Voltage spike with a relay and isolated track section

It sounds like you may not have the return (common) part of the circuit hooked up correctly.

Can you furnish us with a drawing of how you have things hooked up? A picture of the wiring will help a lot.

see wiring diagram drawn out

The diagram is not clear. Blurry. But if the relay coil is connected to a voltage source on one side and the isolated rail on it’s other side, then you will see the voltage source on the outside rail until the train connects it, the outside rail, to the power supply common...thru the metal truck wheels. Nothing to worry about .

Thank you for your time and knowledge.

@cjack posted:

...if the relay coil is connected to a voltage source on one side and the isolated rail on it’s other side, then you will see the voltage source on the outside rail until the train connects it..

Exactly, this is not a "spike", but a voltage potential, which is shorted to zero when the first axle set bridges the two rails activating the relay. The insulated rail, and relay, could even be a much higher(or lower) potential to activate the relay based on the specs of the relay solenoid, or even DC if needed.

If you didn't have the two Z1000s phased, the potential could be any wild number, if you are using separate power to power relays only and no trains or track-activated accessories, they don't have to be phased.