City in Best Position Possible if Proposed Railway Company Merger is Approved

In 2023, the Surface Transportation Board (STB) is expected to vote on a $31 billion plan that would merge the Canadian Pacific Railway Company (CP) and the Kansas City Southern Railway Company (KCS).

You can learn more about the STB by clicking here.

HOW DOES THAT IMPACT US?

The proposed transaction between CP and KCS will have a significant impact on the City of Bettendorf. The CP mainline follows the Mississippi River for the entire southern portion of our city. Data from the merger application indicates a tripling of freight rail traffic – from approximately 7 to 21 trains per day in our city by 2027.

If the STB approves the merger and the two parties close on the transaction, the City of Bettendorf is prepared to mitigate some of the negative consequences of increased rail traffic.

HERE’S HOW

The City of Bettendorf participated in the environmental review process established by the STB, which includes the impact on cities and residents along the mainline. The environmental review process is conducted by the STB’s Office of Environmental Analysis (OEA). The OEA provides a public process for comments on environmental impacts, establishes a scope for an Environmental Impact Statement (EIS), publishes a draft EIS, publishes a final EIS, and provides the STB with any environmental mitigation actions proposed by the OEA.

Our city provided formal statements to the STB as part of this process, as well as followed up with the OEA. In our letter, we expressed serious concerns about the increased rail traffic and how it will impact homeowners, commercial businesses, industrial businesses, public recreation amenities on our riverfront, the environment, and safety. To see a copy of the letter, click here.

The OEA has extended the public comment period to October 14, 2022. To participate, click here.

While that process continues, the City of Bettendorf proactively met with representatives from CP regarding possible mitigation actions. We did this because through due diligence and communication with the STB staff, our city learned that the STB will only approve mitigation actions for specific projects and their approval would likely be limited in scope and not include a monetary contribution. However, the CP offered a different solution.

That is why on July 5, 2022, the Bettendorf City Council voted in favor of a resolution approving the Community Investment and Settlement Agreement, presented by CP. The agreement includes a $3 million payment to our city and gives us the flexibility to use the money for whatever mitigation efforts are appropriate - including quiet zones. The payment will only be issued to our city if the STB approves the merger and CP and KCS close the transaction.

The resolution was included in the Committee of the Whole Agenda (published Friday, July 1, 2022) and discussed by the Bettendorf City Council during the Committee of the Whole Meeting on July 5, 2022 ahead of the City Council meeting. During the City Council meeting, there were no citizen comments at the Public Request of Council or otherwise related to this resolution.

To see the resolution, click here.

WILL IT BE ENOUGH?

The City of Bettendorf engaged Snyder and Associates to analyze the cost of constructing quiet zones from 12^th Street through 35^th Street and the $3 million payment exceeds the estimated amount needed for such quiet zones, which means our city will be able to take other mitigation steps as well, if appropriate.

SO WHAT’S NEXT?

The STB still needs to decide if it will approve the merger and if it does, the CP and KCS need to close on the transaction. Now that the public comment period has been extended, it is unknown when a decision is scheduled to take place.

If the merger is approved and the two parties complete the transaction, the City of Bettendorf will receive the $3 million payment from CP and begin our budget process for mitigation efforts.

Even though the merger decision is not in our control, our city is prepared to take the steps necessary, utilizing our payment from CP, to ease the impact of increased rail traffic on our citizens, businesses, economy, environment, and safety. Through our due diligence, we believe we are taking the best opportunity available and are now in the best position possible to affect what happens to our city.