Federal regulator says it will review rail deal, address Voorheesville’s concerns with proposal

— From the Federal Railroad Administration

Voorheesville in its letter to the Surface Transportation Board said it was “of particular concern to the Village ... the transaction that calls for the construction of the new rail connection.” In 2003, the Delaware and Hudson Railway Company abandoned about nine miles of track between Voorheesville and Albany. Under a proposed agreement between Norfolk Southern and CSX, part of the old line would be rehabilitated for Norfolk Southern to re-establish a connection to the CSX line, which is located behind 18, 22, and 28 South Main Street in the village. 

VOORHEESVILLE — The Surface Transportation Board, the federal agency charged with economic oversight of the nation’s major freight carriers, decided recently to allow CSX to move forward with its attempt to acquire a Massachusetts-based regional rail company.

In its July 30 ruling, the railroad regulator additionally said issues brought to its attention by the village of Voorheesville in a July 20 letter would be dealt with in future decisions handed down by the board. 

The STB also laid out a procedural timetable for CSX’s application request: April 1, 2022 is designated as the day a decision would be made, with the  determination becoming effective a month after. 

Public comments on the proposed acquisition are due by Aug. 20, 2021.

But those wishing to speak on environmental matters related to the proposed transaction have until Sept. 17, and should address the STB’s Office of Environmental Analysis with their concerns.

A public hearing on the acquisition could also  be held sometime between mid-November and the new year, if the STB determines a hearing is necessary.

The STB determined with its third bite of the apple, a 1,262-page request to acquire Pan Am Railways, CSX had finally provided the board with “sufficient information to satisfy the requirements for a ‘significant’ transaction application.”

CSX in February submitted a filing, seeking approval to take over Pan Am Railways and its seven mostly-New-England-based subsidiaries. CSX told the STB that the deal would be a “minor” transaction because there wouldn’t be any resultant loss of market competition as a consequence of the agreements. 

The STB disagreed. 

In March, the federal regulator redesignated the transaction as “significant” and required CSX to hand over additional information.

There are four types of railroad transactions: major, significant, minor, and exempt. A transaction is considered “significant” if it does not involve “the control or merger of two or more Class I railroads that is of regional or national transportation significance,” according to the STB. A  “major” transaction involves the merger or acquisition of two Class I railroad companies. 

CSX and Norfolk Southern, the owner of the rail line crossing over Route 146 in Altamont and over Main Street and Voorheesville Avenue in Voorheesville, are two of the country’s seven Class I carriers.

After the redesignation of the deal in March, CSX filed an amended application in April, which was rejected by the STB in late May for being incomplete. That was followed by the July 1 submission, which was ultimately accepted for review by the board. 

 

Mr. Reilly goes to Washington

Voorheesville in its July 20 letter asked the STB to reject the rail deal because of the “significant impact” the transaction would have on the community. With the acceptance of CSX’s application for review, an outright denial of its takeover of Pan Am Railways may be a more remote possibility than when the village made its request to the federal board. 

But proving the squeaky wheel gets the grease, the STB appears amenable to Voorheesville’s second request: If the acquisition is approved, the village asked the STB to impose conditions addressing its concerns, “such that the Village’s significant public safety and quality of life concerns for its residents be addressed — at [CSX’s] expense.”

Addressing it in a sort of regulator-regulatee power-dynamic kind of way, the STB touched on an issue raised by the village in its July 20 letter: CSX’s claim that it needed no authorization to rehabilitate the tracks over Main Street. 

Rich Reilly, the village’s attorney and author of the July 20 letter, wrote, “Of particular concern to the Village is that aspect of the transaction that calls for the construction of the new rail connection; and the use of that connection to allow 1.7 mile-long, double stacked specialty trains to pass through the community.”

In 2003, the Delaware and Hudson Railway Company abandoned nine miles of line from Albany to Voorheesville, having previously reactivated its rail  between the village and Delanson three years early in anticipation of the move.

About 1,200 feet of the Norfolk southern line are due for a full track and crossing rebuild. This stretch lies between milepost 11, which starts in Voorheesville at about the midpoint of Prospect Street between Skyler Lane and Main Street, and a CSX connection, which is located behind 18, 22, and 28 South Main Street, the former home of Phillips Hardware, Gio Culinary Studio, and Old Goat Wood Shop, respectively. 

The 15 miles of rail between Voorheesville and Delanson is also slated for rehabilitation. 

The trackage-rights agreement between Norfolk Southern and CSX “references ‘construction’ of a connecting track” over Main Street, which “CSX claims that no construction authority is required in this instance because the ‘construction’ referred to entails the rehabilitation of existing track,” according to a footnote in the July 30 board decision. 

The STB in the same footnote references Voorheesville’s concern with the connections and states it will  “address the Village’s letter in a subsequent decision.”

Reilly in his July 20 letter to the STB also wrote, “The proposed connection and additional high intensity traffic, if approved, appear highly likely to result in a total of three at-grade crossings in the Village being closed at the same time — on a regular basis. Such closings would clearly result in additional traffic backups at intersections.”

The village went on to outline a number of concerns for the federal board, stating the proposed project would:

— Greatly increase response times for safety vehicles;

— Trap residents and vehicles on Foundry Road as trains pass;

— Increase the complexity and cost of creating a Quiet Zone, whose design is currently on hold because of CSX’s proposal;

— Increase deterioration of the rail overpass on Route 85A, worsening safety concerns as debris drops from there; and

— Have an adverse impact on the health and safety of village residents as well as lowering their property values.

 

Safety always, history, environment occasionally 

The STB said CSX has to provide it with a Safety Integration Plan, a process that requires the freight carrier to work with and then be regulated by one of the government agencies tasked with enforcing safety regulations on the nation’s rail lines, the Federal Railroad Administration.

The initial purpose of a Safety Integration Plan, in the view of the regulators, was to get two of the federal agencies responsible for overseeing different aspects of the same industry working together — the STB, which polices the economy in which the nation’s major freight carriers reside, and the FRA, which has regulatory domain over every rail line in America save for what’s definitionally known as “rapid transit,” like the subway systems of New York, Boston, and Philadelphia.

The STB and FRA “developed complementary… regulations establishing procedures for the development and implementation of safety integration plans (SIPs) by railroads proposing to engage in certain specified merger, consolidation, or acquisition of control transactions with another railroad,” according to a summary of the rule in the Federal Register.

 Broadly speaking, the safety integration plan is used by the FRA to “maintain and promote a safe rail environment by ensuring that affected railroads address critical safety issues unique to the [merger] of large, complex [railroad] operations,” according to the Office of Management and Budget, specifically, “by a Class I railroad proposing to engage in certain specified merger, consolidation, or acquisition of control transactions with another Class I railroad, or a Class II railroad with which it proposes to amalgamate operations.”

Of note for Voorheesville residents, although likely unapplicable given that CSX is proposing to take over Pan Am Railways and Norfolk Southern has a separate trackage-rights side agreement, are some safety-plan stipulations related to railroad crossings made at grade, like the ones at Main Street, Voorheesville Avenue, and School Road.

For example, applicants have to develop a grade-crossing program identifying existing crossings ripe for an increase in train traffic as a result of the transaction. A safety integration plan “also sets out discrete ... items” that a company “must address in its grade crossing program,” according to the railroad administration, like “measures to avoid blocking or obstructing grade crossing systems.” 

CSX’s safety plan is due Aug. 30; comments on the plan are being taken until Oct. 4. 

A rail merger, according to the STB, typically receives a pass on having to prepare an in-depth environmental assessment or impact statement, and CSX is no exception.

But the regulator did direct the company to provide it with train traffic projections through 2027 — “five years after the date of the anticipated year of the issuance of a final decision from the Board,” the July 30 decision from the STB states.

The longer-term forecast will allow the regulator to “fully evaluate whether the impact of the Merger and Related Transactions would have any potential for environmental impacts warranting environmental review ….”

CSX has until Aug. 19 to get the STB those projections.

Prior to signing off on undertaking, federal agencies are bound by the  National Historic Preservation Act to “take into account the effect” the impact their decision would have on properties included in, or eligible for placement on, the National Register of Historic Places. 

If, for example, an applicant to the STB were proposing the abandonment of a rail line or the discontinuance of passenger train or freight service or the consolidation, merger, or acquisition of another carrier, the applicant would, under certain circumstances, have to prepare a historic report. The report documents both the federal and relevant state government historic properties, sites, or structures, and determines if the building or locale would be adversely affected by the applicant’s ultimate decision.

As with in-depth environmental reviews, rail mergers largely get a pass when it comes to historic reports. And in CSX’s case, “there would be no significant change in operations and properties 50 years old and older would not be affected,” the STB writes in its July decision, so a report isn’t warranted.

More New Scotland News

  • The village of Voorheesville and the Altamont Free Library wrote letters over the summer to the Surface Transportation Board, the federal agency charged with economic oversight of the nation’s major freight carriers, about CSX’s attempt to acquire a Massachusetts-based regional rail company. This week, CSX responded to concerns brought up by the village and library. 

  • “The majority of school districts in the capital area, they are not allowing indoor use by outside organizations; they’re not allowing indoor use during high or substantial transmission rates,” Voorheesville Superintendent Frank Macri said on Oct. 4.

  • For 2022, the town is proposing a tax rate of $1.55 per $1,000 of assessed value for all New Scotland property owners — including those who live in the village of Voorheesville — up from $1.52 per $1,000 of assessed value this year.

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