Reno sues to try to avoid first cost overrun on train trench

RENO -- The city of Reno has filed a lawsuit against the owner of an underground pipeline to try to avoid millions of dollars of additional costs as it digs a trench to lower the train tracks through downtown.

Critics say it's the first sign of what they say promises to be numerous cost overruns in the life of the controversial, $282 million project.

The suit filed in Washoe County District Court attempts to force Kinder Morgan Energy Partners to relocate its pipeline running underneath the tracks.

Kinder Morgan officials said the relocation would cost $7 million. They maintain they don't have to move it unless the city pays for it.

If the city loses the suit, it will have to pick up the tab because the pipeline must be moved before the digging of parts of the 2.1-mile trench can begin.

Mike Robinson, a leading critic of the trench who ran unsuccessfully for mayor, said the city should have detailed the dispute before a county-wide advisory vote on the trench Nov. 5.

The city filed the lawsuit in October but it was not publicly disclosed until a Reno newspaper reported on it Thursday's editions.

"The relocation of the Kinder Morgan pipeline is another hidden cost we're only now hearing about," Robinson told the newspaper.

"If the city pays or if Kinder Morgan pays, the whole community pays, some how, some way."

City officials said the pipeline relocation should not delay the project and that they are confident the city will not have to pay.

Jonathan Shipman, the city's lawyer on the case, said he believes the dispute will be resolved in favor of the city. He said easement agreements with the Union Pacific Railroad dictate that Kinder Morgan must move the line when told to do so and at its own expense.

"The city will resolve this as quickly as possible so it doesn't interfere with construction," he said. "We have a strong case."

The 45-year-old pipeline 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.

Since 1998, the city has been negotiating with the pipeline firm to move the pipe.

"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. 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."

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.

"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," she said.

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. "