City of Keokuk, Iowa, starts bridge talks with railway

A Pioneer Railcorp representative left no uncertainty about the railroad's position regarding a proposed toll increase for the use of Keokuk's swing-span railroad bridge, the Daily Gate City reports. Keokuk Junction Railway, which runs the trains on the bridge, is a subsidiary of Pioneer Railcorp.

Citing "a large (toll)
increase last year," Dan LaKemper told city council members at the workshop
meeting "that the money comes out of the pockets of Keokuk industries. I think
everybody knows that’s Roquette and Griffin Wheel. There’s no pot of gold. When
the bridge rate goes up … (we) pass it on to the shippers. It’s not good for
the city or the railroad."

Keokuk Mayor Tom Marion
said KJR is paying $20.76 per rail car crossing the bridge right now, but
operates the bridge at a loss at that rate.

The first reading of a
proposed $24.96 toll rate has been approved by the city council and approval of
the second reading will be considered at the next meeting, he said. If the
council passes the second reading and waves the third, the new toll will go
into effect.

"They’re (Pioneer Railcorp)
not happy of course, but basically, we’re losing money on the bridge every
year," Marion said.

"Our interest is in keeping
the rates as low as possible so shippers can ship as much as possible,"
LaKemper said. "Some people think the railroad is trying to take more profit
out of it."

He suggested that the city’s
and railroad’s best interest is to keep the industries "highly competitive" and
to keep trying to draw additional industries to Keokuk.

"If you keep raising the
rates, at some point they’re going to stop shipping," LaKemper said. "It’s not
good for the railroad, the businesses or the city."

"What would you have us do?"
asked council member Mike O’Connor. "It costs the city to run the bridge so
essentially we are subsidizing you. This plan has modest increases so that by
2014 the city should be at a point of breaking even. If we wanted to put you
out of business and didn’t car about industry, we wouldn’t be doing it."

Keokuk recently upgraded
the tracks on the bridge to accommodate larger freight cars, which added
expense, he pointed out.

"It’s only logical the rate
be commensurate with what we’ve put into the bridge," O’Connor said.

LaKemper proposed making a
permanent solution to the issue, such as forming a non-profit entity between
the city and the railroad that would spread out costs and assure the bridge is
maintained properly. LaKemper believes shippers would be interested in the
nonprofit concept as well.

He also expressed
disapproval about a recent offer (by Craig Burroughs of Pacific Rim Railway
Company) to purchase the railroad bridge for $500,000.

"I hope no more folks come
in like the last ones," he said. "That’s not in anyone’s interest. The only
folks with interest in the bridge are the city, shippers and the railroad."

Part of Burroughs’ deal was
to pay for the bridge over 10 years and to receive the city’s $3.7 million
bridge fund.

LaKemper reiterated that
Pioneer Railcorp has expressed interest in buying the bridge and added that the
railroad could run and insure it for less than the city.

If the bridge needs to be
taken down some time in the future, the city will be held responsible for the
demolition by Iowa Department of Transportation no matter who owns the bridge,
Marion said. Keokuk does not want to reach into the demolition funds for bridge
operation and deplete it before it is needed.

"I don’t think we need to
be in the bridge business, but we don’t need to sell our souls to be out of it,"
he said.