No money to loan
Rail authority tries to salvage contract with American Heritage
BY LELAND ACKER

The Texas State Railroad Authority (TSRA) has until Jan. 28, 2008, to obtain $500,000 to loan to American Heritage Railways of Texas for operations of the Texas State Railroad, pursuant to the contract between the two organizations.

When House Speaker Tom Craddick nixed the initial agreement using part of $2 million funded by the Legislature for operations, the subject of Monday's meeting of the TSRA was alternate funding sources and contract renegotiations.

Boardmember Charles Hassell reported on the meeting that he, Board President Steve Presley, and TSRA attorney Ron Stutes had with Speaker Tom Craddick and his assistants on Oct. 30.

"He said he understood the intent was never for the $2 million to be used for operations," Mr. Hassell said. "It was to be used for matching grants."

Mr. Hassell said Speaker Craddick said he did not want to shut down the railroad, and if he did, he would have before now.

"To move forward, we'll have to put the $2 million out of our minds (for operational use)," Mr. Hassell continued.

With the $2 million not being available for operational use, the material breech of contract on the part of the TSRA continues. The remedies discussed at the meeting were renegotiating the contract with American Heritage and seeking alternate sources of funding.

"What did Speaker Craddick offer as a remedy for the day-one breech of giving American Heritage an inoperable railroad," Palestine Mayor and Ex-Officio Boardmember Carolyn Salter asked.

Several board members cited the $650,000 given by the state for repairs to which Mr. Presley said Speaker Craddick expressed concern that the funds were made available without his approval.

"So, he really wants to kill (the Texas State Railroad)," Mrs. Salter replied. "He's doing everything he can to kill it without saying, 'I'm killing it.'"

"We must speak complimentary of Speaker Craddick," Mr. Presley said. "He has been helpful in the past, he just sees it his way. He wants it to pass on his terms."

"It's amazing that we got an hour of his time," Mr. Stutes said. "His aides were knocking on the door trying to get him to go to another meeting."

"We need not flatter ourselves," said Boardmember Marie Whitehead. "He might not have wanted to go to that other meeting."

"Speaker Craddick's concern is that the $2 million be used only for capital improvements," Mr. Presley said.

Boardmember Bob Goldsberry made a motion, seconded by Dale Brown, to authorize a request to the Texas Parks and Wildlife Department for the sale of surplus railroad rolling stock and materials to help raise funds to bring the TSRA into compliance with the contract. The motion passed unanimously.

Other options for funding included offering the campground of the Rusk depot and two miles of track owned by the city of Palestine as collateral for loans to be taken out by American Heritage. A question was raised by Mrs. Whitehead as to whether the Rusk City Council would agree to authorize the use of the campground as collateral, to which Rusk Mayor Angela Raiborn said she believed there would be no opposition. Mrs. Salter said she expected cooperation from Rusk if Palestine was to offer its property.

The board agreed to proceed with contract renegotiations with American Heritage. Present for the meeting were members Presley, Hassell, Dan Davis, Brown, Goldsberry, Whitehead, Rusk Mayor Raiborn, Palestine Mayor Salter and Attorney Stutes. Board member Wesley Holloway was absent, and no one from AHR attended the meeting.