Texas State Railroad

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.

“They say they will,” said board member Steve Presley, who is also a Palestine city councilman.

The question the board was unsure of is, if the railroad season starts March 4, how would it be ready to operate if the employees are brought back at the end of this month?

After the meeting, Presley said the key word is “by,” so employees will likely be hired before the season starts.

Iowa Pacific has informed the board that the railroad anticipates losing $125,000 for the first two months of 2017, but anticipates making a profit in March.

“It doesn't add up in my head, but that is what they are telling us,” Presley said.

After an executive session the board authorized an agreement for reinstating full employment for the start of the railroad season.

The board also will explore other independent operators, while the board would run it.

An exit agreement and ceasing all work with IP at a future date was also discussed.

The board reviewed the positives and negatives of being the operator of the railroad lines.

One positive is the lines appear to be profitable, but the negatives include whether there is enough time to get them open by March 4 and a lack of funds to make it happen.

“This is a way to do things,” Presley said. “It is a good framework to start with.”

Former employees wanted to know if they would have first crack at the future jobs, saying they were terminated, not furloughed.

Board Attorney Ron Stutes could not make any promises and said he would not know until the agreement with IP is done.

“I have been authorized to negotiate a deal,” Stutes said. “We need to figure out how to exit our relationship with Iowa Pacific.”

Stutes questioned whether the railroad could resume operations March 4 without the employees returning to work.

The terminated employees were told by the board that, if it had $600,000, it would take over the railroad and rehire all of them.

Goldberry and Presley thanked the employees for their past work.

“Thank you for keeping it running for as long as you did,” Presley said.

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