Fwd: STB 'Abandon Ship' dept. - Wyo & Colo, Walcott to Sartoga WY (cont'd; long) Full Text of Decision 35025 SERVICE DATE – NOVEMBER 10, 2004 EB SURFACE TRANSPORTATION BOARD DECISION STB Docket No. AB-307 (Sub-No. 5X) WYOMING AND COLORADO RAILROAD COMPANY, INC. —ABANDONMENT EXEMPTION— IN CARBON COUNTY, WY Decided: November 9, 2004 By petition filed on July 23, 2004, Wyoming and Colorado Railroad Company, Inc. (WYCO), seeks an exemption under 49 U.S.C. 10502 from the prior approval requirements of 49 U.S.C. 10903 to abandon a 23.71-mile line of railroad between milepost 0.57, near Walcott, and milepost 24.28, at Saratoga, in Carbon County, WY. Notice of the filing was served and published in the Federal Register (69 FR49946-47) on August 12, 2004. Protests were filed by Intermountain Resources, LLC (IMR); the Saratoga-Carbon County Impact Joint Powers Board (JPB); the Town of Saratoga (Saratoga); and jointly by the State of Wyoming and Carbon County (Wyoming). WYCO filed a reply to the protests. As explained below, we will deny the petition for exemption. PRELIMINARY MATTER On October 19, 2004, IMR filed a motion to strike WYCO’s reply to the protests or, alternatively, if that motion is denied, to strike specific statements from the reply. IMR contends that these statements are not supported by evidence in this proceeding. IMR also seeks leave to file a supplemental statement responding to allegations raised in WYCO’s reply, and asks the Board to issue an order that would: (1) set the matter for oral hearing; (2) grant discovery requests requiring WYCO to make certain individuals available for depositions, and produce certain financial documents and other specified information; and (3) delay the deadline for issuing a decision on the merits of the petition until after completion of discovery and a hearing on the matter. On October 29, 2004, WYCO replied. Although our regulations at 49 CFR 1104.13(c) do not permit filing replies to replies, we may do so in a particular instance if it is warranted. See, e.g., Buffalo & Pittsburgh Railroad, Inc. —Abandonment Exemption— In Erie and Cattaraugus Counties, NY, STB Docket No. AB-369 (Sub-No. 3X), slip op. at 2 (STB served Sept. 18, 1998). Here, the supplemental statement that IMR seeks to file responds to new allegations raised in WYCO’s reply to protests and more fully explains the factual situation. Thus, we will accept the supplemental statement for filing to complete the record in this proceeding. However, because we are denying the petition for exemption, IMR’s motion to strike and for other relief is moot. BACKGROUND WYCO acquired the line from the Union Pacific Railroad Company (UP) in 1987. See Wyoming and Colorado Railroad Company, Inc. —Acquisition and Operation Exemption— Certain Lines of Union Pacific Railroad Company, Finance Docket No. 31140 (ICC served Nov. 30, 1987). WYCO states that the last active rail shipper on the line, Louisiana-Pacific Corporation (LP), operated a sawmill in Saratoga that was closed in January 2003. According to WYCO, LP shipped an average of 75 cars per month under annual “take-or-pay” contracts that permitted WYCO to operate the line on a marginally profitable basis. WYCO began the abandonment process in June 2003 but suspended its efforts when it learned that another company was interested in purchasing and reopening the sawmill. WYCO submits, however, that the parties were unable to reach an arrangement that would enable WYCO to continue operating the line on a profitable basis. Assertedly, WYCO was informed that the sawmill would instead use the nearby transload facilities operated by UP at Rawlins, WY. IMR states that it purchased the sawmill on September 26, 2003, but has delayed reopening the plant until it acquires sufficient timber resources in the area to sustain operations. Assertedly, IMR will be contracting with the U.S. Forest Service (Forest Service) to purchase and harvest 100 million board feet of bug-infested timber over the next several years, which, together with other available timber, was expected to enable the sawmill to be reopened by October 15, 2004. Initially, IMR expects to ship between 70 and 80 cars per month, but anticipates that its traffic will increase to between 95 and 120 cars per month after the facility is upgraded (approximately 6 months after opening). IMR argues that rail service from WYCO is the only practical or economically feasible transportation alternative because the UP rail line in Rawlins is approximately 50 miles from thesawmill. Moreover, if WYCO’s service is not available, IMR submits that it would have to acquire its own fleet of trucks because there are virtually no commercial trucking services that serve the area. IMR states that it is willing and able to enter into an agreement similar to the one that WYCO had with LP. JPB, Saratoga, and Wyoming all oppose the petition for exemption, arguing that abandonment will substantially impair economic and community development in Carbon County. The labor force in Carbon County is approximately 7,744 and LP was a major employer in the community. According to JPB, the loss of jobs for 130 direct employees and many contract employees when LP closed the sawmill was a major blow to the economy in the area. Moreover, JPB contends that, if IMR does not reopen the sawmill, there will be no purchaser for the timber that the Forest Service seeks to sell under its healthy forest management plan. Wyoming states that, during the first year of operations, the sawmill would provide more than 70 full-time jobs, produce $2.94 million in new payrolls, and increase county tax revenue by $47,290. Moreover, Wyoming projects that in year two, the sawmill will provide 110 jobs and produce more than $4.6 million in payrolls; by year five, this will increase to 115 jobs and over $5 million in payrolls. Wyoming argues that the petition for exemption should be denied because WYCO has not presented evidence to show that the line cannot be made profitable, and, moreover, IMR has submitted substantial evidence that alternative transportation options are not available. Thus, Wyoming argues that the evidence presented demonstrates that the interests of the public in continued rail service in this area substantially outweigh WYCO’s need to close down the line. As an alternative to outright denial, Wyoming requests that, pursuant to 49 CFR 1121.4(c)(1)(i), we direct WYCO to file additional information regarding the financial condition and profitability of the line in light of impending contracts for rail service that will arise with the reopening of the sawmill. In addition, Wyoming requests an oral hearing regarding the petition for exemption. However, in the event that the petition for exemption is granted, Wyoming requests that we impose a public use condition under 49 U.S.C. 10905 requiring that the line and properties remain in place for an additional 180 days. In reply, WYCO submits that protestants have failed to show that rail service is essential or that the sawmill is economically incapable of moving its finished products by truck to UP’s transload facilities. WYCO also argues that the jobs lost after LP ceased operations are long gone, not because of lack of rail service, but because the sawmill did not earn adequate returns on its investment. Moreover, WYCO asserts that, after IMR filed its protest, IMR informed WYCO that the facility would not open on October 15th and that IMR is not yet prepared to discuss a transportation contract. In any event, WYCO states that the contracts that it had with LP were not providing sufficient funds to enable WYCO to perform normalized maintenance on the line. Thus, because theline has been out of service for nearly 2 years, WYCO argues that there would be substantial costs associated with resuming operations over the line. Also, WYCO asserts that it has forgone opportunity costs over the years. WYCO submits that the Board and its predecessor have consistently rejected speculation about future traffic as a basis for denying the abandonment of an otherwise unprofitable rail line. WYCO notes that protestants can invoke the financial assistance provisions of 49 U.S.C. 10904 to subsidize WYCO’s continued operations or to acquire the line for its net liquidation value. DISCUSSION AND CONCLUSIONS Under 49 U.S.C. 10903, a rail line may not be abandoned without our prior approval. Under 49 U.S.C. 10502, however, we must exempt a transaction or service from otherwise applicable regulatory requirements or procedures when we find that: (1) those requirements or procedures are not necessary to carry out the rail transportation policy of 49 U.S.C. 10101; and (2) either (a) the transaction or service is of limited scope, or (b) regulation is not necessary to protect shippers from the abuse of market power. The exemption process is designed to minimize regulatory burdens. An exemption is appropriate when we have sufficient information to reach an informed decision. Typically, the types of abandonment and discontinuance proposals that are authorized through the exemption process are those where shippers do not contest the abandonment or, if they do contest it, the revenue from the traffic on the line is clearly marginal compared to the cost of operating the line. See Boston and Maine Corporation —Abandonment Exemption— In Hartford and New Haven Counties, CT, STB Docket No. AB-32 (Sub-No. 75X) et al., slip op. at 5 (STB served Dec. 31, 1996) (Boston and Maine); Tulare Valley Railroad Company —Abandonment and Discontinuance Exemption— In Tulare and Kern Counties, CA, STB Docket No. AB-397 (Sub-No. 5X), slip op. at 8 (STB served Feb. 21, 1997); San Joaquin Valley Railroad Company —Abandonment Exemption— In Kings and Fresno Counties, CA, STB Docket No. AB-398 (Sub-No. 4X), slip op. at 4 (STB served May 23, 1997), aff’d (STB served Mar. 5, 1999). Where there is an inadequate record on which to grant a petition for abandonment exemption, the petition will be denied. See Boston and Maine, slip op. at 6. As in any abandonment case, whether authority is sought by application or petition, the railroad must demonstrate that the line in question is a burden on interstate commerce. Typically, in an attempt to make that showing, the carrier submits evidence to demonstrate that the costs it incurs exceed the revenues attributable to the line. While abandonment decisions are not based solely on mathematical computations and considerations, the petitioner bears the burden of showing that keeping the line in service (or, as here, available for service) would impose a burden on it that outweighs the harm that would befall the shipping public, and the adverse impacts on rural and community development, if the rail line were abandoned. See Gauley River Railroad, LLC —Abandonment and Discontinuance of Service— In Webster and Nicholas Counties, WV, STB Docket No. AB-559 (Sub-No. 1X) et al., slip op. at 7 (STB served June 16, 1999). In this proceeding, the evidence presented is not sufficient for us to make an informed decision on the merits of the proposed abandonment exemption. IMR states that it intends to reopen the sawmill and claims that it will generate enough traffic to once again make the line profitable, while WYCO’s argument that the line cannot be operated on a profitable basis is not supported by any cost or other evidence. In addition, WYCO does not present any cost evidence to support the contentions made in its reply that it has forgone opportunity costs, or that the line, when it was operated, did not generate sufficient revenues to allow for normalized maintenance and that, as a result, substantial costs would be incurred in resuming operations. Moreover, while traffic has not moved over the line since January 2003, WYCO was aware that a new shipper is interested in reopening the sawmill, and WYCO should have anticipated that there would be opposition to the abandonment request. Under these circumstances, it would have been prudent for WYCO to submit cost evidence, supported by detailed workpapers, to enable us to assess the profitability of the line. Therefore, upon review of the record before us, we conclude that WYCO has not met the criteria in 49 U.S.C. 10502. Accordingly, we will deny the petition for exemption without prejudice to WYCO’s either refiling a petition for exemption or filing a formal abandonment application to provide the additional information that we would need. (Any new filing must be under a new docket sub-number, accompanied by a new filing fee.) Our denial of WYCO’s petition for exemption moots the labor protection and environmental issues that have been raised, as well as Wyoming’s request for investigation, a public hearing, or a public use condition. It is ordered: 1. IMR’s motion to file a supplemental statement is granted. 2. WYCO’s petition for exemption is denied. 3. This decision is effective on the date of service. By the Board, Chairman Nober, Vice Chairman Mulvey, and Commissioner Buttrey. Vernon A. Williams, Secretary
I'd heard that this might be happening. So it appears that a few miles of rail service may survive. Sure hope that mill gets busy, and can prove itself! Boxcab E50
I rode the passenger train that had been operating on that line in the late '80s early '90s. It was a nice ride from Laramie to Fox Park and back.
I have a bunch of 35mm slides of the trip. They are buried somewhere. I can scan them IF I find them.....
Just to clear something up...we are talking about two different railroad lines here! In late 1987 Union Pacific sold two branchlines to the Wyoming/Colorado Railroad...the branch running from the mainline connection at Walcott south to Saratoga (both in Wyoming) and the branch running from Laramie south to Coalmont, Colorado. The branch that this abandonment case covered was the Walcott to Saratoga line, while the branch the excursion trains that doofus took photos of was the Laramie-Coalmont line. I don't think that the Saratoga line ever saw any passenger operations under WYCO ownership...if it did it was not much. The Laramie-Coalmont line came out in sections, with all but a mile and a half or so in Laramie abandoned by the mid-1990's. The railroad just recently (within the last year or so) finished abandoning this last remnant. The news about the Saratoga branch is equally dismal. The company that needed the railroad so badly to reopen the Saratoga sawmill back in 2004 never did follow through with any of those plans. WYCO re-initiated abandonment proceedings on this line shortly after receiving the negative decision that started this thread- but this time they were able to point out that nothing had been done to get the sawmill back up and running as promised, and if anybody really wanted to see rail service preserved they could use the Offer of Financial Assistance process to do so. Nobody registered any opposition to the abandonment this time around, and the STB blessed WYCO's abandonment of this line not too long ago. Both WYCO operations in Wyoming are dead. A scrapper recently cut up most of the remaining WYCO equipment in Laramie- I know they got a F-7B unit, and there was some sort of an effort to save a couple of cabooses and a snowplow that were next on the list. Apparently the same scrapper cut up at least one locomotive and maybe some more in Saratoga before going to Laramie. WYCO is/was a subsidiary of Western Railroad Builders of Ogden, UT. In addition to WYCO Western Railroad Builders also owns the Oregon Eastern Railroad, the Arizona Central Railroad and the affiliated Verde Canyon Railroad, the Southwest Railroad, and perhaps one or two others. They also have had several contract operations. The F-units that pulled the excursion trains out of Laramie are in service on the Verde Canyon Railroad excursion train, along with most (if not all) of the passenger equipment. They are ex-Alaska units. I hope this clears things up. Jeff Moore Elko, NV
Jeff- Is this the same operation which brought all the old Alaska F units down to the lower 48? Boxcab E50
Boxcab- No. The group that broght the F-units down was Mountain Diesel Transportation, or MDT. I seem to understand that Dale Sanders headed that project up, with some others invovled. I seem to remember hearing that Dale's involvment with MDT caused a lot of the performance problems with CTC Board in the late 1980's. That being said, the two F-units the WYCO used were MDT units. They leased them for a while at startup, with the units purchased at a later date. Jeff Moore Elko, NV
Jeff- you are dead-on in re: the MDT F-units. Sanders got the proverbial "wild hair" in a funny place to get into the locomotive leasing business, and all this did was cause harm with CTC Board. At one point, issues weren't printed for 6 months! I was a columnist for the "Board" in the late 1980s, and got this info backchannel. IMO, had Sanders stayed with just the magazine, the product, good as it was, could only have gotten better. And FTR, I have next to me a copy of the latest incarnation printed by White River Productions, with Cinthia Priest at the helm. Coupla decent articles in this one, including a shortline close to home (the Blacklands). It's called Railroads Illustrated now.
I can attest to that statement- I was a columnist with CTC Board during Dale's brief foray into locomotive leasing, which set back publishing of the magazine for several months while he, Mark Hemphill, and others played choo-choo with their new diesels. That little fiasco almost did in this magazine- had it not been for Hundman, CTC Board would have ceased to exist. (end opinionated rant) As for the "Slow & Easy", A&K Materials has removed the rails and ties from Walcott to Saratoga, closing the book on this historic little railroad. I have an HO scale RSC2 and CA-3 caboose in UPcolors, and maybe someday I'll model this line from Walcott south- until then, the pics of 1242 moving cattle north from Encampment, or an RSC2 switching the Saratoga sawmill, are all that's left of this railroad.
Matters not now- Stephen and Cinthia Priest, through their company Paired Rail Productions, now publish CTC Board, as well as publications for several RR historical societies. The current incarnation of the magazine looks pretty much like it has been.
