The Texas State Railroad board wants some answers from Iowa Pacific following some layoffs from permanent and full-time workers last week.
Presley knows there is likely work that these full-time workers were doing that is no longer being done, because all the work does not cease just because the season ended.
“How can you cut staff as much as you did?” Presley asked.
Twelve to 15 full-time employees with the Texas State Railroad lost their jobs. This number does not include the seasonal employees, who are laid off every year, Presley said.
PALESTINE, TX (KLTV) -
Officials with the Texas State Railroad say the demise of the historic train has been greatly exaggerated.
In an email to her media partners, former Texas State Railroad Marketing & Special Events manager Janet Gregg said the railroad that runs between Rusk and Palestine is shutting down effective immediately.
We spoke with past president and current member of the railroad authority board Steve Presley, and he said the railroad is not going out of business.
“This was a record year for the Polar Express,” Presley said.
Presley said the railroad closes every year after the Polar Express in December and then re-opens in February.
Terminated rail employees to be reinstated
Several questions surrounding the Texas State Railroad and its former employees in Rusk and Palestine went unanswered at Tuesday's Texas State Railroad meeting.
Former railroad employees packed the Palestine City Hall Conference Room to complain about not being paid their final payroll checks, despite being terminated back on Dec. 30.
Chairman Bob Goldberry, also the Rusk Economic Development director, informed the 25 or so people in attendance that the railroad's owner, Iowa Pacific, has told the board that checks were sent out last Friday.
Nineteen employees were terminated by Iowa Pacific Dec. 30, but IP has told the board it wants to rehire most of them by the end of March.
Firings send Polar Express off the rails
BUT LOCALS STILL BELIEVE THAT THE HISTORIC TEXAS STATE RAILROAD WILL GET BACK ON TRACK
Gregg says she sensed trouble four years ago when a company called Iowa Pacific Holdings of Chicago was hired to manage and operate the trains.
Iowa Pacific operates 9 rail lines in the United States, and at least two in Britain.
Gregg and others say even though the Texas State Railroad turned a profit the past two years, Iowa Pacific had trouble paying the bills.
But News 8 has learned rail officials in Texas knew there was trouble coming down the tracks.
Records obtained by News 8 including a draft copy of an un-filed affidavit, claiming that Iowa Pacific had defaulted on two loans and failed to pay the annual rental payment for the last five years.
The un-filed affidavit claims Iowa Pacific owes the Railroad Authority more than $2 million in lease payments and loans.
News 8 has sent Iowa Pacific officials repeated emails and left numerous phone messages seeking comment. No one has responded.
Back on the rails
After months of layoffs and concerns of whether the Texas State Railroad would resume operations March 3, the trains started rolling on that day.
While most of the laid-off railroad employees have returned to work, the Texas State Railroad Board is still looking at operators to replace Iowa Pacific, who is currently operating the railroad, said board member and Palestine City Councilman Steve Presley.
Iowa Pacific has been given until the end of the month to live up to the terms of the contract to the Texas State Railroad.
If it fails to do so, another operator could be taking its place.
The operator owes the Texas State Railroad $1.9 million, and there are doubts whether it would be able to make this payment in the next three weeks.
Railroad board looking at new operators
The Texas State Railroad Authority Board is looking for a new potential operator to run the railroad.
At Wednesday's Texas State Railroad board meeting, members unanimously agreed to send out requests for proposals over requests for qualifications.
Requests for qualifications would have taken longer, and the board does not have the time to go through this process.
With only 15 days left for current operator, Iowa Pacific, to comply with the terms of its contract, the board decided to look at other options.
Iowa Pacific owes the Texas State Railroad $1.9 million, and in December was given 120 days to comply with the contract.
The Texas State Comptroller confirms the rail line owes the state $250,000 in back sales taxes covering operations dating back to October of last year.
Texas State Railroad Board approves tentative contract with Arizona company
RUSK, TX (KTRE) -
During a meeting Wednesday morning, the board for the Texas State Railroad gave its approval for a tentative offer to have the Arizona-based Western Group to take over operations of the railroad.
The railroad’s contract with Iowa Pacific is scheduled to end in May. The board sent a 120-day termination notice to Iowa Pacific in January if the company could not pay back on their estimated $2 million in loan payments owed to the cities of Rusk and Palestine.
At today's meeting the board's legal counsel noted that he was called by Iowa Pacific and told that the group did have an investor on the way that would be good for money and the plan was for them to start making IRS payments. Iowa Pacific had offered the TSRA $500,000 up front as long as they could remain the operator and set up a payment system for the rest.
The tentative contract with the Western Group would call for a five-year term on the lease and an up-front initial payment of $150,000. The proposed contract also calls for current Texas State railroad employees to be allowed to stay on and retired employees to continue receiving retirement coverage.
The Western Group was selected in front of three other groups that submitted proposals for taking over the operations. The other groups were Progressive Rail,First Transit, and Railmark Holdings. Rio Grande Pacific did turn in a letter of interest but not an actual proposal. TSRA president Bob Goldsberry pointed out that all of the proposals were very professional and took time.
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