McFarland_Plaistow_Morse_Peterson_Wyatt_dh.doc

May 30, 2000

VIA FED EX

Thomas F. McFarland, Jr.
McFarland & Herman
20 N. Wacker Drive, Suite 1330
Chicago, IL 60606-2902

Joseph J. Plaistow
L.E. Peabody & Associates, Inc.
1501 Duke Street, Suite 200
Alexandria, VA 22314-3449

Paul Wyatt
PO Box 85
Lenore, ID 83541
(First Class Mail) Ed Morse
Morse & Company
2101 Lakewood Drive, Suite 225
Coeur d’Alene, ID 83814

Steve S. Peterson
Center for Business Development
and Research
University of Idaho
Moscow, ID 83843

Re: Camas Prairie’s Application to Abandon the Grangeville Line
STB Docket AB-No. 564

Gentlemen:

Enclosed for your information and review is Camas Prairie RailNet’s Application to abandon the Grangeville line. There are three separate documents. The first is Camas Prairie’s Application which generally contains the reasons for the abandonment and the underlying financial assertions. Generally, the Railroad’s calculation of revenues in the forecast years (May 2000 through April 30, 2001) projects approximately 2,600 rail car shipments. It appears that the Railroad started with 1999 total car shipments of roughly 2,100 and increased shipments to approximately 2,600 attributable to the increased traffic for U.S. Timber in Craigmont. The Railroad estimates that its on and off branch costs are approximately $1.89 million leaving it an avoided loss of approximately $1.03 million. See corrected Exhibit H.

The Railroad’s Application basically contains the verified statement of three individuals: Kevin Spradlin, Vice President/General Manager of the Railroad; Robert Finley, who performed the economic calculations contained in the Application; and Kenneth Young, who performed the real estate and net liquidation value (NLV) calculations. As indicated in the Application in Exhibit Q on page 1, NLV of the Railroad was calculated to be approximately $2.5 million. This comprised of $758,000 in nonreversionary real estate owned by the Railroad and $1.827 million in salvage value (after subtracting removal costs).

The second document is the real estate appraisal of the rail line. The Railroad maintains that approximately 79% of the Railroad right-of-way is nonreversionary and approximately 21% is reversionary. The Railroad claims that it owns “in fee” 1039 acres representing the nonreversionary property. The actual right-of-way maps showing parcels and property deeds have been requested from the Railroad’s Texas offices.

The next document included for your information is the Railroad’s Environmental and Historical Report (EHR).

I have also requested a copy of the Parsons and Brickerhoff Report which examined the track and the line’s bridge structures. The Report is mentioned in Kevin Spradlin’s Exhibit O at page 6, ¶ 7. The Report is being sent to me via FED EX and I will, in turn, copy it and forward it to those that need it tomorrow.

I would like to set up a conference call for Friday morning to get your preliminary inputs on the Railroad’s Application and to discuss areas for further inquiry. Unless I hear otherwise, I would like to set up a conference call for June 2 at Noon Eastern time, 11:00 a.m. Central time, 10:00 a.m. Mountain time, and 9:00 a.m. Pacific. I will send out the conference telephone number and the access code.

If you have any questions or comments before the conference call, please contact me at [phone].

Sincerely,

Donald L. Howell, II
Deputy Attorney General

Enclosures

Bls/L:mcfarland_plaistow_morse_peterson_wyatt_dh

May 30, 2000
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