The SEDA-Council of Governments Joint Rail Authority defended its operation through distribution of a 14-page information package at Tuesday's Northumberland County commissioners' meeting with the following "frequently asked questions" and answers.
What is the JRA system worth?
Its value to the region in terms of job creation and economic development is nearly immeasurable. Based on recent short line sales, the 200-mile system (real estate and as a going concern) could be worth more than $125 million. In the next 24 months, the JRA will oversee $25 million in capital upgrades and construction of more than seven miles of new track, which is not factor into that $125 million number.
Who benefits from a sale?
The dissolution of a public authority is a very rare event in Pennsylvania. If the system were auctioned off, some proceeds would likely be divided by some formula to the member counties as a single one-time payment. There are some caveats though. In 1984, the U.S. Economic Development Administration provided $2 million toward the lines purchase. As a result, the federal government may have a claim on the sale of assets. Further, at that same time, more than $400,000 was contributed from private sources. There could be claims coming back from those sources as well.
Also, JRA current indebtedness and liabilities would first need to be satisfied. Another major complication is that the JRA has a multitude of partnership agreements with public and private entities for a variety of projects that may be very difficult to untangle without significant payback of funds to grant sources.
Would rail service improve?
Not a chance. Based on the November 2011 customer survey, it cannot get much better than it currently is. The real dilemma for a new railroad owner, having to pay fair market value, is recouping his investment of over $125 million. There will be tremendous pressure to increase revenues to return the investment back to the new owner. This can only result in higher freight rates and diminished service to our region's industries. Increased costs mean less competitiveness in tough global markets. Loss of excellent jobs is the ultimate result. Simply put, the sale of the JRA's railroad system is not only flawed in concept, but would be very bad for central Pennsylvania's economy.
If the rail lines were privately owned, would counties get real estate tax?
No. In Pennsylvania, railroads are considered utilities and do not pay property taxes to counties, municipalities or school districts.