Claims Cumbres and Toltec lost $3 million over two years
By LARRY WINGET
ALAMOSA — Former New Mexico Governor David Cargo wants to know how the Cumbres and Toltec Scenic Railroad has managed to lose $3 million in the last two years. Cargo served on the railroad’s commission for the last few months, until he, and the other members of the commission, were replaced in Dec. of 2006.
Cumbres and Toltec commission executive director Leo Schmitz says he is not sure what Cargo is talking about.
Cargo has called for an audit of the railroad, including its management company. Schmitz said the commission is audited every year and said, “Nope, nope, and no,” to the idea that it has lost $3 million.
Schmitz said the current management company has only been in place since March of 2006. He said their books are not closed
as yet – their fiscal year is equal to the calendar year – therefore
they are not ready for an audit.
Cargo is most interested in how the management company spends money, rather than the railroad’s commission. He said the management company has refused to provide financial information, and has failed to apply for status as a 501 (c) (3) non-profit
organization. Cargo said the management company says it is such an organization in its contract with the railroad. “Heaven knows what they’ve opened themselves up for,” he said.
One thing that could happen
without the non-profit status,
said Cargo, is the railroad could be liable for paying a 7.125 percent gross receipts tax in Chama, N. M., the railroad’s terminal city in New Mexico.
The ex-governor claims the management company has failed to formulate certain plans required by the federal Department of Homeland Security. Without those plans, Cargo feels the railroad is in danger of losing federal funding.
Cargo also claims there has been a 300 percent increase in management fees, under the current management company, with no budget controls and no desire to report to anyone.
It has been reported the management company, during a Jan. 12, Cumbres and Toltec commission meeting, asked for an increase in those management fees to $120,000, up from the current amount of $44,000.
Richard Tower, secretary-treasurer said the increase is warranted because his organization is running a $4-5 million per year operation. He said the last company managing the railroad received $115,000.
Cargo also took exception to the idea that advertising expenditures for the Cumbres and Toltec are not let for bid. No advertising contract has been let for bid for 2006, or for 2007. Cargo says those contracts cover an ad budget of $353,000. Circus Inc., of Santa Fe, New Mexico, has been providing ads for the railroad for the last two years. It was granted a contract extension for advertising the Cumbres and Toltec through September, 2007.
The commission has called for proposals on advertising spending to be made sometime in May or June.
New Mexico commission member Randy Randall has also called on Colorado and New Mexico to
use their offices of tourism to
promote the railroad to wider audiences than can be attracted with just the railroad’s advertising budget.
The Cumbres and Toltec is owned jointly by Colorado and New Mexico. Last year, the scenic railroad hauled 32,000 riders over 64 miles of narrow-gauge tracks. Those tracks cross the Colorado-New Mexico border 11 times between Chama and Antonito, Colo.
