End of the line?: Climbing costs, declining revenues may cut rail service

June 2012 Posted in Business

By Mary Owen

The prospect of cutting service south of Mount Angel by a short-haul, family-owned railway could negatively impact local businesses and the community.

“The rail line runs from the Union Pacific main line in Woodburn, through Mount Angel, Silverton, Aumsville and ends up in Stayton,” said Dan Fleishman, director of planning and development for the city of Stayton.

The Willamette Valley Railway is a short-line railroad, part of several lines operated by Mike and David Root. The Woodburn to Stayton line was leased from the Southern Pacific Transportation Co. in February 1993 and was purchased by the brothers in 1996, according to Wikipedia.

“The line runs to the NORPAC Foods plant on West Washington Street (in Stayton), and there are a couple of spurs in the industrial park, serving Wilco’s Ag Center, Redbuilt and Blazer Industries,” Fleishman said. “My understanding is the only active customers in Stayton are Redbuilt and Wilco.”

Wilco’s CEO Doug Hoffman said the majority of the coop’s dry fertilizer comes via rail.  Trucking in goods adds to costs, he said, but, “not enough to break the bank. As we ship all these trucks, we do put more wear and tear on our highways. We shouldn’t have to do that.”

Plant manager Brian Cowan said Redbuilt needs the railroad. “We have 90 folks here at our operation, we’re building the business back again, and we’ll continue to grow.”

He said Redbuilt is using a Salem rail spur until the Stayton line, closed due to rain damage earlier this year, reopens. “We don’t want to lose it,” Cowan said. “Once you lose the rail, it’s gone.”

If WVR terminates operations in Stayton, Fleishman said the community would be greatly impacted.

“Though Blazer Industries isn’t currently using rail service, their spur has the potential for expansion to serve the Doezler property, 45 acres of vacant land zoned for industry,” Fleishman said.  “Should rail service cease, the current shipments into these facilities would then have to come by truck, adding traffic to our road system.”

Fleishman attributed the possibility of track closure to two main factors: costs to maintain bridges and trestles along the 33.4 miles of track running from Woodburn to Stayton, and the steady decline of business over the past decade.

According information released in June 2011 by the Oregon Department of Transportation rail division, the Willamette Valley Railway shipped 2,034 rail cars for gross revenue of $720,000 in 2006. In 2010, WVR’s shipments had fallen to 783 cars for $466,000 of revenue. The railroad’s revenues per mile of track were among the lowest of the short-line railways in the state that year, Fleishman said.

WVR’s owner Dave Root would like to make repairs to the line and keep it open – if financially viable.

“At this time, there are just not enough car loads to pay for the line,” Root said. “We would need about 400, about $160,000 to $170,000 per year. Last year, we got about $80,000 of revenue from this line. Right now, we don’t see any increase, and we can’t maintain the lines without money.”

Additional bridge repairs along the Little Pudding River, between State Street and Macleay, as well as maintenance to Silverton’s bridge over Silver Creek add to WVR’s financial challenges, Root said. “We’ve put in for a Connect Oregon grant to fix the bridges, but we’re not sure we will be funded,” he said. “Money to paint Silverton’s bridge is just over $100,000. If we don’t get a grant, that will eat up our budget. Everything is multiplying.”

WVR has been approved for a matching grant of $60,000 from Connect Oregon for repairs to the line, with the state picking up $45,000 of that amount, but no agreement has been entered into, Root said. He expects a decision to be made within the next 30 to 60 days.

“By the end of June, we should know where we’re going,” he said.

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