Santa Cruz Count, Calif., rail vote comes back to local commission

Santa Cruz County, Calif., residents who have been following the local attempt to buy a 32-mile railroad branch may have a sense of déjà vu, The Post reports. The Regional Transportation Commission is expected to vote again on issues surrounding a state grant of $10.2 million on Aug. 5. For some commissioners and members of the public, the required votes are just a formality, confirming actions already taken this spring.

For others, among them the
124 people who wrote to oppose the plan before the state commission vote, it’s
a last chance to keep the agency from making what they believe may be a very
expensive mistake.

When the California Transportation
Commission unanimously approved the $10.2 million application for Prop 116
funds, state commissioners made it clear that the money is for a rail line.
Most of the conditions it put on the approval revolve around promises to
provide such services into the future, and guarantee that the uses are for
train transportation.

On Aug. 5, the local RTC
will be asked to pass resolutions committing to initiate recreational passenger
service, continue freight service, take responsibility for any hazardous material
cleanup and pay the state back if rail service ends at any time.

How big a promise is the
payback? The RTC is currently asking the state for $14.2 million to buy the
branch line and plans to request another $5 million for improvements. That
money comes from a combination of rail-only Prop 116 money and other state
transportation improvement program (STIP) funding that would typically be used
for road projects or bicycle lanes.

In other words, it is a
huge investment for an area that doesn’t have any viable mass transit rail
plans, according to its own studies. Once awarded, if the commissioners agree to
all the state’s approval conditions, all of that $19.2 million would have to be
repaid if trains stopped running on the line, confirmed Luis Mendez, deputy
director of the Regional Transportation Commission.

The state wants assurance
that the branch corridor will be used for trains for two main reasons. The
first is the Prop 116 money, which is restricted to passenger rail use. The second
is worries about who would own the many parcels that make up the 32 miles of
track if freight rail use ended. This part is only newly revealed in a memo
leaked to The Post.

An email released by state
staff discusses "potential for multiple lawsuits to settle title."
That’s because access to some of the land comprising the Union Pacific
right-of-way sits on easements, and is not owned by UP. What Union Pacific
doesn’t own it can’t sell. If rail use ended, the landowner could remove the
easement and take back full control of the property. The state wants to protect
itself from the "prospect and magnitude of the potential title
problem," as CalTrans attorney Matthew George wrote June 28, just before
the state commission meeting. And in the 130 years that trains have been
running on the line, there have been many easements granted.

The RTC’s Mendez pointed to
a list compiled in 2006 by an assessor trying to track titles, and it has 112
different parcels. A surprising number of those are listed as questionable
titles. "It’s a bit of a challenge," Mendez acknowledged. In addition
to all the easements for at-grade crossings over public streets, some private
property access is just an easement and some parcels have nothing recorded, he
said. The RTC has some wiggle room to stop freight service and yet retain
easements through a process known as "railbanking." The agency can
apply to the Surface Transportation Board to cease operations but retain the
line for future rail use. However, it is at the mercy of the board’s decision
and without constant maintenance, rail lines fall into disrepair.

Related to the title
concerns are ongoing questions from Caltrans about how the RTC appraised the
rail. Three different firms came up with three values, but they did agree that
since it is not a profitable business, the best way to set a price was
basically what the land would get if sold off separately. Within its resolution
approving the grant is a requirement that the methodology be explained. That
concern surfaced again in the funding allocation, with Caltrans noting it had
"insufficient information to make a recommendation" in June. At the
time, Supervisor John Leopold said the methodology rationale had been explained
and simply needed to be put in writing. Recently Mendez said vacation schedules
have slowed efforts to confirm the RTC’s current explanation is OK. Union
Pacific originally wanted $20 million, but has kept dropping the price. With
the closure of the Cemex plant in Davenport, very little freight currently runs.
And the RTC expects to spend $5 million on repairs in just the first five years
of ownership, and doesn’t yet have a plan to keep the rail tracks in good
repair for freight. Passenger rail is estimated to cost more than $100 million
because the rails are not capable of supporting passenger service without major
upgrades. A Caltrans spokesperson said the valuation is an ongoing issue that
will be discussed at the CTC’s Aug. 10 meeting.

Continuing the passenger
piece is non-negotiable to meet state conditions. And the RTC still does not
having an operating agreement yet with a passenger train operator, although it
has been negotiating with Sierra Northern Railway to provide both the freight
and recreational operations. In February, the agency announced a plan by Sierra
Northern to offer scenic rides and a dinner train between Santa Cruz and
Davenport in order to meet the state’s requirements.

"We’re down to the
last few items," said the RTC’s Mendez in late July, but he did not expect
that the final agreement would be ready by the Aug. 5 meeting. That concerns
Dene Bustichi, who represents the Metro transit board on the RTC and is also a
Scotts Valley council member. He wants a chance to study the operating
agreement before "signing a blank check for the future." When the RTC
last met in late June, he said the sides were still far apart.

The Metro board has been
concerned that some of its funding could be siphoned off to support rail. The
RTC has long promised that the rail purchase deal would not require a subsidy
for ongoing operations.

Engineer and former
commission representative Bill Comfort is not so sure that the community is as
enthusiastic about the rail purchase as the current RTC board. Comfort traveled
to Sacramento to speak against the project before the CTC, and said by June 30
the commission had twice the number of letters opposing the application as
supporting it. Comfort did not get to speak because the commission, thinking
only supporters were there, called only some representatives. He was given time
later when the actual allocation deferral was discussed. He shares Bustichi’s
concerns that the RTC will end up subsidizing what he calls an "amusement
ride" rather than a transportation project.

Should all the votes and
agreements proceed to clear the way for the purchase, Mendez noted that his
agency would still likely have to wait for the money. That’s because it comes
from the sale of bonds. With the state budget once again overdue and an ongoing
deficit, California’s bonding capacity is greatly reduced. The situation
affects both pools of money, the Prop 116 and STIP. In fact, the STIP money was
originally programmed back in 2000, which is the agency’s way of planning to
spend money it expects in the next two years. The actual allocation has been
pushed back several times. Most recently, the RTC agreed to hold off requesting
part of the STIP funds for the rail purchase. It will need $4 million to
complete the initial sale, and then another $5 million for repairs. The agency
is putting off the $5 million request for repairs until the after the purchase
is complete and it would be ready to begin work on the line, explained Mendez.