Was club in trouble before New River Train’s problems with Amtrak tariffs? NEWSWIRE

HUNTINGTON, W.Va. — The West Virginia railroad club that sponsored the annual New River Train blames its financial woes on the cancellation of its annual October excursions on Amtrak, but an analysis of financial reporting shows the club may have been in trouble long before Amtrak began increasing its chartered private train rates in 2018. Regardless of the cause, the situation is so dire, the club says, that it may declare bankruptcy.

According to the C.P. Huntington Chapter of the National Railway Historical Society in Form 990 financial disclosure forms it files with the Internal Revenue Service, the chapter ended each year with a deficit for much of the past decade. From 2001 until 2008, the chapter posted a budget surplus each year, save for 2006, which saw a $59,799 deficit. The best of those years’ balances was 2004, which saw a surplus of more than $240,000, the reports show. Over the past decade, however, the chapter has struggled to carry a surplus into the next year.

According to the filings, in 2009, the chapter experienced a deficit of more than $26,800. The following year, according to the public documents, the chapter had a budget surplus of nearly that same amount. In 2011, however, a string of five consecutive years with deficit balances began, the worst being 2013, which saw a $157,327 deficit, the filings show. In 2016, the last year the society’s form 990s are available for public view online, the chapter experienced a budget surplus of $102,089.

Trains News Wire’s inquiries into the balances shown in the Form 990s were unsuccessful, as questions were referred to treasurer Ramona Webb. She declined to comment. She referred further questions to volunteer Chris Lockwood, who did not respond. Despite the balances shown on the tax forms, volunteer Tim Hensley says there was no indication that finances were a concern prior to Amtrak’s tariff changes. “That’s what really put us in the hole and … in the red,” he says.

How important are surpluses and how concerning are deficits for a non-profit? Trains News Wire reached out to Pikeville, Ky.-based Certified Public Accountant Barry Lucas for insight on the forms. Lucas, who is not familiar with the railroad club, says deficits carried over into the following year are not necessarily concerning. “The important thing that a nonprofit has to consider is, are they generating enough revenue to accomplish their mission,” Lucas says. “A nonprofit is not in the business to make money so much as they are in business to accomplish their mission, which is spelled out on their tax forms.”

Lucas added, however, that nonprofits such as the chapter, like any other business, must also ensure there is enough cash on-hand to cover regular bills and expenses. Hensley said among the financial difficulties experienced by the society was rising costs each year associated with operating the New River Train. He said in 2018, the chapter paid a combined total of approximately $90,000 on fuel and food costs alone. He says raising ticket prices is not an option. “It’s not cheap to put all this together, and we can’t have another raise in ticket prices,” he says. “People won’t ride. We’re maxed out on that.”

Hensley and fellow board member Skip Reinhard tell Trains News Wire that the chapter has, in the past, been able to continue operating through various revenue-generating activities, including private car trips to Washington, D.C., and New York on the rear of the Cardinal, in addition to the New River Train. “The New River Trian was our main fundraiser for the year,” Reinhard says.

Reinhard says the charters helped bring in revenue that may have been lost on running the New River Train. “All those little trips picked up the money that we may have lost on New River Train and it all balanced out and we were finishing out the year with enough money to fund our yard and our building and our museum and maintain our cars,” he said. “It was all working pretty well until this hiccup came along (with Amtrak) and just really messed it up.”

In February, the cancellation of the 2019 New River Train after 52 years of operation. Chapter officials laid the blame for the cancellation squarely upon Amtrak — which supplied equipment and crews for the train’s four late-October runs from Huntington to Hinton, West Virginia — and its adjusted private car tariffs. The tariff, and the decision to eliminate Huntington as an intermediate stop where passenger cars could be added to, or dropped off by the Cardinal passenger train, resulted in a loss of more than $100,000 on the 2018 New River Train and the cancellation of 2019 excursions, the chapter said.

Hensley says the chapter is trying to dig itself out of a hole. “As it stands right now, we’re probably $130,000 in the hole, and we’ve reduced that greatly,” Hensley said. “Some of us picked up the low-hanging fruit.” Hensley said members paid small bills and expenses out of their own pockets.

Hensley says the chapter has requested approximately $200,000 in funding from the West Virginia state legislature in order to pay off debts and provide some funding for operations, but has, thus far, received only a small amount of funding from the state. He says it costs about $22,000 per month to operate, although that figure includes the salaries of general managers Chris Lockwood and Joe Rosenthal, who are no longer employed, but are still active as volunteers.

Hensley says he hopes the state legislature will see the value in the chapter, and especially in the New River Train, which draws about 5,000 riders, or approximately 1,300 riders per trip, per year. “They’re funding fairs and festivals all throughout the state, so we would ask that they would consider us as part of that tourist effort,” Hensley says. “We are a state that really needs to focus on tourism.”

One of the unsung victims of the cancellation of the New River Train is the Hinton Railroad Days Festival. Each year, the New River Train would travel to the festival and its riders would have the opportunity to visit the festival as the power switched ends for the return leg. Reinhard says the train is inherently important to Hinton’s festival. “We brought 5,000 people up to that fair, and that’s how they supported a lot of little things in that community with the money that was generated from those,” Reinhard says. As a result of the New River Train’s cancellation, the festival, held each day the New River Train ran, will now be held for only one day in 2019.
Hensley says there is still hope — although, it’s a long shot — that a 2019 New River Train could run. It would take a change in course with Amtrak, he says. “If we got permission this very day that they were going to rescind some of these things and help us a little bit moneywise, we could probably go forth. It’s probably not too late,” Hensley said. “We could all scramble around in a collective effort. But I hate to see the end of the operation come.”

Hensley says the focus for now is keeping the chapter running and avoid bankruptcy. “We’re trying to get our bills paid off. We’re trying to get money coming in from different places … There’s just a tremendous amount of things that have to be met to pull this off every year,” he says. “We certainly hope to avoid bankruptcy. We want to do the honorable thing and meet our obligations to these people.”