'Sweet deal' with CSX may violate state Constitution

Today the Tampa Tribune exposed yet another sweetener in the secretly negotiated CSX-Orlando rail deal.

Florida's rail deal with CSX Transportation includes a benefit for CSX that goes far beyond the hundreds of millions the company will get from the state.

After selling 61 miles of tracks in Central Florida for commuter rail, CSX will retain the right to use the line for 12 hours a day. It will pay only a fraction of the state's operation and maintenance costs, however.

Is the deal fair - or even legal?

A lawyer who helped negotiate the deal for the state warned more than a year ago that the terms amounted to a subsidy for CSX - a possible violation of the state Constitution. State officials, however, say they struck a fair deal for the taxpayers and the railroad. [....]

It's a sweetheart deal that "gets sweeter" with the break on the access fees, said state Sen. Paula Dockery, R-Lakeland, who opposes the package because of its costs and CSX's plans to raise freight train traffic through downtown Lakeland.

CSX will pay twice as much to use an 81-mile commuter line in South Florida. [In a similar deal in New Mexico, Burlington Northern Santa Fe covers about 95 percent of maintenance costs.]

Is a deal negotiated in secret - using CSX cost data - a bargain for taxpayers?

The state DOT negotiated the CSX deal in secret, with all the DOT staff members and consultants involved signing confidentiality agreements, at CSX's behest. The company said the information it would be providing should be barred from public view under the Sunshine Law exemption for trade secrets.

DOT negotiators used CSX's cost data to determine what the company should pay the state for access to the 61 miles, said Kevin Thibault, DOT's assistant secretary for engineering and operations.

"We feel like the money we're getting from them is adequate," Thibault said.

E-mail messagess obtained by The Tampa Tribune, however, show that one of the DOT consultants, lawyer John Bottcher, disagreed.

If the state didn't "recoup its costs of the investment and the ongoing costs of ownership, then CSXT would be receiving a subsidy," he wrote in December 2006, about a year after negotiations began.

"The Florida Constitution prohibits public financial aid to a private party without a commensurate public benefit," he wrote. "We know that carriage of freight in and of itself provides a substantial public benefit. But there is a point where CSXT's profits private sector benefit would exceed the public benefit. I think FDOT's proposed fee structure is close to that point."

The article describes another business model for determining what one railroad should pay another for the use of a line.

According to an expert with the Alameda Corridor Transportation Authority in Southern California, purchase costs and maintenance costs of a railroad should be figured separately, "but both should be used to determine what the freight railroad should pay."

Also, if passenger and freight trains share the corridor, the bulk of the maintenance fees should be paid by the "longer, heavier, more damaging trains, which are freight trains," Preusch said.

"There's a lot of politics in these things," he said. "But the business model is what I described."

In New Mexico, Burlington Northern Santa Fe sold tracks to the state three years ago for a passenger rail system and worked out an agreement to continue to use the line. The freight trains will run infrequently, but Burlington Northern's fees will cover about 95 percent of the cost of maintaining the tracks, said Chris Blewett, director of Transportation and Planning Services for New Mexico's Mid-Region Council of Governments.

"Those freight trains are pretty heavy. They do a lot more damage than our little passenger trains," Blewett said.

Fee benefit makes rail deal 'sweeter' - for CSX

See also . . .

• FL: CSX commuter train deal keeps chuggin'
• FL: 'Sugar train' outruns the budget ax
• FL: Commuter rail: Find the will to work matters out
• NC: Downtown derailment of half-mile long CSX train delays Fayetteville drivers
• KY: Madisonville mayor blames CSX railyard for flood damage
• AL: CSX settlement brings $491,976 to conservation department
• MA: No fault? No way, CSX told by state's entire US congressional delegation
• Are government subsidies to railroads serving the public interest?