By Aaron Isaacs, HRA editor
Like many museums with all-volunteer management, the Pacific Locomotive Association’s Niles Canyon Railway has aspired to bring in a paid professional to run things. This is usually a big leap financially and has not always been successful.
In the case of Niles Canyon, the decision was forced by the retirement of Dexter Day, the volunteer General Manager for the last 30 years. Instead, PLA chose a different option, hiring a management company to provide the GM. I read about this in the PLA newsletter and contacted their President Henry Baum to get the inside story. He sent me a long and informative email. He explains it better than I can, so here are excerpts.
“We began looking for a replacement for Dexter about 3 years ago. We knew that we would probably have to hire someone to fill his shoes, as no volunteer was crazy enough to take the job on from scratch.
As a regular commuter on the Altamont Corridor Express train (ACE) between Livermore and Silicon Valley for 20 years, I was always interested in how Herzog combined rail infrastructure construction and commuter rail management. I thought, this is an approach we should look into. By hiring a company such as Herzog to manage the railroad infrastructure and oversee train operations, we could combine many management tasks, and negotiate a fixed fee contract. There would be a benefit in that the liability also gets spread around, albeit also the risk.
I contacted Herzog to see what they thought of the idea. They are probably still giggling about it. They were not interested in our small potatoes operation. But they did agree the business model would be a good one (how could they not, it is their model).
The key here is that by hiring a management service to handle the general manager’s tasks, we avoid having a paid employee, and all the government repercussions that entails. And the Board of Directors loved the idea.
We did NOT hire a contract General Manager. Our choice is not a contract hire, which we do have occasionally. We have hired individual contractors to perform specific functions, typically painting or other general contracting tasks, but with people specifically familiar with the ins and outs of railroad equipment. We also contract event staff and performers occasionally, as in last year’s SteamPunk festival. Not railroad skilled hires.
We do routinely hire jobs out to contractors whose companies then enter into a performance based contract with us. And these contractors routinely hire sub-contractors to perform the work, but we do not deal directly with them. For example, we have contract services for track inspections, with a certified track inspector. We have contract services for bridge management and inspections with certified bridge inspectors. These services are provided on a regular basis with a regular cost basis. We can easily budget for them. We have even contracted with Western Gradall Rentals, a predecessor to our new management service, to do excavation work and ditching. We have similar contracts with others, like the janitorial service that cleans our trains – another task volunteers did not want to do.
We hired a company, Western Rail Management Services (WRMS, a California S Corporation) that will provide the service we require, which are to handle the day-to-day operations, which will include performing many of the historic General Manager’s duties. The management service representative (Stephen Barkkarie) will be the focal point between the various government regulatory agencies (FRA, CPUC, environmental agencies) we deal with regularly. Stephen’s company will be responsible that the necessary inspections get performed on time and properly.
While bridge management will continue with the current company, WRMS will take over performing track inspections, brake inspections, overseeing locomotive inspections, excavating, and general project management.