Rebuild the 16, and build new cars? I don’t think so!! They can’t even maintain what they’ve got, much less restore and build more. What do they need more cars for? The ones that they use now run half-empty. The Strasburg Rail Road runs wooden frame passenger cars with the FRA's blessing.
There is no question about the EBT being insular. FRA part 230 clearly states that if your line crosses a public road at grade, you are not insular, period, end of discussion. The EBT crosses such a road between the roundhouse, and station.
As I see Joe Kovalcheck’s history, I must believe that he is only paying lip service to wanting to run that railroad. I believe that he has antagonized the FRA in the hopes that they will play the villain, and come in to shut the EBT down, leaving him to act the part of the victim. All because he won’t spend the money to properly run the line, and can’t bring himself to close it down on his own.