SUNBURY - At least four other counties that are part of the SEDA-Council of Government Joint Rail Authority (JRA) won't join Northumber-land County in seeking the state attorney general's opinion on privatizing the local railroad system.
"I don't think we're going to follow (Commissioner) Vinny Clausi," Union County Commissioner Preston Boop said Thursday.
Leaders from Centre, Lycoming and Montour counties also said they don't have the same opinion as Clausi and fellow commissioner Merle Phillips, who passed a controversial resolution Tuesday to seek the state's guidance on privatization amid accusations the JRA has built itself into a multimillion-dollar agency with high-paid staff while taxpayers see no benefit.
Commissioner Chairman
Frank Sawicki voted against the resolution, saying it was "overkill" and that if anyone studies the issue it should be the auditor general.
That line of thinking seems to be prevalent among other county leaders.
Boop said he's not even sure if Clausi understands how dissolving the authority would hurt the local economy.
"His proposal would have negative effects, and maybe he doesn't care about that. I'm just confused that he would respond the way he has," he said.
The rail is an economic engine for central Pennsylvania, he said.
"This is not the time to dismantle that when it's having a positive effect on economic recovery for the Susquehanna Valley," he said.
It also surprised Boop that Clausi made such a "public explosion" without contacting any of the other counties in the JRA.
While the resolutions calls for other counties to take part in a joint resolution, Clausi, said he is not afraid to go it alone.
"That's not going to stop it. I'm concerned for my county. I don't care what they do, but for the best interest of their own taxpayers, they should act," he said. "They should get their fair share, too."
He and Phillips noted an expected shortfall in next year's budget in seeking some of the JRA's profit.
Clausi and Phillips said JRA, formed to help save local rail lines in 1984, has outlived its intention and is now, in fact, competing with private industry. Their resolution states the authority has built assets totalling more than $40 million with an annual profit of more than $1 million.
'Unwise action'
Centre County Commissioner Chairman Jon Eich said the JRA has been successful since it purchased local rail lines after Conrail abandoned them. It has maintained and updated the infrastructure with substantial amounts of money, he said.
"I think this is an unwise action," he said of the resolution.
In Centre County, usage of rail has increased significantly with the Marcellus Shale industry, he said
"The rail system employs a significant amount of people and moves a significant amount of product. It's been good for Centre County. I'm very much in support of the railroad, and I'm glad it's in public ownership. It's less susceptible to economic changes," he said.
Montour County Commissioner Jerry Ward said the rail was private once, and it failed.
"Why should we give it back again? It's profitable, it's serving the community and a lot of hard work went into salvaging it. And now they want to give it back?" he said.
No one from Northumberland has contacted Montour for its support, but the commissioners have received letters of concern from county residents asking not to pass a similar resolution, he said.
"The Montour County commissioners are not supporting their initiative. It would take a lot of convincing to sway this board," Ward said.
Lycoming County Commissioner Rebecca Burke said it was "short sighted to privatize the rail." She said the resolution is not the answer to any county budget shortfalls; it would only be a temporary solution, she said.
"In actuality, good management, planning and belt-tightening are more likely to be sustained over time," she said. "Selling the rail lines to the private sector will only create a monopoly, which will ultimately hinder economic growth and development while removing the accountability.
"I acknowledge federal dollars are taxpayer dollars," she continued. "However, if the infrastructure of our country is not supported, then our industries and working families will also suffer."
Attempts were unsuccessful to get comment from leaders in Clinton and Mifflin counties this past week. Also, no one from the state Attorney General's Office returned calls seeking comment about the issue.
Spending 'a joke'
Meanwhile, Clausi believes he has the facts to support his case. He said he prepared prior to issuing the resolution.
"We studied this for over a year. I don't do nothing without investigating," he said. "We got a tip off from some people inside. We didn't know they were making that kind of money. Everything is hush, hush, hush, and then we opened the can of worms."
Clausi said the authority has a $22,000 monthly budget for food, gifts and other expenses he deems "unnecessary," and that the JRA's 2.5 employees are making $92,000 a year, $54,000 and $36,000 a year.
"That's at the taxpayer expense. It's a joke," he said.
System 'not broken'
The resolution also charges that 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 background provided with the resolution.
According to an 11-year deal signed in September 2006, JRA owns the railroad rights of way and tracks while North Shore is responsible for capital upgrades and operating, maintaining and marketing the railroad.
Gary Shields, president and CEO of North Shore, said Clausi doesn't know what he's talking about.
"I was surprised (by the resolution). The system is not broken, and why does it need to be fixed?" he said.
The company supports 95 families and has been taking care of its customers for 25 years by upgrading the rail system, revising standards, doubling revenue and investing more than $30 million, he said.
Furthermore, he said, the company plans to hire more people in the new year, and each new employee takes up to six months to train.
"Our families and company are very concerned, and we don't understand it. There was no interest when we weren't making money. Now that we're making a decent return, there's interest," Shields said.
"We're very proud of our people and the service they provide, our physical track and our equipment," he said.
Support for resolution
The otherwise unpopular move does have a supporter on the JRA board in treasurer Dennis Reitz. He told Clausi and Phillips during a meeting Tuesday at which the resolution was passed that they were on the right track.
The authority has served its purpose and it's time for a private industry to provide goods and services instead of a government entity, he said.
With or without support, Clausi wants the attorney general to offer an opinion.
"We want to see if the taxpayer is getting shortchanged. Everything is going up and up and we need some way to help the county," Clausi said.
Clausi said he believes the attorney general will work with the county to look into the issue.
"He will run the show. We're not here to put people out of business. We're here to help the taxpayer, so the attorney general will show us what to do," he said.
PennDOT spokeswoman Erin Waters said PennDOT had no opinion on the resolution.
"If the attorney general's office would take it up and issue a report, we would analyze it then," she said.
Nate Benefield, director of policy analysis with the Commonwealth Foundation, said it didn't seem logical for the attorney general to be involved in the issue unless there was a case of fraud or crime.
"For this, it sounds like it would be better for the auditor general," he said.
When Sawicki suggested the same thing Tuesday, he was shot down by Clausi and Phillips.
Trouble with authorities
In the last 40 years, there has been an increase in authorities, of which there are thousands in Pennsylvania, Benefield said.
"In a lot of cases, it's basically like running a private business. The biggest problem is they're not really accountable to anyone," he said.
Often, a board is appointed and they don't have to answer to voters or elected officials, which can lead to corruption, overspending or debt that taxpayers are responsible to pay, Benefield said.
It is not the opinion of the foundation to disband all authorities, but rather to make operations more transparent and accountable, and to limit the ability of government to create more than necessary, he said.