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Union Pacific Railroad Involvement

The California Department of Transportation requested a survey of the other states regarding states' experiences with the Union Pacific Railroad and

  1. Has your state experienced any project delays & increased costs due to Union Pacific involvement?

  2. Please provide examples.

  3. Has your state experienced any compensation demands and Union Pacific refusing to execute Construction & Maintenance Agreements or Service Contracts until compensation demands were met?

  4. What Railroad property valuation issues have been experienced?

  5. Any general comments on problems & frustration in dealing with UP? Maybe multiple fee demands?

CALIFORNIA

  1. YES.

  2. There seems to be a lot of time wasted in completing and signing the "Construction and Maintenance" Agreements needed for railroad overpass and road widening projects. I tried to create a "Master" at one point so that all others could be modeled from this and thus save time, but, even this was met with further changes the next time it was used. Also, as new staff members enter and leave the ranks at UP railroad they wish to make changes to suit there opinions that further hinders the development of a "Master" agreement. Finally, the turn-around time to have an agreement reviewed is unacceptably long and I have not been able to expedite matters. When asked the response I receive is that they are very busy.

  3. Compensation is either for easement area or for work performed by railroad forces. For easement area we perform an independent appraisal of the property to determine a value which is usually acceptable to the railroad. For track and crossing work we utilize the estimate prepared by the railroad to complete the contract, but, we wind up paying actual costs based upon the audited findings of the invoices. Yes the compensation element is a part of the C&M agreement and must be agreed to before it is signed.
    Another element you have not questioned about but that is a problem for us is that UP railroad will not issue a Right of Entry to our contractor to begin work while we complete the C&M agreement. This is where our projects are held up.

  4. Nothing unusual, however, UP railroad is the only railroad in our state we are paying for easement area.

  5. One of the greatest problems is the time spent in getting decisions made by staff. The individual assigned to Arizona can make few independent decisions. Most must come from "others". Also the lengthy time to review and sign contrasts and prepare cost estimates for work. For one of our last projects it took literally one year from when I requested a cost estimate for additional work for an addendum for a recently completed C&M contract to my notice to proceed for the work.

    We do not understand your question regarding multiple fee demands.

FLORIDA

I'm afraid we can't help with your survey as the Union Pacific Railroad does not operate in Florida.

IDAHO

  1. Yes.

  2. Over the last three years, UP Railroad has been very slow (has taken up to 18 months) to review and sign agreements. I have been told they have only one lawyer to review and approve our agreements and he seems to always request a change in agreement language even though it was used in a previous agreement. Also there have been delays due to their signal shop being required to do a design before preparing an estimate for the agreement. This is an unnecessary delay since the agreement is an Actual Cost Agreement.

  3. Yes.

  4. Even though a US Supreme Court Decision of 1897 states that no compensation is required for use of railroad property for public road crossings, UP Railroad continues to make demands for easement compensation.

  5. Idaho does Right of Entry agreements with UP Railroad that do not require a separate agreement by our Contractor. The agreements with the Contractor requirements for safety and insurance is included and made part of our Project contract.

ILLINOIS

  1. Illinois has experienced delays due to UP involvement.

  2. Examples. Rather than in terms of days or months, IDOT usually thinks in terms of which letting it will be pushed back to -- this has resulted in as much as a year delay. In some cases IDOT will petition the Illinois Commerce Commission (ICC) for assistance in resolving the differences – sometimes this will drag out the resolution of the problem(s). The regulatory agency (ICC) that Deals with railroads is separate from IDOT – however we work closely with each other.

    The primary projects we experience delays with are bridge projects –in part due to their complexity and the various differences in the way IDOT and the railroads build their bridges. The three items the railroads look at with great interest are vertical and horizontal clearance and how storm water is directed away from the bridge (on or off the railroad ROW).

    One extra wrinkle the UP has that the other railroads do not is their Grade Separation Data Sheet and Checklist. This is another hoop IDOT jumps through, which supposedly helps speed things along.

    One final item which causes additional delays is agreement language. Liability Insurance and Indemnification seem to be the two major issues which put an indefinite hold on our agreements. BNSF seems to be the only one that does not like indemnification, whereas UP will sign with it in there. UP prefers to suggest design changes to our structures.

  3. Other than permit fees, which IDOT requires its contractor to pay, we have not experienced any direct costs to encourage the UP to sign our agreements. If I understand your question correctly. There may be some indirect costs to IDOT due to delays in signing, but there are no direct, upfront fees.

    If railroad personnel will be doing work as a result of our project, then we include that as an estimate as a part of the agreement -- this is not a coerced payment.

    If the railroad stalls or refuses to sign the agreement, for whatever reason, then IDOT has the option to take their case to the ICC.

  4. I talked to our Land Acquisition people and they said each railroad has their own little quirks wherein they prefer their own language in the easement documents. IDOT cannot arbitrarily change the language, so these issues usually end up with the ICC. They also prefer IDOT buys their land as a permanent easement as opposed to acquisition by Fee Taking. They have exorbitant fees for processing our documents. If there's no problem with the project it takes about a month to process our documents. In addition to processing fees, the appraisal of the Property by IDOT is usually too low, since they know IDOT wants the property. The Land Acquisition people tell our designers to avoid the railroad if at all possible.

  5. We are working on a Master Agreement for construction projects with the Class One railroad in Illinois – we currently have one for the railroad Safety Projects – where the railroad installs signals, surfaces, etc. on their property. Currently, we are waiting for comments on our agreement language from the railroads. Recently, we have allowed the railroad to bill IDOT directly for Flagging services. Prior to this, we had them bill IDOT's contractor and IDOT paid the contractor plus 5%.

    We have an annual meeting with the various Class-I railroads to discuss policies and exchange information – both railroads and government people make presentations. IDOT has been hosting these for around 15 years or more. They seem to have a positive effect on railroad / IDOT relations; even though we have our differences.

    Regarding processing time with railroads, it seems to also be a factor as to who you are dealing with; some people within an organization have their own response time due to their circumstance or personality. I'm not sure how to overcome that on a day-to-day basis. Once in a while you can bypass them, but you shouldn't make a habit of it.

KANSAS

  1. It generally takes three to four months to work out the agreement with UP Railroad to obtain the right of way once an offer to purchase has been made. This time can be extended considerably if UP Railroad leases the line out to another railroad requiring the lessee to sign off also.

  2. Please provide examples. See No. 1.

  3. UP Railroad requires the construction agreement to be signed before they will sign the right of way easements. We compensate UP Railroad a minimum of $2,500 when obtaining right of way that is parallel to their tracks and a minimum of $1,500 for projects where there is a crossing involved. These minimum amounts cover the administrative cost of handling the paper work. By agreement with UP Railroad, on proposed grade separations, where an "at grade" crossing is being closed the railroad is not compensated any additional amount for the needed easements only the $1,500 administrative cost is paid.

  4. The AHTD uses the "across the fence" valuation for railroad right of way that is encumbered with tracks. Market value is offered for railroad right of way that is wide enough to develop and not encumbered with tracts. Sales data is provided to the railroad for review by the railroad's right of way staff to review. Generally, there are no problems associated with the valuations.

  5. Standard easement contracts have been developed for UP Railroad acquisitions that have been approved by the railroad's legal staff. This speeds up the acquisition process considerably.

    The biggest problem with acquiring the right of way is when the right of way limits are within 25 feet of the railroad's tracks. It takes longer to get processed and, if they do not agree, condemnation must be used.

LOUISIANA

I get railroad C&M Agreements for Louisiana DOTD.

  1. YES.

  2. UP has not gotten estimates in for their signals or surface work, not responded to engineering requests in a timely matter when LA DOTD has noted the urgency of these, or not completed their work (signals and/or surface) as timely as other railroads.

  3. YES, but I don't think LA DOTD has had quite as bad a problem as others states. Mainly our issue has been has been getting UP to address our engineering questions or meet their unique ROW issues.

  4. UP has its own unique ROW issues for LA DOTD to address and over the last several years has changed extensively.

  5. Louisiana did not answer this question.

MARYLAND

Maryland doesn't deal with Union Pacific.

MICHIGAN

I work with the Michigan Department of Transportation owned railroad real estate. I am not aware of any Union Pacific Railroad corridors within the State of Michigan. Therefore, none the five issues that you have outlined apply to the State of Michigan.

MISSISSIPPI

Mississippi has had no experience with the UP Railroad. We did have one railroad that raised a substantial compensation issue about three years ago. We condemned the railroad and eventually settled the case very close to the Department's value.

NEW HAMPSHIRE

New Hampshire has not had involvement with Union Pacific.

SOUTH CAROLINA

South Carolina does not have to deal with Union Pacific; however we have noticed that it is much more difficult to deal with the railroad companies who do operate here in South Carolina. In many cases, we are responding to requests from the Railroad's consultants and not dealing with railroad personnel directly any longer.

SOUTH DAKOTA

We do not have Union Pacific to deal with in South Dakota. However, we always start the ROW and plan involvement very early with any of the railroad carriers due to the long periods of time required for response and action on items.

VERMONT

Vermont has not affected property of Union Pacific which to my knowledge has no land, ROW, or tracks in Vermont. Therefore the remaining questions do not apply.

Updated: 09/05/2014
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