file photo
Locomotive 204 is hauling 129 empties from Shafter to Ely to be loaded with copper concentrate for the return trip to Shafter. If the City of Ely votes to accept S & S’s offer, concentrate will once again head north to the interchange at Shafter and the international transportation system22

The Ely Times

S&S Shortline railroad is offering the City of Ely a very large amount of money in a settlement proposal. How much? $1.5 million in addition to foregoing other monies that have been exhausted during the ongoing lawsuit that began in 2015.

The City of Ely will be holding a special meeting on Monday, June 25, to discuss the proposal and vote on whether they will accept or deny the offer.

Mike Williams, manager and owner of S&S Shortline Leasing, LLC, sent a letter to Mayor Melody VanCamp and all of the city council members dated June 18 with an offer of compromise regarding the lawsuit between the City of Ely and S&S Shortline Leasing.

The letter explains how the City of Ely filed suit against the railroad on June 8, 2015. Three years later, the lawsuit has cost the city, Foundation and S&S Shortline a large amount of money.  The case is scheduled for trial in 2019 and more money and man hours will be spent on preparing for the trial.

“I will have no choice but to aggressively defend S&S from the claims made in the lawsuit,” Williams said.

The letter explains how the lawsuit is currently in the discovery phase and that a number of depositions and document productions are still in order, equaling to a lot more funds being exerted towards this case.

Williams explains in his letter that the lease/joint development agreement between the parties contains a provision awarding the prevailing party its attorney’s fees and cost.

If S&S wins at trial, it will seek to recover its attorney’s fees and costs, which he estimated to be over $500,000 through trial.

“This would be in addition to the nearly $500,000 account receivable that the City owes S&S pursuant to the lease/joint development agreement,” Williams said.

What does the offer consist of?

S&S would pay the city $1.5 million in exchange for settlement avoiding the risk of trial. The city would transfer its interest in the Northern Line, including the land and above-ground surface assets, to S&S in exchange for settlement avoiding the risk of trial; S&S will forego the nearly $500,000 account receivable it currently claims against the city and foundation, and S&S will grant the city an easement for a future utility corridor on the Northern Line as applicable.

This type of opportunity for the city is huge, not only to help their budget, but being able to open doors for the possibilities of economic growth, including opening the railroad to service the mine and developing additional economic opportunities for White Pine County.

Back in December of 2016, S&S Railroad had made an offer to the city of $750,000. $50,000 of the money would pay for the legal expenses incurred and the $700,000 was going to be given to the city. The city voted against this offer.

Now we fast forward to the meeting on Monday, June 25, and the item is back on the agenda, and this may be an offer the city won’t and can’t refuse this time around. Williams will be attending the meeting on Monday.

VanCamp said,  “This is huge for us, we would like to see this lawsuit end with an agreement.”