PIERRE, SD (KELO) — A railroad investment guide will be part of the new four-year railroad plan being developed for South Dakota.
HDR Engineering, a global company based in Omaha, Nebraska, plans to provide the investment guide and statewide plan to the state Board of Railways in October this year.
Secretary of State for Transport Joel Jundt and an HDR official signed the contract in August 2021. He is asking that HDR be paid $548,570 for the work.
Members of the Railroad Board received a briefing on the Investment Guide and Trust Fund at their meeting last week. The council provides low-interest loans and grants to railway projects from the fund.
Jundt provided the council an overview of the fund balance. There was approximately $5 million as of June 30, the end of fiscal year 2020. The balance grew to over $20 million at the end of fiscal year 2021 and is expected to exceed $25 million by June 30. June of this year, according to Jundt.
He said the balance will continue to grow over the next few years and will reach more than $40 million in fiscal year 2026.
The investment guide is intended to provide the board with a better understanding of the rate of return and other financial details the board can consider regarding federal grants for future projects “to know which would be best and should range from forward,” Jundt said. .
The second objective of the investment guide would be “to really stimulate and encourage economic development and upgrades and everything else on these railway lines, both public and private, that these funds can be at work, versus staying in the bank and really not messing around,” Jundt said.
He told the board that a first draft of the investment guide would be presented at the next board meeting on February 16 or at the March meeting. Jundt said he was “very keen to be able to use these funds again and create additional opportunities for people.”
Jundt said the state Department of Transportation and HDR are compiling information on approaches used in other states.
The legislature in the past has swept millions from the railroad fund and other specialized accounts in state government.
“The size of this fund is quite significant,” said board chairman Jerry Cope of Rapid City. He said an investment plan “is a great idea” for using the money.
“If we don’t,” Cope said, “somebody else will.”
The ministry accepted the HDR contract without going through the standard requirement to issue a request for professional services greater than $50,000.
DOT quoted an exemption in state law that specifically applies to “(s)services of such a unique nature that the selected contractor is clearly and properly the only practical source for providing the service.” The determination that the selected contractor is properly the sole source is based on either uniqueness of service or sole availability at the required location.