Western Railroad Discussion > ReTRAC aka Reno Trench Status

The recent post re: Alameda Trench had me wondering -
What is the current financial status of the City of Reno (and Washoe County) regarding the bonded indebtedness and revenue obligations related to the ReTRAC aka Reno trench?
...Lorenzo

The Reno Trench (ReTRAC) has its own unique financing problems. The city refinanced the debt into "Auction Rate Securities". The market for these Auction Rate Securities collapsed in 2008 resulting is a number of problems. The biggest was the 1/8-cent sales tax that pays for the trench wasn't enough to make the payments on the debt. They were redoing the deal about two years ago, so I assume it has stabilized since then, but I would bet its finances aren't robust and a drop in sales tax might cause additional issues.

Reno never should have done this, and they were warned.

The city talked itself into the trench supported by a steady diet of news stories by the Reno Gazette-Journal of wildly exaggerated train forecasts and scare stories about chemical train derailments and emergency vehicles blocked by a parade of "two-story" trains from Oakland. My attempts to present an accurate
picture were like spitting into the wind. Eventually Bill Wimmer and his engineering staff negotiated an agreement with the city on the trench with very favorable terms for the railroad.

JBOmaha



Edited 1 time(s). Last edit at 06/21/17 15:13 by Copy19.

It was said that for the money spend on the trench they could have either built an additional hospital or put in multiple overpasses.

J.

Best I could do is to find out indebtedness as of Jan 2015 is 199 million. It has been refinanced since then. The city of Reno's indebtedness has been and still is a millstone. However Tesla's is hiring 2 to 3 hundred employees a month, home prices are moving up and Interstate 80 has a traffic jam going west in Sparks everyday starting about 4 pm. Apple just paid 48 million for some property downtown. If someone can figure out what to do with the homeless (hundreds), downtown Reno will boom and will become a very desirable place to live similar to San Antonio and Portland.

coach Wrote:
-------------------------------------------------------
> Reno never should have done this, and they were
> warned.

Funny how in this thread and in the Alameda Corridor thread, people are avoiding the phrase corporate welfare. Not trying to make a villain out of UP, BNSF, or anyone else, but when they benefit and the taxpayers are stuck with the tab, it's not difficult to figure that out.... Just say it!

Don't forget to include the "migration" of the Sacramento Depot, and I was blindly criticized when I claimed UP was the prime beneficiary of that project.

I have no further comments regarding the financials, but at least, these projects are better than some "school bonds" the past 2-3 decades, where education quality has gone down the more of these bonds were approved (in California).

The city saw the proposed UP/SP merger as an opportunity to use the Surface Transportation Board as the vehicle to force the railroad out of its casino district. I doubt corporate welfare was on their mind.



Edited 1 time(s). Last edit at 06/22/17 07:14 by Copy19.

Copy19 Wrote:
-------------------------------------------------------
> The city saw the proposed UP/SP merger as an
> opportunity to use the Surface Transportation
> Board as the vehicle to force the railroad out of
> its casino district. I doubt corporate welfare
> was on their mind.

At face value, I can agree with that.

There was another merger (of a construction firm) which led to them getting suspiciously favorable treatment as a bidder in a large infrastructure project. For those who know how to dig deep, money and political trails are there. Merger is almost always a time of huge turmoil for any corporation, so they need all the help they can get.

Until these things stop happening on a regular basis, the cloud of suspicion will always be there, and UP (and SP) are not above that. So the mentioning of "merger" raises more suspicions, at least IMHO.