40847                          SERVICE DATE – LATE RELEASE JUNE 22, 2010

DO

 

SURFACE TRANSPORTATION BOARD

 

DECISION

 

Docket No. AB 1043 (Sub-No. 1)

 

MONTREAL, MAINE & ATLANTIC RAILWAY, LTD.—DISCONTINUANCE OF SERVICE AND ABANDONMENT—IN AROOSTOOK AND PENOBSCOT COUNTIES, ME.

 

Decided:  June 22, 2010

 

            In this decision, the Board announces that it will hold a public hearing in Maine concerning the abandonment application filed by Montreal, Maine & Atlantic Railway, Ltd. (MMA) in the above captioned docket.  The purpose of the hearing will be to allow interested persons to comment on the application.  The public hearing will take place on July 7, 2010, beginning at 9:00 a.m., at the District Court House, 27 Riverside Drive, Presque Isle, ME  04769.  In this decision, the Board also is addressing a request for clarification filed in this docket by MMA on June 4, 2010.

 

On February 25, 2010, MMA filed an application under 49 U.S.C. § 10903 for authority to discontinue service over and abandon approximately 233 miles of line (the line) in Aroostook and Penobscot Counties, Me.[1]  The State of Maine (State), by and through its Department of Transportation, has expressed opposition to the proposed discontinuance of service and abandonment, and the State is seeking the funds, in part through a successful bond referendum on June 8, 2010, with which to acquire the line to preserve rail service should the Board grant MMA’s application.

 

            On April 22, 2010, following a meeting attended that day by MMA, the State, and Board mediation staff, MMA filed a motion requesting that the Board extend the procedural schedule for a period of 3 weeks so that MMA and the State could enter into confidential mediation concerning the future of the line.  In a decision served on April 26, 2010, the Board granted this request and made MMA’s rebuttal due on May 26.  In doing so, the Board noted that it favors the negotiated resolution of disputes. 

 

            By order served on May 25, the Board noted that mediation was progressing, but that it might be difficult for the parties to reach an agreement without knowing the outcome of the June 8, 2010 bond referendum.  The Board therefore ordered the State and the railroad to submit a joint status report outlining their progress toward a settlement by June 17, 2010.  The Board also noted that, due to the scope of this proposed abandonment and the potential economic impact to the State, it expected to hold a hearing to gather testimony and to afford the Board members an opportunity to ask questions before reaching a decision on MMA’s application.  Because of the time needed to schedule a hearing, to consider the testimony received at the hearing, and to produce a written decision, the Board stated that it did not anticipate issuing a decision on the merits of MMA’s application by July 9, 2010, the date proposed by MMA in its April 22 motion.

 

            On June 8, 2010, the citizens of Maine approved the bond issue and thus gave the State of Maine authority to finance the purchase of the line.  However, the parties notified the Board in their status report filed on June 18, 2010, that they are at an impasse concerning the sale of the line. 

 

            Against this backdrop, MMA seeks clarification of the May 25 decision and asks the Board to issue a decision on the merits of the application by July 9, 2010.  The railroad asserts that it is losing significant sums keeping the line in service.  It notes that the Board has adopted the practice of issuing a decision on the merits of an application 110 days after the submission is filed.  This approach, notes MMA, allows offerors to file an offer of financial assistance (OFA) within 120 days of the application being filed in accordance with 49 U.S.C. § 10904(c). 

 

            As noted in the Board’s May 25 decision, a hearing is necessary due to the scope and the magnitude of this proceeding.  The Board will issue a decision as soon as practicable after the hearing, which it is scheduling for July 7, 2010.  However, it is not feasible for the Board to hold a hearing, to consider the evidence presented, and to prepare and issue a decision on the merits of the application by July 9, 2010, as sought by MMA. 

 

The Board understands MMA’s interest in moving this proceeding forward and relieving itself of the line.  But we must balance MMA’s interests against the public interest of facilitating continued rail service.  To achieve that objective, we needed to give the State the time it required to procure sufficient funds to acquire the line.  The State has had to seek legislative authority as well as public approval through a bond referendum to fund the acquisition of the line.  Those efforts go to the heart of Congressional policy on rail abandonments as set out in 49 U.S.C. § 10904, and the Board therefore has properly accommodated them.  The process by which the State has obtained authority to issue the bonds has been difficult, controversial and time-consuming.  Under the circumstances, the time elapsed has been reasonable.

 

The hearing will be held on July 7, 2010, beginning at 9:00 a.m., at the District Court House, 27 Riverside Drive, Presque Isle, ME  04769.  Earlier in the proceeding, the Board solicited notices of intent to participate that listed the party represented, the proposed speaker, and the number of minutes requested.  Based on those submissions, the Board is setting a schedule of speakers, which is attached as the Appendix to this decision.  The Board has adjusted the allotted times from those requested in some instances to maintain uniformity and ensure an orderly hearing.  Parties should confirm by June 24, 2010, that their proposed speakers will be testifying at the July 7 hearing.   

 

            After the Board holds the hearing, the Board will consider the evidence presented and issue a final decision on the merits of MMA’s application.  OFAs to either purchase the line or subsidize continued service are due by July 19, 2010, but the OFA process might be subsequently tolled pending a final decision on the merits of the application.

 

            This action will not significantly affect either the quality of the human environment or the conservation of energy resources.

 

            It is ordered:

 

            1.  MMA’s petition for clarification is denied.

 

            2.  An oral hearing in Presque Isle, Maine will be held on July 7, 2010.

 

            3.  Time for the hearing is allotted as reflected in the Appendix to this decision.

 

            4.  Confirmations of hearing participation are due by June 24, 2010.

 

            4.  OFAs are due by July 19, 2010.

 

            5.  This decision is effective on the date of service.

 

            By the Board, Rachel D. Campbell, Director, Office of Proceedings.

 

 

 

 

 

 

APPENDIX

 

SCHEDULE OF SPEAKERS

 

 

 

Party                                                                                                               Time Allotted

 

 

Hon. Olympia J. Snowe, United States Senate                                                  10 Minutes

 

Hon. Susan M. Collins, United States Senate                                                    10 Minutes

 

Hon. Michael H. Michaud, Member of Congress                                              10 Minutes

 

Panel I:  Government                                                           

                                               

State of Maine, Department of Transportation                                                   20 Minutes

            David Cole, Commissioner of the Maine

            Department of Transportation or Designee

 

Michael James Willette                                                                                     10 Minutes

            State Legislator, District 5 Representative, Presque Isle

 

Panel II:  Carrier

 

Montreal, Maine & Atlantic Railway, Ltd. (MMA)                                            30 Minutes

            Robert C. Grindrod, MMA’s President and CEO                                

Linda J. Morgan                                                                                  

            James E. Howard                                                                                

                                                                                   

Panel III:  Shippers

 

Twin Rivers Paper Company LLC                                                                    7 Minutes

            Brian Sass or Designee

 

Fraser Timber Limited                                                                                      7 Minutes

            Arkon Horne or Designee

 

Portage Wood Products                                                                                   7 Minutes

            Stephen W. Schley

 

Irving Woodlands LLC                                                                                     7 Minutes

            Robert J. Penette, Vice President

 

Huber Engineered Woods, LLC                                                                       7 Minutes

            Alan Weber, Vice President for Logistics and Supply Chain

 

Louisiana-Pacific Corporation                                                                           7 Minutes

            Travis Turner, Manager of Houlton Facility

 

Panel IV:  Community Associations

 

LEADers Encouraging Aroostook Development (LEAD)                                  5 Minutes

            Virginia Joles, President of LEAD

 

Aroostook Partnership for Progress (APP)                                                       5 Minutes

            Walter J. Elish, President of APP

 

Presque Isle Industrial Council                                                                          5 Minutes

            Larry E. Clark

 

Presque Isle Area Chamber of Commerce                                                        5 Minutes

            Theresa M. Fowler

 

Southern Aroostook Development Corporation                                                 5 Minutes

            Jon A. McLaughlin, Executive Director

 

Panel V:  Community Interests

 

Maine Public Service Company (Maine PSC)                                                   5 Minutes

            Rodney K. Leach, Manager of Supply Chain and

            Facilities Management, Maine PSC

 

Northern Maine Development Commission                                                       5 Minutes

            Denis Berube

 

The Aroostook Hospitality Inn                                                                          5 Minutes

            Steve Dobson

 

Seven Islands Land Company                                                                           5 Minutes

            John W. McNulty

 

 

Panel VI:  Labor

 

Brotherhood of Locomotive Engineers and Trainmen                                         5 Minutes

            TBD

 

Panel VII:  Other

 

Eric S. Strohmeyer                                                                                           2 Minutes