At the last City Council meeting on January 23, I made some comments concerning the railroad during the public comment portion of the meeting that I would like to share with the people of Ely.
These are in response to the City Council’s expressed intent to assume some of the financial responsibilities for the Nevada Northern Railway, ostensibly to “help the railroad out.”
When the railroad was given to White Pine County by Kennecott, a firewall was carefully established to separate the taxpayers of Ely from financial and other possible liability that might arise from the railroad. This is why the original signatories set up the dual aspect of railroad governance—the city council as “trustees” and the railroad foundation as the managerial entity.
If this firewall is breached—say, by paying some of the railroad’s bills, assuming bookkeeping responsibilities, etc.—the taxpayers of Ely will be open to assuming all of the railroad’s liabilities . This would include financial liabilities as well as responsibility for environmental regulations that are required for governmental entities but not for private entities. I believe it is unwise to take this firewall down.
Furthermore, there is concern among some citizens that certain members on the City Council want to change the nature of the railroad’s operation.
Although the public was given reassurance by City Council members during the meeting that no one on the council wants to shut the railroad down or substantially change its operation, at least two members on the present city council have reportedly been heard on numerous occasions saying exactly that: the railroad is simply not worth keeping.
One of them even registered his own non-profit with the Nevada Secretary of State in 2008 whose stated purpose was to “acquire and operate the Nevada Northern Railway Company complex previously owned by Kennecott Copper Corporation and currently owned by the City of Ely.”
A part of the agreement with Kennecott, the original owner, clearly states that if the railroad stops being an operating railroad, Kennecott will assume ownership once again.
The Nevada Northern Railway brings over 25,000 visitors to Ely each year, visitors who spend many thousands of tourist dollars on food, gas, hotel rooms, and other items. The loss of that revenue for our businesses and our area would be financially disastrous. Likewise, the loss of the Nevada Northern Railway as an operating historic railroad would be a huge blow to our heritage and to our future.
Please inform yourselves about this issue, contact your city council members with your thoughts, and attend the next city council meeting on February 13.
The White Pine Historical Railroad foundation is an essential part of our community. The foundation has successfully operated and preserved the Nevada Northern Railway for decades, and the Ghost Train of Old Ely has brought over $69 million of tourist money into our community. Because the city of Ely is concerned about its liability, the foundation proposes that the city council appoint the management board as the directors of the foundation and deed the city’s partial ownership in the railroad to the foundation in exchange for the foundation obtaining insurance and agreeing to release the city and its taxpayers of all debts and liability for the railroad.
In the January 30 issue of the Ely Times, there was an article about the finances of the foundation. The article referenced the city of Ely’s “proposal to have the [foundation’s] bookkeeping become the city’s responsibility.” For the past 30 years, however, the foundation’s accounting and finances have always been kept separate from the city, though the city of Ely has paid for insurance and an annual audit of the foundation. The foundation raises its own money to operate and preserve the railroad. Our budget averages $1,314,375 per year. Of this budget, $190,000 is received from room tax revenue. The remaining $1,124,375 is raised by the foundation through donations, grants, museum memberships and ticket sales.
Beginning in 2004, whenever the foundation ran short of funds, my wife and I would help pay the bills. The amount owed us is $72,399.22. What wasn’t mentioned in the article was a second foundation debt of $95,000 that my wife Joan and I personally guaranteed. These debts have always been disclosed on the foundation’s annual independent audit. The foundation’s management board and previous city councils are well aware of the debt. We are not charging the foundation any interest and we have not asked to be paid back in the immediate future.
Despite the success of the foundation in the face of serious economic conditions, the city council is proposing to use taxpayer’s money to pay us back. Joan and I are totally against having the Ely City Council using taxpayer’s money to pay us back. This is a debt of the foundation, not the city. Besides, I see a day in the not-too-distant future when the foundation can pay its debts and have money in the bank.
The city council’s offer to become responsible for the bookkeeping of the foundation raises a lot of questions. Who, for example, would be responsible for raising the $1,124,375 needed by the foundation annually? And if “the bookkeeping become[s] the city’s responsibility,” are taxpayers responsible for the debts of the foundation? Do the employees of the foundation become city employees? What will the cost be to taxpayers?
The railroad has evolved. The city and the foundation have outgrown the documents drawn up 30 years ago. The city and the foundation have jointly owned the entire railroad- all 146 miles of it across two counties. The foundation’s membership now numbers in the thousands. We have members in every state of the union and six foreign countries.
Therefore, the foundation proposes that the city council appoint the management board as the directors of the foundation and turn over its partial ownership of the railroad to the foundation. Why? Because then the taxpayers of Ely will have the best of both worlds! They will be relieved of the financial liabilities of the railroad and yet continue to reap the benefits of a strong, viable railroad.
Please call or write the members of the Ely City Council and let them know that you want the railroad to grow, remain strong and take care of its own debts. Please attend the Ely City Council meeting at 4 p.m. Feb.13 at the armory. If you have questions, please either call me at (775) 289-2085 or email me at firstname.lastname@example.org
I would like to make a few points. First I would like to thank the city employees for the fantastic job they have been doing in snow removal.
I can’t remember when the job has been done so fast and efficiently. Secondly, the new city website will make paying bills a lot easier than having to run to city hall. Also looking for meeting dates for city meetings is nice.
I do have one complaint. In last weeks paper you quoted Mark Bassett as saying the new city council fired city officials.
The council terminated only one city official. The rest left on their own, for different reasons, Also he listed the city attorney as being gone. Kevin Briggs is not gone and still works for the city, Look on the city website he is listed as the city prosecutor. I think all the city is trying to do is bring financial stability to the railroad, it seems like smoke screens are going up everywhere. Thank You.