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Home My WebLink AboutMINUTES - 03121996 - C46 � Me Contra TO: BOARD OF SUPERVISORS Costa County FROM: TRANSPORTATION COMMITTEE DATE: MARCH 4 , 1996 SUBJECT: REPORT ON PROPOSED MERGER OF UNION. PACIFIC/SOUTHERN PACIFIC RAILROADS SPECIFIC REQUEST(S) OR RECOMMENDATIONS) & BACKGROUND AND JUSTIFICATION RECOMMENDATIONS 1) Accept report on the proposed merger of Union Pacific and Southern Pacific railroads . 2) Direct staff and County' s Ad Hoc Intercity Rail Advisory Committee (AIRAC) to monitor merger application process and environmental clearance, with regard to: (1) maintaining opportunities for future intermodal rail passenger connections in East County; (2) insuring public health and safety of County residents from significant changes or increases in hazardous rail freight traffic or other railroad safety considerations that might result from the railroad merger. 3) Request the Transportation Committee to report and advise the Board of Supervisors, as necessary, on the proposed railroad merger. FISCAL IMPACT None . CONTINUED ON ATTACHMENT: x YES SIGNATURE RECOMMENDATION OF COUNTY ADMINISTRATOR x RECOMMENDATION OF BOARD COMMITTEE APPROVE OTHER SIGNATURE (S) : Tom Torlakson Jeff Smith ACTION OF BOARD ON March 121996 APPROVED AS RECOMMENDED X OTHER VOTE OF SUPERVISORS I HEREBY CERTIFY THAT THIS IS A x_ UNANIMOUS (ABSENT #3 TRUE AND CORRECT COPY OF AN AYES: NOES: ACTION TAKEN AND ENTERED ON THE ABSENT: ABSTAIN: MINUTES OF THE BOARD OF SUPERVISORS ON THE DATE SHOWN. Orig: P. Roche, CDD-TPD (335-1242) ATTESTED March 12, 1996 cc: AIRAC PHIL BATCHELOR, CLERK OF J. McCallum, MTC THE BOARD OF SUPERVISORS AND COUNTY APMINISTRATOR B DEPUTY i UP/SP Merger 3/12/96 Page Two BACKGROUND/REASONS FOR RECOMMENDATIONS This past summer the Union Pacific Railroad announced its plan to acquire the Southern Pacific Railroad for $5 .4 billion. On November 30, 1995, the two railroads filed 8, 100 pages of documents with the former Interstate Commerce Commission (ICC) to justify Union Pacific' s purchase of Southern Pacific . The ICC was disbanded at the beginning of this year and its regulatory functions were transferred to a new unit with the U.S. Department of Transportation called the Surface Transportation Board, which is quasi-judicial panel that will provide government sanction for the merger. If approved, the merger will create the largest rail system in the United States, with a 31, 000-mile network serving 25 states, Mexico and Canada. Contra Costa County' s Railroad Corridors: Contra Costa County is served by two major railroad corridors, as follows : ■ The Southern Pacific is /-a 60 mile corridor stretching from Richmond to the Alameda County line near the Clifton Court Forebay. It is a high speed, double track between Richmond and Martinez, at which point it splits into two lines, where the double tracks cross the river to continue up the Sacramento Valley (also known as the Capitol Corridor) , and a single track line that connects to the San Joaquin Valley via Port Chicago, Pittsburg, Antioch, and then heads southeast through Oakley, Brentwood, and Byron to connect at Tracy (referred to as the Mococo line) . ■ The 55 mile-long Santa Fe corridor is a single track line running roughly parallels the Southern Pacific line between Richmond and Hercules, where it turns inland through Franklin Canyon running south of State Route 4 to the industrial areas east of Martinez . The Santa Fe line parallels the SP' s Mococo line until Pittsburg at which point it heads due east through Pittsburg, Antioch, and Oakley across the Delta to Stockton. See Exhibit "A" for map depicting the railroad corridors in Contra Costa County. Impact of the Merger on Contra Costa County and East Bay: ► The merger will combine Southern Pacific and Union Pacific into one large railroad under the name of Union Pacific . The new railroad will compete with the newly merged Burlington Northern-Santa Fe (BN/SF) railroad for rail freight business in the western United States . Once the merger is complete there will then be only two large rail freight carriers serving major markets west of the Mississippi River. UP/SP Merger 3/12/96 Page Three ► The Port of Oakland and key industries, such as the refineries in Contra Costa County, will continue to be the main destinations in the East Bay for both railroads. A settlement agreement has been reached between the two railroads which will preserve each company' s access to the Port of Oakland. BN/SF will retain rights to use the UP/SP tracks (between Richmond and Oakland) leading to the Port . ► The proposed merger' s direct impact on Contra Costa County will involve the renewed use of SP' s underutilized Mococo line to accommodate up to four daily rail freight trains . Union Pacific plans to divert some of its rail freight traffic from the existing Altamont Pass line to the Mococo line because it provides a shorter, more efficient freight connection up the San Joaquin Valley to the Bay Area. Currently, the Mococo line is used approximately once a week, so the new railroad company in their merger application has proposed to spend up to $21 million line for track upgrades and new sidings based on the increase in rail freight traffic. ► The merger' s impact on the double track SP line segment between Martinez and Richmond appears to be minimal in terms of increased rail freight traffic. This double track line has historically carried far more rail freight traffic than planned under this merger. Approval Process for the UP/SP Merger: ► The Surface Transportation Board, U.S . DOT, will hear arguments and vote on the merger application this coming July, 1996, and then issue a final written decision in August, 1996 . The Surface Transportation Bureau is a three person, quasi- judicial body, using the rules and precedents developed by the former ICC. ► The deadline to become an official "party of record" to the Surface Transportation Board proceedings was on January 16, 1996 . Parties of record to the merger application proceedings have until March 29 , 1996 to submit their views or briefs on the merger. The Surface Transportation Board, however, will accept comments on the merger from any person or organization, but such comments will not be considered by the Board in making their decision. ► Several state agencies are expected to submit briefs on the merger as parties of record, which include: California Public Utilities Commission - safety issues; Attorney General - antitrust; Governor' s Office/California Transportation Commission. Locally, the Port of Oakland will probably submit comments or brief on the railroad merger' s potential impacts on the Port' s operations and the City of Brentwood has formally filed as a party of record with the Surface Transportation Board with regard to the merger' s impact on the Mococo line which bisects the city. UP/SP Merger 3/12/96 Page Four ► In parallel to reviewing the application, the Surface Transportation Board is conducting an Environmental Assessment (EA) on construction projects requiring new rights of way and track abandonments/service discontinuance proposed in the merger application. The EA is expected to be issued in late April 1996, and there will be a 20 day comment period. You do not have to be a party of record to comment on the EA. Merger' s Potential Impact on Previous Commuter Rail Proposals in Eastern Contra Costa County: ► In 1992, Southern Pacific made a public offer to allow use of it' s trackage for two limited commuter train service: Oakland Solano County; Oakland - Eastern Contra Costa County. This offer involved a public agency paying Southern Pacific for trackage rights to operate commuter service and sharing in the cost to upgrade tracks and signals to standards for passenger rail service . ► The Mococo line was identified by Southern Pacific as the commuter rail line that would serve East County communities of Pittsburg, Antioch, and Brentwood. The cost to improve this line' s tracks and signals, exclusive of new stations, was estimated at $10 , 300 , 000 million The purpose of these track and signal improvements was to enable the passenger trains to operate up to speeds of 79 mph, and included the following: installation of continuous welded rail in place of older jointed rail, new rail ties, and centralized traffic control signaling, etc. It is uncertain whether the $21 million targeted in the merger application of this line would involve the same improvements that would enable passenger trains to operate at 79 mph. ► In assessing the proposed commuter rail service along the Mococo line, a study sponsored by the Greater East Bay Rail Opportunities Coalition (GEBROC) made the following findings : 1) The opening of the Bay Point BART Station and connecting BART Express Bus Service from Brentwood was more direct and offered approximately the same travel time as the commuter rail operation; 2) The travel market, east of Antioch, for destinations to Downtown San Francisco or Oakland was comparatively small and did not appear to warrant commuter rail operation at the current time; 3) The new Bay Point BART Station and connecting feeder bus service already represents a substantial public investment in rail transit in East County. A public investment in commuter rail in this corridor would appear to be duplicative of the current investment in BART; 4) Commuter rail operation might be more viable in the future as part of a larger commuter rail system that also serves San Joaquin County points such as Tracy, Lathrop, and Manteca. UP/SP Merger 3/12/96 Page Five ► While the pending UP/SP merger has not changed the GEBROC findings about commuter rail in East County, conditions in the future may make such a commuter service more viable than today. What changes are necessary to make commuter service more viable? 1) As East County population grows, the change in travel patterns and demand may show a greater demand for travel to Downtown San Francisco and Oakland from the area east of Antioch, including portions of San Joaquin County. Also, further extension of BART system into East County would have been significantly delayed or deferred; 2) Public funding must be available to underwrite the cost of operating a commuter rail service; 3) The new Union Pacific management must be willing to allow commuter rail access rights to their newly acquired tracks and, presumably, the public sponsor of commuter rail service would share in the upgrade and maintenance of the line . ► It should be noted that San Joaquin County has created their own regional rail authority to implement commuter rail service from Stockton to San Jose via the Altamont Pass rail corridor. San Joaquin County is using their own sales tax proceeds and money set aside under Prop. 116 bond to pay as a pilot demonstration project . Perhaps, based on the experience of the Altamont commuter rail demonstration service, the concept of a larger commuter rail operation serving both San Joaquin and eastern Contra Costa County might be further explored. The Transportation Committee has reviewed this matter and recommends to the Board of Supervisors the following course of action: 1) Accept report on the proposed merger of Union Pacific and Southern Pacific railroads. 2) Direct staff and County' s Ad Hoc Intercity Rail Advisory Committee (AIRAC) to monitor merger application process and environmental clearance, with regard to: (1) maintaining opportunities for future intermodal rail passenger connections in East County; (2) insuring public health and safety of County residents from significant changes or increases in hazardous rail freight traffic or other railroad safety considerations that might result from the railroad merger. 3) Request the Transportation Committee to report and advise the Board of Supervisors, as necessary, on the proposed railroad merger. PR:CDD-TPD railmerge Q dV O V 4 Q 4 ,1 Ag i Y y j �d = ,- m C L � y r' 00 r\ c4 N � S 1 N •✓ ♦^ r- 2 , O Y�' i �f.', •� c i;ti a ♦ .�i+ N O gay : N u Z�