ANOTHER CENTURY OF NARROW GAUGE STEAM UPDATE

August 9, 2002

In late April 2002, the Friends of the Cumbres & Toltec Scenic Railroad commenced a major fundraising drive. Named after its mission to support and assure the preservation, restoration and continued operation of the Cumbres & Toltec Scenic Railroad, the Another Century of Narrow Gauge Steam campaign quietly moved forward during the unprecedented turmoil of the past several months. We are happy to report that, almost 100 days after it started, the ACNGS campaign has become the most successful fundraising effort ever undertaken by the Friends. However, despite our success in meeting the initial short-term campaign goals, the fundraising efforts of the Another Century campaign must continue with even greater urgency. We are still short of our long-range objectives, and intervening events have deepened the financial needs of the railroad significantly.

The campaign objectives, when first conceived and announced, included securing contributions and pledges of at least $300,000 by July 31, 2002. These short-term funds were to be used to supplement the debt repayment and working capital position of the railroad’s operator, Rio Grande Railway Preservation Corp., and to support the railroad’s 2002-2003 winter maintenance program.

The long-term campaign goal was (and remains) to raise at least $2.5 million over the next five years. The Friends’ board of directors concluded that this additional source of capital, at a minimum and combined with other sources of funds, was required if the railroad was to be properly maintained, preserved, restored and operated over the next five years and beyond.

As of August 7, 2002, a total of 422 contributors--almost 25% of the Friends’ membership--have made donations and/or pledges totaling $456,446, including cash contributions of $203,146 and pledges for the balance of 2002 of $15,060. Pledges over the next four years 2003 ­ 2006 now total about $60,000 per year.

Of the cash received by the campaign, $70,000 has been advanced to RGRPC. Direct campaign expenses in the amount of $6,200 have been paid to third parties. Most of these expenses relate to the production of the ACNGS campaign brochure.

The Friends is allocating 10% of all funds received by the campaign to the permanent endowment fund which the Friends maintains for the long-term support of the railroad. Already over $20,000 has been placed into the endowment fund from the ACNGS campaign.

One of the remarkable aspects of the fund drive is that, thus far, the campaign has solicited contributions only from Friends members through a single mass mailing and postings on the Friends’ web site. The Friends members, particularly those who have contributed or pledged to the campaign, have proven once again their loyalty and generosity to the organization and the railroad.

In the next several weeks and months the campaign will reach out not only to those members who haven’t yet responded, but to the broader community of railfans and other segments of the general public that may be interested in supporting the railroad, which many consider to be the most authentic example of steam era railroading in North America.

While the campaign has been a success as measured against its original short-term goals, the situation has changed significantly since the campaign began. Track closures by the FRA just before opening day forced a modified schedule and, two weeks later, the high fire danger prompted the Forest Service to issue orders closing the railroad’s right of way. This shutdown lasted thirty-eight days and cost RGRPC nearly $1,000,000 in lost revenues from trips not run, cancellations, and refunds requested.

The combination of revenue loss, outstanding debts, refund payments to passengers unable to ride during the closures, a shorter than usual season, and the cost of unanticipated locomotive repairs that were revealed during FRA boiler work has placed RGRPC in a position where it had no practical choice but to exercise the termination clause in its operating lease with the commission. This clause requires RGRPC to notify the commission by August 1st if it does not believe it will be able to continue operations past the present season. The termination of the lease is effective on October 31,2002.

However, this action should not be read as a diminishing of the Friends’ dedication to, and support of the railroad. The Friends and RGRPC remain steadfast in the pursuit of their mission, and continue to pursue avenues for financial relief through state and federal programs. To date it has been a frustrating search as we have learned that non-profit corporations do not qualify for SBA loans, and that other programs do not loan to governmental entities. But we will, as always, persevere. Our hope is that enough assistance can be found to put RGRPC back on a sound financial footing and enable it to approach the commission with a new proposal for operating the railroad.

With the concurrence of the RGRPC board of directors, the present intent of the Friends’ Development Committee and directors is to make no further advances to RGRPC and hold the available campaign cash, which now exceeds $100,000, until it can be determined, among other things, how the campaign funds can be employed for the best long-term benefit of the railroad. One thing is certain: regardless of what organization is the operator of the railroad in 2003 and beyond, the railroad will need additional funds for operations and to ensure that historic equipment is preserved, restored and properly maintained. It is possible, but not at all certain, that campaign funds may be used in some way as seed capital for a re-structured operation of the railroad. All options are being reviewed.

It is the Friends’ and RGRPC’s desire to continue to operate the railroad, and we believe that the unique resources of our organizations position us as the best possible party to operate the railroad. The Friends remains firm in its belief that the Cumbres & Toltec Scenic Railroad is a unique cultural and historic treasure of international significance, and we will do everything possible to preserve it as an operating museum of steam railroading. We thank all of the 422 families, individuals and organizations who have thus far contributed to the campaign. These contributions and pledges have had and will continue to have a major effect on the preservation of the railroad and will help assure our common goal: Another Century of Narrow Gauge Steam.

Our campaign continues with even more urgency that before. Our efforts may well determine whether the railroad operation survives. If you have contributed or pledged, thank you very much. If you have not, we urge you to do so today. Every dollar given supports the future of the Cumbres & Toltec!


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