https://www.paypal.com/cgi-bin/webscr?cmd=_s-xclick&hosted_button_id=J92J2F8LA8554
Bitterroot Star Ads
Kearns and Sons

Bitterroot rail line to remain open for now

 

By Michael Howell

Last year, faced with the possible closing down of the Bitterroot Rail Line, Montana Rail Link made a contract agreement to keep the line open for one year if the shippers in the Bitterroot Valley could guarantee enough shipping for the rail company to break even on its operation costs and revenues. The shippers were willing but could not commit to enough business to meet the projected breakeven point.

Julie Foster, Director of the Ravalli County Economic Development Authority (RCEDA), helped broker a deal involving the County, the City of Hamilton and the Town of Stevensville. The three government entities agreed to guarantee up to $72,142 to meet the breakeven point. They agreed to share the potential debt with the county covering up to $42,142 or 58.42%, Stevensville up to $20,000 or 27.72% and Hamilton up to $10,000 or 13.86%.

The good news, according to Foster, is that the local governments’ share of the actual shortfall reported by MRL was only $25,000. That means the actual cost to the county is $14,603.84, Stevensville will pay $6,930.78 and Hamilton’s share will be $3,465.39.

As the first year contract approached expiration, MRL was seeking to come to some agreement with a commitment from the shippers and local governments to meet breakeven costs for the next year. But MRL informed the county at a meeting on March 25 that the projected breakeven gap for year two had grown by 74% to a projected shortfall of $467,000. Not only that, in subsequent years it was projected to be $586,000.

The County recently wrote to MRL, stating that “this number is not attainable for the local governments.”

The County also noted that it had talked with the shippers and once again contacted Alfred Forstall of the Surface Transportation Board regarding a TIGER V grant but the application is due by June 3. It also told the rail company that local governments would like to demonstrate to the public the amount of money that went into maintaining the Bitterroot Line, such as the number of new ties. The County discussed getting a breakdown of expense and maintenance work done during the past year of service. It has not received any response from MRL yet.

The County also asked MRL if it would consider giving them a shipping credit in the amount of the shortfall for the first year by getting credit for a future shipment of magnesium chloride.

MRL spokesperson Linda Frost said on Friday that the company is going to keep the Bitterroot Line open for now without a second year contract with the local governments due to a new contract for shipping in the valley. She refused to divulge who the new contract was with, but said an announcement would be forthcoming. She said the company was currently committed to running the line on a weekly basis. The line will most probably run every Saturday but could run on any day of the week so automobile drivers should be cautious at the many crossings in the Bitterroot Valley, said Frost.

There are no comments yet. Be the first and leave a response!

Leave a Reply

Please type the characters of this captcha image in the input box

Please type the characters of this captcha image in the input box

Wanting to leave an <em>phasis on your comment?