July 30, 2001 11:00 pm

By Gary Fletcher

Observer Staff Writer

ENTERPRISE A new development that could save the Elgin-to-Joseph railroad line may be considered at tonights hearing to grant a permit to pull the 62.58 miles of steel tracks.

In the latest twist of a more than four-year struggle came Monday with word that the Oregon Department of Transportation Rail Division petitioned the federal Surface Transportation Board to rule against abandoning the line and to set the price at $1.89 million so that the state can purchase it.

A Wallowa County Planning Commission hearing at 7 oclock tonight will again consider a permit to salvage the rail. The applicant is Klamert Railroad Salvage of Silesia, Mont. Klamert has put down more than $1 million on a reported $2 million deal to buy the rails.

Planning Department Director Bill Oliver said the commission could approve, disapprove or delay its verdict on the permit until the Surface Transportation Board makes its decision on the abandonment.

Klamert began pulling spikes to remove the rail in Joseph in June but stopped when the county threatened an injunction. The county said the salvage company would first have to get a conditional use permit. Klamert cooperated and applied for the permit.

Hearing notices were sent to 420 owners of property adjacent to the line.

In a July 27 letter, the state Transportation Department submitted to the federal board a petition to reopen the March 12, 1997, abandonment decision.

Among the reasons cited were:

To recognize the offer of financial assistance when the Legislature authorized $2 million in lottery-backed bonds to help buy the line from Idaho Northern and Pacific Railroad if a deal could be struck.

The Joseph line owners were asking $7.2 million and had refused some earlier offers.

Circumstances have substantially changed since the abandonment order. ... The loss of one major sawmill led to IN&Ps decision to request abandonment authority, said the petition. The subsequent owners of the other two mills in Wallowa County recently reopened them and want to import logs and export lumber, both by rail. Wallowa County Grain Growers and others are interested in rail service, the petition said.

The lines value is another changed circumstance, the petition said. IN&P averred that the rail line had a net liquidated value of $3.7 million. The state Parks Department hired a professional firm, which appraised the line, that on an aggregated basis was worth approximately half of IN&Ps stated value and establishes a benchmark of $1,894,295 for an offer of financial assistance.

The vacation order automatically expired in March 1998 because the abandonment was not completed, consummated and noted to the federal board within one year. The railroad did not exercise its option to extend the abandonment order.

Environmental concerns include an in-stream work window from July 1 to Aug. 15, typically a time when there are no anadromous fish spawning, or eggs incubating in stream gravels. That window of time was apparently reversed by the federal board in its decision document. The order now says work cannot start until after Aug. 15.

Another environmental concern is the changing circumstances not dealt with in the order. Since then, at least two other species have been declared endangered. They are steelhead and bull trout.