The Federal Railroad Administration, which is part of the U.S. Department of Transportation, is investing more than $40 million in rail funding for Oregon. Projects span the state and include work in Linn and Lake counties and Coos Bay.
Prineville is getting funding specifically allocated for rural communities. The grant will help the city restore its rail line and improve safety. Prineville’s railway has experienced its ups and downs. When the lumber business was booming in the ‘60s, the railway was a major economic driver for the region.
In recent years, the railway has had to reinvent itself to stay in business. We hear more about the efforts from Matt Wiederholt, the general manager of the City of Prineville Railway.
Note: The following transcript was transcribed digitally and validated for accuracy, readability and formatting by an OPB volunteer.
Dave Miller: This is Think Out Loud on OPB. I’m Dave Miller. 18 miles of track – that’s the distance of the more than 100-year-old rail line between Prineville and Prineville Junction, just north of Redmond. The line has had booms and busts over the years, but hopes are high right now, with the federal grant that the city will use to restore the line and improve safety. Matt Wiederholt is the general manager of the City of Prineville Railway. He joins us now to talk about what the line means to the city, and the impact this grant could have. It’s good to have you on Think Out Loud.
Matt Wiederholt: Oh, good afternoon.
Miller: So what exactly is a short line?
Wiederholt: It’s a classification of a rail line. So we typically don’t run as fast as the big lines that you see going through your communities. We are typically smaller in size, all around just a smaller rail line. Our little line, it’s 18 miles. We’re considered a Class II, but a short line status.
Miller: What’s coming into Prineville on this line these days?
Wiederholt: Well, we’re getting very, very diversified, which is great. At one point we were down to one customer, about 80 rail cars. We’re over a thousand now. In about 2004, we had one commodity. Now, we have everything from animal feed, barley for beer, a little bit of lumber, industrial chemicals, asphalt. We do about 2 million, 2.5 million gallons of that wonderful de-icer that everybody likes to use on the highways.
Miller: So all of that is coming east on the line?
Wiederholt: Yes, sir. We interchange with the BNSF and the Union Pacific just two miles north of Redmond. We pick up the cars from them and bring them into Prineville. Prineville is pretty much a consumer, not really a producer. So a majority of our traffic is inbound for our customers.
Miller: And then empty cars go back towards Bend and Redmond?
Wiederholt: Exactly, the empties go back out, and we hand them off to the BNSF or the Union Pacific to be disbursed for more loads.
Miller: So, it’s something like three dozen companies or so that are getting shipments of all these materials right now?
Wiederholt: Currently, right now in the city of Prineville Railway we have 34 customers utilizing our rail assets. We operate a transload facility on our line, a big warehouse where we can transload and load trucks to cars for customers if they’re not directly served by rail. So yeah, about 34 customers total on our line right now.
Miller: That transload leads to my next question. I’m just wondering what it would mean for those 34 companies currently – most of them [are] getting this stuff – if these goods were transported by truck as opposed to rail?
Wiederholt: Competition, and the ability for smaller businesses, or smaller rural businesses in our case, to compete on a national level. It gives them that access to affordable transportation. If the rail line wasn’t here, somebody making a product or receiving a project, say, over there in your neck of the woods in Portland, they’re going to be a little bit more competitive being that they’re right on the rail. So that railroad to Prineville, it’s a generator, it’s an economic benefit for our small businesses.
With that transload, it takes it even a step further on the smaller businesses. You might have a customer that only loads or receives one or two cars a year. It’s not feasible to take a track maybe across town to that particular business. So that transload on our line, they can truck it just directly to our warehouse and we’ll put it on the line for them, or take it off the line back over to their warehouse or their facility. And it lets them compete on that national level.
About 500 miles is a kind of the trucking ring. So anything outside of that 500 miles, you really need to start looking at rail for more affordable transportation.
Miller: I want to get a little bit of history of this line before we hear about the new grant. Was there a golden age for it?
Wiederholt: This line, we boast of being over 100 years old, continuing to operate a municipal rail line. So the city built it, managed it, operated it since 1918. This particular line in the early ‘60s, we were doing 10,000 carloads of lumber outbound a year. We had seven sawmills in Crook County and around the Prineville area. From ‘60 to ‘64 the railroad supported the entire general fund for the city of Prineville. You didn’t have property taxes in Prineville in the early ‘60s.
Miller: That’s an amazing fact. The revenue or taxes from this rail line alone supported the entire city budget for Prineville?
Wiederholt: Exactly, yep. We were doing great, seven sawmills pumping cars out, a lot of that ponderosa pine going to the East Coast for the building booms back then. But when the sawmills started shutting down – we lost that last sawmill in 2004, Ochoco Lumber, the last sawmill we had – that’s when we really started feeling it. We had built up a nice fund balance of over $8 million in savings. So in 2004, we were bleeding anywhere from about $450,000 to $650,000 a year to sustain operations on the rail line, pulling barely 80 car loads a year. There was a real thought there of maybe mothball in this line, scrapping it. We got a $40 million asset, maybe we scrap it out. And that’s where the thought of the transload, and just kind of a reinvent the line came.
We had a lot of forward thinking city council members who recognized the value of the rail line, not so much in terms of money, but in terms of job creation, business growth, business recruitment. So 2004, I would say, [was] probably our lowest point in over 100 years we’ve operated.
Miller: How close did the city come to just shutting this line down, or mothballing it as you say?
Wiederholt: It was very close. I think if we wouldn’t have had such a savings to get us through that rough patch, I think it would have been very close to reality. Like I said, we had enough people on city council at that particular time. We had a mayor, he understood the potential. I think that helped a lot with this little line to keep it going.
Miller: So let’s turn to where we are right now. Why did you apply for this grant? And I should say that you’re not alone, there were over 100 funded projects around the country, a handful of other ones, including some big ones in Oregon. And a lot of this is from the bipartisan Infrastructure Act that passed Congress a couple of years ago. What were you asking for from the Feds?
Wiederholt: We’re at a point on this line where we would consider ourselves operationally sustainable. We’re putting a little bit of money in that fund balance, we’re paying our way in administrative fees. We’re doing OK. But in 2004, when we were scrambling and we were bleeding and in the red, we didn’t do a lot of maintenance, we couldn’t afford to. We got behind on our capital and our maintenance. As we are operationally sustainable, we still only put about $100,000 [to] $150,000 a year in the capital projects. That’s about what we can afford right now.
This current grant, the CRISI grant, we received $1.6 million. And it’s a 20% match, so the city is gonna have to put up $400,000. So in total, my project will be $2 million in the capital [and] $2 million into an 18 mile short line goes a very, very long ways. We’re gonna do about 10,000 railroad ties in our line, which is about one in five. We’re also going to …
Miller: Just because they’re rotted, the old ones?
Wiederholt: Exactly, yeah. We’re gonna replace the rotting ones, some of the ones that are in our switches and stuff to get ahead of that. And then what we also will get with this grant is the equipment and stuff to relevel our line, and that helps rail preservation. We’ll be able to relevel our line and, and surface it so everything’s back in a level and plane.
Miller: As you noted, the city had to kick in close to half a million dollars, $400,000. Was that a hard ask?
Wiederholt: No, because we still maintain our fund balance, we’ve been putting money into our fund balance, and we had over a million-and-a-half in our fund balance. What we’re gonna do is the railroad will dip into our savings account essentially for that $400,000. This would have been a hard ask a decade ago. Ten years ago, 2013, our fund balance was down to $600,000. So barely a half a year of operation. So a decade ago this would have been a hard ask and we would have really had to either borrow from the city or do something. But we’ve been, like I said, operationally sustainable. We’ve been able to put some money into that fund balance. So we’ve got the money in savings, essentially.
Miller: What would have happened if you hadn’t gotten this money? How dire would the state of this line be?
Wiederholt: We’re in good shape. We’ve been slowly picking away at it. But what this is gonna let us do is it’s gonna let us get out there about eight, nine, 10 years ahead of that capital program that we have in place. I mean, this will jump us ahead about 10 years in our capital replacement and capital program.
Miller: As I noted, you’re one of more than a hundred rail projects around the country to get funding, and one of five in Oregon alone. You hope to get the funding early in the new year and to start work soon after that. But I imagine it’s a similar timeline for a lot of those other projects, including, as I noted, some big ones in Oregon. Are you going to be competing for both materials, like those railroad ties, and the labor, the folks that are actually going to be swapping them out?
Wiederholt: I hope not. That’s the simple answer. I don’t know for sure. It sounds like everybody’s geared up for this. A lot of the railroad tie suppliers and things, they know this was coming down the line, as far as this kind of funding. So we’re hoping not. We don’t know yet. We’ll have to go out to bid. We find out November 19 exactly when the money frees up, and then we’ll just have to go out to bid, hopefully everything goes smooth.
Miller: What do you most want folks, either in Central Oregon there for your particular short line, or in the rest of Oregon to know about these lines, in terms of their invisible importance to our lives? And you have about 40 seconds until we have to say goodbye.
Wiederholt: Simply customer service. Short lines supply that customer service that becomes somewhat hard when you start dealing with the bigger guys. We value or cherish every single car load. We look at every one at a time, and not in big blocks or groups. These short lines that are in these communities are available for that customer service go-between with the big guys. And we cherish every single business that we can get, and we’re right there to help all these smaller businesses.
Miller: Matt Wiederholt, thanks very much for your time. I appreciate it.
Wiederholt: Alright, thank you.
Miller: Matt Wiederholt is the general manager of the City of Prineville Railway.
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