CSX crossing insurance costs Tampa streetcar $400,000
TAMPA - The fight to bring a streetcar downtown involved big battles. Organizers had to choose a route, persuade the federal government to give millions for the project and overcome resistance from some residents and city officials who were worried about the cost to taxpayers. Ten years after the streetcar between downtown and Ybor City became reality, though, it's one small detail, overlooked until the last moment a decade ago, that's posing the biggest threat to the system: Insurance. The TECO Line Streetcar System is paying a whopping $400,000 a year — more than a quarter of its annual budget — for liability insurance at a single CSX railroad crossing. The $100 million policy enables the streetcars to cross a track that eight freight and passenger trains use daily.The expensive premium has so far cost more than $4 million and nearly drained the streetcar's $5 million endowment years earlier than planned. The strain the payment places on the budget was a major factor in last year's decision to run the streetcar less frequently, a move that contributed to a sharp decline in ridership. "If you think about the huge proportion of the endowment going toward insurance, but for having that cost, the endowment today would be much larger and be able to provide for the streetcar operation," said Michael English, a planning consultant for a Tampa firm who was president of the Tampa Historic Streetcar Inc. in 2001. He's served on the streetcar board since its inception. The insurance issue is all the more disconcerting because, on average, only four CSX freight trains and four Amtrak passenger trains use the crossing at 13th Street and Fifth Avenue daily. Streetcars use the crossing about 60 times a day. If the insurance situation were not so urgent and expensive, its early history surely would provide comedic lessons on how not to run a railroad. In June 2001, about 10 months before the streetcar project was expected to be finished, streetcar and city officials suddenly realized the $500 million liability policy requested by CSX would require about $1 million in premiums, according to news accounts. Then-Mayor Dick Greco said at the time he'd learned of the insurance requirement only a few months before. A HART official said he'd been aware of the insurance requirement for years. "The short answer was that we didn't have time to get insurance," English said. Early negotiations dragged on, then were complicated by the Sept. 11, 2001, terrorist attacks. English said public institutions that sought insurance suddenly could not find private sector firms to write large policies. Facing that reality, city officials and CSX agreed on a novel solution: pay flagmen to sit in an air-conditioned trailer at the rail crossing. The plan cost about $300,000 a year in a two-year deal, with the idea that streetcar officials would use the time to find less costly insurance. The streetcar began service in October 2002. The flagman plan seemed to work fine at first but eventually began to run into problems. In July 2003, a streetcar operator reported he had the flagman's OK to cross the tracks while an Amtrak passenger train was backing up to the intersection. Four days later, a streetcar operator was given the OK to cross the tracks but fortunately stopped as a train rolled by. Worried by the problems, CSX, streetcar and city officials came up with an even more elaborate plan: post a streetcar supervisor at the crossing. The supervisor would board the streetcar and radio the nearby flagman. The two would agree the track was safe to be crossed. The supervisor would get off on the other side of the tracks and repeat the procedure when the next streetcar showed up. As negotiations dragged on, one pundit suggested that to overcome the liability issue, riders could disembark, walk across the tracks and re-board the streetcar. Eventually, though, negotiations bore fruit, and by 2004, CSX had agreed to a $100 million policy. "The flagman went away and the liability insurance has been in place ever since," English said. The continued expense of the insurance policy, coupled with declining ridership and an ever-tighter budget, have brought a renewed sense of urgency to finding a solution to the high premiums. Before year's end, a committee of streetcar board members expects to meet again with CSX officials to try to get the railroad to lower the $100 million coverage it's demanded over the years. The committee also is exploring a host of other options, including legislative changes such as giving CSX sovereign immunity from lawsuits over streetcar accidents at its railroad crossing. Committee members also want to see if Tampa's streetcar is entitled to protections given other rail systems like TriRail in South Florida and SunRail in Orlando. Another option could be asking the city of Tampa to assume responsibility for streetcar insurance payments, an accounting move that could help lower premiums. Not surprisingly, that option could face hurdles. "We'd like to find a solution so the city is not holding the bag," said Mike Suarez, a Tampa city councilman and private sector insurance executive who sits on the streetcar board. For their part, CSX officials said their requirement for $100 million in liability insurance is reasonable. The crossing was created specifically for the streetcar. "We are willing to continue discussions to explore various options, but we have re-evaluated the risk created by the (streetcar) crossing CSX tracks," CSX spokesman Gary Sease said in an email. "Our assessment confirms that the risk requires $100 million liability insurance.'' Sease also points out that the railroad has required the streetcar carry liability insurance from the beginning. "It's important to note that HART agreed to the $100 million coverage at the very beginning before any operations commenced. CSX was very clear about this requirement." CSX also suggests the streetcar authority continue exploring whether the insurance can be covered under city or state policies. And then there's this option, which CSX has suggested since the beginning: Get rid of the streetcar track and switch to tires, in essence becoming a bus that looks like a streetcar. "At the onset, we suggested a rubber-tired option that could traverse established road crossings," Sease said. "HART was firm that it needed to be the trolley.''
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