TSR Authority gets $2 million from TPWD
Train survives funding shortfalls, flooding and Austin politics
LELAND ACKER

Engine 7 is turned around on the Texas State Railroad's turntable during an excursion run Saturday. Full runs will resume in January, according to a press release from American Heritage. PHOTO: LELAND ACKER

Since the inception of the Texas State Railroad Authority (TSRA) and operating agency, President Steve Presley has had one objective, find a long-term funding solution for the Texas State Railroad. With a $2 million check from the Texas Parks and Wildlife Department (TPWD) being deposited in the TSRA's bank account Thursday, it appears that objective has been met. The TSRA's role now changes from saving the railroad to overseeing the capital improvements and operations.

"That was the main hurdle to jump," Mr. Presley said. "We still have a lot of work to do."

The TSRA had to work with a seemingly endless list of insurmountable obstacles to keep the train running. The state railroad faced a certain shut down on Jan. 1 after the Legislative Budget Board denied a legislative appropriations request from TPWD. However, funds found in oil and gas reserves yielded $350,000 to keep the train running until Aug. 31.

Texas State Railroad l Authority Boardmembers (from left) Bob Goldsberry, Dale Brown, Marie Whitehead and Charles Hassell display the $2 million check from the Texas Parks and Wildlife Department. The check marked a successful conclusion to the board's efforts to save the Texas State Railroad.

Throughout the spring, board members of the TSRA, then known as the Texas State Railroad Operating Agency, worked with lawmakers in the face of opposition in the leg- islature and from local groups to find a long term funding solution.

"Early on, we were concerned about the effect the opposition (to privatization from local groups) would have on the legislature. (Lawmakers) were getting mixed signals," Charles Hassell, treasurer of the TSRA said. "We visited with House Speaker Tom Craddick (R-Midland) and Lt. Gov. David Dewhurst, and it was made clear that the legislature didn't want to fund the train. They either wanted to transfer it to local hands or make it a static park."

The mixed signals slowed privatization efforts, as House Committee on Culture, Recreation and Tourism Chairman Harvey Hilderbran (R-Kerrville) declined to take immediate action pending further research. Former State District Judge Max Bennett also testified before the committee, opposing privatization and charging that the transfer of ownership did not fit the privatization bill's intent.

While lawmakers debated privatization, members of the operating agency worked out an agreement with American Heritage, making them the private operators of the state railroad. That contract was taken to the legislature for approval. The vote was taken in the final days of the session, just prior to an attempt by several legislators, including Byron Cook (R-Corsicana, whose district includes Palestine) to unseat Speaker Craddick.

The final passage of the bill that would allow the state railroad to be privatized added a few hurdles of its own.

"We asked for $2 million to be appropriated for operations and $10 million for capital improvements," Mr. Hassell said. "(The funding) came in a different format."

The funding approved called for $2 million to be appropriated for the transition of the train from TPWD to a newly created TSRA (which consisted of the board members of the operating agency), which could be used to obtain $10 million in matching grants.

"We had to go back and rework the contract with American Heritage," Mr. Hassell said. "That was time consuming. The way the legislation was worded, we had to hire grant expert Gary Traylor to help us understand what we were dealing with in regards to the $10 million in matching grants."

As contract negotiations continued, a major washout at Bean's Creek halted train runs, meaning when American Heritage would take over on Sept. 1, the train would be inoperable.

"I am very pleased American Heritage has stayed with us, particularly since the washout," Mr. Hassell said. "American Heritage assumed responsibility for that."

Armed with a $650,000 check from TPWD, American Heritage oversaw the repairs to the washed out areas throughout the fall.

Mr. Hassell said on Sept. 1, American Heritage took over the train with no runs being made, no income and found themselves in a position where they had to hire employees.

Then, Speaker Craddick's office objected to signing off on the $2 million promised in the legislation, raising legal questions about the use of those funds for operations.

The cities of Rusk and Palestine stepped in by offering a combined $1 million in loans while the contract between American Heritage and the TSRA was amended to insure none of the $2 million would be used for operations. The Speaker's objections were satisfied and the funds were received by the TSRA Thursday.

Mr. Presley said with the $2 million in the bank, the contract with American Heritage has been salvaged and the train will continue to run.

"Everything looks great," Mr. Presley said. "As the Thomas the Tank Engine event exceeded expectations, it appears the Polar Express will exceed ridership expectations as well, in its first year with limited advertising. In the future, these events will be much larger as they were hugely successful this year."

Mr. Presley said American Heritage is working on other special events which will take place in the spring.

"None of this could happen without the $2 million from the state or the loans from the cities," Mr. Presley said. "If either of those had not happened, the whole deal would have fallen apart."

The TSRA will now move forward with obtaining the $2.3 million in transportation enhancement funds, Mr. Presley said.