Craddick's on board, finally
Speaker agrees to release $2 million to TSRA, contract with American Heritage salvaged
BY LELAND ACKER

A few more stamps and signatures will mark the end of a two-year long nightmare for employees and supporters of the Texas State Railroad as House Speaker Tom Craddick's office announced that his concerns have been satisfied, thus signaling the release of $2 million from the state to the Texas State Railroad Authority (TSRA). In a letter dated Nov. 29, John O'Brien instructed the Texas Parks and Wildlife Department to release the funds as soon as TPWD received a signed copy of the new contract between American Heritage Railways of Texas, LLC, and the TSRA. The move follows weeks of contract renegotiations, emergency meetings and support offered by the cities of Rusk and Palestine.

The $2 million was to be appropriated from the Texas Parks and Wildlife Department (TPWD) to the TSRA, pursuant to Article IX, Section 19.81(f) and Rider 25 of the General Appropriations Act for the 2008-09 biennium.

When the transfer came before the Legislative Budget Board in September, Speaker Craddick (R-Midland) raised concerns that the contract between the TSRA and American Heritage Railways of Texas allowed for some of the money to be used as a line of credit for operations. The Speaker's office contended that such a provision is illegal.

The contract was amended to limit the use of the $2 million for capital improvements, the cities of Rusk and Palestine agreed to loan the TSRA a combined $1 million to offer American Heritage as a line of credit and a provision was added to the contract

to give the TSRA right of first refusal should American Heritage decide to leave or sell the assets it has acquired from the state. Once those ammendments were agreed upon, then the Speaker's office agreed to direct TPWD to release the funds. Steve Presley, president of the TSRA, said another request made by Speaker Craddick, that the railroad be transferred to American Heritage en masse, was rejected by TSRA leadership.

State Sen. Robert Nichols (R-Jacksonville) praised the cities of Rusk and Palestine for stepping up to help the train.

"This agreement is a testament to the hard work of the Texas State Railroad Authority as well as the cities of Rusk and Palestine," Sen. Nichols said. "Because they simply would not give up, the train will receive desperately needed funding for its future."

Sen. Nichols also praised American Heritage for their patience.

"American Heritage stuck it out even when they had the option to walk away," he said. "Their willingness to work through this process shows their dedication to preserving this important piece of Texas history."

"I am proud that our communities were willing to fight for the train," State Rep. Chuck Hopson (D-Jacksonville) said. "I think, that, more than anything, helped get this agreement done today."

"I am pleased that we were able to find a solution that satisfies the TSRA, the private contractor (American Heritage) and legislators who were concerned about the use of public funds," Speaker Craddick said. "There were a number of legal and fiscal issues that played into concerns we had with the contract, all of which have been addressed in order to move forward with repairs to this historic railway."

Rep. Hopson said he was glad the agreement had been reached, but expressed frustration that the process took so long.

"This was an agreement we had coming out of the legislative session. We worked hard to get this done in a manner that all parties could be happy with, the state, the TSRA and American Heritage," he said. "Over the summer, this agreement was put in jeopardy for no good reason. The train is one of the most important sites in East Texas and I think some people got into the process late that didn't have East Texas as a priority."

During Monday's meeting of the TSRA, attorney Ron Stutes said he believed the $2 million would be wired to the TSRA by the end of the week.

The TSRA can then begin using the funds to obtain matching funds from transportation enhancement grants.

Monday, the TSRA voted to approve the changes made to the contract, accept the loans from the cities of Rusk and Palestine and approved guidelines for investing funds received by the TSRA.

Paul Schranck, vice president of American Heritage and general manager for the Texas State Railroad, reported more than 10,000 riders have been booked for the Polar Express runs, which are originating from Palestine every weekend through Dec. 23.

He also reported train runs were being made from Palestine to Maydelle. Full runs from Rusk to Palestine will resume Dec. 15.

The state railroad currently employs 28 full time staff members and 13 part-time seasonal employees.

Mr. Schranck said the 201 and 300 steam engines are in service, but the 300 will have to be taken out of service next fall when its hours of service expire. The 500 steam engine awaits transportation enhancement funds to have the boiler replaced.

Mr. Stutes said with the $2 million being released from the state and the $1 million being loaned from Rusk and Palestine, the TSRA is no longer in breech of contract.