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TO: |
Board of Trustees |
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THROUGH: |
Jay Fox, Executive Director |
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FROM: |
Viola Miller, Chief Financial Officer |
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PRESENTER(S): |
Jared Scarbrough, Acting Chief Capital Services Officer |
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Brian Reeves, Associate Chief Financial Officer |
TITLE:
title
Disbursement: Settlement of Claim for Bair Creek Culvert Repair (Union Pacific Railroad Company)
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AGENDA ITEM TYPE:
Non-Procurement Agreement
RECOMMENDATION:
Approve and authorize the disbursement of funds in the amount of $924,593.63, to the Union Pacific Railroad Company as settlement for a claim in accordance with the terms of the Operations and Management Agreement (Contract #25-P00477) (O&M Agreement).
BACKGROUND:
The Utah Public Transit District Act requires that the Board of Trustees review and approve any contract or expense exceeding $250,000. (Utah Code § 17B-2a-808.1(2)(u)(i); Utah Transit Authority Board of Trustees Policy 2.2(III)(D)(3).
On September 20, 2002, the Utah Transit Authority (UTA) and Union Pacific Railroad Company (UP) executed an O&M Agreement to govern responsibility for maintenance of the shared corridor where UTA’s passenger rail services operate alongside UP’s freight operations. This agreement established each party’s rights and responsibilities, including a cost-sharing mechanism for the maintenance, repair, and replacement of shared infrastructure.
During the construction of FrontRunner North (2005-2007), UTA installed culvert pipes to facilitate water drainage beneath the tracks. These drainage pipes were connected to the inlets of existing culverts located under the UP tracks, extending the system upstream. This enhancement allowed for the construction of the FrontRunner embankment directly over the expanded culvert network.
In 2023, Utah experienced an exceptionally heavy winter with an above average snowpack accumulation. The resulting spring runoff produced unusually high-water volumes, which overwhelmed several culvert systems, most notably the one at Bair Creek in Kaysville, Utah. UP identified issues with track stability in this area and, upon further inspection, discovered significant pipe failure, including large cracks that were contributing to track settlement.
Additional investigation revealed a sizable void on the UTA side of the culvert, raising concerns about the integrity of the rail infrastructure. To address the issue, engineers proposed a solution involving the installation of a new 48-inch pipe within the existing culvert and the boring of a new 60-inch pipe beneath both the UP and UTA tracks, parallel to the original culvert. These upgrades were necessary to restore and maintain adequate drainage capacity while safeguarding the stability of the corridor.
DISCUSSION:
The Operations and Maintenance Agreement between UTA and Union Pacific Railroad Company (UP), (Section 3.2) outlines each party’s responsibilities and provides for joint infrastructure equal cost-sharing in the circumstance where neither Party can establish that one Party should bear 60% or more of the cost based on the respective benefits and burdens for each Party. In this case, UP submitted a claim requesting UTA share equally in the cost to repair the Bair Creek culvert system. UP submitted seven (7) invoices to UTA for UTA’s portion of the work completed.
UTA staff requests authorization and approval of the disbursement amount of $924,593.63 to UP, in accordance with the O&M Agreement, as settlement for the associated claim (as outlined in the 7 invoices) for the Bair Creek culvert repair.
CONTRACT SUMMARY:
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Contractor Name: |
Union Pacific Railroad Company |
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Contract Number: |
25-P00477, Operations and Maintenance Agreement |
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Base Contract Effective Dates: |
September 20, 2002 |
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Extended Contract Dates: |
N/A |
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Existing Contract Value: |
N/A |
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Amendment Amount: |
N/A |
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New/Total Contract Value: |
$924,593.63 |
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Procurement Method: |
Operations and Maintenance Agreement |
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Budget Authority: |
Approved 2025 Operating Budget |
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ALTERNATIVES:
There are no alternatives. Pursuant to the O&M Agreement, UTA is contractually obligated to an equal share of the maintenance, repair, and replacement costs for facilities shared infrastructure between both UTA and UP.
FISCAL IMPACT:
UTA is self-insured for this loss. The settlement amount will come out the general claims fund held by UTA for such purposes.
ATTACHMENTS:
Utah Transit Authority and Union Pacific Railroad Company O&M Agreement executed on September 20, 2002
Bair Creek Culvert_Damage Photos
Union Pacific Invoices