RENO — The city of Reno has sued the owner of the pipeline that runs beside Union Pacific railroad tracks in an attempt to force the firm to pay an estimated $7 million to relocate the pipeline away from the railroad trench, the Reno Gazette-Journal reported.
If the city loses the suit, the $282 million train trench project could go $7 million over budget. No matter who pays for the relocation, the line must be moved out of the railroad right of way and beneath city streets, according to court documents and the project’s contractor.
City officials said the pipeline relocation should not delay the project and that they are confident the city will not have to pay.
But critics of the railroad trench said they believe the city should have detailed the dispute before a countywide vote on the trench Nov. 5.
“The relocation of the Kinder Morgan pipeline is another hidden cost we’re only now hearing about,” said Mike Robinson, who lost a bid to be Reno mayor in November and opposes the trench plan.
“If the city pays or if Kinder Morgan pays, the whole community pays, some how, some way.”
Jonathan Shipman, the city’s lawyer on the case, said he believes the dispute will be resolved in favor of the city because of the easement agreements with the Union Pacific Railroad. Under that agreement, Kinder Morgan must move the line when told to do so and at its own expense, he said.
“The city will resolve this as quickly as possible so it doesn’t interfere with construction,” he said. “We have a strong case.”
City officials have looked at alternate routes for the pipeline along streets, but Shipman said the exact route hasn’t been decided. He said that although Kinder Morgan estimates the cost of relocation at $7 million, the city does not have an estimate but believes it will be less.
The 45-year-old pipeline, owned by Kinder Morgan Energy Partners, runs underground next to the railroad tracks. It moves about 35,000 gallons of fuel a day from Bay area refineries to the Sparks Fuel Depot, Kinder Morgan officials said.
Since 1998, the city has been negotiating with the pipeline firm to move the pipe, something the company says it will do only if the city pays for the relocation.
“We are willing to move it if the city pays the bill, which we estimate at $7 million,” said Larry Pierce, Kinder Morgan spokesman in Houston. “We are not required to move it for a third party, in this case the city, and we are not required to move it off the right of way for anyone.”
Al Lord, a project manager for Granite Construction Co., said the pipeline must be completely removed from the project area to guard against accidental ruptures from digging equipment.
“It is a very sensitive line,” he said. “We can’t work within feet of it.”
He said the dispute over who will pay hasn’t affected the construction timetable, but “there will come a time, if that line is not relocated, that it is going to affect the project.”
Reno Councilman Dave Aiazzi, who supports the trench project, said the relocation of all other utilities has been settled and said the dispute with Kinder Morgan shouldn’t slow the construction timetable.
“That’s why we’ve done the utility relocations way ahead of time,” he said. “We wanted to solve that first. Everything has been settled except for Kinder Morgan.”
Councilwoman Jessica Sferrazza, who opposes the project, said cost overruns remain her biggest fear and the pipeline dispute is just the beginning of money problems.
“We won’t know the real costs until the project is completed,” she said. “The people don’t support it and I will never support it. I predict the $26 million project contingency fund will dwindle by the day. It’s already started.”
Both Aiazzi and Sferrazza said they were aware of the dispute with the pipeline firm but did not know the city filed suit against Kinder Morgan in October.
The lawsuit is pending before Washoe County District Judge Brent Adams and no hearing dates have been set. Kinder Morgan also has filed a motion for a change of venue, arguing that the case can’t be litigated in a community where the taxpayers would have to pay millions if the city looses in court.
In its reply to the change of venue motion, city lawyers cited the Nov. 5 advisory vote showing 63 percent of voters are against the trench project.
“One might even argue that there is a certain segment of the voting population that would enjoy seeing the project run over budget,” the lawyers for the city wrote. “Having it do so would vindicate opponents, giving them the opportunity to say ‘I told you so.’ ”
Robinson said that argument is ridiculous.
“I’m not going to fine myself just to prove I’m right,” he said.
John Bromley, Union Pacific spokesman in Omaha, Neb., said the railroad is backing the city in its attempt to force Kinder Morgan to pay for the relocation. He said according to the agreement for the “perpetual easement,” the railroad can make Kinder Morgan pay for the relocation.
“They dispute that, but that’s why the lawyers are involved,” he said.