Railroad operatorís contract terminated

By Bill Rautenstrauch, The Observer December 21, 2012 01:04 pm

Wallowa Union Railroad Authority ends agreement with Calif. man who planned to bring steam locomotive to Northeast Oregon

ELGIN — The Wallowa Union Railroad Authority is without a contract operator following a decision by the board of directors to terminate an agreement with Court Hammond’s Sierra Nevada and Pacific company. 

In a report during the board of directors meeting Tuesday evening at Elgin City Hall, General Manager Mark Davidson said SNAP, which contracted to run excursion trains on the local line this year, owes money to WURA and to various vendors, and has failed to pay for insurance. Davidson said the contract has been breached.

“He was supposed to operate on our track and bring his equipment. He made an attempt at that but failed,” Davidson said. “We’ve consulted with our attorney and he agrees SNAP is in default on the contract on several points.”

Before coming to Northeast Oregon, Hammond ran the Yreka Western Railroad, an eight-mile excursion line between Yreka and Montague, Calif. The Yreka Western featured a 1915 Baldwin steam locomotive known in the railroad world as the Blue Goose or Locomotive Number 19. Hammond said he would use the vintage car on the Wallowa-Union Railroad line, which is jointly owned by Union and Wallowa counties.

The Yreka Western property, including the locomotive, turned out to be encumbered by various liens. Hammond ran some excursions this summer using WURA equipment, then in early September the season was cut short because of fire danger in the woods.

Davidson said Hammond told WURA he was getting ready to close a sale on the Yreka Western line and wanted to re-negotiate the WURA contract. Davidson added, though, that he had not heard from Hammond in about six weeks. 

“He needed to satisfy the indebtedness to WURA and to the vendors,” Davidson said.

Hammond did not come to Thursday’s meeting.

According to original terms of the contract, WURA was to get the first $15,000 earned by SNAP, and 3 percent of gross revenues over $300,000. After the contract was signed, it was amended so WURA would retain 33 percent of gross revenues, not to exceed $1,500 a month. That was done to help SNAP with cash flow problems.

With little additional discussion Tuesday the board voted unanimously to terminate the contract. Later in the meeting, board Co-Chair Mike Hayward suggested WURA schedule a meeting with Friends of the Joseph Branch, the volunteer group that helps run WURA’s excursions along the Wallowa River.

“Given what we’ve done here tonight, I think it’s crucial we schedule a meeting so we can quickly develop a game plan for what we’re doing,” Hayward said. The board set the meeting for Jan. 22 in Wallowa.

In other business, Davidson gave reports on tax credit opportunities and ongoing operations. The meeting ended with a tour of the multi-modal transit hub recently built in Elgin to serve as a headquarters for WURA and as a waypoint for the bus service.

A $1 million ConnectOregon III grant paid for construction of the 2,400-square foot building, a parking lot, a railroad siding and a bus garage. The building features a lobby, offices, a conference room, a ticket office, a space for a gift shop and a kitchen.

Davidson said the hub will open after WURA has a new operations plan.