PIERRE, S.D. (KELO) — The state Transportation Commission agreed Thursday to loan more money to a county government to complete a road project in central South Dakota.
Lyman County is borrowing another $323,166 plus the potential of up to $500,000 more.
The county had already received the commission’s approval August 23 for a $2,300,000 loan for the project east of Presho.
The road serves the new Dakota Mill and Grain elevator site along the state-owned MRC railroad line.
The total loan for the project, potentially, is now $3,123,166.
Tammy Williams, a state Department of Transportation official, said the county wouldn’t seek any money beyond what was needed.
“I’m okay with it,” she told the commissioners. “So if it’s not used, it wouldn’t be loaned out.”
Williams said the project ran into “a few stumbling blocks” over relocating utilities and acquiring some right of way.
She said Lyman County also wants to put another four inches of gravel on the roadway to handle the truck traffic.
Jerry Cope of Rapid City, a Dakota Mill and Grain official, is chairman of the state Railroad Board.
Toby Morris, a vice president for Dougherty and Company, represents the county. He told the commission Thursday the bid opening is scheduled for March 10.
Morris explained the various ways the county is guaranteeing the loan will be repaid.
He said a local tax-increment financing district will raise money, currently expected to be about $120,000 per year.
There’s also a contract between the company and the county, Morris said, and if that failed, the county could surrender the $212,000 a year it currently receives in federal aid through the state department’s surface transportation program.
“I’m just looking for a belt and suspenders approach to it,” Morris said.
A document that Lyman County filed for the additional loan says that the return of regular rail service to Presho has led to $115 million of local development.
Morris said grain producers in the area are receiving eight cents to 30 cents more per bushel for their crops because of the rail service.
Don Roby of Watertown voted for the larger amount Thursday but said he still wants to have a discussion about the program, which has made two loans.
The other was for a rural project in the Yankton area.
Roby said he’s concerned that money could be borrowed for a project and more money could be sought later for the same project. The commission’s rules don’t specifically address that point.
“We’re kind of half wet. We can’t be half wet. You’re either wet or you’re not,” Roby said.
Observed commissioner Rod Fouberg of Aberdeen, who’s spent most of his career in banking: “You’re in the lending business.”
“I too had some concern,” commission chairman Mike Vehle of Mitchell said. Vehle had circled the $500,000 contingency and quoted former U.S. President Ronald Reagan: “Trust but verify.”
Morris said that as the county’s representative he’ll inspect the bills submitted for the work and a state department official will also check them.
Said Roby, “For lack of a better phrase, there’s potential for a loophole there.”
Transportation Secretary Darin Bergquist acknowledged some expenses were found on the Yankton project that shouldn’t have been included.
“Trust me,” Morris said about the potential that money would be misused on the Dakota Mill and Grain project, “they’re not going to pave any road north of them.”
The commission approved the additional money on a voice vote, without anyone saying “nay.”
Vehle, a former legislator who made a career in the grain business, was the first chairman of the regional railroad authority that leases the state-owned MRC line.
He played a key part in building support at the Capitol in Pierre for the state and federal grants that helped rebuild the track.
“I’m just really proud we fixed that line up,” Vehle said after the vote. “It worked.”