[S]HELBURNE — Residents are incensed that Vermont Rail System cleared 19 acres of forest to make way for a planned rail spur and storage facility without seeking state and local approval.
Company officials say state and local permit requirements are pre-empted by federal laws governing railroads. The town and the company are locked in a legal battle over Shelburne’s authority over the project.
Prominent residents vowed to fight the project, while town officials promised to hold the railroad to account, at a Selectboard meeting Tuesday that attracted such a crowd it had to be held in the Shelburne Community School gymnasium.
The facility Vermont Rail System wants to build just off Route 7 behind Harbor Industries would function primarily as a road salt storage facility, replacing one in Burlington, but company officials say it may also be used to ship other commodities such as lumber, fuel oil or industrial equipment.
More than 300 residents attended the meeting. Police directed traffic as vehicles filled the school’s parking lots and lined Harbor Road.
Shelburne residents said they understand the need for road salt in the region but don’t want the rail spur and storage facility in their town because they fear it will damage the environment, increase congestion and detract from their quality of life.
They questioned why the railroad chose their town for the facility and urged the company officials in attendance to consider downsizing or picking a new location.
Residents and town officials also accused the railroad of not being transparent about the amount of truck traffic and what type of materials will be stored at the facility. A spill of hazardous materials at the site could irreparably damage natural areas the town has worked for generations to protect, they said.
Shelburne business owners who have had to follow state and local permit requirements said the railroad is using federal pre-emption to play by a different set of rules.
The project site is a stone’s throw from the LaPlatte River and is largely surrounded by Nature Conservancy land, which the environmental organization says is home to a number of threatened plant and animal species as well as crucial floodplain forest.
Residents who spoke at the meeting were vehemently opposed to the project, with the exception of one man who questioned why the town had zoned such an environmentally sensitive piece of land for industrial use.
Railroad officials and consultants tried to placate angry residents, saying the project will have to undergo rigorous federal environmental review and won’t increase truck traffic. They also said the company will pay for road improvements and noise mitigation measures to reduce the impact of trucks loading up and entering Route 7.
Residents appeared unconvinced that trucks will be able to get safely on and off Route 7 at that location.
The company representatives said they don’t believe a traffic light is necessary but plan to recommend a right turn lane for southbound traffic. Vermont Rail System needs a state permit for construction that affects the state highway system.
The review process for that permit will involve a traffic study and could result in the state Agency of Transportation requiring additional traffic mitigation measures.
The federal approval process includes a stormwater permit review, which is delegated to the state Department of Environmental Conservation. Last month the state ordered Vermont Rail System to stop pre-construction activity while its stormwater construction permit is reviewed, giving the town a reprieve.
David Wulfson, the railroad’s owner and himself a Shelburne resident, has said his company has outgrown the current salt storage facility in Burlington’s South End. Onion River Co-op has signed a contract to buy a portion of that property and plans to build a second City Market location there.
Wulfson apologized for getting off on the wrong foot with residents and town officials, an oblique reference to his company’s cordoning off a strip of parking it owns near the Shelburne Craft School that has become a popular shortcut. The company removed the barriers, and officials have said they are working out a lease with the town that would allow public access.
The planned salt storage facility may be double the size of the Burlington facility, but that doesn’t mean double the salt will be shipped there, company officials said.
The company and its distribution contractor Barrett Trucking currently rely on a “just-in-time inventory scenario” where salt arrives by rail and is loaded directly onto trucks, they said.
In previous winters the company has run out, leaving municipal customers out to dry during periods of high demand. The increased storage will allow it to bring in much of the salt by rail during the summer, according to company officials.
Operating the rail spur won’t require blocking Harbor Road to unload freight, they added, a major concern for residents.
Vermont Rail System’s general counsel, Eric Benson, said it is a small family-owned company by rail industry standards. It leases close to 350 miles of railroad in Vermont and neighboring states.
He urged residents to work with his company and suggested ongoing litigation and other efforts to block the project would only limit the company’s ability to help the town adjust.
“For every dollar that we spend fighting about this is one dollar less of what we might be able to contribute to the community,” Benson said. That remark served only to further incite the audience and town officials.
“I’m sorry, but I’m going to have to respond. This board will not succumb to a threat. … We’re going to do what we think is right for the town,” said Selectboard Chair Gary von Stange, drawing loud applause from the crowd.
Crea Lintilhac, with the Shelburne-based Lintilhac Foundation, said the charitable organization has hired environmental lawyers to better understand federal pre-emption. The foundation also hired a hydrogeologist to collect baseline water quality information from the LaPlatte River, to track any changes if the facility is built.
“Our hope is we can really slow this process way down,” Lintilhac said.
James Dumont, the environmental attorney the foundation hired, said the case law surrounding railroad pre-emption in Vermont is far less settled than Vermont Rail System and its attorney would have residents believe.
Dumont pointed to a case the Vermont Supreme Court decided in 2000, where Burlington sued to have the railroad adhere to the city’s planning and zoning rules when the current salt storage facility was built. The court ruled that not all elements of the city’s zoning laws would be pre-empted by federal law, including traffic and salt runoff issues, according to Dumont.
A second case was resolved in 2005 and involved another salt storage facility along the Connecticut River operated by Green Mountain Railroad, which also belongs to Wulfson’s family. In that case the state sued to have the railroad go through Vermont’s Act 250 environmental review process.
Vermont lost in federal appeals court. Attorneys for Vermont Rail System have said they believe the legal opinion from that case will hold sway in the current litigation with Shelburne. However, Dumont said that opinion points to the earlier Vermont Supreme Court case as an example of where state and local regulations are not pre-empted.
Meanwhile, lawmakers have taken an interest in the project, with testimony taken in the Senate Finance Committee and a hearing in the House Committee on Fish, Wildlife and Water Resources.
The Fish and Wildlife committee heard Wednesday from several involved in the issue, but without finding a way to significantly influence the process.
“I thought there were significant enough water quality issues to have a committee meeting … to figure out if there is something the Legislature can do, or should do, and to whom we should do it,” said Chair David Deen, D-Westminster.
Rep. Kathryn Webb, D-Shelburne, said she sought a hearing on the salt shed in response to repeated requests from constituents.
Legislators weren’t given many options.
Several constitutional concerns might limit what measures the Legislature may undertake to address the situation, legislative counsel Michael O’Grady told committee members.
A principle of the United States Constitution prohibiting certain types of ex post facto legislation forbids criminal sanctions for acts that were legal when committed, O’Grady said. Another constitutional principle forbidding bills of attainder won’t allow the Legislature to penalize specific parties for their acts, he said.
The Constitution’s Due Process Clause could also restrict legislative interference in the issue, O’Grady said. The United States Supreme Court has established that in some instances retroactive legislation may violate this clause if such legislation doesn’t hold a rational relationship to a legitimate government interest.
Legislation could potentially trigger the Constitution’s takings clause as well, O’Grady said, if a new law imposes severe retroactive liabilities on parties that could not have anticipated these conditions.
O’Grady said a number of legislative approaches to the issue could raise constitutional concerns, but said he’d need to see proposed legislation to know whether that were the case.
Reporter Mike Polhamus contributed to this story. Details of Michael O’Grady’s comments to legislators were added at 11:02 a.m. Feb. 10, 2016.
