or appeal.” It’s been filed not by the company attorney, but Washington, D.C., attorneys Baker & Miller, PLLC, who specialize in transportation matters, including proceedings before the Surface Transportation Board.

They present a compelling case. From reading their petition on behalf of PIRY, you can tell they’ve really done their homework. They’ve gone back and looked at every one of the cases the STB cited as precedent for their decision and, of course, drawn different conclusions than the STB.

Their strongest argument is the letter from Carver Lumber that “refutes the main factual premise which led the board to authorize discontinuance”; namely, that “[t]he shippers served by CIRY . . . do not object, and will continue to be served from the north or from the south . . . .” We now know that’s not true.

In fact, Carver isn’t being served at all. Carver Lumber’s letter makes clear that since the City’s carrier, CIRY, took over last year, not one shipment has been made to Carver Lumber. The one time it was attempted, it was with inadequate equipment, resulting in a runaway train (through several grade crossings at 30 mph, threatening public safety) and a derailment.

The filing also claims that a proper environmental impact study was not completed, and that Pioneer was unjustly refused the opportunity to purchase the Kellar Branch from the city. I think there’s a good chance the STB will grant the stay and hear the appeal for the sole reason of Carver Lumber’s concerns.

All this leaves me with several questions. Why is the city making it so difficult for Carver Lumber to do business? Do they not care about small, locally-owned Peoria businesses? What does this action say to potential businesses who might consider locating in Peoria? What does it say to potential businesses who might consider locating in or near Pioneer Park? What does sacrificing Carver Lumber’s business for the sake of the Park District’s trail extension say about the city’s priorities? And where are the Peoria Journal Star reporters on this story? Isn’t it news that the City of Peoria is directly responsible for over $25,000 in additional transportation costs for one of its local businesses? Isn’t that outrageous enough to warrant an editorial, or at least a front-page story in the local section? I sure think so.

This whole project has been outrageous from the beginning, and the City Council should put a stop to it. The filing by Pioneer concludes:

There is a way by which CIRY can be relieved of its operating obligation, the City compensated for the use of its tracks, the environmental impacts adequately studied, and service to shippers maintained. That way is by granting the stay, reconsidering the Board’s decision, and then allowing PIRY to file an OFA [“offer of financial assistance,” i.e., allowing Pioneer to purchase the Kellar Branch from the city]. Granting the stay provides an opportunity for the Board to reconsider its decisions in light of the new evidence submitted by Carver, and correct its decision. The public as [a] whole will benefit.

I couldn’t have said it better myself.

Carver Lumber was promised some things by the city. The city promised that Carver would continue to receive rail service via the Kellar Branch until the new western spur could be completed. The city promised it wouldn’t stop service on the Kellar Branch until service via that western spur was in place and operating smoothly. And the city promised Carver that it would receive comparable shipping rates via the west.

The city broke its promises.

Now Carver Lumber has petitioned the Surface Transportation Board (STB) to overturn their ruling and force the city to reinstate service on the Kellar Branch. Pioneer Railcorp is also filing a motion to stay the STB’s ruling pending appeal in light of this new development.

You can read Carver Lumber’s grievances here. The STB ruling makes it possible for the city to start dismantling the Kellar Branch any time after January 22, 2006. However, the promised western spur is not yet complete, and the corners being cut in its construction will add to Carver’s shipping costs.

To make matters worse, they have received no shipments via the Kellar Branch since September, resulting in over $25,000 in additional shipping costs to truck the lumber from the rail yard to Pioneer Park. Why? Because the company the city hired to work the line, Central Illinois Railway (a subsidiary of DOT Rail in Granville, Ill.), is unable to haul the rail cars up the Kellar line. You may remember the last time they tried — and the whole load slid backwards down the hill and derailed.

Furthermore, even once the western spur is completed, the city has been unable to pursuade Union Pacific (the only line the western spur will access) to allow CIRY to use their tracks to make deliveries to Carver Lumber. Without trackage rights, they may be left without service entirely. That’s the trouble when you don’t have neutral access — the kind of neutral access they have via the Kellar Branch.

And why is all this nonsense going on? Because the Park District wants to remove a working rail line to put in a hiking trail. They’ve already driven potential business away from Pioneer Park because of this ceaseless quest to remove competitive rail service. Now it’s almost as if they’re trying to run Carver Lumber out of there as well.

The city could make things a whole lot easier on everyone if they would just kill this ill-conceived trail project and sell the rail line to Pioneer Railcorp. Then the Park District could use their grants to build a trail along a different route to connect the Rock Island with the Pimiteoui — a route that wouldn’t hurt Peoria businesses.