The D&RGW Creede, Colo. branch has been discussed here frequently for a variety of reasons over a decade and a half, not for the least of reasons being ex-FEC 4-6-2 148 present on the line.

They're calling it quits:



Much more of the story and background here, which like most Trains.com Newswire stories is behind the subscribers-only paywall:

http://trn.trains.com/news/news-wire/2015/12/04-drg

You must be lucky then...

It appears the editors of the web page failed to mark the story with the "lock" icon signifying "subscriber-only" content. My apologies.

But I have to assume there are quite a fair number of subscribers on this forum, willing to discuss details outlined in the story if they have any real relevance.

I suppose being dead for 24 years would be a "health issue". This is most definitely not the same Don Shank.

I think the Donald Shank as President of the ex-Creede branch is Donald Shank JR. (Like "Junior" in Indiana Jones).

The President of the DM&IR is Donald Shank Senior.

Doug vV

I am interested in their insurance rates quadrupling. Has anyone else experienced such a radical increase in insurance premiums lately, or was this caused by incidents relating to their operation only?

Hmmm...... Calling it quits? ...... Quoting a "former official" ?? .... Contacting friends of the line ???..... Allegedly contacting the President, but not getting a response ????.....

I must say, I'm truly disappointed in Trains Newswire.... It must be a really slowly news day when they need to "create" news.

As a Director in the Foundation, I was surprised by this article. The only kernel of truth in this otherwise amusing work of fiction is the statement regarding a sudden increase in the Foundations insurance premiums. Other then that, the rest is pure speculation and quotes from parties who are not decision-makers.

Mr. Shank was not at all amused when I contacted him yesterday regarding how he wanted to respond this article. He and his wife are enjoying a relaxing vacation and celebrating their anniversary. It is safe to say that having to take a phone call from me while he was siting on a beach in Hawaii was not something he intended on doing during his trip....

At this time, the Foundations operations have come to a close for the season. We are closed during the winter. There is nothing more to say then that. We close for the season every year.

To answer the question posed by the previous poster; The Foundation experienced a sudden increase in its insurance premiums as a result of a single incident. That incident was not the result of any action or negligence on the Foundation's part.

Our Right-of-way crosses Colorado Highway 149 at a number of locations. At two locations immediately north of Wagon Wheel Gap, the tracks cross the highway at very odd angles. See the attached link to Google Street-view.
https://www.google.com/maps/@37.8109504,-106.8752366,3a,49y,318.23h,79.45t/data=!3m6!1e1!3m4!1sqZmIWDjwwUQJ4J0BY9s2Sw!2e0!7i13312!8i6656?hl=en

A bicyclist, riding within the State Highway right-of-way, apparently got a wheel "caught in the flange-way" and crashed as a result of her front tire "suddenly turning". For reasons unknown, the railroad was never contacted at the time of the alleged incident. An accident report was apparently made, although it was unclear from the report if the alleged accident actually occurred at the crossing, or near the crossing.

A number of months later, the Foundation was contacted by an attorney representing the injured cyclist. This was the first time the Foundation, in over 14 years of owning the line, ever had to file a claim with its insurance provider.

To the best of our knowledge, the insurance carrier did not have to pay any damages as a result of the claim. However, they did have to spend money to defend against the claim. The insurance carrier, upon learning of the unique angles at the crossing, undertook a "re-evaluation of potential risks" associated with the physical characteristics of our line. The result was that our premiums, which, prior to the incident, were well below market rates, were raised to reflect what the insurance carrier felt was an appropriate rate given their potential exposure to risk.

In addition, the Foundation reviewed its own insurance levels, as well as our deductible level. While this incident would have been adequately covered by our insurance, the Foundation's Directors needed to evaluate if our insurance levels would be adequate for future incidents. It was decided to attempt to increase the amount of insurance we wanted to maintain on the property.

The result of both actions (the incident and the re-evaluation of our insurance levels) led directly to us securing new price quotes for our insurance needs. To say we had heart failure over the sticker price would be an understatement.

The reality of that additional cost to our operating budget means that in 2016, the Foundation will be undertaking a complete review of our current business model. In addition, we have been re-evaluating for some time now if our efforts to maintain all 20 miles of railroad, given our current operations, remains practical. However, no final decisions have been reached, nor is any decision likely going to be reached until well into next year....

So, for those lamenting the imminent loss of the Creede Branch, that is not going to happen anytime soon. While changes may be coming, the "for sale" sign is not going up anytime soon.

Sincerely,

Eric S. Strohmeyer
Director - D&RGRHF

Eric, thank you for setting the record straight. We cant deny the fact that we live in a highly litigious society. Are operations still limited to the motor car currently? Sad that Trains didn't bother to vet the claim of one former board member. I'm sure they have their justifications.

Rob

Things learned when I had to buy railroad insurance for my employer:
Some insurance companies seem think that there is a greater chance
of a liability loss if the customer has to pay less of it, and raise their
rates for increased coverage to reflect that fear. There is also the
possibility that with higher coverage, it may be more attractive for a
lawyer to sue on a contingency basis.
Some insurance companies may also worry that if you later ask for
increased coverage, you are fearing a risk that they don't know about.
Some policies include defense costs (yours AND theirs) in the coverage
limit. On a small policy, the insurance company's lawyers' minimum
charge for defending you may even be the coverage limit! If r
evaluation resulted in your railroad requesting a policy where the
insurance company pays its expenses to defend you in addition to the
liability limit for any damages finally paid, your premium will be much
higher.

As a result of the recent response from Mr. Strohmeyer, I am going to add a little more of the Trains Newswire article (byline William P. Diven) simply to put the (alleged) issues into further context--i.e. more of just what it said:



If the zoning dispute happens to sound vaguely familiar, let me give a little more background information, including some documents with an all-too-familiar name amongst our circles:

http://www.stb.dot.gov/Decisions/readin ... /43002.pdf

http://www.stb.dot.gov/Decisions/Readin ... /44047.pdf

http://www.stb.dot.gov/FILINGS/all.nsf/ ... 233503.pdf

http://www.stb.dot.gov/filings/all.nsf/ ... 233523.pdf

This is where I go and produce an extra large tub of popcorn, and get a more comfortable chair, with some strong spirits in reserve.

Ah Mr. Mitchell,

I must say, you do like to try to stir up controversy. And while I might be inclined to argue with you for hours simply for the shear fun of it, I must respectfully ask for a rain-check for another time perhaps......

Nonetheless, I'll reiterate what I said in my earlier post. This article in Trains is a manufactured "non-story". Let me be clear, the Foundation is NOT closing its operations, nor is a "for sale" sign being hung on its property at this time. The thrust of this article seems to imply that there is a "throwing in of the towel". This could not be further from the truth. The premise and conclusion of this article is flat out false.

Mr. Coombs has been a valued member of our team for many years. A number of years ago, he wanted to fully retire from the railroad industry and informed Mr. Shank he would be resigning his position with the Foundation. After 10 years of helping the Foundation, he wanted to be able to travel and not have any more responsibilities to worry about.

We were (and are) grateful for his many years of service to our cause. However, by his own choice, he left the Foundation; and other than stopping by to visit from time to time, he is no longer a part of the inner circle of the Foundation. He has not been a part of the decision making team for over two years now. Why he felt compelled to make statements on behalf of the Foundation today, given his decision to resign two years ago, quite frankly baffles us.

Furthermore, we cannot understand why a reporter at Trains Magazine was hounding Mr. Coombs relentlessly for information in the first place. We find this fact even more disturbing and baffling. Mr. Shank would have been very happy to talk to Trains, or any publication for that matter, directly. However, he has never received any communications directly from Trains seeking comments or input for a potential story. Anyone who has visited the South Fork Depot knows Don is more then happy to discuss the railroad, or any other of the Foundation's projects, with the public and media alike. If Trains had called, they would have gotten an answer directly from the head decision maker.

Furthermore, while the author of the article tries to imply that this supposed "fire-sale" was somehow precipitated by an adverse decision before the STB is another work of fiction. He goes to great length to try to paint Mr. Shank in a bad light. The quotes he obtained from the City administrator are just flat out inconsistent with the facts of the case.

Mr. Mitchell would have everyone re-reading the various STB decisions and using those elements to prove some point. However, he fails to point out the other related proceedings, nor does he provide any of the readers here at RYPN with the entire set of facts.

PRIOR to the final ruling from the STB, Mr. Shank and the City of Monte Vista reached a voluntary settlement agreement to end the years of litigation. Hopefully the readers here will be able to review the PDF file I'm attaching to this response which contains the actual stipulation agreement. For those unfamiliar with the such agreements, the "key" to what precipitated the actual conclusion to the process is found in Paragraphs 6 and 7 of the agreement.

The combination of the intervention by those "cast of characters", the prospect of many additional years of litigation, led to the parties wanting to seek a conclusion to the litigation. There was no adverse ruling against Don or the Foundation, the parties agreed to settle the dispute. What proves this? .... Look at the date the agreement was executed. The settlement was reached on March 16th, 2015.... the STB did not issue its ruling until 8 days later. However, the matter was effectively over when parties agreed to move the railcars voluntarily and otherwise dismiss the legal proceedings with prejudice.

So Mr. Mitchell, I reiterate again, the Trains article is not correct or accurate because the of inclusion of a few quotations of the City Administrator; for nowhere does it mention that the matter was actually resolved by voluntary settlement agreement. Instead, the article tries to paint a picture of a fictitious fire-sale brought about by a supposed adverse ruling that wasn't an adverse ruling at all....

The Trains article is not helpful.... It is quite hurtful. It has created a patently false sense of confusion and mis-information designed to tarnish the Foundation. I can assure you Mr. Mitchell, if I don't get a full retraction of this article by the end of this week, I'll be sure to keep you informed of how much money Kalmbach will be paying its attorneys to defend itself. I'm that mad over this.... As you correctly pointed out Mr. Mitchell, the "cast of characters" are not afraid of suing people or parties.

That "cast of characters" you mentioned barely arrived in the nick of time to help the Foundation. It was our arrival in the proceeding that directly led to the settlement agreement. Iowa Pacific spent a small fortune underwriting the City of Monte Vista's legal bills.... What value did it produce for their shareholders? .... The answer is nothing when the City agreed to settle...

Not known to many is the longstanding feud between the principals of the Foundation and Iowa Pacific.... It is quite personal in nature. One would only spend that kind of money in order to try to settle a score, otherwise, Iowa Pacific doesn't have a dog in that fight. Given IP's relationship with certain parties in the media, we feel fairly confident were the slanderous nature of the Trains article likely arose from. It is just another form of harassment we'll have to deal with.

So with that Mr. Mitchell, I hope you enjoyed your popcorn and beer tonight.... And I bid you a good night....

Sincerely,

Eric S. Strohmeyer
Director - D&RGRHF

Tel: (908) 361 - 2435
Email: E.Strohmeyer@cnjrail.com

Two questions:

1) Did the alleged "motorcar collision" event not occur as alleged, or did the incident have no impact on the insurance coverage (yet)?

2) How many members does the Foundation have?

What is the source of animosity between Mr. Ellis and Mr. Shank? If Mr. Ellis is truly concerned about eyesores, perhaps he should attend to his ever-growing junk lot in Alamosa. Nothing says "Ride Our Train!" like the presence of sideswiped or burned equipment in front of the depot.

Hmmm.... my guess about the "issues" between Iowa Pacific and Mr Shank is that, as I recall, they used some of his equipment early on...after they bought their part of the railroad....and they probably didn't pay for it, or they tried to screw him over somehow...

My view might be considered a bit biased.....I've worked for Iowa Pacific before ,seen how they operate.....and been screwed over...
My bet is they are continuing the "fight" either because of vindictiveness or because they want to buy him out/ force a sale, perhaps they want it for car storage...hard to tell exactly, but either would not surprise me.
Iowa Pacific has had problems with paying bills,etc since the beginning...with a pretty long line of people, services and materials they failed to pay for in a timely manner or at all...

Obviously, I have no love for Iowa Pacifics operation and while Mr Shank may not be completely innocent, I have known Iowa Pacific far to long to doubt the truth in what he says about them...

I saw that apparently Trains updated the story, however I don't have a subscription so I cant see what the update is. Was the update anything of note? Was there a retraction or did they just correct some grammar?