Offer for railroad increases

WATSONTOWN - Moran Industries has increased its offer to $30 million to purchase the 200 miles of rails and assets of the SEDA-Council of Governments Joint Rail Authority (SEDA-COG JRA).

The offer "promotes the best long-term economic interest of the residents of the (eight) member counties," John D. Moran Jr., president of the Watsontown-based firm, was quoted Tuesday in a company press release.

A $12.5 million offer in December for the short-line railroad operation was rejected by the SEDA-COG board, whose members said it was too low to consider.

Moran's interest was spurred by the Northumberland County commissioners,

who passed a resolution by a 2-1 vote Dec. 13 requesting the state attorney general's opinion on whether the JRA should be dissolved in favor of privatizing the local railroad.

Meanwhile, Northumberland County Commissioner Vinny Clausi said Tuesday the attorney general has responded that it will not be getting involved.

Price going up

SEDA-COG JRA Executive Director Jeff Stover and board Chairman Jerry Walls, as well as Clausi, have previously said the value of the JRA may be upward of $100 million.

Stover said Tuesday the authority had not formally received the new offer, but he would be referring the information to the board at a meeting today. He had no further comment.

Clausi said he couldn't speak for JRA, but noted it was "nice to see the price going up." "It's too low in my opinion," he said.

All eight member counties would have to agree to dissolve the JRA. Representatives of Centre, Lycoming, Montour, Union and Clinton counties have previously said they don't support the Northumberland County resolution.

The county's resolution is in response to accusations that JRA has built itself into a multimillion-dollar agency with high-paid staff and excessive spending while taxpayers see no benefit. Part of the county's argument is that JRA and its exclusive, 10-year contract with North Shore Railroad Co. keeps other rail providers out of the region.

SEDA-COG JRA has been advocating against the county's campaign, saying its information is inaccurate and misleading. Also, it says no one was interested in the local rail operation until it became more profitable.

Moran said the county's concerns bring into question the validity of the contract with North Shore, and cited an investigation by the attorney general into contract "and questionable dealings regarding the selling of tax credits."

"I think that it would be in the best interest of all parties concerned that the operating agreement be terminated and the railroad, in its entirety, be privatized," Moran was quoted in Tuesday's release. "This will allow all parties to put these questions and concerns behind them."

The AG's office confirmed last month it had conducted an investigation of the contract with North Shore last year. In its initial letter requesting information in January 2011, it said the understanding was that the contract "did not result from a competitive bid process as required by... (the) Municipality Authorities Act."

However, in an April 26 letter to JRA, the state said it had decided to "take no action at this time," but that "nothing should be inferred or implied by this decision."

According to state law, a government body or authority must have competitive bids for any expenditure of $10,000 or more. Anything under that amount, the agency must at least obtain quotes. But a competitive bid for professional services, such as engineering or architecture, can be different, JRA officials have argued.

North Shore did sell its federal tax credits for $1.8 million in November 2008, but SEDA-COG JRA pressured the company to reinvest the money into upgrading the lines to meet

"With this offer, I am advocating for privatization because I firmly believe that government - federal, state and local - should have a limited footprint on society as possible," Moran said. "America finds itself at a time where it seems as though the breadth and depth of government has reached into every aspect of our lives. We hear from politicians everyday that they want to reduce the size of government and I am asking the commissioners to do just that so the private sector can do what it does best: create jobs."

Moran is a warehouse and distribution service involved with the Marcellus Shale natural gas industry, has been redeveloping the former Celotex site in Sunbury for off-loading material related to gas drilling.

The company provides more than 2.2 million square feet of storage in Watsontown, Sunbury, White Deer, Williamsport and Lock Haven, and distribution services throughout the country.

Clausi said previously that two other companies have also expressed interest in the rail operation, but there has been no new developments and no other companies have approached the county, he said.

With the recent letter from the attorney general's office saying it won't get involved, Clausi said the next step for the county is to hand the issue over to its solicitor."

"We're going to put a lot of time into the issue, but we need to make sure it's legal to do," he said.