BY CHUCK VANDENBERG
FORT MADISON – Fort Madison Mayor Brad Randolph said the city has never been closer to signing an agreement with Amtrak to get a platform built at the North Lee County Historical building and moving passenger depot service to a closer proximity to downtown.
But several city councilmen including Rusty Andrews, Chad Cangas, and Brian Wright, and Mark Lair expressed concerns about the city’s costs associated with the project going forward.
The city has already spent close to $600,000 on preparing the site, including lifting the building out of the flood zone, which also was a benefit to the North Lee County Historical Society, so that expenditure had benefits outside of the Amtrak depot.
The idea was first proposed by former mayor John Wright and then was taken up by former Mayor Steve Ireland. The city was able to secure grants and peripheral funding to pay for the costs of the project outside the $600,000. The platform for the new depot is estimated to cost about $1.2 million, but Randolph said grants have reduced the city’s cost to about $350,000. When the city first approached the railroads, which includes Burlington Northern Santa Fe, which owns the rail property and grounds, the cost was estimated to the city at about $115,000, but adjustments to the original plans and time, have increased the cost.
“I added this to the agenda last week, because we’re coming to a critical point in the negotiation process. The city manager has offered up some insights and specifics to an agreement that will be considered for approval. Since we’re at that point of cost, going forward it’s imperative that we have an understanding of what it means to move Amtrak service to the new depot,” Randolph said.
City Manager David Varley told the council that he had projected some costs to run the depot on an annual basis. He said the documents are getting very close to being ready to sign.
Varley said on several occasions during the conversation that he had estimated costs a bit higher.
“We tried to put in here a budget that estimates what it would cost to run the depot. We’re hoping we estimated on the high side and we think we did. I’d rather come back and say we can run this amount vs. this amount plus x%. It looks like if we get the bid letting to the point where we’d like to get it, we probably won’t be open for six months in the current budget year, but we did put $19,000 in the budget for six months.
When all the costs were added including possible personnel, security, maintenance, utilities and increases in insurance at the facility, Varley said he was projecting about $51,000 per year on a 20-year agreement.
He did say, however, that utilizing current staff would save some money, but they already are picking up other tasks, and possible negotiations on the insurance could reduce the amount, as well as costs dropping each year as they fine tune the processes.
“To be honest, we’re not sure if we’re high or low because things are still unknown. There are things we need to do for Amtrak that we just don’t know yet exactly how much it’s going to cost. If we can do maintenance with staff that will keep our out-of-pocket low, but we would charge that to Amtrak’s cost center.
Regarding the insurance, Varley said the main culprits for the increase is pollution insurance at $5,500 per year and Amtrak demands some insurance caps be moved from $1 million to $2 million and that would require an additional $8,000 annually with current projections.
“That’s our best estimate. My best guess, if you said – ‘Dave, what can we do it for a few years from now’, – my best guess would be $35,000 and maybe less than that.
After the meeting, Randolph said he didn’t want those numbers to scare people because they are estimated high and who knows how the final negotiations will work out.
He said 10 years ago the cost of the project initially was about $115,000, but that was with a 750-foot platform. He said Amtrak wanted the platform 1,200 feet so the trains wouldn’t have to be moved a second time to drop off additional passengers. Then BNSF, which will own the property and lease it to Amtrak, who will lease it back to the city after it’s constructed, asked that the platform be moved 400 feet to the west because it was too close to the curve on the track. Because of that move, a retaining wall had to be constructed. With those changes, the cost to the city is now about $350,000. Randolph said he has been applying for grants to help offset some of that cost as well.
“In the original agreement given to us, there was no rent and we were responsible for moving Amtrak at a cost of $37,000 plus,” Randolph told the council. “We weren’t comfortable with that at all. Remember, the location they are in now, they pay nothing. Amtrak pays nothing to be in that facility and they can stay there in perpetuity for nothing. They can never be kicked out of that building. That creates a dilemma because we want them to move and we want them to pay, and right now they don’t have to move and they don’t have to pay.”
Councilman Rusty Andrews said at this point with the agreement the way it is, it may not be fiscally responsible to keep moving forward. He said the cost of the platform didn’t bother him as much as the 20 years of operating costs.
“How many dollars is it worth? It’s not just me thinking. A lot of people have told me this doesn’t make sense and have said let’s take care of ourselves, our infrastructure first,” Andrews said.
“Everything said about the good parts of this are true. A 24-hour museum exhibit space that’s open all the time – that’s great. But at the end of the day it has nothing to do with preserving that space for the museum. That’s not the issue. It just scares me. 20 years for possibly 50,000 per year, it’s a lot to commit to.”
Councilman Chris Greenwald said he wasn’t in favor of the depot move at first, but now the city’s at a “gut-check” time when it comes to tourism.
“This is kind of like we did in 1985 when we built the Fort. That was intended to be self sustaining and it still isn’t. This is a lot better return on our investment than the Fort,” Greenwald said. “Am I taking a bad example and saying we should do this bad example? No, because it seems to me this project improves that project.”
Greenwald and Randolph both said that if the city doesn’t do this, they risk losing the Amtrak service, the only east-west stop in Iowa, and that in essence ‘shrinks’ the town.
Andrews argued that those people are still coming into town on the trains.
“I can give you pretty good odds they aren’t doing a lot of shopping now,” Greenwald responded.
“People want to know where they’re stopping and might inquire about the city and it might invite further interest later because they could see the Fort, the river, the historic depot,” Randolph said. “The fact is that we get somewhere near 9,000 people that either get on or get off at our facility. You hope that you are getting something out of that.”
Councilman Brian Wright said the costs seems like a lot of money a year and it’s not a sure thing they’re going to go in down there.
Randolph said everything presented to the council on Tuesday had been agreed to.
“There are some things they are being inflexible with and we’re not ready to accept that premise yet, but everything that’s been presented to you is a done deal,” he said.
Councilman Chad Cangas said he didn’t think going forward was a bad idea, but he wanted someone to tell him how to explain it his constituents who will ask the questions in a different forum.
“People would say this is fiscally a bad idea. But have we done any projections as to where the benefit to the city lies. For those that won’t ask the question now, but will ask me in some other forum, do we have an answer for that? I’m not asking you to quantify it, but I want to understand why it’s a good idea to move forward with this,” he said.
Randolph said originally when this was tossed about it was thought it would be a way to bring more people back to the central part of town and people would see the benefit of that. Somebody would have to be the benefactor of that.
“I’ve always looked at it as an infrastructure benefit. If you were to ever lose Amtrak, the talk was if you don’t improve your depot, there was a good chance you would lose your stop. We had to have legislatures intervene with that years back and that was a real concern. If you took away Amtrak and you take a person’s ability to get in and out of town, you invariably shrink your town and I don’t want to see that.”
Greenwald said the only real way to determine the impact is to not bring them into town.
“I did the math if we bring 9,000 people and we can get our cost to $30,000 that $3.30 per person. If we can get them to get gas or ice cream we can make our money. I’ve said a couple times at budget meetings we’re spending more money than this on the fort. But I think this adds to the fort, this adds to that picture.”
Councilman Mark Lair asked what would happen at this point if the council voted it down.
Randolph said at that point it would be in the hands of Amtrak to see what the next steps would be, but the historic district would have a renovated building.
After the meeting, Greenwald said if the council votes the depot move down, he’s going to recommend looking very hard at other operations within the city that are subsidized but aren’t generating revenue.
“If we’re correct that this is not worth $30,000 a year, then we have to re-evaluate some of those other things. Are we going to stay in the tourism business or not.”