Rail authority stands ready to oversee repairs
BY LELAND ACKER

PALESTINE - The Texas State Railroad Authority and operating agency met Wednesday to discuss working with American Heritage Railways, Texas Parks and Wildlife Department (TPWD) and the Texas Department of Transportation (TxDOT) to facilitate the transfer of the Texas State Railroad to the rail authority and to discuss track repairs.

"American Heritage is still willing to pursue the option of them taking responsibility for repairs," Boardmember Bob Goldsberry said.

Board member and President Steve Presley said, "It appears TxDOT funds will be available to fix the washouts. There is up to $5 million in that pot."

Mr. Presley was referring to TxDOT funds set aside to repair park roads.

"State Sen. Robert Nichols (R-Jacksonville) found it in the (state) constitution that a railroad is a road," he said, explaining how park road funds could be used to repair the washed out track.

"This is a great day in the history of the Texas State Railroad," said board member Marie Whitehead.

Mr. Presley said repairs to the track will not be made until after Sept. 1, according to reports from HDR Engineering, a firm hired by TPWD.

The rail authority requested the responsibility of repairing the track from TPWD, who would have to follow certain bidding procedures. Board member Dale Brown noted that if permission to repair the track were given to American Heritage, they could do the capital improvements. The rail authority would be reimbursed by TxDOT for the improvements and no bidding process would be required.

"American Heritage deals with this a lot," Mr. Presley said. "If we give them authorization, they will fix the tracks."

Mr. Presley mentioned a landslide at the Durango Silverton Narrow-gauge Railway, which included "giant boulders" falling on the track.

"They cleared it off in a week," Mr. Presley said.

Regarding the final agreement between TPWD and the rail authority regarding transfer of the ownership of the state railroad, Mr. Presley said the preliminary draft has been given to the Legislative Budget Board (LBB). He said the final provisions should be approved soon.

The rail authority voted to authorize Mr. Brown to seek proposals from area banks to be the rail authority's depository.

Board members showed optimism about the financial future of the railroad. The rail authority will receive $2 million after Sept. 1, plus another $2.3 million is available in Tx- DOT funds. Mr. Presley said grant writer Gary Traylor will try to convince TxDOT that the $2.3 million can be used for capital improvements.

Loans from those funds will be issued to American Heritage for the initial operational cost and capital improvements. As the funds are repaid, the funds will then be used to secure an additional $10 million in matching funds.

Board member Dan Davis made the motion to send a letter to the Lt. Governor to outline the rail authority's cash-flow formula. Mr. Goldsberry seconded the motion, and it was approved by a 4-0 vote.

Mr. Presley said the worst possible case scenario is that the railroad might run out of funding and close in three years. He said there was about a one-percent chance of that happening. Even with the worse-case scenario, the train would outlive the Sept. 1 closure date set by the state. If that were the case, Mr. Presley said additional funding could be sought.

Mr. Presley emphasized the more likely scenario is that the train will run for years to come.

"We know how to anticipate problems, but American Heritage knows how to solve problems and keep trains running," Mrs. Whitehead said.

Mr. Goldsberry said if the $10 million in matching funds were not available, the LBB has hinted that it could take the funds out of TPWD's budget and give it to the rail authority.

"With the current cash flow, everything can work for a couple of years," Mr. Presley said. "We have $4.3 million to work with."

Lori Kastrop, newly hired marketing manager for the state railroad, was introduced to the rail authority. She said the current focus is advertising Thomas the Tank Engine.

The plan involves internet advertising, the distribution of rack cards, newspaper ads and promotions, and radio ads and promotions.

Ms. Kastrop is a 1999 graduate of Palestine High School. She graduated with a Bachelors of Business Administration degree in Marketing from Texas State University in San Marcos in 2003.

Before adjourning, the rail authority voted 4-0 to take no action toward dissolving the Texas State Railroad Operating Agency.

Attending the meeting were board members Mr. Presley, Mr. Davis, Mrs. Whitehead, Mr. Brown, Mr. Goldsberry and TSR Marketing Manager Ms. Kastrop. Absent were board members Wesley Holloway and Charles Hassell.