First in a series
SHAMOKIN - In 1983, Consolidated Rail Corp. (Conrail) was abandoning railroad lines across Northumberland and neighboring counties because companies were seduced by the trucking industry. For the local economy, 3,000 jobs were at stake.
"Conrail was no longer investing. They were not maintaining, letting weeds grow between the tracks," said Jerry Walls, SEDA-Council of Governments (SEDA-COG) Joint Rail Authority (JRA) board chairman.
From that, the JRA was created as a public municipal authority under the Pennsylvania Municipal Authority Act, similar to a sewer, water or economic development authority. Eight counties (Centre, Clinton, Columbia, Lycoming, Mifflin, Montour, Northumberland and Union) represented in the JRA appoint two members to form a 16-member board.
Within the last month, Blair County has formally applied to become a part of the JRA as well.
"Most of the time, the counties try to find a shipper who needs and uses rail service from their county as well as another citizen as their representatives (on the board). That serves them by bringing the best of private and community perspective on the board," Walls said.
Walls, along with JRA Executive Director Jeff Stover and manager of public information Steve Kusheloff, discussed the authority at length during a Dec. 29 interview
at The News-Item. They were joined by retired longtime state Rep. Robert E. Belfanti, who expressed his support for the JRA operation.
JRA officials wanted to explain the authority's purpose and operation in light of the controversial resolution passed on a 2-1 vote by Northumberland County commissioners on Dec. 13 to seek the state's guidance on privatizing the local railroad system. Commissioner Vinny Clausi and his colleague at the time, Merle Phillips, who is no longer in office, voted in favor of the resolution amid claims the JRA has built itself into a multimillion-dollar agency with high-paid staff while taxpayers see no benefit.
The JRA, which pays a fee to rent space at SEDA-COG'S Lewisburg location, has two full-time and one part-time employee. Stover is paid $92,000 a year while another employee makes $54,000 and an administrative assistant makes $36,000.
Its railroads include the Juniata Valley, Lycoming Valley, Nittany and Bald Eagle, North Shore and Shamokin Valley. Together, the lines provide rail service to nearly 100 industries with more than 10,000 employees.
Public-private partnership
When JRA formed, it purchased the Conrail system using state grants. The only time money from member counties was used throughout the years was in 1984, when $50,000 - or 1.2 percent of the total project cost - was contributed by Centre County to acquire lines there, and in 1988, when $25,000 - or 2.4 percent - was contributed by Northumberland County to purchase Conrail lines that have become the Shamokin Valley Railroad.
They make the point about minimal county contributions in countering Clausi's suggestion that taxpayers should share in the authority's profit.
Once the original lines were purchased, JRA sought requests for proposals from different companies and awarded a five-year contract for the actual freight hauling service to North Shore Railroad Co.
"We have the public ownership of the infrastructure. The tracks, the right-of-ways, the land under the tracks, the bridges, the drainage, the engine, houses, rail yards - that's all railroad infrastructure and publicly owned," Walls explained.
It's a public-private partnership, where JRA is the owner and North Shore is the operator.
As part of the agreement, North Shore has to run the trains and serve the customers, maintain the railroad annually and market the service.
In 1989, the contract with North Shore was renewed for another five years. (The same year is when the Juniata Valley line was purchased by the authority.) In 1995, the contract with North Shore was renewed for another two years.
More contract renewals
Walls, a JRA member since 1996, spent 38 years as director of planning and community development for Lycoming County. When Conrail originally abandoned, his county stayed away from JRA because its lines had not yet been abandoned. However, it happened in 1995 to the "Williamsport cluster," and the county commissioners decided to join with the JRA. The lines were purchased for a dollar, but at the time they were not suitable for trains at 40 mph.
In 1996, North Shore entered into a 10-year agreement with the JRA, but this time with the promise to pay back a loan of $3.4 million the authority had used to upgrade its new tracks. It was a good deal for the authority, while North Shore recognized the opportunity for more business, too.
In 2007, when JRA and North Shore entered into its latest 10-year contract, it stipulated that the operator was responsible for maintaining the lines at a higher standard and, importantly, this applied to active lines and those with minimal to no traffic, including at the time the Shamokin Valley Railroad. Additionally, the operator fee was increased from five percent to 10 percent.
"There was a direct tangible value in exchange to extending the contract to 2017," Walls said.
Also in 2007, JRA hired a specialized, experienced track engineer to inspect every bit of the 200 miles of track twice a year to determine a maintenance program each year.
Walls said the improvements to the lines with minimal traffic played a key role in the JRA being awarded $1 million in federal and state grant money to construct a new siding and runaround to serve businesses near Ranshaw on the Shamokin Valley Railroad. When that announcement was made in December 2010, Belfanti said it was a "significant day" for the future of economic development in eastern Northumberland County, and described SEDA-COG as a "godsend" for its work in acquiring the grant.