PALESTINE (KYTX) - Despite ongoing discussions of cleanup costs related to a Rusk diesel spill this past spring, officials with the Texas State Railroad Authority say negotiations to transfer railroad operations are moving smoothly.
TSRA board members met Wednesday in Palestine, Board Chairman Steve Presley said today.
Current Texas State Railroad operator American Heritage, which owns a limited 62.5 percent stake in the railroad with stringent ownership guidelines, is in negotiations to transfer that ownership and operations to Chicago-based Iowa Pacific Holdings.
On March 1, a diesel spill at the Rusk Depot led to American Heritage spending about $250,000 for cleanup. TSRA voted to reimburse American Heritage up to $150,000 to finish cleanup and for future remediation costs, including possible groundwater testing. So far, as much as $360,000 has been spent in total cleanup costs, Presley said.
Texas State Railroad leaders are asking for a $400,000 reimbursement from state lawmakers because railroad officials believe the leak was caused by a faulty fueling system installed by Texas Parks and Wildlife in the 1970s. Presley said the system failed underground, and during cleanup, it was determined that fuel had spilled long before it was discovered in March. However, Texas Parks and Wildlife is disputing any responsibility it might have in paying for cleanup.
"There is no point in pointing fingers or assessing blame," Presley said. "In my opinion, we just need to figure out how to get it paid for. Texas Parks and Wildlife has been very cooperative in the past, and I understand why they have their stance on the issue. While I understand, I don't agree with that."
At least one TSRA board member, Charles Hassell, wants to repay American Heritage for cleanup costs over time using new revenue from Iowa Pacific after the ownership transfer is complete. Presley said Iowa Pacific has larger cash flow and reserves through its freight business and has a history of turning struggling short-track rail lines into more profitable lines, so the TSRA believes that the Texas State Railroad could become more profitable within a few years of the transfer from American Heritage.
At the present time, cleanup costs are costing the railroad dearly. It is using funds it had reserved to acquire matching grants to improve and rehabilitate portions of the Texas State Railroad, including bathrooms and sidewalks at the Palestine depot.
The Texas State Railroad, the state's only historic steam engine, annually attracts between 70,000 and 80,000 guests, Presley said, but one trip on the 25-mile line between Rusk and Palestine uses about 400 gallons of fuel.
Without the $150,000, it could mean a lose of as much as $600,000 in grants, he said.
Presley is leaning on several state leaders, including state reps. Chuck Hopson (R-Jacksonville) and Byron Cook (R-Corsicana), State Sen. Robert Nichols (R-Jacksonville), Lt. Gov. David Dewhurst and Agriculture Commissioner Todd Staples, who have helped the Texas State Railroad in the past, in getting state reimbursement.
Without that reimbursement, it could leave the railroad at "somewhat of a dead end," Presley said. He added that the railroad provides an economic stimulus through jobs and area spending that have a better return on the state's sales tax and other revenues than most bonds or other types of investment.
"It's a good example of how public private partnerships can work for the good of everyone," he said.
