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MRL pitches in on grant effort

By Michael Howell

Following the successful effort of Bitterroot Valley shippers, working in cooperation with Ravalli County Economic Development Authority and local government, to keep the Bitterroot rail line open for another year, Montana Rail Link has announced that it will kick in $100,000 in matching grant funds for the $1 million TIGER IV grant application that the county is submitting for infrastructure repairs on the tracks.

Lynda Frost, Assistant to the President at MRL, stated in a press release, “Montana Rail Link is proud to announce our decision to contribute $100,000 towards the Tiger IV grant match. The accomplishment of restoring rail service in the Bitterroot prompted MRL officials to lend support to this effort, and we look forward to assisting Ravalli County representatives in securing the grant. MRL is proud to partner with the hard working folks of the Bitterroot who dedicated countless hours in the process of re-opening the line. Through their dedication it was an easy decision to contribute the grant matching funds.”

When MRL decided to shut down the Bitterroot line due to a washed out culvert north of Stevensville, RCEDA Director Julie Foster helped broker a deal to keep the tracks operating for a year if the shippers could collectively guarantee enough shipments to make the operation break even. When the shippers came up short at the last minute the County decided, along with the municipalities of Hamilton and Stevensville, to provide a guarantee to meet the shortfall of about $72,146.

That’s a done deal and rail service to the Bitterroot is scheduled to resume May 19th.

But then there is the question of how to pay for it if the shortfall is realized.

On Monday, April 23, the Commissioners approved making a loan application to the Montana Essential Freight Loan Program to cover the cost if the shortfall in profits should come to pass. RCEDA Director Julie Foster explained it was a 10-year term at 0% interest, although there was an upfront 1.4% fee that would be charged.

Then she suggested that the Commissioners may want to consider adding another $100,000 to their loan request as a funding source for the match for the TIGER IV grant. She said since MRL has agreed to put in half of the $200,000 in matching funds, the County could add the remaining half to this loan request and make it for $172,146.

Commissioner Ron Stoltz said that he thought it was a violation of the County’s recently adopted fiscal policy which prohibits taking out loans for terms longer than the life of the asset. He said in this case they would be buying possibly three more years of rail service but paying for it for ten years.

Commissioner Greg Chilcott said that the money was actually buying infrastructure improvements that would last for more than 10 years. But whether or not the rail will run on that infrastructure depends on the shipping volume and is a separate issue.

Gene Mim Mack, mayor of Stevensville, who was present at the meeting, said that in his view, “We are buying time now. How we choose to finance that is another question and you look for the best way financially.”

The Commissioners voted 3 to 1 to apply for a $172,146 loan.

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