CPKC Responds Saying 1929 Agreement Fair And Should Be Followed
The Fourth Avenue Bridge has been a major thoroughfare in Moose Jaw since its first wooden iteration in 1911.
It has always been a major traffic bridge over top of the operations of the Canadian Pacific Railway (CPR) today’s forerunner of Canadian Pacific Kansas City Railway (CPKC)
The present day cement Fourth Avenue Bridge was constructed in 1929 and is in dire need of major structural and other repairs.
According to documents submitted by the City to the Canadian Transportation Agency “the Viaduct is well past any legitimate service life expectations.”
Repairs will potentially cost into the tens of millions of dollars and take the main traffic artery out of service for months during reconstruction.
With the design work on the lastest rebuilding proposal for the Fourth Avenue Bridge almost complete the big question is where will the money come from?
The City of Moose Jaw is hoping CPKC will shoulder part of the cost of the multi-million dollar re-build. The railway has responded negatively to the City’s request.
The entire matter is now before arbitration with the Canadian Transportation Agency for a decision.
At the present time neither side is commenting publicly while arbitration is on-going.
The Canadian Transportation Agency is yet to render a decision in the case.
Today we look at the legal response by CPKC to the City’s arbitration application.
Fourth in a series.
By Robert Thomas
“The City’s arguments are unfounded and should be rejected. The Parties have a binding agreement that clearly apportions costs incurred to maintain the Viaduct, whether these costs are characterized as incurred due to “rehabilitation”, “reconstruction” or maintenance...”
From the outset of their 33 page response it is abundantly obvious that CPKC is outrightly rejecting any suggestion that the Railroad should be held financially responsible for the proposed rehabilitation work to the Fourth Avenue Bridge.
And yes it is all based upon the 1929 agreement signed between the then Canadian Pacific Railway and the City of Moose Jaw. An agreement CPKC legally contends is rock solid when it comes to who pays for the proposed rehabilitation project.
In the mind of CPKC there has never been an agreement to pay for rehabilitation costs on a 50/50 basis ever.
The legal filing by CPKC includes more history going back over a century ago to the initial 1911 wooden structure and the reasons why the new 1929 bridge - one of the structures making up today’s Fourth Avenue Bridge - was constructed in the first place.
In CPKC’s history the need to move from the original wooden 1911 structure to the 1929 concrete viaduct was “the City’s desire to build a new Viaduct with lower maintenance costs than the previous structure.”
The filing goes on to contend the CPR (identified as CPKC in the filing) agreed to reimburse the City 50 percent of the one-time construction costs (up to $70,000) with the City’s promise they would pick up the majority of the maintenance costs.
The Railway further contends the initial 1929 cost sharing agreement was not a rehabilitation cost of the 1910 structure but rather the construction of a totally new structure.
“Unlike the City’s present project that is the heart of this Application, the 1929 project was not a reconstruction, rehabilitation or maintenance project - it was a project to build a new bridge,” CPKC’s filing states.
CPKC sees this as the bottom line when it comes to their helping to finance any rehabilitation of the Fourth Avenue Bridge.
The Railroad goes on to point out that even if there had not been the 1929 agreement the Canadian Transportation Agency resource tool states the base grade separation costs should be born 85 percent by the road authority (in this case the City) and 15 percent by CPKC and CN.
CN has a single track under the viaduct but was not a Party to the 1910 Opinion nor the 1929 Agreement.
THE FOURTH AVENUE BRIDGE SHORTLY AFTER ITS OPENING - FROM THE MOOSE JAW CHAMBER OF COMMERCE’S COLLECTION
Given the City is responsible for sections totalling 85 percent of the Fourth Avenue Bridges length CPKC contends this adds comfort to applying the 1929 agreement to the arbitration case.
CPKC outright rejects a 50/50 cost sharing agreement proposed by the City for the rehabilitation project.
The interpretation of the 1929 agreement is key to both the City’s and CPKC’s arguments.
For CPKC the 1929 viaduct is not one but actually two structures - the new viaduct and the 1910 steel truss that was incorporated into it. They point to clauses four and five in the 1929 agreement that the City is responsible for maintaining the new Viaduct and CPKC are responsible for maintaining the 1910 steel truss.
The Railroad requested the CTA to not act in an “unfair” manner and allow the City to abandon the 1929 agreement.
1965 Section Who Paid What
CPKC uses the 1965 reconstruction financing of the north approach as evidence the Railroad does not bear financial responsibility for the present restoration project.
The 1965 reconstruction created access ramps and eliminated the simple (direct) road connection to Fourth Avenue NW.
The financing for the 1965 reconstruction did not involve CPKC but in a 1964 order was split 50/50 between the City and the federal government funded Railway Grade Crossing Fund.
A pavement collapse on the Fourth Avenue Bridge’s north end entry ramp, part of the 1965 structure, has been fenced off for some time - MJ Independent photo by Robert Thomas
CPKC contends the 1964 Order is critical because it clearly demonstrated the Railroad “had no responsibility to maintain this portion of the Viaduct”.
Additionally it showed the City and CPKC’s division of maintenance responsibilities applied with equal force to rehabilitation or reconstruction projects, CPKC’s filing stated.
CPKC’s filing further contended the 1964 Order preserved the maintenance responsibilities set out in the 1929 agreement.
The 1989 Reconstruction
The 1989 reconstruction of the Fourth Avenue Bridge only took place after a further disagreement with the then CPR.
And after the CPR initiated talks with the City - after recommending dropping load limits first to 10 tons and subsequently 2.5 tons - there was a breakdown when the City discovered other deficiencies in the bridge.
So the entire issue went to arbitration at the then National Transportation Agency (NTA).
In their submission CPKC stated the NTA rejected the City’s proposal of a 50/50 split for the 1989 reconstruction but rather they “expressly stated that it was giving effect to the 1929 Agreement.”
CPKC was held responsible for the maintenance of the 1910 truss and the City was responsible for the maintenance of the asphalt wearing surface or the flooring of the Fourth Avenue Bridge.
The decision is used as a basis of CPKC’s submission to the present arbitration as the 1910 truss section is considerably smaller than the entirety of the bridge.
Despite the small section of the area under the Railroad’s responsibility as set out in the 1929 agreement and the 1989 Recontruction Arbitration Order CPKC contends the City is once again wrongly requesting a 50/50 financial split of the rehabilitation project.
Their contention is they should only be held responsible, if at all, for the 1910 steel truss section.
Poor Maintenance???
A major point in CPKC’s submission is the City did not live up to their part of the 1929 agreement keeping the bridge decking in good repair.
CPKC points to a 2017 assessment teport by Stantec Consulting looking into the condition of all City owned bridges.
The 2017 Stantech Consulting Report’s non-glowing overall bridge maintenance program by the City is pointed out by CPKC.
“Over the past 15 years, the investment in the City’s network of structures has been below the industry standard, which results in years of “Catch-Up” spending to restore the inventory to an acceptable level,” the CPKC submission reads.
The seemingly confirmed lack of proper maintenance on the City’s bridges is pointed out by CPKC as a breach of the 1929 contract and the major reason for the poor shape of the Fourth Avenue Bridge and therefore the Railway should not have to pay for it.
Simply stated the City did not live up to the terms of the 1929 Agreement and now wanted CPKC to bail them out by contributing 50 percent of the rehabilitation is the Railroad’s view.
The Railroad states in their submission one of the stated objectives by the City is to upgrade the Bridge to carry heavier weights like buses and fire trucks which benefits the City but in no way benefits CPKC.
Further the City’s own consultant points out the section CPKC is responsible to maintain can carry the evaluation vehicles.
CPKC states that any load capacity upgrades are “solely in the 1929 Viaduct and 1965 Approach” and as such they should not be held financially responsible to fund any weight upgrades.
CPKC points out the Bridge presently cannot currently support City buses and fire trucks - something the City fails to mention the Railroad claims.
In their legal argument CPKC contends the 1929 Agreement must be interpreted as a whole.
“Decision makers cannot use the surrounding circumstances to ‘deviate from the text such as the court effectively creates a new agreement,’” CPKC’s submission reads quoting the Supreme Court of Canada’s decision of Santa Capital Corp versus Creston Moly Corp.
CPKC further claims the City is in effect trying to use “vague references” to the underlying intent of the 1929 Agreement.
CPKC goes further to use the 1989 Reconstruction agreement where the option the City said they could live with - and was adopted - that the 1929 Agreement be respected.
Simply put, CPKC was responsible for the maintenance of the 1910 Steel Truss section and the City was responsible for the reconstruction, upgrading, repair and maintenance of the concrete portions of the Fourth Avenue Bridge.
CPKC outright dismisses the issue of land ownership under the Fourth Avenue Bridge as irrelevant given the 1929 Agreement.
“Costs previously incurred in reconstructing the Viaduct have always been allocated in accordance with the 1929 Agreement, not by an assessment of who would benefit from the reconstruction ”
CPKC goes on to argue that the 1929 Agreement is fair and reasonable and therefore should not be wavered from in any arbitration decision.
Given that the 1929 Agreement is fair and reasonable CPKC argues arbitration need not apply the City’s cost allocation for the reconstruction/rehabilitation proposed.
If there are costs assessed against CPKC the argument is made in all fairness that CN Rail - which has never been part of an agreement - be included in any cost share as they have one track going under the Fourth Avenue Bridge.
What CPKC Wants
In the end CPKC asks that the 1929 Agreement be honoured and as such they are not held 50/50 responsible for funding the entire rehabilitation.
CPKC asks the City be responsible for the BGS costs needed to rehabilitate the 1929 Viaduct and the 1965 Approach.
They also ask the City be held fully responsible for all costs to rehabilitate the 1929 Viaduct flooring.
CPKC be held financially responsible with the BGS costs necessary to rehabilitate the 1989 section and the support piers but excluding the decking.
If the CTA chooses not to follow the 1929 Agreement CPKC asks the proposed work be apportioned 85 percent to the City and 15 percent to CPKC.
Reached for comment CPKC politely declined comment siting the ongoing arbitration.
With CPKC stating at best they are willing to pay is 15 percent and the City wanting CPKC to pay 50 percent there is a legal argument with more paperwork filed.
Part Five looks at the City’s response as this series wraps up.