kempthorne_vs_dh.doc

VERIFIED STATEMENT OF GOVERNOR DIRK KEMPTHORNE

I am Dirk Kempthorne, and I am the duly elected Governor of the State of Idaho. My business address PO Box 83720, Boise, ID 83720-0034. I make the following statement based upon my information and belief.
The State of Idaho strongly opposes this abandonment. Continued rail service to the Camas Prairie region is essential if local businesses are to maintain their economic viability and if the state, local officials and other organizations are to succeed in promoting economic development. Abandonment of this rail line will cause significant harm to the rail shippers and to the surrounding rural communities. The harm to the public caused by the abandonment greatly outweighs any burden on Camas Prairie RailNet (CSPR or Railroad) by continuing rail service.
Abandonment of the Grangeville line is unwarranted at this time. Unlike other branch line abandonments, traffic on the CSPR has increased significantly since 1998 when CSPR purchased this line from the previous rail carrier. I am informed that in the short time that the Railroad has operated the line, traffic has nearly doubled from 1,571 cars in 1997 to nearly 3,000 cars as estimated by the shippers in the forecast year (May 1, 2000 to April 30, 2001). Rail shippers have not only increased their car traffic, but I believe they are also willing to make monetary concessions to continue rail service. It is also my understanding that grain shippers were willing to increase their car shipments by shipping grain from elevators not currently served by rail.
While Idaho has enjoyed a period of substantial economic growth and diversification, the Camas Prairie has not shared in proportion to the State’s prosperity. Unemployment in Lewis County is 7.7% and is 9.2% in Idaho County, as compared to the unemployment rate in the State and the nation of 4.3% and 4.1%, respectively. The recent location of the U.S. Timber mill in Craigmont was a welcome economic boost for this area. U.S. Timber made about $400,000 of improvements to the old Channel Lumber Company mill in Craigmont. U.S. Timber is Craigmont’s largest private employer and is one of the top five private employers in Lewis County. U.S. Timber ships in Canadian lumber for milling and processing and ships the finished product to destinations across the United States. It is my understanding that the Company decided to locate in Craigmont because of the facilities, skilled work force and access to rail transportation.
Loss of this rail line would seriously jeopardize U.S. Timber’s Craigmont operation. Closure of the mill would have a devastating effect on the local economy and the effects would ripple throughout the entire Camas Prairie region. I am advised that closure of this mill would add a full percentage point to Lewis County’s unemployment rate. Abandonment would clearly cause a severe adverse impact on rural development.
In addition, Idaho’s malt barley producers rely exclusively on rail transportation to move their product. All of the 40,000 tons of malting barley produced in the Camas Prairie region is transported on the Grangeville line. I understand that the Chairman of the Idaho Barley Commission explained to the Idaho Public Utilities Commission, the loss of rail service may force 670 barley growers in Lewis, Nez Perce, and Idaho Counties to effectively withdraw from the malting barley market. This would leave barley producers in the region with one less farming option in an already stressed farming economy.
Despite Camas Prairie’s claim that abandonment will pose minimal risks to the economy to this region, I am informed that testimony at the Idaho Public Utilities Commission’s hearing was markedly otherwise. Local officials and other concerned citizens expressed grave concerns about the increased truck traffic needed to replace the transportation provided CSPR. Not only would truck traffic increase on a mountainous two-lane state highway by approximately 18,000 round trips, but such additional traffic would pose serious safety risks to the motoring public. The loss of rail service and the conversion to trucks would also have an adverse impact on the local and state roadway systems.
I am also informed that researchers at the University of Idaho predict that abandonment will have enormously negative impacts on the regional economy. Such abandonment will erode the manufacturing base for one of the most rural regions of the United States.
I am convinced in the short time that Camas Prairie RailNet has operated the Grangeville line that it has not sufficiently explored all alternatives to increasing its revenues. In addition to shipper concessions and increasing traffic, I understand that CSPR received $185,000 from the company filming the movie “The Wild Wild West.” In addition, Idaho is preparing for an influx of tourists to celebrate the bicentennial of Lewis & Clark’s journey across Idaho nearly 200 years ago. I believe that the potential for tourist revenues has not been fully explored. This is all the more perplexing given the “dinner/tourist” train that currently runs on the Railroad’s other line. These revenue enhancements, coupled with the concessions mentioned by several of the shippers, lead me to conclude that there are still opportunities to obtain additional revenue from this line.
I am convinced that the abandonment of the Grangeville line would severely hamper the Camas Prairie region’s economic development. As we have seen in other areas of Idaho, rail transportation is absolutely essential to a long-term economic development strategy. CSPR’s request to abandon the Grangeville line in this instance is untimely and misguided. Consequently, I urge the Surface Transportation Board should deny Camas Prairie’s Application.

VERIFICATION

State of Idaho )
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County of Ada )

DIRK KEMPTHORNE, Governor, State of Idaho, being duly sworn, deposes and states that he has read the foregoing Verified Statement, and upon information and belief knows the facts asserted therein are true as stated.

DIRK KEMPTHORNE

SUBSCRIBED AND SWORN to before me this day of July 2000.

Notary Public, State of Idaho
Resident in Boise, Idaho

My Commission expires on:

STB DOCKET NO. AB-564
V.S. GOVERNOR DIRK KEMPTHORNE 1