By PAULENE POPARAD
Officials of the publicly owned South Shore passenger service on Tuesday
ended more than a decade of litigation and arbitration with the privately
owned SouthShore freight service by approving an omnibus settlement to end
all disputes over terms of a 1989 agreement.
Also Tuesday, commuter line officials ratified a new contract into 2007 with
the United Transportation Union representing 75 South Shore engineers,
conductors, and ticket collectors; the current contract expired in July
Directors of the four-county Northern Indiana Commuter Transportation
District, which owns and operates the passenger service, called the freight
Said NICTD chairman St. Joseph County Commissioner David Niezgodski, “This
is going to be a very, very good day, a momentous day for NICTD. This
litigation consumed a great deal of time.” With a new computerized traffic
control signal system and catenary upgrades about to be undertaken, “This
future is upon us; it’s a new beginning,” he added.
NICTD general manager Gerald Hanas said after the meeting, “Both parties
blinked in the interest of moving forward.” He estimated NICTD has spent
several hundred thousand dollars on legal fees related to the dispute.
NICTD and SouthShore officials met twice publicly in 2001 to hammer out a
resolution but failed. At that time NICTD contended the freight service,
which leases and uses a portion of NICTD’s tracks, owed the passenger line
$11.5 million in unpaid fees. SouthShore officials countered in May 2001
that NICTD had been paid more than $32 million since 1991.
Freight service officials also said in 2001 that they had spent over $1
million in legal fees on the dispute and if NICTD won its demands, the
SouthShore would be put out of business.
Under the current settlement NICTD will receive a $4 million payment at
closing; an additional $3 million or comparable real estate may be paid or
transferred within 36 months subject to additional conditions.
NICTD agreed to change the way it charges the freight service for helping to
maintain NICTD’s right-of-way; rather than paying a percentage of gross
revenues from freight operations, to which the freight service vehemently
objected, the contributions will be based on a car-mileage fee structure
adjusted for inflationary impacts. SouthShore also agreed to make an
unrestricted annual payment of $175,000 to NICTD for a bridge reserve fund
for future repairs.
In addition, NICTD agreed to allow certain heavy-axle load freight traffic
on restricted portions of its right-of-way in return for unspecified
surcharges and engineering studies to evaluate such moves for long-term
maintenance implications. The SouthShore serves NIPSCO generating stations
and steel-related customers including International Steel Group’s Burns
Harbor plant, formerly Bethlehem Steel.
NICTD’s approval included authorizing settlement bonus payments to the
Chesterton firm of Harris Welsh & Lukmann, the district’s legal counsel for
the freight litigation, and to Hanas in the amount of 1 percent each of the
Regarding the union contract, Hanas said cost of living adjustments of 22
cents per hour for 2002 and 2003 will be added to the base wage rate with a
total imputed adjustment of 3.5 percent for those years; no retroactive
wages are due under this arrangement. Wage increases of 3 percent for 2004,
2.5 percent for 2005-06, and 3.5 percent for 2007 were approved.
Vote to approve the contract was 7-0 with NICTD board member Dennis Burke, a
railroad union employee, abstaining and member George Smerk of Indiana
The UTU, which has ratified the new contract, is one of six unions
represented among NICTD’s 340 employees.
The next NICTD board meeting is Jan. 30, 2004.