S.D. panel plans a second look at several proposals for federal railroad grants

Capitol News Bureau
KELO Railroad Cross

PIERRE, S.D. (KELO) — A project that could revive a forgotten route between Brandon and Valley Springs gained an endorsement Wednesday from the South Dakota Railroad Board.

But board members wouldn’t go beyond promising a letter of support to help Ellis & Eastern Railroad of Sioux Falls pursue a federal grant for the seven miles.

E & E is looking for $20 million through the federal Consolidated Rail Infrastructure and Safety Improvements — CRISI — program.

The board ultimately declined any further involvement, after learning that some of the $20 million might be used in Minnesota, and after learning that South Dakota officials weren’t sure how a two-state arrangement would work.

“I have no idea,” the board’s attorney, Karla Engle, who’s been involved in state government’s railroad issues for some 15 years, said several times about various issues regarding the multi-state approach.

The longer that the E & E representative, Dan Kippley, talked, the sketchier and more complicated the proposal became.

He said that Knife River Corporation owns E & E and that MDU Resources Company owns Knife River.

He explained E & E officials plan a meeting next week with Minnehaha County officials to discuss possibilities for either joining an existing regional railroad authority or forming one.

Minnehaha County isn’t a member of any South Dakota regional railroad authority. The Brandon-Valley Springs segment of the line under consideration is in Minnehaha County.

That raised another red flag. Regional rail authorities have county property-tax authority in South Dakota. Not having a regional authority involved on the E & E project meant the state Department of Transportation would be at risk if something went financially bad for E & E.

Why? Kippley wanted the state agency to serve as the go-between on the federal grant. Deputy Secretary Joel Jundt said several times he was apprehensive about what Kippley was suggesting. “We’re the ones where the buck stops,” Jundt said.

Kippley couldn’t promise a firm construction date. He said work could be in 2021 — or 2022 — or 2023.

“If anything goes south, the state is in the middle of it,” the state board’s chairman, Jerry Cope of Rapid City, said.

Kippley’s hope is to get the congressional delegations from South Dakota and Minnesota lined up behind the grant application. “If one grant wins, two states win,” he said.

His goals are to connect traffic from the Brandon-Valley Springs line with the Burlington Northern Santa Fe railroad at Manley, Minnesota, an unincorporated community one mile east of Valley Springs, and with the Union Pacific railroad at Worthington, Minnesota.

There was a long silence when chairman Cope asked what the state board wanted to do. Board member Gary Doering of Cavour finally said, “We’d have to find out if we got the statutory authority (to administer a federal grant in Minnesota).”

Cope told Kippley it would be difficult for the state board to participate in the grant application. Kippley said he’d still like a letter of support from the board — and a letter backing the project from Governor Kristi Noem.

That brought laughter from several on the teleconference. Someone said it would be presumptuous to speak for the governor. Board member Greg Carmon of Brandon said a letter from the board would be “the only way forward.” Other members including Jeff Burket of Spearfish agreed with Carmon.

“Then we’ll proceed that way,” Cope said.

Kippley said E & E also might apply for a federal STC grant for a bridge in South Dakota.

STC stands for special transportation circumstances. The Federal Railroad Administration provides the money to South Dakota, Wyoming and Alaska because the three states don’t have passenger rail service. South Dakota’s current allotment is $12.7 million, because nothing was spent from the account in 2017 through 2019.

The state board in April agreed to support STC funding for reconstruction of a bridge on a rail line across Lake Farley at Milbank and to rebuild part of the D & I line in southeastern South Dakota. On Wednesday the board agreed to take another look at several projects that were previously proposed for possible STC funding.

One is a loading facility at Belle Fourche that would provide materials for the Sanford Underground Research Facility at Lead. Another is a siding on the MRC line that serves three grain elevators between Mitchell and Kadoka.

The board wasn’t certain whether a fifth proposal — the purchase of the Napa-Platte line — using STC funds was still afloat.

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