Kimball rail spur project now facing increased public scrutiny

A recent update on the rail spur project that has long been in development by the City of Kimball gave little comfort to local residents who have waited years for its completion.

According to Mayor James Schnell, the project, as it stands, cannot move forward as initially planned.

“No matter what we do, we’re starting basically from the very start again,” Schnell said.

In a statement read by Schnell at the start of the meeting, the state of the rail spur project became quite clear when considering the construction bids the city had received in the past for the project and comparing them to the adjusted cost to complete the project.

In 2009, the bid for construction of the project came in at $3,797,041.00 with a second bid in 2012 coming in at $4,392,000.00. However, the city did not move forward with construction after attaining either bid.

After switching to a new engineering firm CRS Advance LLC in the summer of 2012, an estimate of the overall cost of the project revealed that all of the previously allocated funds would be grossly insufficient in order to construct the rail spur and proposed industrial park.

“CRS’ engineering estimate for the railroad infrastructure alone is estimated at $7,032,726.00. Additional expenses have to be considered such as cost of acquiring land necessary for development, cost of providing the industrial park with basic utilities and infrastructure. These are likely to exceed the cost of developing the rail spur to about $10 million,” Schnell said.

Along with a prohibitive cost, to date, no land has been acquired for the project, and the city has not rebid the project for construction. Right now, whether or not the project can move forward rests in finding other avenues to acquire revenue for the project, according to Schnell.

“We are chasing a tail we can’t seem to catch up with, and that tail is money. We’re really at a point right now whether we would move forward and try to see if there’s something else. We have a short amount of time for the donation in effect for this project. It has only about six months left on it,” Schnell said.

One idea proposed at the meeting was to shift the focus of the project to better serve Castronics.

“Castronics is still interested in a rail site, which is all we’ve been interested in since day one. There’s plenty of Union Pacific land to put a site on. If you have to put in a full train length siting, then there’s that land too,” Council member John Morrison said.

Though the smaller focus of the project and concentrating on primarily Castronics would alleviate some of the prohibitive cost associated with it, City Administrator Daniel Ortiz believes that scaling back the scope of the project could lead to problems with gaining approval by Union Pacific.

“The one caution you have to keep in mind when going smaller is certainly what is UP willing to take on, because in their mind, they look at car count. If you go with a smaller operation that entails heavy usage of the rail spur, it might be something they’re not even interested in. The other issue that we had was what Castronics is proposing would be the siting that would be purely for their use,” Ortiz said.

The proposal also caused local residents, such as Jim Huff, to wonder how shifting the focus on to Castronics would serve the taxpayers of Kimball who have helped fund the project over the past few years.

“I understand Castronics will benefit. I just don’t know what we as taxpayers have to benefit from this if this is undertaken by the city, and it wouldn’t be owned by the city unless you own the land underneath the siting,” Huff said.

Huff also questioned whether the project was still feasible, considering that the City of Kimball has already spent $508,710.25 on the project to date with little progress being made.

“Do you honestly think that this project is still feasible considering your bids from 2009 which ware 25 percent higher than you initially figured and the cost of land has quadrupled since 2009? I’m sure that if you went and rebid this it would be higher than it was in 2012,” Huff said.

However, Kimball Economic Development Director Wilson Bowling responded to questions about the money spent in the past on the rail spur project by stating that that cannot be the primary focus for further discussions concerning the project.

“Unfortunately, as hard as it is, we can not consider what was spent in going forward. We have to put all of that behind is. It’s a sunk cost. It’s already been spent. We have to look at, right now, are we going to spend going forward. We can’t think about the half a million we’ve spent before. That’s done,” Bowling said.

According to Ortiz, in moving forward, one of the first steps would have to be coming up with a new engineering design for the project and a ten percent plan with UP.

“For the ten percent design, with CRS, those are roughly $5,000, but that’s just $5,000 of a single phase of all the hoops that we have to jump through to get approval. In the long run, we’re not going to be looking developing this project within the next three, four--six months is pushing it,” Ortiz said.

However, Schnell proposed that once a plan has been put together, the council should submit it to Union Pacific in order to see if they would accept the project, before moving forward with any other aspect of the project.

“Initially, what we’ll need to do is go to Union Pacific before we start writing checks and say this is what we are at, will you consider doing that? Or else there’s no need to go to an engineering firm,” Schnell said.

If the plan is not accepted by UP, there is the potential for the project to once again go through the voting process to be amended and for the public to possibly vote to discontinue the four-tenths collected for taxable properties.

“If we’re not going to do it, then we don’t need to keep taking tax dollars from the citizens. With what’s been collected now, it’ll probably pay the bills. If it goes to a vote, we’d ask the people if they want to drop it and no longer have the city collect a four-tenths of a percent. That’s what it would basically come down to,” Schnell said.

As it stands, the project is at a crucial point where either within the new year a plan will be put in place to set it back into motion or be scrapped all together.

“What we’re here to ask the council tonight is if you want us to move forward or start planning to go to a vote now before we start spending any more of the taxpayers’ money. Or do we revamp and come up with a different design that could possibly service Castronics and maybe someone else later on down the line?” Schnell asked.

After a great deal of discussion, Warner made a motion to proceed with options to see what the cost would be for a rail spur that would service Castronics and possibly a couple of other locations.

“For what has been spent and would be spent, I think it’s worth a few dollars to pursue and see if there are any options. That’s my thought on it,” Warner said.

The motion was unanimously approved by the council.