GROUP PRESENTS OPTION TO KEEP RAILROAD RUNNING AUSTIN - An East Texas group working to save the financially strained Texas State Railroad told Texas Parks and Wildlife commissioners Wednesday that a potential private operator could be selected by late February. Members of the Texas State Railroad Operating Agency participated Wednesday in a meeting of the finance committee of the Texas Parks and Wildlife Commission in Austin, attended by the Tyler Morning Telegraph. Agency members from Rusk and Palestine updated commissioners on where they are in the process of finding an alternative option to continued state operation. "We feel the best option for the railroad for long-term funding ... appears to be one where we would find a credible private entity that would come in and operate the railroad but under the guidance and control of a local, public agency - a local, public authority in this case," said Steve Presley, a Palestine city councilman and the operating agency's president. A Texas State Railroad Operating Authority, which would be made up of representatives appointed by the cities of Rusk and Palestine, would be the public entity overseeing the private entity's operation of the train. There are plans to file legislation to create such an authority in this legislative session. Presley told commissioners that a request for qualifications for a private operator was issued earlier this month and is due back Feb. 12. A selection could be announced by Feb. 23. Negotiations with the selected operator would go through mid-March. Presley said the RFQ requires that a private operator have experience running a profitable railroad and the financial strength to continue the railroad's operations. It also includes requirements related to preserving the historical accuracy and assets of the train. Three operators have expressed interest in submitting proposals, he said. American Heritage Railways is among those interested. It operates the Durango & Silverton Railroad and the Great Smoky Mountains Railroad. The Texas State Railroad Operating Agency, which was created by an interlocal agreement between the cities of Rusk and Palestine, has been asked to provide information to the Legislature about how the railroad could operate with a private entity running it, Presley has said. It would be up to the Legislature, however, to make the final decision. The agency was given the task of finding a private operator last year after the railroad's future became threatened because of budget constraints on the state level. The tourist train, which runs between Rusk and Palestine, narrowly escaped being turned into a static display last year by the Texas Parks and Wildlife Department, which currently operates it. Parks and Wildlife officials have said repeatedly that without additional funding, the railroad would have to be turned into a museum. Just in time, though, late last year, additional money was found to keep the train moving, at least through Aug. 31. Come September, however, the train could face the same fate unless action is taken to privatize its operations or allocate more funds to continue state operations. In its legislative appropriations request for the 2008-09 biennium, Parks and Wildlife is asking for additional funding for state parks in the form of more than $85 million of general revenue each year. The Texas State Railroad and Battleship Texas are not included in that $85.4 million request. Because of their size, Parks and Wildlife has decided to deal with them separately, requesting $11.8 million for the railroad for two years and $16.1 million for the Battleship Texas. Walt Dabney, state parks director for Parks and Wildlife, told commissioners during Wednesday's meeting that the railroad is "the largest and probably most complex unit of the state parks system." "You've been aware that we've been struggling over the last number of years to keep the train running ...," Dabney said. "We've kind of come to the end of the road." PRESENTATION As part of the information given to the committee on Wednesday, the operating agency supplied commissioners with the full RFQ as well as an economic impact study done last year by William J. Boswell and John L. Crompton of Texas A&M University. The study showed that the economic impact of the railroad on Anderson and Cherokee counties was $5.9 million in direct expenditures, $8.1 million in sales, $5.4 million in income to local residents and 157 jobs. The economic impact of the railroad on the state was estimated to be $892,000 in direct expenditures, $1.2 million in sales, $778,000 in income to Texas residents and 24 jobs, according to the report. The numbers are based on total 2006 visitation of more than 54,600 guests. "We are in a rural area," Presley said during the meeting. "Rural economies are not like the metropolitan areas. It is much more difficult to stimulate a rural economy ... This is one thing that can be done that is a great economic stimulus to our area." He said the advantages of such a public-private partnership include the chance that a private operator could triple or quadruple the ridership of the railroad and double the employment in the area, according to projections from some operators. They would also, he said, spend large sums of money on advertising, which the state does not currently do. "Those additional riders ... are not just going to ride the train," Presley said. "They bring them in for a weekend experience." Presley and members of the agency answered several questions from the commissioners, including ones about how such a public-private operation would be structured and the timeline of the RFQ. There were also several questions from Commissioner John Parker, of Lufkin, regarding the protection of the assets of the state railroad. According to the presentation, it is the group's desire to keep as many assets as possible in public hands and only lease them to the private operator. Any turnover of significant assets to the private entity would be done over a period of six to eight years. The entity would earn the assets as they met performance goals, Presley said. Parker, who has told the Tyler Morning Telegraph previously that he is opposed to giving away any state parks, asked what would happen after that six- to eight-year period. Presley said there would be buy-back privileges at the lowest offered price. He also noted that the rolling stock would not be allowed to leave the railroad, except on a temporary basis. Parker also asked about money the state might have to pay to the operating authority to subsidize or reimburse the private operator. The estimated amount could be similar to the $11.8 million legislative appropriations request, possibly about $11.6 million, according to the discussion Wednesday. Most of that money would be used to make repairs to the railroad, Presley explained. Officials have said the railroad needs about $30 million to $40 million worth of repairs and improvements. Presley assured that, "No one will get money without having it been justified or spent under the contract. The contract is going to be open and visible and ready for anybody to examine before the Legislature even votes." After the meeting, Presley said he hoped the commissioners took away from the presentation the idea that by "using a local public-private partnership, the railroad can be saved and improved significantly long term for the same amount of money as the state would spend to operate it for the next two years." "It would be a huge economic boost to our regional economy ..." he said of a private operator. Texas Parks and Wildlife Executive Director Robert Cook thanked Presley and the local group for their work during the meeting. "They are trying to help," Cook said. "They are trying to get an option out there, as directed by the Legislature, to determine if that option is viable. I think that's an important step." Joseph Fitzsimons, chairman of the commission, also expressed his gratitude for their work. "A lot of people talk," Fitzsimons said. "And your group actually started to work." http://www.tylerpap er.com/site/ printerFriendly. cfm?brd=1994& dept_id=226369& newsid=17746903
I'd hope they'll keep assets in public ownership. The possibility of them going to a private owner, makes me a little nervous. Boxcab E50
