SUNBURY - Northumberland County Commissioners Vinny Clausi and Merle Phillips want the state attorney general to study whether the SEDA-Council of Government Joint Rail Authority (SEDA-COG JRA) should be dissolved in favor of privatization of the local railroad system.
They presented their case at a special meeting Tuesday in which they said JRA, with support from public funds, has built itself into a multimillion-dollar agency with high-paid staff while taxpayers see no benefit. The commissioners also said the authority - founded in 1984 to save local rail lines - has outlived its intention and is now, in fact, competing with private industry.
With news of the bold resolution having leaked out late last week, the meeting room at the county administration building was filled. Among the 30 in attendance were those with ties to the authority.
"Why is everybody concerned? Because the gravy train is going to end?" Clausi asked.
"We're just asking him (the attorney general) to look into it. I don't know what everyone's excited about; they may rule against it," Phillips said. "The profits are there, the money is there and the taxpayers don't see a dime of it."
The two top men from SEDA-COG JRA, meanwhile, presented their case for keeping the agency intact.
'Excessively profitable'
According to the resolution, JRA, which is made up a board of governors and seven counties (Centre, Clinton, Lycoming, Mifflin, Montour, Northumberland and Union) purchased abandoned Conrail lines for $4.1 million in 1984 with the "sole intention of preserving the existing short rail service." The resolution says the county "recognizes that the rail lines have become excessively profitable and realizes that no monetary compensation has been garnered from the authority."
Commissioners said the authority was successful, increasing traffic on the rail lines from 1,900 carloads in 1986 to 32,000 in 2010, with further expected growth generated from the burgeoning Marcellus Shale industry.
Furthermore, the resolution states, the authority has built assets totalling more than $40 million, with an annual profit of more than $1 million and more than $5.4 million in surplus in 2010.
The appointed operator, North Shore Railroad Co., an independently owned private firm based in Northumberland, operates under a no-bid contract and has capital projects funded by the taxpayers. It has amassed assets of more than $9 million and profits of $3.9 million, with nearly $6 million in surplus in 2010, according to the commissioners.
No one from North Shore Railroad spoke publicly at the meeting and no one from the company returned a call seeking comment later Tuesday.
Concern from Bridy
Commissioner-elect Stephen Bridy was first to speak during the public comment period, asking the commissioners if anyone was already interested in purchasing the rail lines, to which the commissioners said there wasn't.
"We are inviting the attorney general to see how the taxpayers could benefit. We work for the taxpayers," Clausi said. "Let's not mumble or jumble. We don't favor anybody."
Bridy said he was concerned the move could increase shipping charges for businesses that use the rail lines and put more tractor-trailers on the road.
Clausi countered by saying no one knows what the outcome could be, and it could decrease shipping charges.
SEDA-COG JRA Executive Director Jeff Stover and board Chairman Jerry Walls both spoke directly to the commissioners.
They said there were inaccuracies in the resolution's facts and they would be willing to meet with commissioners to clarify matters. They also provided the commissioners and public with information regarding the operation.
They said the authority doesn't have the kind of surplus the commissioners are claiming, noting its money goes into matching grants and rail projects.
Clausi said the authority had budgeted $22,000 for food and Christmas packages each year and too much money for salaries. When he asked Stover how much the 2.5 employees made, Stover said he made $92,000 a year, another employee makes $54,000 and an administrative assistant makes $36,000 a year.
Stover and Walls also objected to the implication that taxpayers don't benefit from the authority.
"I respectfully disagree. It's evident we provide them benefits by providing rail," Walls said.
"With all due respect, we have done well for a reason," Stover said. "The model we have is good, and it's getting better."
Lawyers calling
More than once, Clausi questioned why they were there, asking if they had something to hide for fighting so hard against the county's efforts. He also noted when the news broke the county was going to pass the resolution, he had many calls from different lawyers.
"The way I see it, as soon as you touch someone's pocketbook, they come in and protest," Clausi said.
Despite their efforts, Clausi told them he was not going to change his mind.
"We want to see our fair share. Are we saying you're doing something wrong? No, but it's our right to ask the attorney general to come in and investigate to see if it can be a better job," Clausi said.
Sawicki objects
The commissioner kept that promise when it came time to vote.
Clausi, who won re-election in November, and Phillips, whose term ends in a few weeks, made and seconded the motion to adopt the resolution.
Before the vote, commissioner Chairman Frank Sawicki, whose term is also ending, asked why the attorney general was being used rather than the auditor general, who deals with performance of corporate entities. He called for a motion to table the decision until the potential errors within the resolution could be addressed, but the motion failed.
Sawicki voted against the resolution.
"I don't agree. It involves no malfeasance. It involves performance," Sawicki said.
Following the meeting, he said the information and resolution was sprung on him a few days ago.
"It's a major organization, and it's worth a lot of money, and it should not be taken lightly," Sawicki said.
Tapping the attorney general for an opinion was "overkill" and "not necessary," he said.
'No harm' in asking
Commissioner-elect Rick Shoch attended the meeting, but didn't offer any public comment. Following the meeting, he said he needed more time to form an opinion.
"There was a lot of information and a lot of handouts. I want to take a look at it. We all may have different opinions of what's right to do," he said.
At this point, he said, the commissioners are only asking for an opinion.
"There's no harm in that," he said.