There are, City of Prineville Railroad manager Jerry Price told the city council during a work session Wednesday evening, only two options for the future of the rail line: "Either shut it down or continue operation."
>Ochoco Lumber Company, the city railroad's biggest customer will shut down and the mill will be mothballed, a suggestion that one person said the railroad might follow
Sometime ago, Mayor Steve Uffelman had requested a report from the COP-RR advisory committee which had been formed to study how the facility could become financially better off. That charge had been made prior to the announced closing of Ochoco Lumber mill and a reduction in the workforce at the area's other sawmill, Crown Pacific.
With those two operations shutting down or cutting back, and the loss of Craig Woodward's wood chip operation, the railroad's customer base was severely eroded. It so happened that when the mayor had asked for a report, it was Ochoco Lumber's John Shelk that was slated to make the presentation. That report had to wait while Shelk dealt with the closure process of his Prineville sawmill.
Uffelman had said when asked what kind of news he expected Shelk to bring to the worksession, that there could be some discussion about the future of the sawmill located a few blocks from the center of town. Shelk did not disappoint anyone.
"Ochoco will shut down as of August first - Ochoco has run out of logs," he said. "We thought we could get by another year, subsisting on private timber but even that)s getting hard to come by. It is not to be."
Shelk talked about a handful of timber sales complicated by critical elk habitat, critical bird habitat and, in one sale, the need to operate only when there was a certain depth of snow on the ground to be able to log. Therefore the decision was made to shut down.
"We decided to mothball the mill, not tear it down," he explained. "We are putting pressure on our Congressional delegation, on the Forest Service - everyone we can. (President George w.) Bush is going to restart the federal timber program but we don't know when. That could take two to four years."
Even in the most optimistic outlook, Shelk said he would be surprised if the mill could get up again in a year and a half. It would take, he explained, getting three or more timber sales under contract. "Enough so we would know we had a year's operation. We'll be down at least a year and a half and if the environmentalists are able to block those sales, in four years or so we'll start to dismantle (the mill.)"
Mothballing the railroad is something the city might look at, he added. "It's a rough choice: sell the rolling stock, give the right-of-way back to the government to turn it into 19 miles of bike path or mothball it."
Price disagreed. He said he thinks the city's options are limited to just two: "Shut it down or operate it. We can operate it with Crown Pacific's single shift and the Dinner Train and using interest from the railroad's reserve funds, have a sizable deficit at the end of the year."
To close it down would be more costly, he explained. The railroad is under the authority of the three-member Federal Surface Transportation Board. "As long as we have a customer, we're obligated to operate." Even if it means operating at a loss, the obligation is still there, he added.
In order to start the process of shutting down, and Price said he didn't believe the board would see any difference between shutting down and mothballing the line, and it would take time and be expensive. First, he explained, the city would have to file a petition with the board and pay a $15,000 fee. Legal expenses could run another $15,000 to $20,000. If nobody protested the closure it could take several months to get the boards approval, longer if anyone filed a protest.
And then there's the contract with the Crooked River Dinner Train, now in the third year of a 5-year contract. The dinner train has marketed 23 trips this month, Price told the council, and more next month and even more the month after. They have taken bookings well into the spring of 2002.
Plus there are the grants that the city agreed to in the 1980s to upgrade and keep the rail line running. According to the grants, if the rail road ceased to operate the city would have to refund the $2.4 million. Closing down the railroad would be more expensive that keeping it running.
When told that the advisory committee was to meet again later this week, Mayor Uffelman suggested that that panel look at the variables and try to put together costs for the two options, shutting down and continuing to operate.