04-07-1986 CCMMINUTES
SPECIAL CITY COUNCIL MEETING
MONDAY, APRIL 7, 1986
Mayor Ackland called the special city council meeting to order at 7:00 p.m.
in the city council chambers. The following members were present: Mayor
Paul L. Ackland, Alderman Michael Carls, Alderman John Mlinar, Alderman Pat
Mikulecky and Alderman Marlin Torgerson. Also present were City
Administrator Gary Plotz and City Attorney Jim Schaefer.
Mayor Ackland introduced the discussion, stating there are areas of concern
concerning the railroad which need to be addressed before the bids for a
spur line and connector track are acted on. He asked Jerry Ross, operator
of Dakota Rail, to summarize progress to date.
Mr. Ross reported he has been continuing rehabilitation on the Hutchinson -
Wayzata rail line since September 1985. He produced photographs showing
progress to date. He is continuing to negotiate rates and routes with major
carriers and traffic is starting to move on the line with several
shippers. Since this activity has started, Burlington Northern is now
willing to give competitive rates to retain business on connecting routes.
Ross has purchased $63,000 worth of equipment to assist in the cleanup and
rail rehabilitation. Cleanup is progressing as spring weather allows.
Negotiations are in progress to arrange for a dinner train out of Mound
which could make a pleasure trip to Hutchinson several days a week,
producing publicity and aiding tourism. Addition of rail service should
make the industrial park area more desirable, providing prospective industry
with two means of transportation.
In further discussion between council members, Mr. Ross and members of the
audience, it was brought out that lease rates for property along the
railroad have been increased on renewal dates this year. Ross stated that
previous rates, which had not been changed for many years, were too low to
produce a realistic return to the property owner. A fair market return on
property is about 12% per year plus taxes. No leasees have contacted Ross
to inform him they are unhappy with increased rates, but he would
be willing to discuss questions or concerns with any of them. Leases can be
terminated on short notice by either party.
It is not feasible to cross Highway 7 to Rockite, but a track up to the
crossing is feasible. Shipping agreements are being negotiated with various
prospective shippers. These negotiated rates are confidential and not
public information.
There was further general discussion concerning shipping possibilities and
finance.
There being no further business, the meeting was adjourned at 8:35 p.m.