Tulare Co vs RailAmerica (SJVR)

John Barnhill Apr 21, 2008

  1. John Barnhill

    John Barnhill TrainBoard Member

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    Tulare County fights to save railroad tracks
    Company wants to sell its rails as scrap metal

    BY HILLARY S. MEEKS • <mailto:hmeeks@visalia.gannett.com> • April 21, 2008

    Lindsay-based Tulare Frozen Foods saves $500,000 a year by using trains to
    carry 50 million pounds of frozen vegetables as far as Texas, Florida and New
    Jersey.

    That savings could soon disappear if San Joaquin Valley Railroad officials
    abandon nearly 40 miles of Tulare County track. The railroad company, owned by
    RailAmerica, has for the second time filed a federal request to abandon a
    9.2-mile segment from Exeter to Strathmore and a 30.57-mile segment from
    Strathmore to Jovista.

    The company's apparent intention is to sell the track as scrap metal, said Paul
    Saldaña, chief executive officer of the Tulare County Economic Development
    Corporation.

    "We think this is just the first of several abandonments that they'll file, not
    just on our railroad, but probably on other Rail America holdings throughout
    the United States," Saldaña said. "I think they probably figured we were the
    easiest ones to pick off."

    That would be a mistaken assumption, Saldaña said. Almost every incorporated
    city in Tulare County, and the county itself, have filed opposition to Rail
    America's request. The request is pending decision by the Surface
    Transportation Board.

    Calls to San Joaquin Valley Railroad and to Rail America's attorney were not
    returned.

    Effects of abandonment

    "This is a significant threat to Tulare County," Saldaña said. "It will rob us
    of the ability to put companies in that would use rail service in Lindsay,
    Strathmore, Exeter and Terra Bella."

    Tuff Stuff, a company that recently relocated to Terra Bella from Downey, has
    been watching the abandonment request anxiously. One of the reasons Tuff Stuff
    moved to Tulare County was the opportunity for expansion — something that might
    not happen if the rail is abandoned, said general manager Max Lee.

    "Freight is an issue that is pressing more and more," Lee said, "because the
    cost of gas is going up every day."

    Tuff Stuff uses low-density plastic polyethylene to make 100 percent recycled
    products, including farm buckets and dollies. The company, which needs trains
    to bring in the plastic it recycles, plans to open the Terra Bella operations
    in August, hasn't considered what it will do if the railroad tracks are
    abandoned, Lee said.

    "We will try to do what we can to stop it," he said. "We would definitely like
    [the railroad] to stay so we can all grow together."

    Abandonment also would be a blow to county efforts to fight air pollution, said
    Mike Ennis, Tulare County supervisor for District 5, which includes much of the
    area where the affected tracks are. More trucks would mean more pollution,
    Ennis said.

    Tulare County supervisors and cities in the county have been discussing the
    possibility of expanding rail service to help air quality, he said.

    But companies such as Tuff Stuff and Tulare Frozen Foods would likely use
    trucks if the San Joaquin Valley Railroad lines are abandoned. Jim Fikkert,
    Tulare Frozen Foods president, said the company would either:

    * Truck its frozen vegetables around the United States.

    * Truck them to another site where they'd be loaded onto trains, a process
    called "transloading."

    "Transloading would be a better option than all trucks, Fikkert said, "but it
    would still have a serious impact on cost."

    Tulare Frozen Foods is the only company currently using the South Exeter Branch
    tracks, Saldaña said, but that's because San Joaquin Valley Railroad introduced
    a $950-per-car surcharge in 2006.

    The surcharge has kept other companies away, he said.

    "It's very intentional on their part to drive away the business so they can
    essentially scrap the rail line," he said. "Their interest isn't in being a
    railroad company. It's in pulling off the rail and salvaging it."

    Tulare County got a consultant from Pennsylvania to see whether the tracks are
    up to par, Saldaña said. With the exception of some parts south of Terra Bella,
    he said, the tracks are in good shape.

    Area officials don't plan to give up on them.

    "I think rail is going to be the future," Ennis said.
     
  2. SP Cabforward

    SP Cabforward TrainBoard Member

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    I guess Oregon isn't the only place were RailAmerica is causing issues.
     
  3. BoxcabE50

    BoxcabE50 HOn30 & N Scales Staff Member TrainBoard Supporter

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    Hmmm. Seems to be something familiar here....

    Boxcab E50
     
  4. inch53

    inch53 TrainBoard Member

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    It sure does smell strange. It’s beginning to seem like Rail America is buying lines and making big promises, running them till there’s nothing left without major repairs. Then wanting to scrap out what’s left or trying to charge outrageous fees and large public investment.
    Worst of it is that, this seems to becoming more and more of a trend, with large investment companies and hedge funds.
    inch
     
  5. Mr. SP

    Mr. SP Passed away August 5, 2016 In Memoriam

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    From the sound of it RailAmerica/Fortress is only interested in handing out millions to a supposed child molester instead of investing in the rail lines they operate.
     
  6. Ironhorseman

    Ironhorseman April, 2018 Staff Member In Memoriam

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    RA has taken over the "being unreasonable" trophy from Uncle Pete, it seems. They certainly do not care a hoot about anything but the bottom line. :(
     
  7. YoHo

    YoHo TrainBoard Supporter

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    Well, they shouldn't care about anything but the bottom line...BUT, They should also realize what business they're in. They're in the business of running railroads and that's how they should be making their money. If they don't think that's a profitable business then I suggest they get out of it and give it over to someone who wants to run railroads.
     
  8. Frank Campagna

    Frank Campagna TrainBoard Member

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    I wonder why they got into the railroad business to begin with. Hedge funds are usually about turning a quick buck, while railroads tend to be long term investments. Scrap prices are at an all time high. We'll see how their visit with the Surf Board goes. Apparently the feds expect a company to run a railroad. Novel idea. Might just catch on.

    Frank
     
  9. friscobob

    friscobob Staff Member

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    There is an intense debate on this very topic on the Railamerica group at Yahoo. One of the folks is from Dallas, TX, and works for DGNO/TNER, while the other is someone who has been kicked off most of the groups he's been on, and whose own career as a railroader was short and unproductive. That debate, I'm afraid, is going to turn very ugly, with the outcome being the latter person will be booted off that list.

    Inasmuch as I'm not a fan of corporate decisions, I understand that railroads (ANY railroads) have to generate enough revenue to pay the bills, make payroll, buy diesel fuel, and keep the track in shape. If the return on investment ain't there, you just can't run a railroad for charity or just because you like to play with trains on a 12": 1' scale. Same in any business- if you ain't able to make money, no matter what you do, you close the doors. I'm sure we'll see accusations of "not putting the money back into the business, just keeping it for profit", but unless you are able to back up those accusations with cold, hard facts that can stand scrutiny even in a court of law, it's best to shy away from such statements.

    Granted, with skyrocketing fuel prices, it would seem cheaper to ship by rail than by truck, but the truckers and railroads are hit by high diesel fuel costs.

    I'm as pro-rail as the next person here, and I'd love to see the affected lines running again, even if by someone other than RA. And I dearly hope that a financial solution can be found (not just a sentimental one) to keep that line open and running. But if they can't, prepare for a very unpleasant fact.
     
  10. E&NRailway

    E&NRailway TrainBoard Member

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    With what RailGenerica is doing lately, it makes me happy they're not running the E&N anymore.
     
  11. JCater

    JCater TrainBoard Member

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    Once again history repeating itself. This story could have been written in the early part of the 20th century in many parts of America. As a business owner I do indeed understand that one must make money or go find something else to do. I also understand that as a business owner I must keep my eye to the future. We once had the greatest rail system the world had ever seen. We then tore it out because it could not compete with trucks and cars. We now regret that decision, especially in crowded cities with no public transportation aside from buses.

    Soon, very soon, freight and people will once again need rails to get places and the folks that own railroads would do well to look toward that future and find a way to maintain their railroads now. There should also be some help from the government since transportation is a vital national interest concern...let's not lose what little railroad we have left in this country!
     
  12. CAPFlyer

    CAPFlyer TrainBoard Member

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    Bob - thanks for the support over there BTW. I know most of the people on that group can actually think and understand the duality of railroading, but there's a couple who just have no desire to (I wouldn't say that they don't have the capability because I'm sure they do).

    As for the SJVR thing, I was running some numbers yesterday and guys, I'm sorry, but it's not about "milking" anything unless you're talking about the county and the customers milking a ton of money out of the railroad.

    Using the numbers that are provided in that article (which is nothing but a smear piece in most ways because it puts out a lot of supposition and "I know" without any facts to back it up), it's no wonder SJVR wants to abandon the line. If it were any other railroad, they'd be doing the same.

    For Tulare Frozen Foods, they claim to ship 50 million pounds of produce a year by rail. That sounds like a lot right? Okay, well, let's start converting that into carloads.

    First we take 50 million and divide it by 2,000. That gives us 25,000 Tons per year.

    Now, we look at a standard reefer. For this, I'll use a CryoTrans car - CRYX 5137.
    The car weighs 103,700 pounds (or just shy of 52 tons) and can carry up to 182,300 pounds (or 91 tons). HOWEVER, looking at the history of this car on our tracks, I can tell you that loads are more typically in the 80 Ton (160,000 pound) range.

    Okay, so using those numbers, let's divide 25,000 by 80 to get how many carloads they ship a year. That number is 312.5. In other words, they ship less than a carload a day out of that facility. That's a crew a day to move one car in and one car out on that 40 miles of trackage. See why they're not making wanting to continue service? That's a lot of time and money for very little return.

    As for the county EDC rep's statements, it's all well and good that they have companies interested in moving in, but how many cars a year will they move? How soon will they move in? Are they looking only at that location or are they looking at others? Has anyone contacted the railroad yet with any of this information?

    It's great that they're wanting to expand businesses in their county, but they have to make that case to the railroad (any railroad) that there will be an expansion that will make it feasible for the railroad to at least try to break even on their costs to keep the line open for any extended amount of time.

    In addition, there is no proof in that article that the SJVR has allowed the line to deteriorate, only that they want to abandon it. For example, the track that the UP & DGNO abandoned in Dallas last year along what was called the Levee Industrial Branch was in pretty good shape and we were doing tie replacement on it right up until the last car came out. But the track was abandoned because all the customers moved off after the City of Dallas decided that to put in their "signature bridges", they need the land of one customer (who sold it for a nice profit from their investment 30+ years ago) and the right of way of the track in that area, so it was a good idea for us to move the remaining customer to another location and abandon the track altogether than try to rebuild the ATSF line that connected to the levee just to serve 1 customer. Same here, Tulare can certainly move their operations if it's that big of a deal. Might suck for the county, but it wouldn't be the first or last time that a customer moved because of a shift in transportation availablilty.
     
  13. CAPFlyer

    CAPFlyer TrainBoard Member

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    Oh, one more thing - please stop using the term "Hedge Fund" when talking about Fortress. They aren't a Hedge Fund. They are an Investment Company like Fidelity Investments, CitiGroup Capital, and Berkshire-Hathaway. There is a major difference between a hedge fund and an investment company. A hedge fund is looking for short term ROI (quarterly & yearly). An investment company is looking for a long term ROI (typically 5-10 years). As such, an investment company's drive is not to get rid of unprofitability by divesting it. In the long run, it's better to take a short term hit if it's going to end up with a long term return.

    Thus, a company like Fortress, B-H, CitiGroup, Fidelity, etc., would rather put up a lot of money up front and fix the problems and take what was a flat growth company (like RailAmerica was before the purchase) and turn it into a good growth company. That way they maximize the value of the company when they get to the end of the investment period and go to sell off the company or spin it off into an independent (and getting a nice payout or stocks as part of the spin-off agreement).

    In this specific case, when you remove tracks, you eliminate all potential of making any money on that line, thus it is harmful to the long term investment in the company for the line to be abandoned and scrapped if there is any chance of it making a profit for the company in the future, so abandonment is something that is done only if there is little chance of acceptable growth along the line in whatever is determined to be the needed timeframe to begin showing profit on that line.
     
  14. Ironhorseman

    Ironhorseman April, 2018 Staff Member In Memoriam

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    CAPflyer - you have raised some good points with your last two posts. Thanks for the information. :)
     
  15. BarstowRick

    BarstowRick TrainBoard Supporter

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    Community Attempts To Do The Right Thing!

    Here you have a county and cities determined to keep the rails. As opposed to places like Hollister, Ca that has fought the SP railroad for years and now the UP and wants the companies located in Hollister, who ship by rails to find other alternatives. What more trucks in Hollister tearing up the streets...I don't think so? They've already discouraged DelMonte into literally packing up and leaving town. The rails there could also be used for commute to San Jose and San Francisco or better said all points north.

    Here Tulare county and the cities therein want the railroads. I wonder if they want them bad enough to file a petition to purchase the rails and operate them like the California Traction Lines of Lodi, CA. Of course that folded up along time ago. Still it would be worth it to these counties to take over the trackage and provide their own services.

    Sadly, they may find that it's just under the break even point when it comes to dollars and cents or is that sense? Noting the information shared by CAPFlyer.

    Just a thought.
     
    Last edited by a moderator: Apr 25, 2008
  16. ctxm

    ctxm TrainBoard Member

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    They don't have to pick up a single car everyday, maybe twice a week would do? At a $960 surcharge per car it seems like the railroad could make money moving three or four cars nine miles?
    Sure they county could forget about rail service and go all trucks but that would be a bad decision in a time of rising fuel costs and increasing population. The correct decision would be to figure out how railroads can make a decent income or convert them to a public service and run them at cost. Investment companies buying them to turn a profit are the worst thing that can happen, their motives are strictly profit based with no interest in the effects on the public so they don't have the expertise or the desire to make a railroad succeed if they can make more destroying it.
    At one time reliable rail service was considered important enough to the country to be regulated, cheap fuel made that unnecessary but expensive fuel is bringing back the need. Tulare county was the scene of "The Octopus" so maybe history is repeating it's self ! I wish them well and would love to see the valley laced with branch lines serving vibrant industries again.....dave
     
  17. friscobob

    friscobob Staff Member

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    Take it or leave it, here's my opinion, FWIW.......

    Chris-

    What you have said is pretty much what a retired vice president of rail operations of LTV and the founder & original owner of the Kiamichi Railroad in southeastern Oklahoma has told me.

    It's hard for railfans, such as most of us are here, to accept the possible loss of another railway line for whatever reason, or even an entire railroad (the Rock Island is the extreme in the latter case). Those who mention profitability vs, sentimentality are almost immediately hit with a wave of scorn, anger, disbelief, etc. I'm not a railroad employee, nor am I a regular reader of Railway Age. However, having taken Jack Hadley's words to heart (the fellow I mentioned earlier), I find myself trying to look at both sides of the argument. Is this a case of Homer Bedloe, the mean exec of the C&FW, trying to force the Hooterville Cannonball out of service? Or is this the sad fact of economics?

    I do know Portland & Western serves a lumber mill (Hull-Oakes) which is at the end of a branchline that is, to be kind, in ragged shape, thanks in large part to deferred maintenance from the previous owner (SP). At least once a week, a local heads down this branch to serve Hull-Oakes, and head back to Corvallis and Albany. The debate there is to either bring the line up to FRA Class 1 standards or abandon the line, forcing Hull-Oakes to ship by truck. Sadly, the housing slowdown and present economic situation may solve this problem most unpleasantly.

    How often does SJVR serve this branch? What is the timeline for the other company mentioned earlier to build on this line? Beteen the two, is there a possibility of keeping the line open, even with minimal service (once-twice a week) and enough maintenance to keep trains on the track?

    I know I'm gonna sound like a corporate stooge for saying the following, but I assure you I'm not, nor am I being compensated by RA or its subsidiaries. Nor am I saying this as a favor for somebody, or beacause I'm naive. Having said that, here goes:

    Railroads have been shut down, sold, merged, spun off, and abandoned almost since the first rails were laid. If the business isn't there any more, or the geography makes it difficult to operate a certain line versus, say, one with lesser grades, fewer tunnels & bridges, etc., the line will be abandoned. If another line can be used in favor of a certain line, up it comes.

    Have there been scoundrels and incompetents in the railroad front offices? Without a doubt- mention the name William Deramus III around me,, and stand back- my reaction is gonna be rather salty. Are the business practices of some railroads incomprehensible? Of course, even to industry insiders (which again, I'm not). These days, it seems convenient to direct dislike for railroad decisions to anonymous suits with bottom-line-itis, and admittedly some of the decisions do look like they came from such creatures (remember the UP trademark flap, and their inability to consolidate the traffic patterns of C&NW and SP after mergers of both companies?).

    Some of you on Trainboard do work for railroads, and definitely know more than I do, by the very fact you're there and I'm not. I'm OK with that, and bow to your experiences and railroad wisdom. But, last I checked, a railroad is a business, and its business is to provide transportation of goods and services (and, in the case of Amtrak, people) from one point to another in the best possible time at the best possible price. To perform this service, certain decisions have to be made on the amount of money spent on locomotives, rolling stock, personnel, track maintenance, and so on. If there are branch lines with lots of customers, obviously it behooves the railroad to serve this line often, and to keep it in good enough repair to allow operation. On lines with a smaller customer base, perhaps not so much, unless the business is very lucrative or the cargo is heavy (i.e. coal).

    I, along with a lot of you, find it hard to understand how a company based in far-off Florida can make decisions that affect the existence of a single line of railroad in California. Unless, of course, SJVR has enough autonomy to make these decisions, or is following directives from RA.

    But again, a railroad is not in business to play choo-choo for us- it's in business to move things. And if it cannot do so profitably, certain steps must be taken to stem the loss. Same as with an ordinary store- you open the doors and provide your service, and hope to have lots of black ink in your ledgers while paying the bills, employees, cost of more merchanside, etc. If you cannot turn a profit, you either do what you can to stem the loss, or close the doors.

    Again, I state that I hope a positive solution can be found to keep this line open, and that it can serve more customers, whoever is operating this line. And with fuel prices jumping every day, it seems to make more sense to keep a rail line in place. But if the shippers ain't there, and ain't gonna be there...............I don't need to finish this sentence.

    If anybody disagrees with what I said, no problem- I'm a big boy now, and I have broad shoulders and thick skin. :tb-wink:
     
  18. YoHo

    YoHo TrainBoard Supporter

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    I don't really disagree, but the problem with Railroads is that they are also a form of infrastructure. Once they are pulled up, it will be almost impossible to relay. And that has implications beyond the 5-10 year profitablility margins.

    Look at the Milwaukee Road Pacific extention or the afformentioned Rock Island. Both of those looked pretty useless as routes when they were pulled up, but People are kicking themselves that there isn't another pass over the cascades now. It would turn a profit. People are desperate for more capacity to the west and would love the Rock. Iowa Interstate is buying brand new locos to run Ethanol trains on their Rock Island track that was so marginal.

    Yes, it is a business, but it is an exceedingly long term business. Rail service is infrastructure as much as power and roads or Fiber comms backhauls. Tulare will suffer disproportionatly if the railroad is pulled up....assuming they intend to have and expand an industrial base.

    Hollister clearly isn't interested. That's their problem. Dallas too made a choice.
    And none of that takes into account the push for more fuel efficient transportation. Now is the time when railroads should be holding on to potential capacity. Why doesn't RA help Tulare promote industry there and make the line profitable?

    Also, to correct CAPflyer, Fortress is an invesment group like Citicorp, that is true but they do in fact have multiple hedge funds in their portfolio.
     
  19. CAPFlyer

    CAPFlyer TrainBoard Member

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    Hedge funds in the portfolio and being one are two different things through. :)

    As for where the decision for stuff like this comes from, it's mostly from the local (railroad) level. Corproate will make sure that the due dilligence has been done and that there's not any other option, but beyond that, most decisions are left up to the individual railroads (as long as they're covered in the budget).

    Finally, I'm sure that the SJVR's Marketing department has been working with customers trying to expand the line. They would be remiss if they haven't. The question is, how truthful are the EDC's claims about their efforts? I have no doubt they're trying, but if the SJVR isn't seeing any prospect for growth, those efforts must not be bringing much additional volume. That is why I raised those questions before. The EDC guy is claiming to have more customers, but no indication as to how much they'd use the railroad. The railroad can't make commitments to keep the line open without some idea how much traffic they'll get.

    Finally, on the issue of going only a few times a week. That's certainly a possibility in some cases, but with refrigerated cars (like what the customer in the article uses), you have a specific amount of time to get those cars from when they're loaded to the destination and you have to ensure that the reefers have fuel in them to keep refrigerated, so they're very labor intenstive to take care of. As well, just because you only go out 2 or 3 times a week, it still means that you have to maintain the track, the signals (which can be VERY expensive, especially when it's wet), and inspect it to ensure that things like switches aren't tampered with and the rail is safe to run over, so your cost savings is only somewhat mitigated by running fewer times because you have less traffic which means more chances for things to break (if it doesn't get used, it tends to be more prone to failure as metals like being worked out to keep their strength).
     
  20. John Barnhill

    John Barnhill TrainBoard Member

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    [​IMG]
    CHRISTIAN PARLEY/FRESNO BEEBoxcars remain idle between Lindsay and Strathmore on Tuesday. San Joaquin Valley Railroad has filed a plan to abandon 39 miles of line in Tulare County.


    Tulare Co. resists rail line cut
    Company's plan to quit 39-mile route could stall small towns' economies.
    By Tim Bragg / The Fresno Bee
    05/13/08 23:50:45

    EXETER -- A railroad company's plan to abandon a 39-mile rail line could stall economic growth in this small town and others along the route, Tulare County officials say.

    The move also has Valley transportation experts worried that more rail lines could disappear, which could hurt development of mass transit and efforts to reduce pollution.

    "If they come in and pull up the rail and ties, it's gone, and we can't get it back," said Tulare County Supervisor Mike Ennis, who represents areas where the rail line operates. "Rail access is important to attracting more businesses to the county."
    Officials at Tulare Frozen Foods, which packages frozen broccoli, cauliflower and spinach at the former Lindsay Olive plant, said it had planned to ship 150 carloads on the rail line this year.

    The company ships about 70% of its product by rail, said Jim Fickert, the company's chief operating officer. If the rail line is abandoned, the company, which employs about 150 people in Lindsay, would have to change the way it does business, making future Lindsay expansion unlikely, he said.

    "It would double our transportation costs if we had to do it all by truck. It's something we can't handle right now," Fickert said
    Exeter-based San Joaquin Valley Railroad filed a plan to abandon 39 miles of rail line that run along the county's east side between Exeter and Jovista near Kern County. The company operates about 200 miles of rail lines in Fresno, Kings, Kern and Tulare counties.

    Railroad company officials, through federal government filings, say the 39-mile portion that serves Ducor, Exeter, Lindsay, Porterville, Richgrove, Strathmore and Terra Bella is not economically viable, and too difficult to sell.

    According to paperwork filed by the company, abandonment would allow the railroad to avoid annual operating costs of about $119,765 for the 39-mile section. It also could sell the used rail, ties, spikes and other materials for about $760,000. Only one customer, Tulare Frozen Foods, remains on the entire section, according to the railroad.

    Railroad officials in Exeter and at the Boca Raton, Fla., headquarters of its parent company, Rail America Inc., didn't return calls seeking comment.
    Tulare County officials oppose the idea and will conduct a study to see whether there is a way to save the rail line, while seeking to delay abandonment proceedings for 90 days, to determine whether a deal is possible.

    The federal Surface Transportation Board is charged with balancing economic burdens on railroads with the public's need for service. Permission usually is given to abandon unprofitable rail lines, though public agencies and private parties can force them to be sold instead.

    Board officials declined to comment on the San Joaquin Valley Railroad's abandonment application, citing a policy against commenting on such matters before the board makes a decision.

    But the board's Web site shows it approved the railroad's application for a shortened abandonment process for a 9-mile portion between Exeter and Strathmore. A decision on the rest of the line will take longer because of environmental concerns.
    The board could make a decision as soon as next month.

    Valley counties that have branch lines served by San Joaquin Valley Railroad are keeping close watch on Tulare County's efforts.
    "We're interested in preserving any kind of opportunity for economic development in the area," said Clark Thompson, a planning coordinator with the Council of Fresno County Governments. "We want to maintain the rail corridors we have for future transportation use. Even if there's no freight activity, we want to preserve them for a possible passenger rail system as our communities continue to grow."


    Thompson said Fresno County has lost lines that served Clovis, Orange Cove and Parlier. If more Fresno County abandonments are filed, officials would consider pursuing a challenge similar to Tulare County.

    Paul Saldaña, president and chief executive officer of the Tulare County Economic Development Corp., said he hopes Tulare County can reach an agreement to purchase or lease the line.

    Ted Smalley, executive director of the Tulare County Association of Governments, said at least five companies have contacted local officials about buying the line.
    "If people are willing to buy it, it means the rail line has a financial viability," he said.
    Saldaña said at least 12 companies are interested in future use of the line if the cost is reasonable.

    "We have a number of clients who are requesting rail service as a precursor to locating here," he said.

    The issue, Saldaña said, is a $950 surcharge on each car shipped. The railroad, in the abandonment paperwork, said the surcharge pays for rail maintenance on the line south of Exeter.

    Tuff Stuff Products came to the area on the promise of rail service. The company, which makes plastic pellets and products such as floor mats, moved into a former packinghouse in Terra Bella.

    General manager Max Lee said the company could ship four times as many pellets in a rail car than in a single truck trailer. But because of current surcharges, shipping by rail is not cost effective for the company.

    "With [rising] diesel rates, it's become a lot more expensive to ship," Lee said.
    County officials said they hope the federal government will be sympathetic to keep the line open as an economic engine in an area with high unemployment.
    "I haven't heard a train whistle in Porterville in a couple of months," Ennis said. "I hope we didn't hear the last one."
     

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