Ravaged rails: Disasters declared, counties now assess damage
WORTHINGTON — Following a joint meeting via interactive television Friday morning, Rock County commissioners approved spending up to $750,000 toward an estimated $1.5 million repair bill to get the Buffalo Ridge Regional Rail Authority (BRRRA) back in operation after flooding caused extensive damage to the short-line railroad two weeks ago.
Nobles County commissioners, meanwhile, are taking a wait-and-see approach.
Owned jointly by Rock and Nobles counties since the late 1980s, the approximately 40-mile short-line railroad was completely undermined in areas, leaving the rails stretching through open air with nothing left underneath. Much of the damage is in Rock County, where an estimated 23 inches of rain fell in a one-week span earlier this month. Shippers who utilize the rail have already said they aren’t pouring any more funds into it.
Rock County Administrator Kyle Oldre said because the BRRRA is jointly owned by governmental bodies, it may qualify for disaster assistance. Representatives from the Federal Emergency Management Agency (FEMA) are slated to visit both Rock and Nobles counties on Tuesday to conduct preliminary damage assessments. If accepted by FEMA, the costs incurred to bring the line back up to pre-flood condition will be 100 percent reimbursable between federal and state funds.
The Minnesota Southern Railway utilizes the railroad and performs maintenance on the line. Its owners, Brent and Kathy Polanchek, also own the locomotives and own and lease railcars for the line, Oldre explained. Polanchek has owned Southern Minnesota Railway for the past 15 years.
“Working with FEMA, the operator can’t be reimbursed,” Oldre said. “So, the expenditure would need to come from the rail authority, and FEMA would reimburse the rail authority for damage.”
At this point, the BRRRA has a fund balance of $2,000 — far from the $1.5 million needed to make the repairs.
Oldre suggested Friday the counties consider a 50-50 split of the cost -— $750,000 each -— with the expectation the expenditures would be reimbursed by FEMA.
“It’s imperative, if we’re going to be an ag community, we have to figure out how to move our ag product,” Oldre added.
Rock County Commissioner Ken Hoime expressed the need for the repairs to be made to the railroad.
“I think we can all see the urgency of this so Brent can stay in business,” he said. “I think we all need to take serious consideration.”
If FEMA decides the rail qualifies for federal and state funding, the money would only cover the costs to bring the line up to an 80-pound rail, which is what was in place prior to the flooding. Today’s rail standards are 135-pound rail.
In discussing the matter as a local board, Nobles County commissioners had several concerns — starting with the FEMA reimbursement. While no motion was made, there was a consensus to wait until FEMA’s Tuesday visit and decision before committing any funds to repair the railroad.
Commissioner Don Linssen said when it comes to the government, there is no guarantee. He wasn’t the only Nobles County board member with concerns about a financial contribution.
“At some point you have to step back and ask, ‘Is this really a good investment?’” said Commissioner Matt Widboom, adding that he struggles with the idea of putting money toward a substandard rail that hasn’t proved profitable.
The income generated for car usage hasn’t been enough to provide Polanchek with a paycheck since he took over operation of the short line, the operator said during the joint meeting.
When the BRRRA purchased the short line in the late 1980s, the authority estimated approximately 3,000 cars would utilize the line each year. Polanchek said Friday that he hasn’t seen more than 1,000 cars use the line in each of the past 15 years.
“I have mixed emotions,” Linssen said of the rail line. “Putting it back to 1920s or 1930s standards … we’re really not doing ourselves any favor.
“Whether we get FEMA money or not, it’s still tax dollars,” he added. “What is the viability of that system five or 10 years down the road?”
“The tough part is Rock County has a bigger shipping advantage, but our partnership is 50-50,” Commissioner Gene Metz said.
Polanchek acknowledged that while he doesn’t have any direct customers in Nobles County, he’s been working to build up use of the line.
The GEVO plant in Luverne ships out 12 to 14 rail cars a week of ethanol, while the New Vision fertilizer plant at Magnolia gets about 100 cars of product shipped in annually. Also, Polanchek acquired a contract with Phillips 66 this spring to assemble unit trains at Manley to be taken to the Bakken oil fields of North Dakota.
“We spent about a quarter million dollars out there to improve the track,” Polanchek said, adding that a good portion of it was destroyed in the deluge. As a result, the contract has been suspended until the track is fixed.
“We’re in a prime location for them and I really think that’s something that’s going to be real helpful to us as we move forward,” he added.
Polanchek told both boards of commissioners that whatever profits the short-line generated in the last 15 years went into improving the rail line.
“I’ve got 15 years of my blood, sweat and tears and millions of dollars of my own investments in here,” he said. “I’m not going to walk away and let that go.
“I’m hoping in my lifetime we can have the track in really nice condition and maybe we can make a buck then,” he added.
After the joint meeting ended and Rock County approved putting forth $750,000, Oldre called an emergency meeting of the BRRRA. The group met in Adrian, where they authorized contracts to be signed with Trackworks LLC of Sleepy Eye to begin repairs. Oldre anticipated signed contracts would be returned by late Friday.
“We’re hoping $750,000 will get us open back to the east,” he said.
As for the remaining $750,000 needed, Nobles County commissioners voted to meet at 4 p.m. Tuesday to make their decision on whether to front the money.
A presidential disaster declaration requires a minimum $7.3 million in reportable damages, and Rock County alone has $4.3 million thus far. Nobles County, meanwhile, has damages of nearly $650,000. Nobles County commissioners on Friday approved a disaster declaration due to flooding.
If the presidential disaster declaration comes through, Oldre said Rock County could see funds coming back by late September, but more realistically in October or November.
Daily Globe Reporter Julie Buntjer may be reached at 376-7330.