Thursday, July 16, 2009

Rail company wants Keokuk bridge as gift

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Keokuk Junction Railway Co. doesn't necessarily want to own the swing-span railroad bridge between Keokuk and Hamilton, Ill., but that may be the best solution for all parties involved, according to company President Mike Carr, the Burlington Hawkeye reports.

"We really aren't too excited about owning it," Carr said. "I'm not even sure I want to own it. But I think in the long run, it's going to be best for the city and us if we do. We don't want to buy it for money. We want them just to give it to us."

A controlling majority of Keokuk Junction Railway stock is owned by Peoria, Ill.,-based Pioneer Railcorp.

The Keokuk City Council kicked around the idea of selling the bridge for years. But the idea began to get more attention last month after the council proposed raising the cost of using the bridge. The council proposed raising the fee for the next three years from $16.67 a car to $19.67 per car and charging a second fee of $50 an hour for the time a city employee operates the bridge.

Keokuk Junction Railway, the only rail company that uses the bridge, rejected the initial proposal. But the two parties have come to tentative agreement of a single fee of $20.76 per car for a year. The council is expected to vote on raising the rate raise, which must be done by ordinance, later this month.

As part of the agreement, city officials pledged to make a concerted effort to determine whether the council would agree to sell the bridge and to explore questions that need answering before the bridge can be sold, Mayor David Gudgel said. Gudgel, who didn't rule out the possibility of simply giving the bridge to the railroad, said It could be years yet before the city gets all its questions answered and is ready to divest itself of the bridge.

Carr points out the rate increases are passed directly to the two customers it has in Keokuk -- Roquette America Inc. and Griffin Wheel.

"We can maintain the bridge cheaper and more effectively, more efficiently than the city can. And that is the bottom line. ... Those bridge fees get passed on directly to those customers that use rail. We'll be able to keep the costs down for them, our customers. Which in turn helps them, which in turn helps the city of Keokuk," Carr said.

The current rate simply isn't enough to pay for bridge maintenance and employees who have to operate it, Gudgel said. Officials hope with the rate increase, the bridge will be able to pay for itself. The city spends at least $500,000 annually on maintaining the bridge. Although in 2008, costs were closer to $1.2 million, partially due to damage done during flooding last summer, said Keokuk Public Works Director Gerald Moughler.

Giving up the bridge would mean no more maintenance costs, which should be payment enough for the city, Carr said.

Before the council is willing to part with the bridge, officials first plan to shop it around to see if any other companies would be interested in the structure, such as BNSF, the Southeast Iowa Regional Economic and Port Authority or Roquette.

Carr was less than enthusiastic about the idea of another company owning the bridge and pointed out no other company could use it because Keokuk Junction Railway owns the tracks on either side of the bridge.

There are at least two other issues needing resolved before the city sells the bridge:
• Determining what the city would do with the $3.7 million fund it has in case the bridge ever needs to be demolished.
• Forging a legally binding agreement to guarantee the new owner does not abandon the bridge.

Gudgel added that if bridge were no longer maintained, the new owner would be required to remove it.

"I'm telling them (the city council members) if you give us the bridge, transfer it to us, you guys can keep that money for demolishing the bridge and use it for whatever you want in the city. We'll take care of that (bridge). Because the last thing we want to see is that bridge demolished," Carr said.
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