The legislature’s Program Evaluation Division is recommending that the North Carolina Railroad begin sending 25 percent of its annual income from track leases to the General Fund and make a one-time payment of $15.5 million from reserves. The recommendations, included in a 48-page report examining the railroad, also call for it to sell off 14 properties not necessary for the line’s corridors and operations. The recommendations were presented to the Joint Legislative Program Evaluation Oversight Committee. They come a year after House Speaker Thom Tillis mentioned the NC Railroad as a potential asset that could be sold to help the state through tough budget times. The railroad is owned by the state, but is operated as a separate corporation. Its primary revenue, $14 million in 2011, comes through a lease agreement with Norfolk Southern Railroad. Since 2006, that money has gone toward a corridor improvement plan. The review noted several downsides to selling off or reorganizing the railroad, among them that the corporation currently pays property taxes to local governments. Besides the payments to the General Fund, Program Evaluation Division officials also recommended that the railroad strengthen its financial reporting requirements and create a strategic plan.
Railroad president Scott Saylor said the proposed dividend payments to the General Fund take into account the railroad’s ongoing corridor improvement plan and shouldn’t affect that plan. But he said the plan is contingent on investments by private partners, and that if those investment plans change, corridor improvements might be delayed. The railroad currently has $62 million in reserves, money that Saylor said is committed. “We recognize that the General Assembly has difficult budget decisions and that the budget difficulties are likely to continue,” Saylor said. He said one of the 14 properties identified for potential sale, a depot in Hillsborough, is currently being used by Norfolk Southern. Several of the other properties are in Morehead City, including along the waterfront where charter boat businesses and the city are tenants.
(THE INSIDER)
10/18/12
