The City Council has approved a lifetime $1,600 license agreement that will allow the city to run utilities under Union Pacific rails to service businesses near the south I-15 interchange.
"Under our original agreement, we paid a $100 annual fee for the easement," said Randy McKnight, city administrator. However, a clause in the contract allowed the railroad the right to re-evaluate the contract and the annual fee."The new fee proposed for this year was $700," said McKnight. The $700 fee would be charged annually and Union Pacific would have the right to re-evaluate the contract in the future.
"They have offered to allow us to pay a one-time fee of $1,600," said McKnight, who recommended the council take the offer.
"It doesn't look to me like we have a heck of a lot of choice," said Mayor Robert Steele.
Chad Brough, council member, asked if the railroad had offered a justification for the extra fee.
"Under terms of the original contract they could re-evaluate. I'm certain that if we asked for justification, they would give us reasons," said McKnight.
"They must be using this as a way to generate some quick cash," said Jens Mickelsen. "They have to know no one would turn down the opportunity to pay a lifetime fee of $1,600 as opposed to paying an annual fee of $700."
"I recommend we pay the $1,600 and get on with life," said Steele.
Council members agreed.