New Short-Line Railroad Coming To Town

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After years of litigation back and forth between the City of Jackson and U.S. Rail, a new short-line railroad company has been approved to take over the rail line, once the lease with U.S. Rail expires at the end of April 2014.

The contract for the Indiana Eastern Railroad, DBA the Ohio South Central Railroad, was approved in the Jackson City Council meeting Monday evening. On hand for the announcement was Indiana Eastern Railroad CEO and majority owner, George Andres, and Ohio Rail Development Commission (ORDC) Executive Director, Matthew R. Dietrich.

Plans for the change began earlier this year when U.S. Rail announced they would be terminating their relationship with the City when their lease was up. At that time, the city enlisted the ORDC to find a new operator of the line. A search of potential operator's was narrowed down to two finalists who provided more detailed proposals and met with the shippers utilizing the line during a meeting in July.

Following that meeting the ORDC recommended the Indiana and Eastern Railroad as the new short-line operator. The ORDC then drew up a contractual agreement for the city to approve and council to adopt.

Once the current contract with U.S Rail expires, the city and ORDC will work together to eventually place the operations of the short-line in the hands of the ORDC.

The City feels that the railroad business would be better served in the hands of those with the expertise and resources to make the line as successful as possible.

Even though the ordinance was unanimously approved, several of the council members had questions they wanted addressed before the vote was taken.

Second Ward Councilman Ron Queen questioned why the proposed contract was for 25 years. Dietrich replied that they had looked into the length of the contract and thought 25 years was pretty standard.

"They have to have time to try to recoup their assets, and 25 years is about the right spot to look at for their up-front investments," Dietrich said. And we did incorporate five-year performance reviews to look at how things are going."

Queen asked who would be responsible for property taxes. City of Jackson Law Director Joe Kirby responded that the operator would be responsible from the first day on, and said the City is currently trying to recoup money from U.S. Rail.

Queen indicated he hated to approve the ordinance without reading the 20 page contract first, but did not want to put jobs at risk by delaying approval. He did ask what the consequences would be if the contract failed down the road, but was told by Dietrich that would be something to discuss at a later date.

Councilman Eric Brown expressed his concerns about not approving the contract and delaying getting the whole process moving forward.

With all that said, council approved the ordinance.

"I hope I did not upset any of the citizens of Jackson Monday night when I voted yes on the 20 page contract to bring in the new railroad supplier," Councilman Queen said the following day.

Queen went on to say, "When our ordinance was given to us in our packet Sunday night it was not an emergency ordinance, so I did not read the 20 page contract completely. Then right before the meeting was starting on Monday, our city lawyer, Joe Kirby, gave us a new one and said it needed to be passed as an emergency tonight."

Queen went on to say, "Some council members can vote on ordinances without even knowing what they are, but I try to pick my packet up as soon as possible and read over the info. I voted yes, because I did not want to put any jobs in danger of being lost. It was very stressful making that decision within the short time I had to make it, because we are dealing with the citizens money and I take that very seriously."

The relationship between the City of Jackson and U. S. Rail had been a stressful one for quite some time. Some of the council members fear the same problems could appear again, but both Andres and Dietrich seemed very optimistic the troubles are in the past, and once they can get past them, the future looks a lot brighter for the short-line railroad.