Keokuk council rejects MOU with Keokuk Junction Railway, approves first reading to raise rail-bridge toll to $70

The Keokuk City Council voted on May 7 to reject a memorandum of understanding with Keokuk Junction Railway Company LLC that would have governed a proposed capital-improvement project on the city’s railroad swing-span bridge, then approved the first reading of an ordinance to raise the per-railcar toll to $70 and add a 3% annual escalator.

City staff explained the rationale behind the two options: the MOU would have secured the railroad’s help with grant-writing and front-end engineering for a roughly $7,000,000 project tied to larger long-term bridge needs estimated at $30 million–$40 million. Staff said the federal CRISI grant window is short and that KJRY had offered to pay most upfront grant-writing costs and about 5% ($350,000) toward the project; the MOU also included contractual limits on future rate increases. “This project in itself was about a $7,000,000 project,” said city staff during the presentation.

Opponents on the council argued the MOU’s limits on rate flexibility would constrain the city’s long-term ability to cover capital and debt costs. One councilmember urged preserving the city’s authority to set rates if the city must bond for a larger match, saying the rate structure in the MOU “would not provide any room for capital.” After discussion, the motion to approve the MOU failed on a roll-call vote in which the council recorded No votes from Marshall, Walker, Matlick, Dade, Andrews, Van Berkham, Bryant and Greenwald; the mayor announced, “Motion fails.”

With the MOU defeated, the council considered an ordinance to amend City of Keokuk Code section 9.6.0.01 to raise the per-railcar fee. Councilmembers debated an amendment to change the ordinance text from $65 to $70 per railcar. The amendment passed, and the ordinance passed its first reading by roll call (Marshall, Walker, Matlick, Dade, Andrews, Van Berkham, Bryant and Greenwald recorded aye votes). Staff said the new schedule includes a 3% escalation each fiscal year and directs a biennial review of charges to ensure fund sufficiency.

City staff warned the council that while the $70-per-car rate would bring the bridge fund closer to operating costs, it would not by itself create large capital reserves for a multiyear project; staff reiterated that if the city pursued bonding for a major capital match, rate revenue under the ordinance might still be insufficient to cover principal and interest without additional increases. Staff also noted operational changes under consideration — for example, limiting bridge openings to a four-hour window to reduce overtime — that could lower operating costs and affect net revenue.

The ordinance will return for subsequent readings as the council finalizes whether to pursue the ordinance-only path, reopen negotiations with KJRY, or both. The council was told the CRISI application deadline is near (staff cited a June date) and that timing for grant competitiveness is an important factor in any decision.

Actions recorded: the MOU motion failed; the first reading of the ordinance to set a $70 per-car toll (with 3% annual escalator and biennial review) passed and will return for additional readings.