Railway Preservation News

Trying to save the 503
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Author:  conopt_rail [ Thu Mar 08, 2018 8:54 am ]
Post subject:  Re: Trying to save the 503

If you hired a contractor to replace your old furnace, there is usually a charge to remediate the asbestos. The contractor can simply disconnect it and wrap it in plastic and take it away to another place for the remediation. This happened in my case just because they could get it out whole. But if it has to be disassembled first, then the remediation may need to be done on site. After the furnace is gone, there are on covenants about what could be done with the old asbestos or the metal. It is 100% up to the party that hauled it away. There is no concept of "title" lie with an automobile, there is a concept of ownership because the contract certainly implies that.

So it is very illogical to assume that the locomotive is an entity that requires a "title" and is registered somewhere. Nor is it logical that there are DIFFERENT rules in place if the scrapper removes the furnace intact and re-sells it for re-use.

It is also very illogical that the scrappers who are removing the CMR rails are prohibited from selling them to a specific entity, namely the CMR. It would be as absurd as saying that they could sell the rails to any short line except one in South Carolina. Or saying that the scrapper had to sell the rails to a specific steel company.

I am not a lawyer, just an engineer. But I think that this is a contractual issue and the concept of "possession" is important. Once you sign a contract with someone to remove your furnace, it "sort of" belongs to the contractor. If you change your mind, then you need to re-negotiate. Since work was performed on that contract, it is not as simple as saying NO.

My guess is if the scrapper had simply removed the engine INTACT, they would have complied with the contract and would be free to dispose of it as they wished. Since that did not happen, it is likely that the city would be able to re-negotiate the contact to the remediation work that was already performed. And if the contract has not been negotiated, the scrapper could likely "sell" the engine and arrange for its removal.

Author:  Ron Travis [ Thu Mar 08, 2018 10:23 am ]
Post subject:  Re: Trying to save the 503

I would not conclude that the contract clearly defines ownership of 503. I would not just assume that the concepts involved in the scrapping automatically stipulate ownership. A complete contract, in my opinion, would include who is to receive the proceeds of the scrap value.

The use of the word “title” in these discussions does not necessarily mean an actual certificate of title as is used with vehicles. It can just be a term of ownership or legal right.

In any case, the contract says the City may terminate the contract at their convenience. I assume the City has terminated the contract, and therefore, if there was a right of ownership conveyed to Inland, it has been withdrawn.

In watching the meeting last week and this week, it is not hard to see that the City resents that this deal was made without their involvement. It is not hard to see why they would. The urgent cause to rescue 503 from scrapping painted the City as a villain that necessitated the rescue. It also put the whole matter into the public limelight. It is not hard to see why the City would want to move quickly away from the idea that they ever wanted to get rid of 503 without the approval of their citizens. Therefore, in my opinion, this now assures that the City does not want to let 503 go to any outside entity. That would simply confirm their original intent to get rid of 503.

However, I don’t see any approach that would have accomplished Jason’s goal here. He could have started his negotiations for purchase by going directly to the City, but this too would have highlighted the intentions to get rid of 503, and that too would have activated public resistance wanting to keep their history.

Author:  train guy [ Thu Mar 08, 2018 10:52 am ]
Post subject:  Re: Trying to save the 503

I wonder if Inland will try to sue the city to recover the cost of the work already done to date, since the salvage value of the locomotive was included as partial payment in the contract.

Author:  co614 [ Thu Mar 08, 2018 11:11 am ]
Post subject:  Re: Trying to save the 503

Train Guy you raise an issue I too have been wondering about. As they were noticeably absent from the City Council meeting and thus couldn't be questioned my best guess is that they were told ( off the record) to be quiet and the City would take care of them " down the line". Of course I could be totally wrong, just a suspicion. The PA newspaper guy I've spoken with tells me that Inland will not speak with the media.

My further guess is that they've received part or all of the $ 23K called for in the contract and may well consider that fair payment for the asbestos remediation they've already done and now they'll just go quietly into the night and stay on the City's good list??

In any event, the poor place is obviously run by a collection of incompetents and Jason will be doing himself a huge favor to get as far away as possible...... as soon as he can.

IMHO-Ross Rowland

Author:  John Risley [ Thu Mar 08, 2018 4:34 pm ]
Post subject:  Re: Trying to save the 503

Think if Inland wants to dig in it would have to be settled by the courts {or by lawyers out of court} once and for all, but I think Inland would win their case of ownership and right to sell. Of course all the parties could sit down and find agreement on their own but doubtful unless Inland chooses to just bow out. True enough the contract may not spell everything out to every minute detail, but it sure as hell implies ownership. If no work had been started I could see courts ruling that the contract could be cancelled. But once the work commenced I would think that the contract was now active and no turning back without negotiating some sort of agreement which would pretty much be a "new contract". Still say Inland would have to agree to do so or not. I am also not totally convinced it would cause the big rift between them and the city. Inland having ownership and right to remove would make life much easier for the city period. I think an impartial judge would rule for Inland. For all the cloak and dagger, the city may secretly want Inland to have ownership as it would solve the problems as desired in the first place. Make all the problems and future expense go away. The amount of money in question is not the equivalent to a multi million dollar mistake if the engine goes away. Not to mention saving quite a bit of money in the near future with cosmetic restoration and up keep. The city no doubt has better places to spend the money. Sounds like the city of PA is in the same boat as most museums, financially strapped. A local donor with money to back him up to pay the expenses to keep the locomotive could possibly change things too? Key seems to be in ownership and if Inland stays in the game to me anyway. My opinions mean less than nothing and am now officially a "foamer". Now where's my bling?

It probably means way more to all of us then it does to all but a few of the opposition. No matter who wins ownership the squawking and complaints will be over very shortly after the final decision is made. A few slaps on the wrists and it will be business as usual. Regardless of the ending someone will not be happy. I hope Inland stays in the game as I think they are in the right and that trumps ruffled feathers in my book. Being that Inland has worked with the effort to save the locomotive {from my understanding so far} I only hope they continue too as originally planned. This is quite the drama almost good enough for a cable TV show! Regards, John.

Author:  elueck [ Thu Mar 08, 2018 6:40 pm ]
Post subject:  Re: Trying to save the 503

I think that the whole thing may hinge on the rights of the city to transfer ownership of city property without a public hearing. In most cities in Texas, selling or transferring ownership of city property to individuals requires a public hearing. The locomotive as such being city property, it therefore cannot be transferred without such hearing (which was NEVER HELD). Once the locomotive ceases to exist, and is therefore a pile of scrap, that now can be transferred without such hearing.

It was exactly this rationale, and process that was used by the city of Lafayette, LA to scrap former T&NO 743 that was in the parking lot of the city golf course. They needed more parking spaces, so they let a contract to scrap it, and then allowed the scrapper to take possession of the scrap. Done without a whimper from anyone who lived in the city.

IF this is correct, Inland (by a stretch) could argue that the locomotive would be theirs to sell if and when it was removed from the city property, by what ever means, scrapping, or otherwise, but as long as it sits there, on city property, and there has been no public hearing, I don't think that title resides anywhere but with the city.

When they hue and cry began to be raised, the council probably figured that they were in over their heads, and simply decided that without a hearing, it was theirs and they were not in violation of the law.

Author:  RCD [ Thu Mar 08, 2018 7:00 pm ]
Post subject:  Re: Trying to save the 503

Again unless the city has put some kind of legal barrier in I don't see what is stopping Inland from going in and scrapping the locomotive right now. If the people who run Inland get inpatient they just may do that to finish the contract and collect payment, instead of waiting for the city to get there act together.

Author:  p51 [ Thu Mar 08, 2018 7:05 pm ]
Post subject:  Re: Trying to save the 503

Classic "last minute" save that will have to be repeated in the future...
503 didn't get 'saved' so much as the city got shamed into not getting rid of it.
Anyone want to lay bets on how long it'll be before there's another outcry to 'save' the locomotive again?

Author:  Chris Webster [ Thu Mar 08, 2018 8:25 pm ]
Post subject:  Re: Trying to save the 503

Ron Travis wrote:
In any case, the contract says the City may terminate the contract at their convenience. I assume the City has terminated the contract, and therefore, if there was a right of ownership conveyed to Inland, it has been withdrawn.

Just repeating Ron's point since several posters missed it.

Author:  John Risley [ Thu Mar 08, 2018 10:34 pm ]
Post subject:  Re: Trying to save the 503

I read that part too. I question that as what kind of contract can get terminated at any time? That doesn't sound like a contract but an agreement. That is why I thought that once work actually started it would be kind of late to "terminate" the contract. Before any work started maybe. But I am not an attorney so it is a wag on my part just like most everybody else commenting. Was understanding that a contract was a legally binding document. Of course you can write it as tight or loose as you want, but would think the "terminate at any time" would be anytime before the work started. I am probably being naive, but can somebody familiar with contracts explain this in layman's terms.

Author:  Chris Webster [ Thu Mar 08, 2018 11:40 pm ]
Post subject:  Re: Trying to save the 503

John Risley wrote:
I read that part too. I question that as what kind of contract can get terminated at any time?
John, it is a standard clause in government contracts. Here is how businessdictionary.com defines it:
termination for convenience - Standard clause in government contracts which gives the government the right to unilaterally terminate the contract at any time with or without giving any reason. The contractor is generally entitled to a negotiated settlement for an equitable recovery of costs and losses incurred.

Author:  whodom [ Fri Mar 09, 2018 12:36 am ]
Post subject:  Re: Trying to save the 503

The city will definitely have to pay the contractor something. It’s even conceivable that they’ll have to pay more than the original contract price, since the contractor’s winning bid was based on the recovery of the scrap value of the locomotive.

Author:  John Risley [ Fri Mar 09, 2018 1:09 am ]
Post subject:  Re: Trying to save the 503

Thank you Chris for the post. Makes no sense to me but not much does these days. Appreciate it. John

Author:  Ron Travis [ Fri Mar 09, 2018 10:06 am ]
Post subject:  Re: Trying to save the 503

John Risley wrote:
Thank you Chris for the post. Makes no sense to me but not much does these days. Appreciate it. John

I too wondered about that clause in the contract allowing the City to terminate at their convenience. It does seem like an illogically one-sided benefit. I suspect it is a reflection of doing business with a government entity. The government can enjoy the benefit of the termination clause and the provider will not object because they value the government as a customer enough to offset the undesirability of the clause.

In this case, there must have been quite the sense of panic in the City Council being able to pull that termination lever and tell us that they never had made a decision on the fate of 503.

Author:  co614 [ Fri Mar 09, 2018 11:16 am ]
Post subject:  Re: Trying to save the 503

It's painfully obvious what happened. The City Manager accepted Inland's solution to his problem of how to get this old junker steam engine out of the way so I can clean up the dirt under it that the state is on my tail to do and better yet also get rid of the asbestos and all the bits & pieces, and all that for a very cheap $ 23k plus the scrap value. That's nearly $70k cheaper than the other 2 proposals and is under the $25k ceiling that the City Manager is allowed to operate without anyone else's approval.

He signed the contract with Inland and Inland proceeded to remove the asbestos. The next phase was to demo the 503, cart away the pieces, remove the display track, ties, ballast and remediate the soil underneath it. Inland moved its heavy equipment into place and had it not rained hard would have started the torches the next day.

Then a savvy local reporter got involved which led to Jason becoming aware of the situation and we know what happened next.

To risk being repetitive after watching that 90 minute display of incompetence they called a special City Council meeting I'd run as far away from this gang as my legs would carry me. The overwhelming odds are that they will spend forever figuring out that the locals have zero chance of raising the funds needed to properly care for the 403 and at that point it will sit again and after not long will be forgotten by all.

IMHO-Ross Rowland

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