In a unanimous vote, the Washington (Iowa) City Council has accepted a counteroffer from Canadian Pacific (CP) that would allow the city to secure city funds and “municipal cooperation” for the proposed CP-Kansas City Southern (KCS) merger, which would “increase train traffic by more than 300% in the area,” the Southeast Iowa Union reported on Nov. 21.
The proposal, which, according to the Southeast Iowa Union report, was “the same one tabled by council members at their previous meeting,” includes:
- A $200,000 cash contribution from CP, for use as the city sees fit.
- Payments of $225,000 from CP for each crossing the city agrees to close.
- A $55,000 contribution from the railroad for a quiet zone study.
- Waived costs by the railroad for the removal of crossing surfaces, signals and signs at any crossing the city agrees to close.
According to the Southeast Iowa Union report, CP representative Larry Lloyd said, “There was no sunset clause on the offer, meaning the city could take advantage of crossing closures as far in the future as it wanted,” adding, however, that “state and federal fund initiatives would likely run out of cash in the next few years.”
“The agreement would still hold,” Lloyd said. “It’s conceivable that in five to six years, the Bipartisan Infrastructure Law runs out, and that $100,000 match could go away, so that’s probably the incentive for [the city] to do it sooner rather than later. But from CP’s perspective, that incentive is always there; we would love to close a crossing at any point in the future.”
According to the Southeast Iowa Union report, city officials “floated the idea of potentially reopening a crossing down the road,” but Lloyd said, “The current regulatory environment made closures difficult to reverse.”
“The general railroad standard is if you want to open a crossing, you need to close two,” he said. “The long-term plan by the railroads, Iowa DOT, U.S. DOT, Federal Railroad Administration, everybody, is to reduce the number of crossings. The general consensus is if you would ever want to put a crossing back into service, you would need to reduce that by two.”
Although the vote to approve CP’s offer was unanimous, several council members said they “still had reservations about the [CP-KCS] merger.”
“We’re not going to improve the offer,” said Illa Earnest, who, according to the Southeast Iowa Union report made the motion. “We may have questions that come along later, but it’s not going to influence the offer.”
“We are very pleased that the City of Washington has voted to ratify a community investment agreement with CP,“ CP spokesman Andy Cummings told Railway Age. ”From the outset, CP has committed to working proactively with communities that will see increases in train traffic as a result of the CP-KCS merger. The agreements CP has reached with Washington and other communities reflect that commitment.”