Once City of Prineville Railroad paid everybody's property taxes and for many years, whenever the city fathers needed extra cash, there was the railroad's reserve fund to tap. However, right now that part of the city's operation is in a very delicate situation.
>Ochoco Lumber Company's announced closing will have a huge impact on many people and possibly a devastating effect on a piece of local pride and Crook County history
The announcement that Ochoco Lumber Company was to cease operation hit Jerry Price, COP-RR's manager, hard. Last year, the sawmill comprised about 45 percent of the railroad's business. So far this year, through the end of May, the mill represented 55 percent of the freight carried over the railroad's 19 miles of track. Losing that amount of traffic is a serious factor to consider for the railroad's future.
For many years, Prineville called itself "The City of No City Taxes." It was the only incorporated town in the United States that collected no taxes. The railway paid all costs of city government.
The railway paid - totally or in part - for a lot of other things in Prineville, too. City Hall, for example, was built with railroad money. Railroad money also went into upgrading the street lighting system, the city swimming pool, the sewage disposal system, park and recreation facilities and the paving of almost all of Prineville's streets.
Early in 1986, the Prineville Railroad loaned a private company $100,000 to build a new moulding mill in Prineville. Only access to railway funds allowed the city to swing such a deal, which brought many new jobs to the community.
Even in more recent history the railroad continued to benefit the community. In the early 1990s, Prineville found itself facing a major environmental problem. The federal government warned the community that the treated waste water it was putting into the Crooked River was too high in nitrates. Fix the problem, the EPA said, or we'll shut your wastewater treatment plan down. Using federal grants and loans from the railroad's reserve fund, the city built its popular Meadow Lakes Golf Course.
Price said that right now, the fund has about $5 million invested. Without the income from Ochoco Lumber Company, the only way to keep the railroad running will be to dip into that fund.
"That has been my philosophy all along," he explained, "the reserve fund was there for this kind of thing."
With a 38-year history in railroading, Price said he's seen the peaks and valleys of the business before. "It's important to have a large reserve for this type of situation," he believes.
With the income from the investments, Price believes the railroad can continue to operate at a limited capacity without touching the principle. "We'd be riding a fine line, but we could do it."
Price quickly added that he hasn't talked with the mayor or city council about all this yet. City Administrator Henry Hartley said he expects to hold a work session on the subject of the railroad's future next month.
"It's a delicate situation," Price continued. "If Crown Pacific were to close, and given the present timber industry that could happen, then the City of Prineville Railroad would go down."
The railroad moved 1,977 carloads across the tracks last year, he pointed out, adding that more than 500 of those were from Crown Pacific.
In the worst case scenario, what would the railroads option be if Crown Pacific were to close? "It would be the city council's decision, of course," Price answered, "but I would expect they would file for abandonment with the federal government."
Closing down something like a railroad isn't a simple thing. One doesn't just sell off the rolling stock, if a buyer could be found, and pull up the rails. Price explained that the Surface Transportation Board, once known as the Interstate Commerce Commission, would have to give their authority. It is a long, drawn out process, he said.
Looking at the worst thing that could happen for the railroad, Price said there are limited option. The rail line has obligations to other local companies to fulfill, including the Crooked River Dinner Train.
"He's been in here already, wanting to know what will happen," Price said. "I told him we'll get you through this year, but we don't know about after that."
With a history that goes back nearly a hundred years, the City of Prineville Railroad has seen the peaks and valleys before. In the early years it ferried passengers, freight and cattle. Then as the popularity of motor vehicles grew, fewer people rode over to the station near Redmond and passenger service was dropped. The city continued to back the railway through the depression years until the need for lumber grew and the situation turned around. In 1938, Ochoco Lumber and the Alexander-Yawkey Lumber Co. began operating in Prineville. As the yellow pine from the Ochoco Mountains moved through Prineville to market, it was on the city's railroad it moved on.
The big mills saved the railroad, but now it appears that the rail line is fast approaching a valley. Questions are being asked and answers will have to be found.