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.Â
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.Â
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?
Easy answer…because Pioneer Railcorp, imperfect as they are (but far less so than Central Illinois Railroad) would likely have to be tapped as operator, either by the City or by order of the Surface Transportation Board.
(And don’t even get me started on Amerhart leaving for Pekin.)
… cause of the likely legal costs?
The city would be within its rights to fire Central Illinois Railroad Co. as operator; there is ample evidence for a breach of contract, and a court would back it up. Legal costs may be a factor but the city is willing to endure them for the trail. CIRY’s screw ups are harming the city’s trail plans.
But that would leave two customers withour rail service. One of them, O’Brien Steel, could be served by the Tazewell & Peoria Railroad, but Carver would require service and Union Pacific is not going to service them directly. That would be an opening for Pioneer Railcorp to return as operator (one of three orginal bidders during the 2001 process, Burlington Junction Railway, lost interest before a selection was made).
I’m inclined to agree with DPJ — the reason they haven’t fired CIRY is because Pioneer is waiting in the wings to take over, and if they take over, they would be in position to fight the conversion of the line to a Rock Island Trail extension. So, the city is willing to accept CIRY’s lack of service, and thus accept the hardship on Carver Lumber, in order to further their trail plans. Poor judgement.