Topic:
RAILROADS; TRANSPORTATION DEPARTMENT;
Location:
RAILROADS;

OLR Research Report


June 5, 1998 98-R-0677

FROM: James J. Fazzalaro, Principal Analyst

RE: Rail Facilities in Middletown

You asked for information on when the Department of Transportation (DOT) acquired the railroad tracks and rail bridge that crosses the river between Middletown and Portland and if the terms of the acquisition give the state an obligation for maintenance, safety, or continued operation of the track and bridge facilities.

SUMMARY

1986 legislation provided $3.4 million in state bonds to acquire rail facilities in Middletown being abandoned by the Consolidated Rail Corporation. These facilities were commonly known as the "Middletown Cluster" and include the "swing" bridge across the Connecticut River between Middletown and Portland. The legislation initially provided this money to the Department of Environmental Protection (DEP), not DOT, but it was amended in 1987 to put these facilities under DOT jurisdiction. The legislation included authority to use up to $2.2 million of the money for "repair and restoration" of the swing bridge. The facilities were acquired by DEP with DOT's assistance, in March 1987. The acquisition authorization was amended in 1987 to, among other things, specifically identify the acquired lines and add the Wethersfield Secondary Track for acquisition, require DOT to evaluate the economic feasibility of rerouting freight traffic to Hartford along a different route, and eliminate specific reference to using the money to repair and restore the swing bridge.

The acquisition authorization did not require the state to operate these facilities. Instead, it required DEP, and later DOT, to make suitable arrangements for temporary continuation of services along the acquired lines. DOT executed a service agreement with the Connecticut Central Railroad Company (CCRC) in June 1987 under which the railroad was obligated to provide service along the lines at no cost to the state. Under the agreement, if "accelerated maintenance" is required during the first two years, the state must provide it. But primary responsibility for emergency maintenance, bridge repair, and routine maintenance is the railroad's responsibility. The agreement defines these terms in certain ways which, for example, excludes painting the swing bridge from the railroad's responsibility to perform bridge repair. There is also a limitation with respect to "catastrophic loss" which, under the current terms of the agreement, means damage to the physical plant that exceeds the greater of $75,000 per year or 25% of the railroad's gross revenues.

In 1988, DOT conducted an economic feasibility analysis on rerouting traffic along the Wethersfield Secondary track as required by the 1987 law. It determined that such a rerouting was not economically viable and state participation was not appropriate. A significant factor in this decision was the estimated cost of rehabilitating the swing bridge which at the time was $4.4 million without benefit of a detailed engineering evaluation. This evaluation was conducted in 1991 and led to a revised estimate of over $32 million for a complete rehabilitation of the swing bridge. Indications from DOT are that a current estimate for this project might be slightly higher than the 1994 estimate.

The deteriorated and unreliable condition of the swing bridge, and the very high cost of rehabilitating it, has raised a difficult public policy question. The main concern is the possible failure of the mechanical and electrical systems that open and close the bridge. As these systems deteriorate, the likelihood that the bridge may someday be unable to move increases. DOT has not programmed money to rehabilitate the bridge because it is not certain that the size of the investment is warranted compared to the current rates of usage. Should the bridge be unable to function, it is not clear whether the main user dependent on the bridge for rail car service, the Stone Container Corporation, would remain at its present location.

LEGISLATIVE AUTHORIZATIONS AND OBLIGATIONS

SA 86-59

The state became involved in acquisition of rail facilities in the Middletown Cluster in 1986 with passage of Special Act 86-59. This act provided $3.4 million in state bonding to the DEP for the purpose of (1) purchasing any rail line abandoned by Conrail in the Middletown Cluster (up to $1.2 million of the authorization) and (2) restoring rail service in the Middletown Cluster and between Middletown and Hartford through, but not limited to, rehabilitation and restoring tracks, bridges, road beds, and highway crossings and repairing and restoring the railroad bridge between Middletown and Portland (up to $2.2 million of the authorization for these purposes).

The legislation also required DEP to contract with the Valley Railroad Company to do the restoration of the tracks, road beds, and highway crossings and to restore rail service between Middletown and Hartford and between Middletown and Maromas (an eastern section of Middletown near Dart Island State Park). In addition DEP was required to contract with "suitable persons" for the repair and rehabilitation of the rail bridge between Middletown and Portland and for any other bridges along any rail lines purchased under the authority provided by the act.

Finally, the act expanded the Valley Railroad Company's charter to allow it, pursuant to a contract with the state, to operate its trains and other equipment along any of the lines the state purchased pursuant to the act.

SA 87-98

The state acquired the rail lines in the Middletown Cluster on March 26, 1987. The "swing" bridge carrying the tracks over the Connecticut River between Middletown and Portland was among the properties acquired. DOT assisted DEP in the acquisition negotiations with Conrail and in coordinating with the Valley Railroad and Conrail for continuation of service.

Additional legislation revising the authority and responsibilities set up by SA 86-59 was adopted as SA 87-98. The acquisition authorization was changed to identify specific line segments instead of the general authorization to acquire lines abandoned in the Middletown Cluster. The specific lines written into the act apparently reflected the actual segments acquired. These included:

1. the Wethersfield Industrial Track (Mileposts (MP) 2.6 to 3.0),

2. the Middletown Secondary (MP 15.0 to 22.3),

3. the Portland Industrial Track (MP 0.0 to 1.0),

4. the Cromwell Industrial Track (MP 13.7 to 16.2),

5. the Laurel Industrial Track (MP 0.0 to 5.5), and

6. the East Berlin Industrial Track (MP 0.0 to 1.2)

The act also directed the DEP to transfer ownership of these lines to the DOT.

Within the total $3.4 million authorization made available under SA 86-59, the 1987 legislation reduced the allotment for acquisition of these lines from $1.2 million to $1.15 million to reflect the price at which these lines were actually purchased. SA 87-98 redirected the use of the remaining $2.25 million authorized. Under SA 86-59, this money was supposed to be used for restoration of service within the Middletown Cluster through, at least, rehabilitating the tracks, bridges, road beds, and highway crossings and repairing the rail bridge between Middletown and Portland. Instead, SA 87-98 required DOT to use the money (1) to purchase the Boston and Maine Railroad's Wethersfield Secondary Track (MP 3.0 to 7.0) and (2) for planning, appraisal, engineering, construction, reconstruction, and rehabilitating the previously purchased facilities. Thus the legislation no longer specifically required money to be used to repair and restore the Middletown-Portland rail bridge.

SA 87-98 also required DOT to (1) make suitable arrangements for temporary continuation of rail freight service via New Haven and Durham to customers located along the previously purchased lines and (2) required the transportation commissioner to analyze the economic viability of providing freight service to the Middletown-Portland area by routing traffic over the Hartford-Middletown-Portland line instead of by the existing route from New Haven to Middletown via Durham. The commissioner had to determine the appropriate role for the state in providing such services. If he determined that it "would be economically viable and that state participation would be appropriate" he had to construct or reconstruct the track of the Hartford-Middletown-Portland line to Class 2 service standards and "make appropriate improvements to bridges and other facilities including connecting branch lines" and make arrangements for such service.

SUBSEQUENT EVENTS

As noted previously, the state acquired the Middletown Cluster rail properties, including the swing bridge, on March 26, 1987 and they were transferred from the DEP to the DOT shortly thereafter. As required by SA 87-98, the DOT performed an economic viability analysis of the option of rerouting freight traffic directly between Hartford and Middletown by way of the Wethersfield Secondary track. This analysis was done internally using a federally-accepted cost benefit methodology and was not published as a formal report to the legislature, as none was required by the law. The analysis indicated that at least $12.2 million (including $10 million additional beyond the bond authorizations made by the two special acts) would be required to reroute this service. These cost estimates included a figure of $4.4 million to rehabilitate the Middletown swing bridge that was calculated without benefit of a detailed inspection and analysis its condition. This evaluation was subsequently conducted in 1991 and the actual costs to rehabilitate the bridge have now been determined to be eight to nine times higher than the original estimate.

Based on its analysis, DOT determined that rerouting rail freight traffic would not be economically viable and that state participation would not be appropriate.

RESPONSIBILITIES UNDER THE SERVICE AGREEMENTS

At our request, DOT provided copies of the original and supplemental service operating agreements with the CCRC for our review. We examined them in order to find how responsibility for operation and maintenance of the rail facilities, including the swing bridge, were specified. The initial agreement was signed June 24, 1987 and was amended through a supplemental agreement on March 28, 1996. The original agreement contains the relevant provisions and these were not amended in the supplemental agreement.

The service agreement does not appear to specify any requirements for state rehabilitation of the rail facilities beyond the first two years of the agreement. Specifically, it states that within the first two years of the agreement, accelerated maintenance, if required, is the state's responsibility. Accelerated maintenance is defined as replacing ties and "other track and structural materials" sufficient functionally to restore existing rail service facilities to the level necessary for them to be maintained in compliance with FRA Class I track safety standards for two years after completion of the rehabilitation project.

If the state rehabilitates any of the facilities to standards above FRA Class I, the service operator must maintain them at the rehabilitated level. The agreement places responsibility on the railroad to (1) perform at its own expense all emergency maintenance, bridge repair, and routine maintenance that does not involve catastrophic loss and (2) maintain the rail facilities to FRA Class I standards to permit continued operation of the freight service according to FRA standards. Definitions of the maintenance related terms limit these obligations in several ways. "Bridge repair" includes routine maintenance items like painting, bridge timber replacement, grouting, and replacing rivets and bolts, but it specifically excludes painting the Middletown-Portland swing bridge. "Routine maintenance" means work such as surfacing, spot tie and rail replacement, spot tamping and lining, tightening bolts, driving spikes, and other necessary repairs needed to enable "continued safe operation at the FRA track standard attained as a result of the completion of the initial rehabilitation project." "Emergency maintenance" includes snow removal, washout repair, repair of derailments, and compliance with railroad safety citations.

The agreement defines the initial rehabilitation project as brush and tree clearing, surfacing, replacing rail, switches, sidings, passing tracks, and other track and structural materials including crossings and signals and making the "necessary repairs" to bridges on the Middletown Cluster at least to the extent to bring the facilities to FRA Class I standards or above. The agreement notes that the rehabilitation project is subject to pending legislation (ultimately SA 87-98).

The railroad's ongoing maintenance responsibility is limited to matters that do not involve catastrophic loss. For the first two years of the agreement, catastrophic loss is defined as damage to the physical plant exceeding $75,000 per year or 25% of the railroad's gross revenue, whichever is less. After the first two years, and for the remainder of the 30-year agreement, this term means damage of $75,000 per year or 25% of the railroad's gross revenues, whichever is more. If a catastrophic loss of the physical plant substantially impairs its ability to operate on the line, the railroad must be relieved of its maintenance and operations responsibilities unless funds required for restoration beyond the railroad's obligation for maintenance are received from a source other than the railroad or can be recovered, within certain limits, through basic rates or surcharges in a period of less than two years.

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