Paulsboro, schools sue over closings related to derailment

Paulsboro and its school district are suing Conrail for $5.9 million, saying a 2012 train derailment led to school closures and depressed property values.

In the suit, filed last week in U.S. District Court, the Paulsboro Public Schools and the Borough of Paulsboro ask for $865,339 in costs related to closing schools for six days.

They also seek $5 million to make up for what they calculate as lost revenue for the next decade, thanks to lowered property values and the lower property taxes that will follow.

The Nov. 30 derailment caused more than 20,000 gallons of highly toxic vinyl chloride to spill and spew fumes. Seven cars derailed, four into the Mantua Creek, after the train was permitted to cross the East Jefferson Street Bridge despite a red light indicating the swing bridge had not been properly locked.

The National Transportation Safety Board issued a report over the summer that placed much blame on the rail company.

Hundreds of residents were evacuated, and the borough's schools were closed for six days.

"The schools' student body is comprised of a high proportion of low-income and minority students, for whom an interruption in continuous days of instruction has a disproportionate and adverse effect," the suit reads.

Each day has a value of $134,223, according to the suit; the district is also asking for $60,000 in other unbudgeted costs.

The borough and district also are suing for $5 million because of projected losses in tax revenue over 10 years.

With the derailment and subsequent news coverage, the suit reads, property values have dropped, and tax rates cannot be increased as quickly.

"The stigma associated with the borough . . . has caused a loss of assessed property values, and/or a deceleration of the rate increase of assessed value increases compared to other comparable communities, that is reducing and for many years will continue to reduce the revenues available," the suit reads.

According to the suit, about 42 percent of property tax collections are allocated to the schools, 38 percent go to the borough for operations, and 1 percent is set aside for the public library.

The borough and district say the rail company ignored warnings, did not properly maintain the bridge, and did not take necessary precautions.

The company had no comment Thursday evening, saying it will respond in court.