Greenway Gail McNulty
News

Rail Opponents: RTC Is Moving Too Fast With Progressive Rail

Commission says state and federal rules require to pick new freight operator quickly

Gail McNulty, Greenway’s executive director, believes the Regional Transportation Commission’s new freight contract could put the county on the wrong track. PHOTO: KEANA PARKER

[This is part four in a series about future of the rail corridor. Part five runs on June 13. Read Part 1 here, Part 2 here and Part 3 here.]

Tech consultant Will Mayall has been scratching his head, trying to solve a puzzle.

Mayall, who worked for Apple in the mid-1980s, spends much of his time on the phone, giving advice to startups. But over the last few months, he’s devoted more hours to studying the sometimes controversial recent history of the county’s coastal rail corridor, digging through public records on the Regional Transportation Commission’s  informational pages and deciphering how they all fit together.

Mayall serves as a boardmember for Santa Cruz County Greenway, a nonprofit advocating for the removal of the tracks along the county’s publicly owned rail corridor, in favor of an extra-wide bike and pedestrian trail—in opposition to the RTC’s established rail-alongside-trail plan. And Mayall says that the commission, which owns the corridor, is rushing into a new draft agreement with Progressive Rail, a Minnesota-based freight operator, too hastily. He can’t figure out why, he says, but he believes the RTC hasn’t been forthcoming in its explanations.

Mayall worries that the possible 10-year deal with Progressive Rail would shift control of the rail corridor to the company, getting in the way of plans for both passenger service and a possible trail-only solution. Given those concerns, Greenway supporters say they have an important message for the RTC as commissioners get ready to vote on the contract with Progressive on Thursday, June 14.

That message can essentially be summed up in six words: We could do so much better.

If the long-winded rail trail saga were a romantic comedy, the RTC and Progressive would be standing at the altar, ready to get hitched—while Greenway, which has an admittedly strained relationship with the RTC, runs down the aisle yelling “I object!”

Mayall is imploring the commission to offer more of an explanation as to why Progressive is the right fit. After all, Greenway supporters say, the Progressive deal could even prevent the commission itself from getting what it wants.

“They’re not intentionally driving us into a bad place,” Greenway Executive Director Gail McNulty says of the RTC, “but they’re making choices that could lead us there eventually.”

 

PROG LOCK

Mayall says the RTC has “manufactured a false sense of urgency,” but RTC officials say they’re required to pick a new operator as soon as possible.

Shannon Munz, a spokesperson for the commission, tells GT that because the RTC bought the rail corridor with California bond money, the state will mandate that it continue freight service, per guidelines under the federal Surface Transportation Board (STB).

Late last year, Iowa Pacific, the previous operator, announced its desire to pull out of the agreement, although it still isn’t clear what penalties, if any, the RTC would face should it decide to put the issue of its next freight operator on hold. An STB spokesperson told GT via email that he and his colleagues were unable to answer questions on the matter, as they were too hypothetical.”

McNulty says Progressive could have a big impact on the county, and not necessarily in a positive way. “The biggest standout problem with the contract,” she says, “is that the vision is out of line with what the community wants for the corridor.”

Whereas Iowa Pacific was something of an absentee freight operator, known mostly for storing rail cars, Progressive officials have bragged to county leaders about their ability to get involved in bringing economic vitality to the area. When it comes down to it, though, McNulty fears that Progressive will either fail in its money-making mission—like its predecessors before it—or bring in long trains of cars that will clog the line, making for a noisy, unattractive corridor once the RTC finishes repairing the track to allow Progressive to travel the length of the local 32-mile line.

As the commissioners prepare to vote on the contract, they have yet to receive results from the Unified Corridor Study, which will outline suggestions for the major local transportation arteries—Highway 1, Soquel/Freedom and the rail corridor—and is expected to come out in six months. If the RTC ever tries to introduce passenger rail service on the corridor, which the study may recommend, McNulty says the priority given to freight service could make it difficult for passenger trains to move at an acceptable clip and get anywhere on time.

Dondero, however, says there could be a number of solutions. It’s possible, he says, that the freight service could run at night and that positive train control—a system that automates rail scheduling and is now coming online around the country—is making it easier for train companies to communicate and coordinate schedules. Dondero says this scrutiny is all a distraction from the bigger issue of locals stuck in traffic—especially those driving from the southern portions of the county and who want another way to get to work.

Jason Culotta, Progressive’s public affairs director, says passenger and freight service coexist on railroads around the country, and that the company plans to respect the passenger rail schedule.

 

APPLIED MATH

Mayall says there’s one other option the RTC could pursue, and it’s called “abandonment”—a process by which the STB lets line owners stop providing rail service if it’s no longer economically viable. If the corridor owner determines that circumstances have changed, they can re-apply to reverse the abandonment.

Before the RTC bought the rail line, a 2010 appraisal referenced a consultant who found that there was “no chance that the STB would deny an application” from the owner to pursue abandonment of the corridor. The appraiser added that, in his opinion, there was no way the STB would ever be profitable north of Watsonville, and he predicted that the RTC would seek to abandon the line immediately, which the RTC ultimately did not do.

The appraiser found that it generally takes three to six months to get approval for abandonment, but he added that the RTC should qualify for an expedited process to speed things up, given that the Davenport cement plant had closed down by that point.

GT reached out to the RTC for follow-up information, and, in an emailed statement, Dondero charged Greenwayers with “cherry picking” information from more than 10 years ago—the 2010 study references findings from 2005—and stressed that state transportation requirements demand the commission continue freight and passenger service.

“Abandonment would not serve our community or our future, and would be entirely inconsistent with the policies of the RTC that have been established and confirmed over many years,” Dondero wrote.   

 

CONTRACTUAL ORIENTATION

The 28-page draft of the agreement with Progressive Rail is rich with detail.

If the forthcoming corridor study finds that freight service won’t work on the southern portion of the corridor, for instance, Progressive would be released from the 10-year contract, and the RTC will be required to pay Progressive $300,000. Bike advocate Ron Goodman, who wrote an analysis breaking down the contract on his website bikeadvocacy.org, argues that this clause creates a conflict of interest that undermines the study.

Dondero says the arrangement boils down to the cost of doing business. “The reason for that is that it costs them money to set up shop here. They have to lease locomotives and hire people and set up an office. There’s a lot of work that needs to happen before they even move one car,” he tells GT.

The contract also prioritizes freight service over passenger rail service.

There were other elements that raised eyebrows in the 28-page contract, like construction of a possible locomotive pit in the area around the Wrigley building in Santa Cruz. The contract additionally mentions a provision allowing the freight operator to store up to 100 cars on the corridor at any given time, each in designated zones, and none for more than two months. Each of those passages is a holdover that the RTC had negotiated into the previous freight agreements.

Iowa Pacific had been parking cars outside the designated corridors, Dondero says, which was one of the ways it was in violation of its contract. Progressive owner and president Dave Fellon has said his company’s “not in the business of storing cars,” but that they may do it for a day or two here or there, as their customers request it.

As for the locomotive pit, Progressive representatives have announced that they want to remove the wording about the locomotive pit from the contract. “It was a feature of a previous agreement that the RTC had had,” says Culotta. “The reason they had it in there was they had a goal to keep a locomotive there that could be used to switch out cars. Since Progressive Rail has no intention of storing cars, we’re happy to have that removed from the wording.”

If Progressive comes in, Culotta says the majority of Progressive’s freight customers would be local farmers, who could ship produce to other parts of the country—reducing their greenhouse gas emissions and potentially their costs, as well. He anticipates some of Progressive’s existing customers from the Midwest will also have an interest in expanding to California.

Progressive has additionally discussed hauling propane into Watsonville, creating some concern there. It isn’t clear how much Watsonville officials would be able to regulate the unloading of propane or other materials because of federal guidelines, according to a memo from the Watsonville city attorney to the City Council.

As things move forward, the previous freight operator casts a long shadow over the line, as Iowa Pacific still owes the RTC about $80,000. Dondero won’t be holding his breath or waiting for a check to come in through the RTC’s mail slot.

“When a check comes in, I’ll give you a call,” Dondero says. “I haven’t seen any money.”

News Editor at |

Jacob, the news editor at Good Times, won the 2014 award for best local government coverage from the California Newspaper Publishers Association. A longtime basketball and football fanatic, Jacob has evolved into a shameless fair weather fan and band wagoner for hot West Coast sports teams. He also enjoys arguing with others about where to find the best burrito in town.

14 Comments

14 Comments

  1. Bud Colligan

    June 3, 2018 at 12:34 am

    If you think “Progressive” Rail is a better company, and the proposed contract is better than the current one, I suggest readers go to the link below and read about Progressive Rail’s reputation in the communities in which they operate, and how its executives are being sued for securities fraud in a federal class action lawsuit: https://sccgreenway.org/news/the-case-against-progressive-rail. There is also information there about all the things that will happen as a result of this great freight contract, like:

    – Allows storage of 100 empty oil tanker storage cars on the North Coast
    – Prioritizes freight service over transit for the community
    – No limit on freight trains, any hour, with noise of rail horns
    – Traffic delays
    – New railroad storage and maintenance facilities on the West Side of Santa Cruz
    – Requires payment of $300,000 to get out of the contract in six months
    – Restricts current access to the rail corridor for the community
    – Shifts responsibility from the Iowa Pacific (the current rail operator) to the RTC (i.e. you the taxpayer) to repair all the current track and trestle damage, estimated to be at least $2 million to $3 million
    – Will result in almost no income for the county or RTC

    Oh, and did I mention the insider deal between the RTC and Progressive Rail, to the detriment of the other five bidders on the rail contract? You can find all the inside dealing with the actual emails, discovered through a public records request, at the above link as well.

    The reader can decide if this sounds like a good deal for all of us!

  2. Bud Colligan

    June 3, 2018 at 12:22 am

    The litmus test for investing $500 million to $700 million in a public transit system is not whether a few people like it. The litmus test is whether it delivers the transportation effectiveness that we need at an affordable price. SMART has dismally failed that test (see a publicly referenced analysis here: https://sccgreenway.org/smart-comparison/) . It transports 2,191 average weekday commuters after spending $566 million through June 30, 2016 and will have spent at least $1.16 BILLION when the 20 year sales tax expires. It is not an effective use of the taxpayer’s money in any scenario, notwithstanding the argument that we have NONE OF THE MONEY (oh, I know, we’ll get it all from grants and cap and trade funds!). You can wishfully hope that reality were different, but it isn’t.

  3. Bud Colligan

    June 3, 2018 at 12:10 am

    It’s not a “recreational amenity,” and it won’t be no matter how many times you purposely misrepresent it. It’s a transit-oriented multi-use pathway that can move more people than the proposed train by A LOT–see studies by Nelson Nygaard and Alta Planning and Design, the two preeminent transportation consultants in our country:
    http://files.sccgreenway.org/2016-The-Great-Santa-Cruz-Trail-Study-Web.pdf
    https://sccgreenway.org/greenway-capacity/
    https://sccgreenway.org/trail-width-matters/

    As to the four rail customers, there is an option to do freight service in Watsonville that connects to other rail lines. There is NO FREIGHT in north county and hasn’t been for years. And we have a current operator, whose name is Iowa Pacific and is STILL operating. So rather than do an unnecessary 10-year contract with an operator with a bad reputation (https://sccgreenway.org/news/2018/5/25/news-stories-from-communities-where-progressive-rail-operates and https://sccgreenway.org/news/2018/5/25/progressive-rail-ethics), it would seem much smarter to continue serving the existing freight customers as they are being served now.

    The RTC should also explore abandonment and the payback of the $10.2 million to the state NOW, so we have all the options on the table as the UCIS is completed at the end of the year. The Surface Transportation Board does NOT require rail lines to lose money, which is what is happening now because there is so little freight that can use rail in our county. Watsonville and Santa Cruz are small communities and will never support a profitable freight business, in spite of train lovers insistence that they will.

    It does no good to continue to shout at each other from each side. We should get ALL THE FACTS in front of us so the Commissioners can make an informed long-term decision on the county’s transportation strategy once the UCIS is completed at the end of the year. That is what was promised to voters in Measure D.

  4. David Date

    June 1, 2018 at 9:00 am

    Our County is bringing in record tax revenues while concurrently running deficits. There is no money for a passenger train, not now, not ever. It can no longer be said that the RTC is interested in finding solutions to the transportation crisis. This is purely a for profit deal.

  5. Gail McNulty

    June 1, 2018 at 5:35 am

    Progressive Rail is not the type of company our environmentally conscious local leaders should endorse. Yet they are about to sign a 10-year contract with them. Learn how our Regional Transportation Commission (RTC) arrived at this ironic juncture and why they must pivot while they still can.

    Read more: https://sccgreenway.org/news/the-case-against-progressive-rail

  6. Ashton

    May 31, 2018 at 4:03 pm

    Just take a walk along the tracks and see what would need to happen to build a trail. As you can see in the above photo it would take destroying many plants and trees, excavating tons of earth, building huge retaining walls. There will be many slopes and low areas that must be filled with earth, culverts installed, more retaining walls, and some major bridges built. All of these areas could instead be conserved, restored to native plants, or used as community gardens.

    • Bill Smallman

      June 2, 2018 at 1:49 pm

      Just to clarify, all that work you mentioned would be required to build a trail next to the tracks, i.e. “Rail + Trail” plan, and there is zero impact with trail built over removed tracks. It’s simple to envision the tracks in the picture above as a bike path, as there are numerous photoshopped photos. People not only know what they are getting with Trail Now/Greenway’s plan, but the construction estimates are accurate. The Friends of the Rail Track’s plan is far different. Nobody has any idea what that is going to look like, there are no plans for train stations or parking lots, and retaining walls and tree removal galore. All of this will come at a high price. Then, when the tracks get abandoned again because the trains are not profitable, and not helping with HWY 1 traffic, the train stations and parking lots sold and demolished, and the tracks removed and trees planted over them with everybody scratching there heads why so much money wasted and the bike path not built there instead.

  7. Howard Cohen

    May 31, 2018 at 3:55 pm

    The Surface Transportation Board will not allow the current rail customers in Watsonville to be abandoned for a recreational amenity. The City of Watsonville will not stand for it either. I have spoken to the four rail customers in Watsonville and they legally will oppose any action to abandon rail service. So will Roaring Camp. No argument can be made for abandonment of rail service as long as rail customers require a rail common carrier and a rail operator is willing to provide the surface. Currently there are four rail operators willing to provide common carrier service and Progressive Rail has the best proposal.

    In addition, the RTC has no authority to abandon the freight easement because they don’t own it. Only the rail operator can abandon the freight easement because they own it.

  8. sam

    May 31, 2018 at 1:53 pm

    FYI, the greenway board is composed of extremely wealthy people who do not
    want a train near their homes. They couldn’t care less about the bike/walk path.

    • Doug Erickson

      May 31, 2018 at 6:30 pm

      brrr…haha! your comment is so ludicrous that it warrants a gut laugh!

  9. Howard Cohen

    May 31, 2018 at 11:25 am

    The RTC has not given up any rights to run commuter service and freight service does not preclude commuter service. If and when the RTC decides to implement commuter service, freight will be run when commuter service is not running. That is how SMART in Sonoma County combines commuter service and freight service on the same single track. I rode SMART in Sonoma County recently with the Mayor of Watsonville, a Capitola Councilman and the Executive Director of the RTC and saw first hand how freight and commuter service can coexist on a single track and maintain a 100% on time record.

    I spoke with many passengers on the train and what I found the most striking was how much SMART passengers loved riding the train and the positive impact it has had on their lives.

    Here is a link to our restaurant server’s testimonial regarding how SMART rail service has improved the lives of residents.

    https://youtu.be/l18yZZTX9KA

    What the RTC gains from the agreement with Progressive Rail is the ability to maintain the freight easement, service the freight customers and comply with Prop 116 funding for passenger rail. The current operator is in violation of its contract with the RTC and liabilities from its other operations exponentially exceed its assets and income. The current rail operator’s tenuous financial situation has put Watsonville rail customers and their employees in immediate jeopardy and it could cease operation at any time. The RTC Commissioners understand this and know it would be grossly irresponsible to not approve an agreement with Progressive Rail as soon as possible.

  10. Bill Smallman

    May 31, 2018 at 8:48 am

    Will Mayall, and many others, have done an excellent job informing the public, but I think it is time to compile this great work onto a ballot. Like the Desalination Plant, this issue is big. The corridor is the only place recycled water distribution pipelines can be economically installed. There is no question the benefit/cost ratio for “Trail Only”, is, by far, the highest and most effective use of our tax dollars. There are also much more effective local transportation improvements which will be ignored if the train is favored. The highway should have been widened, and car driver growth stopped by other means, like improving the bus system, embracing new technology, and stopping growth due to lack of water. Do you want to stagnate and listen to excuses of what we cannot do, or strive for our best? It’s often said we can’t do this because we have to pay back the $11 million, we won’t get this and that money from the State, or the State made up this rule and that rule etc. Don’t forget the State also spends our tax money? Why waste money which can be used in other Counties, just because you think you are more clever? The decisions of the use of this money is highly negotiable. Negotiations on the smart use of our money are not being done. Do you want to vote on this, or listen to even more excuses? Bill Kocher became a leader of an organization promoting Desal across the State, and the only way to convince the City and Soquel Creek water there are better alternatives, was to create Measure P. Do we need another Measure?

  11. Ryan

    May 31, 2018 at 5:56 am

    Despite what the RTC continues to say, they are not obligated to provide freight service. The following link is to a 2012 petition filed with the STB prior to the purchase of the corridor. The document explicitly states the RTC is not legally obligated to provide freight service.

    http://files.sccgreenway.org/2012-09-07-STB-Decision.pdf

    Additionally, the California Transportation Commission is on record indicating freight rail service does not satisfy Prop 116 requirements. See highlighted section in letter linked below.

    https://www.sccrtc.org/wp-content/uploads/2011/04/CTCMay2000onProp116.pdf

  12. Barry Scott

    May 30, 2018 at 6:40 pm

    I welcome Progressive Rail to our area, a stronger company than Iowa Pacific, operating under a stronger agreement. They’ll provide jobs and economic activity while taking freight off our highways and moving it more safely and with a fraction of the greenhouse gas footprint we have with trucks.

    There are no freight customers this side of Watsonville, so we can expect a return of our rail excursion trains and the improvements to the line that come with continued use, all important to our ability to retain the entire rail right of way for future use for transit and immediate use for the trail, which breaks ground this year! Greenway seeks to delay matters by ten years or more, jeopardizing both projects.

    More about this at http://www.railandtrail.org

Leave a Reply

Your email address will not be published. Required fields are marked *

Are you an earthling? Prove it with logic: *

To Top