Lebanon, LM&M Railroad negotiating new operating agreement

City considering how to fund costly repairs to rail bridges along route.

Credit: Linda Weisenborn

Credit: Linda Weisenborn

LEBANON — For more than 35 years, the Lebanon Mason & Monroe Railroad has been a part of the Warren County tourism scene. That could end if an agreement is not made between the tourist attraction and the city, which has to consider expensive repairs to railroad bridges.

City and train officials have been in discussions to renew the operating agreement since last spring as the current eight-year operating agreement ends on Jan. 1, 2023.

The city owns six miles of rail track from Lebanon to Hageman Junction near U.S. 42. Lebanon acquired the rail line in 1981 when Penn Central abandoned the rail line. The rail line was originally part of the Cincinnati, Lebanon and Northern Railway that was constructed in the 1870s. The rail line served passenger and freight trains but started to decline in the early to mid 1900s, according to the city.

LM&M offers various programs and ride packages for visitors as well as seasonal rides during the Halloween, Christmas and Easter seasons.

City Manager Scott Brunka told Lebanon City Council that recent bridge inspectors have found that two of the five rail bridges it owns will need to be replaced in the next few years. The cost to repair both rail bridges is estimated at $2.45 million. One of the rail bridges is more than 100 years old.

Brunka said the rail line has limited to no freight potential, which prevents obtaining certain state and federal grants. In addition, the gauge of the rail track will need to be updated in the future as the current track gauge is no longer manufactured. He said the estimated cost to replace the rail track is $575,000 per mile with a total cost of $3.2 million.

If the city funded the rail bridge replacements, council would have to modify the capital improvement budget by eliminating road paving, Brunka said.

Since 2014, the city has spent $931,073 on rail maintenance, averaging about $133,000 a year. Brunka said there have been minor bridge repairs done over the current contract period. As part of the current agreement, LM&M pays the city 75 cents a ticket which has generated about $183,992 in the current contract period.

In 2014, the city contracted with Stone Consulting to evaluate the tourist train. Brunka said that study found that the rain attracts an average of 40,000 to 50,000 passengers a year.

That study said the train is effective at bringing visitors who live a few hours from Lebanon, but very few riders stay overnight in the city. The total economic impact was about $2.4 million for the city’s economy.

Ray Kammer of the LM&M Railroad, which is a nonprofit organization, met with council in executive session to review its financials and its business plan.

Kammer told the Dayton Daily News that the railroad and city are trying to obtain grants to replace the bridges before negotiating the new agreement.

He said he was optimistic that a plan and an agreement will be developed reached with the city. Kammer said the train contributes an economic impact of $3.6 million a year.

“We’re working together because no one wants to see this go away,” Kammer said.

LM&M, like many other local businesses are trying survive the pandemic. Kammer said COVID-19, “had a bad effect on us. We were down about $1 million in revenue last year.”

Kammer said on the railroad’s website that LM&M is also pursuing potential freight transload business which will help defray the cost of repairs to the track.

“If funding is not obtained to maintain track and infrastructure, the operating contract will not be renewed and 2022 will be the final year for the LM&M Railroad,” Kammer said.

He said the loss, both economic and social, to the city of Lebanon would be significant.

Brunka said possible funding scenarios would include using $600,000 in city/county American Rescue Plan funding, and obtaining an $800,000 state improvement grant to replace one bridge.

The other bridge, which would be engineered and bid out in 2026 would be funded with $700,000 city reserves and replacement funds and $700,000 that would be recouped over the new contract period using private funding through a ticket surcharge and LM&M freight.

Councilman Doug Shope said the city should negotiate a surcharge at $3 a ticket and use those funds for repairs. “That would be the common sense way to do this,” he said. “It is a large benefit for the city, but roads and streets benefit the entire city has to be a higher priority.”

Mayor Amy Brewer said council supports the train and other businesses in the city. “We need to find a good, responsible way to do this. I think we can do it.”

Brunka said the next step will be for city staff and the LM&M to begin negotiating a new agreement and for the city to pursue the grant funding that was mentioned.

“This will take some time, and I don’t anticipate an actual agreement going to city council for a vote for months,” Brunka said. “Our current agreement with LM&M is effective until Jan. 1, 2023 so we have time.”

Sonya Staffan, who owns two downtown businesses and is president of Main Street Lebanon, said her theory of a successful downtown has a destination attraction to anchor local businesses. For Lebanon, those anchors would be the train, the Golden Lamb, the Warren County Museum and the Village Ice Cream Parlor.

“Losing the train would be a financial strain on the merchants,” she said. “I’m thrilled the city and the train are working together on this.”

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