PIERRE, S.D. (KELO) — A rail investment guide will be part of the new four-year railroad plan being developed for South Dakota.

HDR Engineering, a global company based in Omaha, Nebraska, plans to deliver the investment guide and statewide plan to the state Railroad Board in October of this year.

State Transportation Secretary Joel Jundt and an HDR official signed the contract in August 2021. It calls for HDR to be paid $548,570 for the work.

Railroad Board members received a briefing about the investment guide and the trust fund at their meeting last week. The board makes low-interest loans and grants to rail projects from the fund.

Jundt provided the board with an overview of the fund balance. There was about $5 million as of the June 30, end of the 2020 fiscal year. The balance rose to more than $20 million by the end of fiscal 2021 and looks likely to exceed $25 million by June 30 this year, according to Jundt.

He said the balance would continue to grow in the next few years and reach more than $40 million in fiscal 2026.

The investment guide is intended to provide the board with a better understanding about the rate of return and other financial details that the board can consider regarding federal grants for future projects “as to which ones would be the best and should move forward,” Jundt said.

The second purpose of the investment guide would be “to really spur on and encourage economic development and upgrades and everything else on these railroad lines, both public and private that these funds can be at work, as opposed to sitting in the bank and really not doing anything,” Jundt said.

He told the board that an initial draft of the investment guide would be presented at the board’s next meeting on February 16 or at the March meeting. Jundt said he is “very desirous to be able to again get these funds in use and create additional opportunities for folks out there.” 

Jundt said the state Department of Transportation and HDR are compiling information about approaches used in other states.

The Legislature in the past has swept millions from the railroad fund and other specialty accounts in state government.

“The size of this fund is pretty big,” board chairman Jerry Cope of Rapid City said. He said an investment plan “is a great idea” to put the money to use.

“If we don’t,” Cope said, “somebody else will.”

The department agreed to the HDR contract without going through the standard requirement of issuing a request for professional services exceeding $50,000.

DOT cited an exemption in state law that specifically applies for “(s)ervices of such a unique nature that the contractor selected is clearly and justifiably the only practicable source to provide the service. Determination that the contractor selected is justifiably the sole source is based on either the uniqueness of the service or sole availability at the location required.”