Red Oak council backs funding for railroad spur repairs

“This is going to be about $18,000 for this first year,” said Silvius. “$15,000 of it will cover the costs of our half of repairs which are about $26,000.”

Per the agreement, the remaining $3,000 would go towards the necessary insurance expenses and property taxes concerning the rail spur’s operation. Silvius adds $3,000 would be allocated through a similar economic development grant in the future for additional maintenance. However, Adams has also previously expressed optimism about the number of cars potentially using the spur to generate enough revenue to address ongoing maintenance.

While they have looked into other funding sources, Red Oak City Administrator Kyra Smith says their financial advisors have suggested using the general fund for the initial repairs.

“We talked to the bond counsel and they think we should just use the general fund right now for this year,” she explained. “Then we can look at other options in the years moving forward.”

Particularly, Silvius says the bond counsel has suggested looking into TIF revenue in the future, not only for maintenance on the spur but funding for MCDC and the Red Oak Chamber.

Adams added that the council’s approval Monday night comes well within the timeline to secure the proposed costs from June 22.

“That bid we have from Ameritrack Rail is good for 20 days, so once this approved we’re still within that 20-day cost estimate,” said Adams. “So, if we can nail it down here before that time runs out there will not be any changes to that bid whatsoever.”

He says the hope is to begin the repairs in July with the spur operational by August 1, which is Bunge’s deadline for when they would like to start using it. The Montgomery County Board of Supervisors is expected to revisit its funding portion of the project on Wednesday.

In related business, the council also approved its annual funding allocations to MCDC for $30,000 on top of the $18,000 for the railroad spur and the Red Oak Chamber at $20,000--an uptick of $5,000 from the previous fiscal year.

In other business, the council...

--Held a public hearing and approved the first readings of sewer rate increases including 10% each year over the next three years. Additionally, they held a public hearing and approved the first reading of water rate increases including 10% the first year and 7% in years two and three.

--Set public hearings for July 17 on amended recycling fees and to update their ordinances to the 2018 International Property Maintenance Code.

--Approved the temporary shutdown of 4th Street from East Cherry Street to Sunset Avenue between 2 p.m. and 11 p.m. on July 20 for the MotoCross Races.

--Approved the firework display to be held on July 22 at roughly 10:30 p.m. at the Grandstand Arena of the Montgomery County Fairgrounds.