The North Coast Railroad Authority reaffirmed its desire this week to restore railroad service in Humboldt and Mendocino counties. But with the authority facing a running deficit, ongoing lawsuits by environmental organizations, a potential $1 billion plus price tag, an unwilling freight partner and no secure funding source, authority staff acknowledged Friday that the road to railroad restoration will be very long and very costly.
“It’s a lot of smoke and mirrors and selling assets to keep the organization rolling,” North Coast Railroad Authority board member Richard Marks said Friday about the authority’s financial status. “... It’s really a miracle that the organization still exists.”
Marks said the authority’s decision to re-up its commitment to restore a northern rail line was a response to the authority’s freight partner, the Northwestern Pacific Railroad Company, telling the California Transportation Commission in June that it had no intention of operating a freight line north of Healdsburg.
At that same meeting, commissioners expressed concerns about the railroad authority running a yearly deficit of about $200,000 — sometimes resulting in some authority employees not being paid — and questioned whether the authority should consider submitting a shutdown plan.
This prompted some local entities including the Humboldt County Association of Governments, the Arcata City Council and the Humboldt Land Area Formation Commission to pen letters to the authority asking that they be included in any future discussions should the authority consider giving back its railroad easements to the state.
The concern was that the rail corridor could potentially be lost as a public right of way that could support projects such as the ongoing Humboldt Bay Trail.
“If that’s the way it’s going to go forward, we would like to participate because we’d like to keep that corridor in local hands,” Humboldt County Association of Governments Executive Director Marcella Clem said Friday.
The authority’s rail lines north of Willits have not been in operation since 1998 after they were damaged by El Niño storms, according to the authority.
The railroad authority’s Executive Director Mitch Stogner said Friday that repairing the nearly 100 miles of track in the Eel River Canyon alone could cost more than $1 billion and another $50 million for the track running from Scotia through the Humboldt Bay region. The railroad authority was created in 1989 by the state Legislature to maintain and expand rail service in the North Coast, but Stogner said that the state does not provide it funding to operate.
Stogner said that the authority is once again going to the state Legislature in the hopes that this time it will provide some funding. The most recent legislative funding efforts had been vetoed by Gov. Arnold Schwarzenegger, Stogner said.
“It’d be great if we can get some capital grants to repair the line,” Stogner said. “Step one is to get state support to fund the agency so we can maintain the line and pay the necessary amount to do that.”
Stogner said the Humboldt Bay rail line would likely be the more feasible restoration project and that the track could be used as both a freight line for the Humboldt Bay port as well as a tourism train around the bay.
Marks said he would like to see something done with the rail corridor right of way rather than having it continue to dilapidate and be used for homeless encampments.
“I hate to just see it sitting there dilapidated,” he said. “I think it needs to be an value added in Humboldt and right now it’s not serving that.”
Meeting in Eureka on Wednesday, the authority’s Board of Directors voted unanimously to pass a resolution stating it will continue to seek to funding to restore rail line service north of Willits.
When Stogner gave a presentation to the California Transportation Commission in June, he said the authority had no plans in the foreseeable future to operate trains north of Willits.
Stogner said that the resolution was passed after a representative of the Northwestern Pacific Railroad Company — former California Congressman Doug Bosco — told the commission that the company had no intention of operating freight north of Healdsburg.
Northwestern Pacific Railroad Company is a private partner with the authority and maintains a 62-mile freight line running from south of Napa to Windsor. Marks said Northwestern Pacific Railroad currently does not pay the authority to use the rail line until the company makes a certain amount of profits from its freight line per the terms of a 2011 contract. Marks said he would not disclose the amount of money the company would have to make. The authority is hoping to negotiate a new contract given the authority’s financial situation, Marks said.
The state has not provided any funding for railroad repairs since 2006 when it gave about $43 million in state and federal funds to repair 142 miles of track from south of Napa up to Willits, according to Stogner. The state also provided another $8 million earlier that year to repair culverts, bridges, levees and crossings on the authority’s entire 316 miles of railway running between Eureka and Novato, according to a previous authority press release.
Under questioning by commissioners, Stogner said that the authority had a $200,000 operational deficit that sometimes resulted in employees not being paid. Stogner said the company had been selling some of its property to make up for the deficit, but commissioners questioned how sustainable this would be.
Commissioner Jim Madaffer of San Diego called on the authority to submit both a shutdown plan and a viable business plan by October.
“Because it’s unconscionable to continue in this operation,” Madaffer said. “If you’ve got something that is operating that is not fiscally viable, then it should not continue in operation.”
Stogner said Friday that the authority is in better financial shape now than it has been in the past 10 years, but said that help from the state Legislature will be needed to continue their operations. The authority has been in discussions with North Coast Sen. Mike McGuire (D-Healdsburg), Stogner said.
“It’s not like we’re in dire straits now,” Stogner said. “... The point is there has never been a dedicated source of operating funds for the NCRA. We have been a self-help agency on day one.”
As for the shutdown plan, Stogner said he has since spoken to the commission and said that the authority is now planning to submit a business plan to the state by February.
Reached Friday, Madaffer said that should the authority not produce an acceptable business plan next year, his previous comments would a “harbinger of things to come.”
‘In the face of really impossible odds’
Another barrier to the railroad restoration project is ongoing litigation.
Stogner said in June that the authority has had to pay more than $500,000 in legal costs as part of ongoing lawsuits filed against it by the environmental organizations Friends of the Eel River and Californians for Alternatives to Toxics in 2011.
The lawsuits challenged the authority’s stance that federal law preempt it from having to conduct an environmental review under California law as part of its efforts to restore rail lines between Napa and Humboldt counties. The case went to the state Supreme Court, which sided with the environmental groups in July, though the authority also claimed victory. Stogner said they are still considering their options on what to do next. The authority can petition the U.S. Supreme Court to hear the case.
Californians for Alternatives for Toxics executive director Patty Clary said the Supreme Court has since remanded the case to the appellate court. Other than the lawsuit, Clary said the authority will have obstacles even trying to restore the rail line north of Windsor because of concerns about toxic chemicals, such as dioxin, in the railroad infrastructure presenting an environmental danger.
“So [the authority] basically had to pass that resolution in order to hang on to the easements and rights of way that they have,” Clary said. “Otherwise, they become pretty close to being what? — useless. ... The resolution is really nothing more than [the authority’s] attempt to hang on to the right of way in the face of really impossible odds.”
Authority board member and 2nd District Humboldt County Supervisor Estelle Fennell said that authority needs to keep all options on the table, and the resolution is one way of reiterating their charge.
“So long as this is a possibility, we can’t just close the door,” Fennell said.
Will Houston can be reached at 707-441-0504.