Today, Central Illinois Railway (CIRY) filed with the Surface Transportation Board (STB) to abandon the Kellar Branch line. And today, Pioneer Industrial Railway (PIRY) filed with the STB to purchase the Kellar Branch. Just as I predicted.

As you may recall from my previous post, “Congress and the STB have adopted procedures that make it possible to force the sale or subsidy of lines slated for abandonment,” “to encourage continued service.” The procedure for forcing a sale or subsidy is to file an “offer of financial assistance,” or “OFA.” Under this procedure, “any financially responsible party seeking to continue service on a line approved for abandonment (or exempted) may compel the railroad to sell or conduct subsidized operations over the line,” according to the STB website. That’s what Pioneer is trying to do.

The city, of course, doesn’t want that to happen. So, CIRY is trying to side-step Pioneer’s purchase request. This gets a little technical, so I apologize in advance. The legal maneuver is this: citing the STB’s ruling in City of Rochelle, Illinois — Adverse Discontinuance — Rochelle Railroad Company (5/27/1999), CIRY claims that Offers of Financial Assistance (the procedure for forcing sale of the line) need not be entertained because this is not an abandonment, but a discontinuance proceeding. The line was formally abandoned when the Rock Island line went belly up back in the early ’80s. If the STB buys this line of argument, then Pioneer can’t file and OFA, and the discontinuance will sail through unopposed.

However, I read this ruling, and it doesn’t say what CIRY and the city want it to say. First of all, in Rochelle, they weren’t asking to completely discontinue service and tear out the tracks. They were essentially asking the board to replace operators — i.e., replace Rochelle Railroad Company with a city contractor — just like when Peoria wanted to replace Pioneer with CIRY. What the board actually said in that case was, “offers of financial assistance will not be entertained in this proceeding, because the City is continuing to provide rail service over the line” (emphasis mine). In other words, they didn’t rule out a forced sale because it was a discontinuance proceeding, but because the city was still providing service over the line in question. Here in Peoria, that condition does not exist. The city wants to permanently discontinue service by any and all carriers.

Furthermore, it is clear from other filings that the STB accepts — even expects — Offers of Financial Assistance in discontinuance cases, not just abandonment cases as CIRY asserts. For instance, one need look no further than a case CIRY cites in their own filing: Norfolk Southern Railway Company — Discontinuance of Service — in Sumpter County, SC (8/30/2005). In that case, the board said:

Provided no formal expression of intent to file an offer of financial assistance (OFA) has been received, this exemption will be effective on September 29, 2005, unless stayed pending reconsideration. Petitions to stay and formal expressions of intent to file an OFA under 49 CFS 1152.27(c)(2), must be filed by September 9, 2005.

Now, why would they provide a deadline for filing an OFA if they disallow OFAs in discontinuance proceedings? I don’t think CIRY is going to win that one. But, by fighting it, they will continue to delay the proceeding. I’m not saying that Pioneer will prevail in forcing a sale of the line, but I am saying that the CIRY and the city will probably have to go through the OFA process, which will delay the Park District’s plans again. If they haven’t already, the Park District better start filing for another extension on their grant money.

This Kellar Branch saga is kinda like watching a chess match, isn’t it?