• STERA votes to BUY Buffalo Line from NS

  • Discussion pertaining to the past and present operations of the LAL, the WNYP, and the B&H. Official site: LALRR.COM.
Discussion pertaining to the past and present operations of the LAL, the WNYP, and the B&H. Official site: LALRR.COM.

Moderator: Luther Brefo

  by railwatcher
What others are saying......From the Olean Times Herald:

Authority agrees to buy rail line

By RICK MILLER, Olean Times Herald 02/13/2007

SALAMANCA — The Southern Tier Extension Railroad Authority voted Monday to buy the north-south railroad through Cattaraugus County from Norfolk Southern Railway by March 1.

The rail line that runs from the Cattaraugus-Wyoming County line to the New York-Pennsylvania border would then be leased to the Western New York & Pennsylvania Railroad.

It would be a similar arrangement to the one the Railroad Authority negotiated with Norfolk Southern for the east-west former Erie-Lackawanna Railroad in Chautauqua, Cattaraugus, Allegany and Steuben counties.

Cattaraugus County, municipalities and school districts along the line stand to lose more than $500,000 in property taxes a year when the tax-exempt Railroad Authority takes title to the rail line.

Earlier Monday at a meeting with the Rail Authority at the Center for Regional Excellence, county town and school officials complained about the lack of advance notice of the proposed deal that was made public only last week.

In an attempt to ease the financial loss property taxes from the railroad, the Rail Authority authorized William Burt, president of the Western New York & Pennsylvania, to negotiate with Norfolk Southern for a transitional payment in lieu of taxes in the first year.

  by railwatcher
Segmented from the Olean Times Herald:

Local government and school officials are speaking out against a plan that would make a north-south rail line through Cattaraugus County tax exempt.

The Southern Tier Extension Railroad Authority voted Feb. 12 to buy the north-south railroad through Cattaraugus County from Norfolk Southern Railway. The railroad authority then plans to lease the line back to the Western New York and Pennsylvania Railroad.

The rail line would be tax exempt because the rail authority is a quasi government not-for-profit agency. The deal will cost the county, municipalities and school districts along the line more than $500,000 in property taxes a year. The proposed deal includes a plan to charge the railroad a payment in lieu of taxes (PILOT) fees. But those PILOT payments won’t begin until 2015.

Cattaraugus County Legislator Jerry Burrell, R-Franklinville, offered a resolution to oppose the PILOT agreement during Wednesday’s meeting of the county Legislature’s Agriculture and Markets Committee

He said the rail authority can offer tax abatement to railroads without consent of municipalities and schools affected, but that doesn’t mean schools and towns shouldn’t have been contacted and told of the plan before the rail authority voted.............

There were similar complaints when the deal was made on the former EL main in the Allegany County towns of Alfred and Almond, including their school district. The deal still went through.


  by railwatcher
What others are saying :

Jamestowns' Post Journal:

Rail Deal Could Mean Changes For Falconer

The Western New York and Pennsylvania Rail Road’s anticipated operation of north/south line in Cattaraugus County could mean some changes for the railroad’s Falconer operations.

The personnel changes were not the only ones discussed during a Tuesday meeting of the Southern Tier Rail Authority.

WNYP officials, who operate the east/west line from Hornell to Corry, PA, would also like to purchase the north/south line in Cattaraugus County. STERA members discussed the line’s acquisition and its impact during the Tuesday meeting.

Authority would purchase the line from Norfolk Southern, grant tax abatements on it (outside a one-year PILOT program that would provide Cattaraugus County taxing entities half of what they would receive in taxes), and lease it to Norfolk Southern, who would then lease it to WNYP.

About 15 people, including school and town officials who would lose taxes, along with railroad workers fearing the transaction could cost them their jobs, visited Tuesday’s session to voice concerns about the matter. Job changes will also be felt at WNYP’s Falconer headquarters.

Bill Burt, WNYP president and chief executive officer said he is unsure of the details of how many workers will move or change to an Olean facility on the north/south line, but, he said, there would be "reshuffling" of positions between the Falconer and Olean stations.

Burt said he does not expect other Norfolk Southern railroad workers to lose jobs as a result of the transaction, but, rather, be relocated or be able to bump other workers, depending on contracts employees have with Norfolk Southern.

He said the transaction will also include WNYP and other railroads hiring others.

He said people are concerned about the transaction affecting jobs, but, said Burt, how many jobs would be affected if there were no Monofrax, Bush Industries or Empire Cheese, all of which use rail for product transportation. He said those companies can ship four times further than a gallon of fuel allows.

Teamsters representative Ed Long of Fredonia, said, however, railroad workers facing results of the transaction would have to travel 30-60 miles away for work.

"That I consider a job loss," he said. "You can candy-coat it any way you want," said Long. He also asked why there are no benchmarks, such as job growth figures, as a result of the PILOT programs being offered for WNYP. In addition to the one for the north/south line, WNYP has been granted an extension to begin paying PILOTs on the east/west line.

"This is corporate greed here," he said, adding the deal does not guarantee anything for the area except that Norfolk Southern gets track and rehabilitation paid for by taxpayers.

"There is no guarantee for taxpayers’ return on investment," he said.

Karl Kruger, STERA board member from Allegany County, said, however, the deal does hurt a few but saves many.

"It’s an opportunity to bolster employment," he said. "The real deal is supporting Monofrax, Dresser Rand," he said.

Ann O’Brien, business administrator for the Olean City School District, voiced concern about the deal’s "trickle down effect." She said if the district loses tax revenue that means it has to make up for it in taxes or cut student programming. Kruger said, however, if the deal is not allowed, there may not be school districts on which the deal would have an effect.

Diane Monroe, superintendent for the Allegany-Limestone schools, said she thinks the problem is a conflict of competing investments: those of the rail authority, who want to invest in business; education officials, who want to invest in the workforce; towns, who want to invest in infrastructure and quality of life; and railroad workers, who want to invest in families.

"We shouldn’t be competing," she said, adding the factions all have a narrow perspective.

Quoting Ben Franklin, Burt said, "We either hang together in this, or we surely will hang separately."

From the Olean Times Herald:

Railroad payments take sting out of tax loss, say officials

SALAMANCA—School districts and municipalities would receive some payments in lieu of taxes this year from Norfolk Southern Railway, which hopes to close the sale today of its north-south Buffalo line to the tax-exempt Southern Tier Extension Railroad Authority.

Railway Authority members approved the sale of the railroad from Machias Junction to the Pennsylvania state line on Feb 12, contingent upon Norfolk Southern agreeing to pay at least some of the property taxes on the line for a year. School districts and towns have complained they had no advance notice of railroad property coming off the tax rolls.

On Monday, the Railroad Authority met to hear concerns from some individuals who could not attend the Feb 12 meeting, including superintendents from Allegany-Limestone and Portville school districts, as well as some of the Olean-based Norfolk Southern workers concerned over the loss of their jobs.

After William Burt, president of the Western New York & Pennsylvania Railroad, negotiated a payment from Norfolk Southern, Railroad Authority members voted last week via e-mail to take title of the rail line from Norfolk Southern before taxable status day, March 1. By transferring the property before Thursday, the railroad won’t have to pay property taxes. The Southern Tier Extension Railroad Authority is tax-exempt.

Norfolk Southern offered to pay 50 percent of what the 2007-08 property taxes would have been, and the authority agreed to it last week. Since the school, town, county and village taxes were expected to drop from $489,000 in 2006 to around $330,000 this year, the amount Norfolk Southern will transfer to the authority to divide among the schools, towns, villages and Cattaraugus County will only be about $115,000, Mr Burt said Monday.

"Norfolk Southern could have done better," agreed Karl Kruger, an Allegany County legislator and authority member from Friendship.

He had opposed extending the tax abatement above Machias Junction to the Wyoming County line, as had been proposed after the Feb 12 vote.

Allegany-Limestone Central School District Superintendent Diane Monroe said, "I expect this deal to go through. I expect it is the right thing to do. It’s clearly out of our hands."

While she said the district appreciated the payment negotiated by Mr Burt, she added: "I don’t think it is enough."

School districts along the rail line were among the hardest hit, since most had begun working on tentative 2007-08 budgets and had no reason to believe the railroad was negotiating to sell the line to the rail authority. The rail authority will then lease the line back the Norfolk Southern on the condition that it subleases the line to the Western New York & Pennsylvania Railroad.

Ann M. O’Brien, business administrator for the Olean City School District, told authority members the deal would cost city taxpayers more than $74,000.

School Superintendent Mark J Ward also expressed concern over the loss of 25 Norfolk Southern jobs.

Mr Ward and other superintendents have expressed concern that the Western New York & Pennsylvania asked for and was granted an extension of the tax abatement for the east-west line. On the north-south line, taxes would resume at the 33 percent level in 2014, the same time as the full tax abatement extension begins to expire on the east-west line.

"I appreciate you listening to us," said Portville School Superintendent Peter Tigh. However, he added, the authority was morally obligated to inform the school districts at an earlier time during the process.

Railroad Authority Chairman John Margeson, the Allegany County administrator, said the authority extended an opportunity for municipalities and others to express their concerns at a public hearing, as well as at Monday’s meeting. It is not legally obligated to do so, he added.

Ed Long of Fredonia, a Teamsters representative for railroad maintenance workers at Norfolk Southern, said on top of the tax loss, about 25 employees would lose their jobs if Norfolk Southern pulled its operations out of Olean.

Mr Burt disputed the job loss, saying, "It’s not expected anyone will lose their jobs." Different unions have different "bumping" privileges, he said.

Norfolk Southern employees would likely find work in other rail centers.

Mr Burt noted the first public indication of the plans for the north-south rail line came in a Feb 1 letter he sent to Cattaraugus County Legislature Chairman Crystal Abers.

Mr Kruger of Allegany County said the authority was acquiring the rail line to support businesses, including Dresser, AirPreheater, Monofrax and Bush Industries.

Mr Burt said, "My people have done a fantastic job" in bringing shippers back to rail.

Cattaraugus County Legislator Jerry E Burrell, R-Franklinville, who is chairman of the Development and Agriculture Committee, will introduce a resolution opposing the property tax abatement plan.

  by Otto Vondrak
What's the status of this purchase? Is there a projected start-up date for the WNYP to take over?

  by Alcoman
Can someone outline what trackage is included in this transaction? Olean I expect will be the starting point and base of operations. I have not followed this too much so any help is appreciated.

  by railwatcher
There hasn't been much talk at all since the deal was made, before the taxing date, 3/1/07. I would assume that there has to be some time to get the details of the transfer done, obviously they weren't set to make that all happen on the 1st of March.

I would think that a take over time frame would have to be set up between the two operators, and STERA.

As for what the total trackage is and when it's gonna finish will come out when they get all the details finished.

Alcoman, I wished I knew the answer, too.

  by Luther Brefo
Alcoman wrote:Can someone outline what trackage is included in this transaction? Olean I expect will be the starting point and base of operations.
An informed source tells me that the line from Machias to Driftwood is what the railroad is currently looking at with the possibility of Olean becoming the center of operations.

  by hartlandguy
I understand Mr. Burt saying that no one will lose their job. He correctly points out that NS employees will be able to bump elsewhere. Most likely, that will mean they will move, as Buffalo and other NS terminals are really too far to drive. Assuming that the WNY&P hires new employees, what will they be paid? I am unaware of what WNY&P employees make, but I would surmise that it is considerably less than at NS. Thus, doesn't this actually add to the loss of tax base by area schools and governments? And how much money are taxpayers going to be expected to donate to the new railroad? I know there are two sides, but I'm just wondering how the financials will really work out.

  by SecaucusJunction
Maybe these are the guys that will be relocated to the rumored new crew location of Port Jervis, NY.... or maybe that is just way too much wishful thinking...

  by blockline4180
I guess well all find out by June 1st if the rumored increased freight traffic on the Southern Tier actually happens!