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Observer 11/24/14

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Home arrow News arrow Local News arrow RAIL LINE PURCHASE RAISES QUESTIONS

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RAIL LINE PURCHASE RAISES QUESTIONS

By Alice Perry Linker

Observer Staff Writer

ENTERPRISE — A Wallowa County plan to buy a railroad received mixed reviews during a public hearing Monday, while, in Salem, state agencies said a new organization will be required to accept state funds set aside for the railroad purchase.

The Oregon Attorney General's office said that Wallowa and Union counties must create a separate entity to accept and administer the $2 million allocated by the 2001 Legislature to buy a portion of the Idaho Northern and Pacific Railroad. The entity must be made up of a board of representatives of each county and must operate independently of the counties' governments. Formation of the new organization is expected within a couple of weeks.

The new organization must hold public hearings before the state releases any money, whether in the form of a loan or a grant. Monday's discussion centered on the line from Elgin to Joseph, which was abandoned in 1994.

Wallowa County Commission Chairman Mike Hayward said that testimony received during Monday's hearing will become part of the public record for the new organization, and he does not expect those who testified to be required to reappear.

Hayward said he was notified Friday afternoon of the state's decision to require a new organization, but he said the county decided to proceed with the hearing because a number of people had said they wanted to testify. Another hearing is scheduled for 9 a.m. Monday.

Wallowa County has prepared a confidential letter of intent to present to the railroad and is expected to release about $500,000 in earnest money to back up the letter. An agreement is expected within two weeks, according to a news release from the county.

Several Wallowa County residents asked to know more about how the railroad would be managed and maintained.

"I'd like to see the economic study," said Pat Wortman, a former county commissioner. "We haven't been able to confirm the use. All who were asked, ‘Would you ever use it?' have said ‘probably,' or ‘not sure.'

"I'd like to see that we are not encumbering our county funds."

Doug Tippett, a long-time rancher, said he is opposed to rail acquisition at this time.

"Who would operate? At what cost? Who is going to operate? Don't tie us to this albatross before we answer these questions," he said.

Negotiations, including economic and financial information about Idaho Northern, are confidential under an agreement between the two counties and the railroad.

Other Wallowa County residents agreed with Wortman that more information about costs and maintenance is needed, and a few said that grain growers will not use rail to ship their grain out of the county.

Nobody from the two existing Wallowa County mills testified.

"If a railroad is profitable, why isn't private industry running it?" asked Dale Potter. "We have no business plan, feasibility study, no economic plan. (Congressman) Greg Walden, R-Ore., says there's no money for something like this."

Some in the audience supported the railroad purchase, citing the number of jobs that could be created and a potential economic boost to the county.

"I think this means jobs here," said Ralph Swinehart, an engineer. "The line is in very good shape, and mill people say it is essential to haul logs in."

Two Union County residents, including Marc Stauffer, an Elgin city councilor, supported the railroad purchase. Stauffer cited Elgin's growing industrial park as a potential user of rail.

"Dollar for dollar, rail is cheaper than truck," he said.

Wallowa County commissioners have approved borrowing $500,000 from the county's public works fund to provide the earnest money required by the railroad. The money would be repaid after the state releases its funds.

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