Well, I don't know if I received a letter. I see a copy of a letter from an attorney, Mr. Dunlap, to Mr. Masters, who is on the 175 11/15/05 - TRANSPORTATION - RES. 050148 City Council technical staff. Yes, we have had some conversations, but I think you will agree that in none of those conversations did I agree that the individuals could not or would not attend or that they could ignore a duly authorized subpoena as issued by this body. I believe the conversation was your opinion that these individuals were not necessarily the proper individuals for the subject matter and that you would seek to supply the correct individuals. Is that an accurate representation of our conversations?
That's correct, Mr. Chairman, and there has been, I know, subsequent conversation that's been had with you.
Mr. Chairman, because I was asked to represent the company at this hearing, and I'm here and I'm prepared to make a statement and to 176 11/15/05 - TRANSPORTATION - RES. 050148 try to answer your questions to the best of my ability and to work with others to make sure that we have subsequent discussions with you.
Okay. So the individuals are ignoring the subpoena of the City Council?
I don't believe anybody is ignoring a subpoena, sir. I'm here, Mr. Chairman.
Why don't you come to the table. Please identify yourself for the record.
I'm Benjamin Dunlap and I am counsel for CSX 177 11/15/05 - TRANSPORTATION - RES. 050148 Transportation in this matter.
Mr. Dunlap, you're with the firm of, is it, Nauman Smith?
And I have a document dated October 24, 2005 signed by Benjamin C. Dunlap, Jr. Is that your name?
And the document I have, did you receive on behalf of CSX, your client, subpoenas properly issued by this Committee?
Yes. We received and I signed for a subpoena that was directed to the corporation. 178 11/15/05 - TRANSPORTATION - RES. 050148
So we don't have to dispute as to whether or not the subpoena was issued?
And then you've written to Mr. Masters a letter indicating that notwithstanding your receipt of the subpoenas and that they are duly authorized, that you have decided for your own purposes to not supply the individuals that we requested.
You at 179 11/15/05 - TRANSPORTATION - RES. 050148 least agree to that?
I do not disagree with that. But, sir, under the Pennsylvania Rules of Civil Procedure, as I mentioned in my letter to Mr. Masters, when a subpoena is issued upon a corporation, only officers, directors or managing agents need come to -- are authorized, rather, to appear at a hearing.
Well, as you can imagine in any legal matter, you very well know that that is subject of dispute, because apparently one of the provisions of the statute or the rule that you're citing would seem to argue against your position with regard to the party wishing to have either such testimony or documents produced is contrary to the same rule if you issue a subpoena.
Well, I 180 11/15/05 - TRANSPORTATION - RES. 050148 knew that that would be your position. This is not a deposition. This is a public hearing. The Committee is authorized and the Council is authorized by state statute to issue subpoenas. We take this very seriously.
Well, apparently you didn't take it as seriously as we would like you to take it because you didn't produce the people that we want.
We followed the Rules of Civil Procedure in the matter and we supplied someone who has knowledge of the matters that are the subject of the Council's resolution.
Well, notwithstanding your opinion, maybe that's a matter that the Court should decide, and we'll subsequently take the necessary action to get to a resolution. You're going to be with us for the rest of the time? 181 11/15/05 - TRANSPORTATION - RES. 050148
Okay. That may be the only thing that I've asked that you might do today, since you did not do what the Committee asked in the first place. So let's start. First, Mr. Sullivan, I wish to have you sworn.
Do you swear to tell the truth, the whole truth and nothing but the true, so help you God?
You understand that there are penalties for false testimony in Pennsylvania?
CSX has what I found is a Code of Ethics for the company. You're aware of that?
I'm going 182 11/15/05 - TRANSPORTATION - RES. 050148 to read into the record the CSX Code of Ethics. This is from your website. "CSX Values. At CSX, we believe that living by a set of fundamental core values helps define the true measure of a company. They guide the way we treat each other and how we make business decisions. When all employees are aligned to fundamental guiding principles, companies consistently deliver superior financial results that ensure long-term success. "At CSX, we have developed a core ideology that is the foundation for everything we do and is embodied in the motto 'right results, right way.' This creates an environment that allows us to maintain a focus on what is important, while challenging everything else in a drive for continuous improvement. There is nothing magical about this concept. It is the discipline of execution that distinguishes great companies. It is about building an organization that has purpose, focus and alignment; that lives 183 11/15/05 - TRANSPORTATION - RES. 050148 its values every day; and that creates an environment that allows employees to grow and to produce superior results. "This core ideology - our vision, purpose and values - is the heart and soul of our Company. We believe that adhering to this core ideology will help us become an even stronger and sustainable organization - a leader in an evolving business world." Now, Mr. Sullivan, could you explain to the Committee how parking your trains on our streets; the nature and substance of whatever is in those trains, in some instances yet to be determined; interfering with the proper crossing at at least two locations; disrupting a growing, thriving neighborhood; negatively impacting a neighborhood park that has seen tremendous investment by public and private and philanthropic institutions; and the general behavior that's been exhibited so far in this matter, how that matches with the CSX 184 11/15/05 - TRANSPORTATION - RES. 050148 Code of Ethics?
Mr. Chairman, I address the issue of the park and some of the issue of the trains that are stopped at times in the statement that's been given to you, which I would hope will be read into the record or would ask to be read into the record. I'm certainly willing to read it, if you want.
We'll get to that. Can you just try to answer my question?
Yes, sir. Our job, we believe, is to serve the customers and to serve the community as best we can and to provide the underlying functions that are needed to make this economy work. We are an important part of the economic life of this City, of the port, of all of the customers here, and we do everything that we can to see that service is provided to them and all across our 23,000-mile system. We believe that we do 185 11/15/05 - TRANSPORTATION - RES. 050148 everything that we possibly can to make life in a community better, and we will continue to work at that.
All right. Let's get a little background information, maybe a little better understanding. Now, your position is what? Regional Vice-President for Public Affairs; is that right?
I'm in government affairs or state relations. I also deal with the news media at times.
So you're not involved in the day-to-day train operations?
Okay. But you're here to testify at a hearing that is specifically about train operations?
I was asked to come and represent the company at this hearing, yes, sir.
Yes, there is. I don't have one with me, but there is, yes.
And who are the individuals who are in charge of train operations? 187 11/15/05 - TRANSPORTATION - RES. 050148
They are going to vary in the region. There is going to be a Division Manager. There's going to be --
Division Manager, I believe. I've got to double-check the exact title, but I believe it's Division Manager.
He is 188 11/15/05 - TRANSPORTATION - RES. 050148 responsible for train operations in an area that would extend roughly from Richmond, Virginia to Northern New Jersey.
He would report to a gentleman who is the -- I believe his title is Vice-President of Operations -- I'm going to have to double-check the precise title -- who is based in Chicago, and his name is Tony Tuchek.
What's his 189 11/15/05 - TRANSPORTATION - RES. 050148 title?
Again, I'm going to have to double-check the title. I believe it is Vice-President of Railroad Operations for the North.
He, I believe, reports to -- I believe his title now is Executive Vice-President of Operations.
Is that the Executive Vice-President and Chief Operating Officer?
He's the EVP and COO, right? Okay. And you 190 11/15/05 - TRANSPORTATION - RES. 050148 report to?
So with regard to operations, who are the decision-makers or who is the decision-maker on train operations for anything affecting Philadelphia?
That is a question that I can't give you a direct answer, because it's going to involve several different people. It's going to involve overall network operations, which are directed out of Jacksonville. It's going to involve specific local customer operations, which is going to come out of both Baltimore and Philadelphia, but in general, it starts, if you will, in Jacksonville.
With whom? 191 11/15/05 - TRANSPORTATION - RES. 050148
It would start with the people down there who report to Mr. Ingram.
I understand that, and that's been a part of the problem over the past week or so since we called for this hearing and issued the subpoenas. Why is it so difficult to identify the responsible individuals?
I think we're trying to do that, sir, and get you the people who can come up here and deal with the questions, and I know, Mr. Chairman, that that's what Mr. Casselini is trying to do right now as we speak.
So you have your testimony. We've gone a little around the chart here a little bit. Before we get into that, how long has CSX been operating in this area? Did CSX buy somebody or merge?
Yes. The history of it is, CSX operated here as a 192 11/15/05 - TRANSPORTATION - RES. 050148 predecessor railroad, I believe. I joined CSX in 1998. It was the Baltimore and Ohio and then the Chessie system merged together. And then in 1998 was financial control, 1999 was operating control. A couple of railroads, including CSX, took over control of most of what is known or was known as Conrail. And so you already had CSX operating here with a presence and in fact operating in that area that we've been talking about at Schuylkill River Park. That area was not Conrail. That was CSX or B&O, I guess, dating back over time, and then in 1999, CSX took over some additional operations as well.
And how long have you been blocking the tracks on Locust and Race Street?
That, I can't tell you exactly how long we've been doing that. I know that that is a long-standing operation down there that's used for serving customers in the 193 11/15/05 - TRANSPORTATION - RES. 050148 Philadelphia area, and it's also served --
Everything that comes out of East Side Yard and that moves between East Side and moving up toward what I guess would be called the Art Museum Tunnel.
I understand that. My question was, how long have you been blocking the tracks?
And, sir, I know we've been doing railroad operations down there for many years, and I'm going to have to assume that the processes down there have not changed considerably in all of those years.
I don't have the data to say exactly how far back that goes.
And what is it that possesses you to think that you 194 11/15/05 - TRANSPORTATION - RES. 050148 have the authority to block City streets --
I'm sorry. Mr. Chairman, I think that there is a dispute as to what exactly we do or don't have the right to do down there and that that is one of the reasons that we're involved in --
Do you think you have a right to block our City streets?
We think that we have a right to operate down there and that that is why we're involved in the litigation that we're involved in today.
Mr. Chairman, as I address in the testimony, railroads operate in different ways, and when you 195 11/15/05 - TRANSPORTATION - RES. 050148 get into a terminal area, there is going to be stopping and starting and there is going to be movement. It is not a smooth functioning thing.
I'm more midatlantic, I guess. I don't have the entire east.
To your knowledge, have you had a similar situation as this where you have a rail line going through a city that's either adjacent to or in close proximity to a neighborhood where you've had problems 196 11/15/05 - TRANSPORTATION - RES. 050148 with neighbors, their objections to you denying access to the other side of the rail line at all?
Councilman Clarke, I know that there is -- and, again, as I address in my testimony at some length, there is a real growing tension between the demand for rail transportation and freight transportation in general, the ability to serve communities, the ability to juggle demands like traffic for the Port of Philadelphia, which is actually trying to incent shippers now to put more traffic on the rails, the demand to keep certain materials off of the highways and the growing or the rapidly changing nature of neighborhoods in many of our cities. Some of the details in each city are going to vary, but the conflict, if you will, is a common one and it is one that is, to be perfectly honest, is growing. And so there is increasing pressure to move, if you will, railroad 197 11/15/05 - TRANSPORTATION - RES. 050148 infrastructure out at the same time that there is more pressure to have increased use of rail and to put more demands on that infrastructure. It's a long-winded answer, but --
I understand. I read that portion of your testimony. Should I assume that there's been different levels of response in different municipalities as it relates to this issue about access and rail lines and its impact on neighborhoods? I know in Washington there was legislation, and you talked about Baltimore. Have there been different levels of response, legally, protests? I mean, off the top of your head, can you tell me about --
A couple of different issues, Councilman. In terms of what's going on in Washington and Baltimore, that really relates to the 198 11/15/05 - TRANSPORTATION - RES. 050148 movement of hazardous materials and what can or can't be done there, which I'd be happy to address. I think the other issues are ones that really are extremely difficult in terms of saying public policy. You see neighborhoods changing, and I think what's happening in the area of Schuylkill River Park is a terrific example of that. At the same time, you see increased demand for rail transportation. It is an issue that is becoming more and more difficult to deal with for everybody. I'm happy to address the hazardous materials issue as well.
Have you ever had a situation in any municipality or locale throughout the eastern region that you're familiar with where you've 199 11/15/05 - TRANSPORTATION - RES. 050148 had to deal with civil disobedience?
Where people said, You're blocking our street. You know what, we think we'll block your trains. Have you ever had to deal with anything like that?
Councilman, we've never had that, and I certainly hope that we never would, because I think that's an invitation to a real safety issue and a real problem, and I hope that it just would not ever come to that. I really do.
Well, in the City of Philadelphia, we are a city that's steeped in history and tradition of protests, so we do it in a real civilized way. We actually have -- and I don't know if I should be saying this in the public way, but we actually have an environment where we actually call the 200 11/15/05 - TRANSPORTATION - RES. 050148 police and tell them that we're going to protest, and they actually provide protection for the individuals who are protesting, and in most cases, they notify the entities, the organizations or whomever that the protest is going to be lodged against. So it's kind of orchestrated so people will know that people are going to be out there and they're going to block traffic and they're going to do whatever they have to do. Not too long ago we had a group of truckers who were upset about something. We had the taxi cabs who were upset about something, and we actually got wind of it early on and we knew that there was going to be a lot of noise around City Hall, so we closed the window so we could conduct our public business. And this is not a threat, but I'm just kind of throwing something out there. If in fact there was a situation where the community and some of the 201 11/15/05 - TRANSPORTATION - RES. 050148 elected officials just got fed up because of the lack of response by CSX that they felt the need to go to that level, the good-old grassroots protest, it would probably be a situation where the safety issue could be dealt with, people would not go and jump in front of a moving train. There would be appropriate notification to CSX, and I'm assuming that subsequently you would notify your drivers that there are probably going to be people on the tracks, there are probably going to be a group of people protesting this particular issue in blocking traffic, and those people will probably be surrounded by police to ensure that all of the safety issues are resolved. You've never had to deal with anything like that?
Councilman, never. Never had to deal with anything like that. I would just make one other observation. Obviously we work very hard 202 11/15/05 - TRANSPORTATION - RES. 050148 to maintain safety. We don't encourage people on the tracks. I wouldn't want to be in a position where anybody at any level who was condoning that kind of an activity. I think the other thing to keep in mind is that when you disrupt that freight traffic, it would disrupt the flow of commerce, which sounds like this wonderful thing, but, in fact, it means that somebody is going to go to work tomorrow morning and the assembly plant is shut down because the parts to work on that product aren't there. It means that a distribution center is not going to have the product that it needs to get out to people. It means that a ship is going to be having a problem getting material to flow out of the Port of Philadelphia. That's in Philadelphia or in another city. And if it happened in another city, you would have the same problem here. We operate as a network, and 203 11/15/05 - TRANSPORTATION - RES. 050148 when you do something in one city, it affects the entire network. So it's a --
So that means that your customer base will probably not be very happy about this particular action and not be very happy about you as an operator?
I think it would mean that there would be an economic issue for the economy in general and for the people who work in the economy.
So the likelihood that you would see the need to resolve this issue, if this happened on a consistent basis, would probably be elevated, because you don't want to have unhappy customers?
Well, the fact that I'm even having this 204 11/15/05 - TRANSPORTATION - RES. 050148 conversation with you today, right, because this is probably a conversation I shouldn't be having in public --
-- that's the level of frustration I have with you guys. This is like ridiculous. You don't respond to the subpoenas. I think we've been more than fair. I've sat at this table numerous occasions and I've seen Councilmembers, my colleagues, virtually rip people's heads off, right, but we haven't done that. We've been extremely civil. We've had discussion after discussion with members from CSX. We've bent over backwards to try to accommodate individuals. You've put us in a position where we've had to issue subpoenas, and you've essentially ignored them in spite of what your colleague is saying here or your legal representation. You've ignored the subpoenas. And the fact that I'm having this level of conversation, 205 11/15/05 - TRANSPORTATION - RES. 050148 you should understand that the level of frustration with this is just that bad. This is like ridiculous. You talk about commerce. We believe that the investment that we've made on the waterfront is going to support a level of commerce as it relates to the City. This particular section of town is increasingly becoming a more attractive area for people to move in, and a lot has to do with access to the waterfront. A lot has to do with access to the park. So it affects our commerce also not having the ability to access that particular location. So this is kind of a two-way street. So while I'm not promoting here today in public that there will be some sort of civil discord, I think that people are at the level where that will now at some point in the very near future be an option, because I think that people will be willing to do that. I think that 206 11/15/05 - TRANSPORTATION - RES. 050148 the Philadelphia Police Department will accommodate us to ensure that all of the safety issues are dealt with, and if we can't get more cooperation out of CSX, I can seriously see us trying to do something like that. I got to tell you, I'm a politician. There's nothing better than a politician standing in front of a protest with a sign. That's a great photo op for my reelection campaign. And I wouldn't be doing it for that reason, but understanding that this is something that will not hurt me as a political figure. So you need to talk to your people, tell them that this thing is reaching a level of frustration that we're getting ready to start talking about some really, quote/unquote, unreasonable measures. So if you can just understand the level of seriousness that this is here, it would be very helpful to us. 207 11/15/05 - TRANSPORTATION - RES. 050148
Thank you, Councilman. Council President and then Councilman Kelly.
Thank you very much. Mr. Sullivan, for the record, would you please describe the bridge maintenance schedule and plan for the Columbia Bridge and the 25th Street viaduct? And while you're at it, would you tell us if you think that CSX consider these two bridges to be in good condition?
Council President Verna, good afternoon. We inspect those bridges -- they are thoroughly inspected for structural integrity once a year. Again, in the testimony, I did not address 208 11/15/05 - TRANSPORTATION - RES. 050148 Columbia Avenue, but I did address 25th Street viaduct in there. It's a critical rail link for the City. Everything that goes down to the port moves there. We inspect the bridges. The bridge structure itself was being inspected once a year for structural integrity. The tracks are inspected, because I believe they are main line tracks. If they are main line tracks, and I've got to double-check that, they're inspected twice a week on -- this is going to sound crazy, but they're inspected twice a week on non-consecutive days, so you can't go back to back. In -- well, I guess it was the spring. I don't have the precise date, but this spring we entered into an agreement. The City asked the Pennsylvania Public Utilities Commission --
I'm sorry. My husband keeps telling me I hear too well. I'm having difficulty 209 11/15/05 - TRANSPORTATION - RES. 050148 hearing you. Can you pull the microphone closer to you, please?
The Pennsylvania Public Utilities Commission entered into an agreement with us or we entered into a consent -- how would you describe it?
A consent agreement -- I want to make sure I've got it right -- that we are going to inspect that bridge, the exterior part of the bridge, the precise thing that concerns the Committee and that concerns the community and that concerns us, twice a year, and that probably in the spring and the fall, the necessary repairs would be made at that time. And that is something that is now, I think, under the purview, if you will, of the Pennsylvania PUC. And we entered into that agreement with 210 11/15/05 - TRANSPORTATION - RES. 050148 them and would have to answer to them if there was an issue.
So both the tracks and the construction, the concrete, will be inspected twice a year?
No. I'm sorry. The concrete, the exterior of it, the facade, whatever, will be inspected twice a year. The tracks themselves are inspected on a maintenance schedule. It depends upon the classification of the track. That is all established by the Federal Railroad Administration. I will have to determine or find out, and I will do this for you quickly, exactly what the class level is of that particular track. In general, main line track -- an example of that would be the line along Schuylkill River Park -- is inspected twice a week. That's a visual inspection by the company. There are also inspections that are done. I don't know the schedule, but they are done independent of that by the Federal 211 11/15/05 - TRANSPORTATION - RES. 050148 Railroad Administration, and there are additional inspections that are done of track with computerized equipment that tests for track geometry and that checks for rail alignment and that checks for defects within a rail.
The gentleman that testified from Southwest Philadelphia who was very concerned about the condition of the tracks in that community, are they also inspected as frequently?
They are inspected. I don't know precisely what the class of those tracks is. I will find out. We've got that written down, and we'll find out what they are.
And can we have something in writing on that, please?
For the record, sir, can you tell us what kinds of hazardous materials are 212 11/15/05 - TRANSPORTATION - RES. 050148 transported by CSX through Philadelphia? Please describe all types of chemicals.
I can provide that to you after the hearing. We do a density study that's done on request for emergency management agencies and for response agencies, and I can have one available to the Emergency Management Director and provide it to you very quickly. That would --
You'll provide it to the Chairman, please, and he will make certain that we all get copies.
Thank you. Let me ask another question, if I may. If CSX could not bring HAZMAT freight cars through Philadelphia, where would those cars be rerouted?
At this point, I don't know. This is our main route up 213 11/15/05 - TRANSPORTATION - RES. 050148 and down the East Coast. This is what we refer to as the I-95 Corridor. This is where all of that traffic goes. I think it's important to understand, again, as I mentioned in the prepared testimony, when an individual city, such as Washington or Baltimore or Philadelphia, says, You may bring into this city that which is originating in or leaving from this city but nothing else can move through, you're very quickly going to bring a system essentially to gridlock, because what you're saying is, what one city is saying, Baltimore, for example, is saying, Stuff for Baltimore can move here, but if it's going some place else, it can't. Then Washington is saying the same thing and Philadelphia is saying the same thing, and what you then confront is a situation where nothing can move anywhere and you end up with customers who don't have materials. We had a situation -- we've had a couple of situations, but the railroad 214 11/15/05 - TRANSPORTATION - RES. 050148 industry itself back, I believe it was, shortly after September 11th when the troops invaded, I believe it was, Afghanistan embargoed temporarily after talking with the Federal Government all of those movements, and within a matter of days, we had cities calling the government because their municipal water supplies were in desperate straits. They didn't have chlorine. So the materials that we move are moved for a very real purpose, and when they can't move through certain areas, they can't move and we can't fulfill that basic mandate we have as a common carrier to move things as safely and directly and efficiently as we can, we've got a problem, "we" society.
We all have a problem. Does CSX have an inventory of all billboards on their property?
I don't know. I do know and I heard the testimony earlier 215 11/15/05 - TRANSPORTATION - RES. 050148 and have written it down, and we are certainly prepared to work with and help the City department -- I believe you said Licensing and Inspections and whomever -- to make sure that any billboards that are on our property are properly permitted and legal. And we will work with them to take whatever action is necessary to address those that are not.
Well, apparently you have quite a number of them. I think that we should be provided information as to how many billboards are on your property, do you have permits from L&I for all or any of them, and I'd like to know if you are complying with the City's billboard ordinance, how many are legal, how many are illegal, and I would also like to know how much revenue do the billboards generate for CSX each year.
So I 216 11/15/05 - TRANSPORTATION - RES. 050148 would appreciate your forwarding that information to the Chairman of the Committee, please. I'm finished.
Thank you. As an add-on to the Council President's request, and then I know Councilman Kelly has questions as well, Mr. Sullivan, if you could provide to us a listing by locations of all of the bridges and viaducts owned by CSX and a copy of your regular inspection reports. Can you provide that to us?
Excuse me. I'd like to know when did these inspections start, because I just cannot believe that we would find chunks of concrete falling if you have inspections as you contend you do, and it's happening too frequently. It's a 217 11/15/05 - TRANSPORTATION - RES. 050148 problem.
It's not only a problem for us, our constituents, but you, and it's something that has to be addressed.
Agreed. Agreed. Mr. Chairman, excuse me. If I may, just for one quick second. (Pause.)
I just wanted to make sure we were getting all of the things that we're committing to do. Thank you.