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MARK STEIL: MPR's Mainstreet Radio coverage of rural issues is supported by the Blandin foundation, committed to strengthening communities through grant-making, leadership training, and convening. We invite you to visit the Mainstreet Radio website, go to www.mpr.org, and click on Mainstreet. You can hear Mainstreet Radio reports as well as hear this program live on the internet. If you missed any part of the program, you can hear it at any time on the Mainstreet website. The address, again, www.mpr.org, and click on Mainstreet.

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Good morning. I'm Mark Steil. And welcome to this special Mainstreet Radio edition of Midday. We're at the MPR studio at Augustana College in Sioux Falls. During our first hour, we'll take a close look at a small railroad which wants to become a big one, the Dakota, Minnesota and Eastern Railroad plans to transform itself into a major coal hauler, carrying the product from Wyoming through South Dakota and across Southern Minnesota.

The railroad says it would create thousands of jobs, open new markets for agricultural products and foster economic development. Opponents, though, worry about noise and traffic tie ups. If the $1.2 billion project becomes reality, it would be the largest US rail expansion in more than 70 years. We have more from Mainstreet Radio's Cara Hetland.

CARA HETLAND: The DM&E acquired the abandoned Chicago and Northwestern line 12 years ago. Since then, the Brookings, South Dakota, based company has more than doubled its staff and added 3,200 railcars. Its 600 mile line runs across Southern Minnesota and through South Dakota. It transports primarily agricultural products and runs up to six trains a day at a speed of roughly 10 miles per hour. The expansion plan calls for upgrading its current line and adding 280 miles of track in Western South Dakota into Wyoming. The $1.2 billion plan taps into the Wyoming coal mines of the Powder River Basin.

CEO Kevin Scheiffer says without the expansion and added revenue from hauling coal, DM&E can't survive.

KEVIN SCHEIFFER: We are going from the washboard gravel road of the industry, the unwanted stepchild of the industry, to the industry leader. We will be the best and most efficient railroad in the country. That will attract businesses and development up and down our line.

CARA HETLAND: The new and improved line would haul 40 million tons of coal in its first year of operation and would double that within four years. Scheiffer says the project won't use public money. And the additional 20 daily trains at speeds just under 50 miles an hour would pay for the project, benefiting every customer along the line.

He says the deregulation of the wholesale electricity markets and the Clean Air Act drive the proposal. It's necessary, he says, to compete with the major Union Pacific and Burlington Northern Santa Fe railroads, which dominate the Powder River Basin coal market.

Scheiffer says there will be a growing need for the low sulfur, low ash Wyoming coal. Saint Cloud State University history professor, Don Hofsommer, says the railroads haul 40% of all goods. And that's the most ever in the history of the rail. He says it's created a new dilemma for the industry, but one that will be solved with public policy.

DON HOFSOMMER: Are we going to, as a society, decide to add more highway miles? Are we going to add lanes to existing miles? Are we, on the other hand, going to allow or suggest to the privately held railroads that they expand their capacity?

CARA HETLAND: Hofsommer says rural towns need the rail to survive in the '90s. He says when the railroad was being built a century ago, towns made it or didn't, based on the location of the lines. He says, South Dakota has always been rail poor, and now there's mostly abandoned rail lines in the state. Hofsommer says the improved rail will attract businesses, create jobs, and improve getting local commodities to market.

DON HOFSOMMER: My sense is that the agricultural sector of South Dakota, which certainly is a dominant sector, if not the dominant sector, has to rely on that as a distinctly advantageous artery to get commodities to market. And my sense is that if money can be put in, especially private money could be put into that rail line, it's the very best insurance policy the state could have.

CARA HETLAND: Opponents of the plan say the faster trains will decrease the quality of life along the line. Complaints with the Surface Transportation Board say faster and more frequent trains will increase the noise levels and cause a safety hazard. The board ultimately will decide if the project is necessary and in the public's interest to go through.

The board rejected a request for an interview, but in its July scheduling document said, DM&E failed to provide adequate information for why the line is needed, and had until yesterday to reply to complaints. The board will issue a final decision November 3, contingent upon an environmental impact study. The new line could be operational by the year 2002 if it's approved.

In Sioux falls, I'm Cara Hetland, Minnesota Public Radio.

MARK STEIL: And joining us in our Sioux Falls studio is Kevin Scheiffer, president and CEO of the Dakota, Minnesota and Eastern Railroad.

Good morning, Kevin.

KEVIN SCHEIFFER: Good morning, Mark. Thanks for having me.

MARK STEIL: Sure. And in our Rochester studio is Paul Wilson, who is co-chair of the Olmsted County DM&E Task Force.

Good morning, Paul.

PAUL WILSON: Good morning. And how are you folks?

MARK STEIL: Just fine.

KEVIN SCHEIFFER: Good morning, Paul.

PAUL WILSON: Good morning.

MARK STEIL: We'd also like to hear from you. Our phone number is 1-800-537-5252.

Kevin, this is a very large project. Ultimately, what do you think the chances are that the project will, in fact, go forward?

KEVIN SCHEIFFER: I think they're very good. Obviously, I'm biased in that view. The history of these cases are that in the last-- I researched roughly the last century of construction cases. There aren't many that are denied, but there are some out there. I found one. Having said that, this is a, as you mentioned in your story, this is a bigger project than most of them. It carries with it a big picture issues that isn't comparable, in many cases, to the run of the mill construction cases.

But having said all that, I think the chances are very good, not because of historical statistics, but because of the public policy drivers behind this project.

MARK STEIL: Paul, what are some of the concerns in Rochester and Olmsted County about the project?

PAUL WILSON: Well, there's numerous concerns, and many of them have been shared with the Surface Transportation Board and DM&E. But I think it's really important to emphasize that Olmsted County and much of this area is a very proactive area that looks at issues and looks at some of the concerns that they have.

And we try to look at what may negatively affect this. We've not been negative in this process, but we are looking at something that could adversely affect the communities along the line in the county. Many of them, of course, are neighborhood concerns concerning their local environment, if you will. And by environment, that means the noise, and all the traffic issues, and all the concerns that go on there.

As we look at the county as a whole, there's the smaller communities that have similar issues, if you will. The numbers are fairly high. For example, one small community has approximately, I think, 27% of its houses that could be adversely affected by the proximity of the line. So there are issues that we need to look at.

And just mentioning too, this whole project, and just to piggyback on what Kevin said a little bit, this is a unique project. We've never had one like in this century. And it's going to be interesting to see how all the things fall out and fall into place. But that's an opening statement, if you will.

MARK STEIL: Sure. Kevin, how are you dealing with some of these community concerns, homeowners, businesses, that sort of thing?

KEVIN SCHEIFFER: Sure. First of all, I don't think this is a particularly unique project. I would say that it's bigger than most, but there have been big projects. The last build into the Powder River Basin in the '80s was similar in terms of its magnitude, but my only point was it's not a run of the mill case. And with that, I think I agree with Paul.

In terms of the impacts on communities, I hear very-- we get very positive feedback and real concerns. The concerns fall primarily in the area of safety, traffic, and noise. The positive aspects of it fall in the category of economic opportunities, jobs, taxes, passenger service, getting trucks off the highways. Where you have certain safety issues with the railroad, you have positive safety impacts on the highways, so that's an issue.

So those are some of the pros and cons in the communities in our broader service region for our existing customers, for the agriculture customers that use our railroad, for the industrial customers that use our railroad. This really boils down to a fundamental question, are we going to have a railroad with long term viability or not?

MARK STEIL: If you'd like to join our conversation about the Dakota, Minnesota and Eastern Railroad and its plans to expand in the region and run coal trains down its main line through South Dakota and across Southern Minnesota all the way to Winona, actually, give us a call at 1-800-537-5252.

We have a caller on the line right now. Good morning, Howard in Winona.

AUDIENCE: Yeah, my name is Howard. And I'm in Winona, Minnesota. I guess, my first point is, I would much sooner have a train on a track than a truck coming at me down the highway. I don't like trucks on-- especially, not on two lane highways. I don't think they belong in a mix with passenger cars and light trucks.

The other thing is the mayor in Winona has made some proposals, telling the railroad that that's fine if they want to come through. But if they do, and I'm not quoting exactly, but he said, there are certain things that the railroad has to do in conjunction with the City of Winona traffic problems-- overpasses, sound barriers, et cetera. And that's-- I'll just listen off the air. Thank you.

MARK STEIL: Great. Thanks. Paul Wilson in Rochester, the concern about trains rather than trucks, I guess, that makes some sense that it might help alleviate some traffic congestion. Does that issue come up?

PAUL WILSON: Well, certainly. And in looking at it in another way, if you will, is it appropriate to have trains running through very populous neighborhoods and business areas? That's just another question to follow through on what the gentleman called in about. Obviously, he has a legitimate concern, but at the same time, we have to look at the neighborhood issues, and that's very important.

Just a little more thought, if I could, on the uniqueness of the situation. I know Mr. [? Dettmer ?] from the Surface Transportation Board, as one of the staff individuals, did point out the uniqueness to us at a forum last week, which I found rather interesting.

MARK STEIL: Paul, if you had your way, if you could design the railroad, what would you put in Rochester? Do you want it to bypass the city or what?

PAUL WILSON: Of course, from the county perspective, we're looking at all the concerns, which is why we have the studies going on now, to look at how that may impact, whether it be negatively or in whatever direction. But I think-- I'm not against trains as such. That's not a concern that I have, but we need to look at what it can positively do for us. If we can't identify anything positively as we go through the county, then obviously, it's going to be the reverse. It's going to have a negative impact.

And we need to look at this. We are a pro community, proactive, pro family organizations in our communities. And we want to look at what is good for our neighborhoods and good for the development of the community economically.

MARK STEIL: Also with us this morning is Kevin Scheiffer, who's the president of the DM&E Railroad. How far can the railroad go to meet some of these community concerns. I mean, if somebody wants it to bypass their city, that sounds like an expensive option. Is that possible?

KEVIN SCHEIFFER: Anything's possible. And from an engineering standpoint and so forth, what I look at is, first, there is a threshold question. Do you solve more problems than you create? And there is no such thing as a bypass, I tell people. It's an alternative route.

And Paul is exactly right. There are issues when you bring a train through a neighborhood, but there is a significant difference. And I don't think people intuitively always leap to this, I think, pretty basic observation that the railroad was there 150 years ago when the community started building up around it.

And they-- a lot of things have already been designed around the railroad, the traffic flow, the homes were built when the trains were running a lot more than there are today. Those kinds of issues went into it. If you do a bypass or an alternative route, as I call it, you're picking up the line. And instead of putting it down in an undeveloped area where it was built 120 years ago, you're putting it in a developed area. And the impacts there are much more traumatic, not to say they're not significant where the railroad is at today.

MARK STEIL: But if a community would say, we'll deal with that, we really want this bypass, can the railroad oblige them?

KEVIN SCHEIFFER: Yeah. Theoretically, if you can get to a politically acceptable alternative and make it a cost-neutral kind of issue, that would be an easy call. And you have two big thresholds there. And that is the issue.

PAUL WILSON: Can I just jump in with a comment?

KEVIN SCHEIFFER: Sure.

PAUL WILSON: This rail line has really never been a major player in this part of the state, if you will, especially in Olmsted County. It's been a small regional railroad. So the development of what, I guess, I would call a class 1 railroad is quite interesting. It changes all the dynamics of what's going to happen in the future and how we're going to pay for all of that.

KEVIN SCHEIFFER: And I wouldn't argue with that, Paul, in recent history, but it used to be a class 1 railroad. The class 1 railroad abandoned its service there. And it used to have a lot more trains running over it. In recent history, though, you're exactly right. I'm not arguing with you.

PAUL WILSON: That's where we need to take off from. We can't go back to some of that.

KEVIN SCHEIFFER: Sure. Yeah, no argument there.

MARK STEIL: Let's take another phone caller. Ken from Princeton is with us. Good morning, Ken.

AUDIENCE: Good morning. I have a background in transportation and public utilities, that's where my bachelor's degree is. I've watched over the last 30 years of transportation history, where preexisting and new installations, such as light rail have been proposed and the community reaction to those.

It seems like most communities want the improvement that the facility that's going to be built is going to bring to them, but everyone that comes forward on these things seem to say, not in my own back yard. I've also seen existing facilities such as airports and railroads, as in this case, which are built at a time when everybody wanted them. And everybody bought houses or land and built subdivisions around them, knowing that that was there. And then when all of a sudden, it turns to a growth situation where the airport has grown or the railroad wants to put in additional capacity, then those people don't want it there anymore. And they knew it was there when they bought.

MARK STEIL: Paul in Rochester, is there an obligation for your side to look as well at some of the benefits the railroad might bring?

PAUL WILSON: Oh, certainly. And we're doing that if we can identify those, for example, through the studies. Another issue he brought up, and it's a little more specific, the light rail, and that's been a discussion in this area as we look at all of transportation. I think, maybe, that's where this discussion needs to fit in, not just picking and choosing and doing one here and one there, because as we look at the comprehensive plan, and that's, perhaps, what needs to be developed, that looks at all of the issues of transportation, not just DM&E, not just the light rail, but everything that goes on. And we need to look at that. And we need the timelines to do that with. And we don't have that as it is right now.

MARK STEIL: Kevin, is that part of the planning process now?

KEVIN SCHEIFFER: In terms of the light rail, that is something that has been talked about at the local community in Rochester. I visited with folks there. I have a hard time seeing how those frames will mesh. If somebody can present a proposal where we can make them work and you can get around the political and cost issues that go with that, it's certainly something we keep an open mind to, but I can't put the project on hold for five years while you sort those things out.

I do hope, Howard in Winona, in answer to his question about the local concerns there, we have spent an awful lot of time trying to understand individual community concerns. In Winona, he mentioned that the mayor had made some comments. Jerry Miller, I think, is the mayor in Winona that-- and we've spent a lot of time there.

The issues in Winona are different because there is a lot of train traffic there today. We are looking at bypass-- I'm sorry, overpass issues there. There's been studies on that in the past. We have regenerated those. We've got to work with other railroads in Winona, though, we don't own railroads in Winona. We have to work with the CP and the UP and others. We're trying to do that and come up with a plan for Winona.

And this goes to your question, Mark, about all the other communities. We're trying to develop an individual plan for each community. And we're working on that.

MARK STEIL: You're listening to a special Mainstreet Radio Midday program from Sioux Falls. We're talking about the expansion plans of the Dakota, Minnesota and Eastern Railroad. Our guests this morning are Kevin Scheiffer, who is the president of the railroad, and Paul Wilson, who co-chairs the Olmsted County DM&E Task Force.

Paul, you had another comment.

PAUL WILSON: Yeah, I was just going to-- and I was happy to see Kevin address the concerns of public cost because that is why we're doing what we're doing with the studies. And just to follow a little bit, I know that Kevin has alluded to the fact that time is money, and I totally agree with that. We need the time so that we can identify the money to take care of the public costs that will be necessary to carry out this project if it should go forward.

MARK STEIL: Paul, do you feel you're getting the information you need from the Dakota, Minnesota and Eastern Railroad?

PAUL WILSON: At this time, no.

MARK STEIL: Kevin--

PAUL WILSON: One of the things-- can I finish?

MARK STEIL: Sure. Go ahead, Paul.

PAUL WILSON: The economics here, especially in Olmsted County, and perhaps, a little more so in the city of Rochester, but also Southeastern Minnesota, are health care. And we just simply can't undermine that. We have a major employer that drives the engine, if you will, of the economics of this region. And we need to address their concerns. If they're adversely affected, we have to weigh which, obviously, is going to be the water boy for us and carry and keep our economy going.

MARK STEIL: Kevin.

KEVIN SCHEIFFER: I would say, if there are questions, Paul, would be a fine time to raise them. And I'll try to respond to them. I would say, I've been in Rochester, I'm sure, a dozen times over the course of the last year and a half, trying to understand the issues. I think I have a reasonable handle on what the issues are there. And I hear this refrain quite often that, well, we don't have answers to all the questions. And I keep saying, what are the questions?

I got a very constructive letter from local officials in Rochester, listing out questions last week, listing out 11 questions. And that gives me something to bite into and respond to, but I'd be happy to try to address any questions.

PAUL WILSON: Much of what we've gotten, and you got to be very honest and admitted our concepts. They're not facts that we've gotten back. So--

KEVIN SCHEIFFER: If you have a specific question, I'm glad to wrestle with it right now, Paul.

MARK STEIL: While we're thinking about that, let's take another phone caller from John, in fact, lives near Rochester. He's in his truck. Good morning, John.

AUDIENCE: Good morning. How are you, gentlemen, doing today?

PAUL WILSON: Good.

MARK STEIL: Good.

KEVIN SCHEIFFER: Good.

AUDIENCE: I guess I felt compelled to call and to disagree with one of your guests as far as it goes to get trucks off the road. It happens to be my business. I own a small trucking company specializing in refrigerated hauling.

And I guess, I would agree with the statement that in order to get trucks off the road, they would do well in hauling bulk commodities like coal, like grains, and farm commodities. But I don't see how that would work in anything else. I mean, anything you buy in the store anywhere got there by truck and not by train. I really don't see that the train can do-- that the railroad in general can do a good job in servicing small communities.

MARK STEIL: Well, let's just chalk that one up as a vote for the trucking industry.

Mary from Rochester is also with us this morning. Good morning, Mary.

AUDIENCE: [INAUDIBLE] of Michael Nelson, an independent transportation system analyst, and William Whitehurst Jr., an economic and transportation consultant. And both feel that the DM&E is unlikely to achieve the coal volumes and revenues that have been projected. And they both question most of the figures that are presented for projected usage, et cetera, and the ability to compete with the UP and the BNSF. Both have real concerns about DM&E's ability to make the proposed project a profitable one. I'll hang up and listen to your comments.

MARK STEIL: Kevin, much of your project is built, as I read it, on the projection that the use of Wyoming coal and power plants is going to increase dramatically over the next decade, the next 20 years, well into the future, which means that there may have to be another railroad hauling coal out of that region. But as this caller said, there are a lot of questions about where you came up with those coal usage figures.

KEVIN SCHEIFFER: Sure. What is-- one of the things driving this project, and I always have to keep mentioning this because everybody refers to it as a coal project, and I always bristle when I hear that, it's about a lot more than that. It's about our grain. It's about our existing traffic base and making the railroad we have today work. It needs to be rebuilt.

Having said that, it does require additional revenue to do that. And coal is a substantial part of that. We are projecting significant volumes. I take some-- I don't mean to make light of this, but it's somewhat of ironic thing to me that you have this group, the study that the caller referred to, very legitimate question to raise, but it's raised by a group that's funded by Mayo Clinic and others that are opposing this project based on all the number of trains that are going to come through town.

My God, we're going to have 40 trains come through town. And they funded a study that said, at the maximum, we will have three loaded trains a day going through town. And if we really are lucky and do well, 10 years from now, we can get that number up to seven loaded trains a day, which is a total of-- as a start up, adding six trains a day to our base. And these are the same folks who locally say, well, we're going to have 40 trains a day going through. So--

PAUL WILSON: Kevin, can I--

KEVIN SCHEIFFER: --can I have it both ways? Sure, go ahead.

PAUL WILSON: Can I clarify on that?

KEVIN SCHEIFFER: Please.

PAUL WILSON: If I understand in your application, don't you identify a definitive number of trains?

KEVIN SCHEIFFER: Certainly. We do. We identify a range of trains. You're required to put in the edges of the envelope. In the best case scenario--

MARK STEIL: What are the edges of the envelope?

KEVIN SCHEIFFER: The break even analysis on this project is 4.3 loaded trains a day. We're projecting that we will do significantly better than that, and within a year or two of start out, with seven loaded coal trains a day. That compares to the three trains a day figure from the Mayo Clinic research.

And then we project that if we do real well, 10 years from now, we could get up to 17--

PAUL WILSON: Isn't that seven--

KEVIN SCHEIFFER: --loaded trains a day.

PAUL WILSON: --or six years or seven years? Am I not correct?

KEVIN SCHEIFFER: Pardon me?

PAUL WILSON: Is that not six or seven years in your application?

KEVIN SCHEIFFER: From three years of-- from three years from now, which is 10 years from now, Paul. The start up is 2002. 10 years from now-- in a little over 10 years from now, actually, in 2009, I think it is.

PAUL WILSON: Question. What happens if in all this process, as you're building this, and you go bankrupt?

KEVIN SCHEIFFER: We will have the absolute best light haul railroad on the planet, meaning--

PAUL WILSON: How are we going to be able to use it? I mean, that's--

KEVIN SCHEIFFER: Well, the railroad isn't going to go away. The current investors-- in the unlikely event that happens, you'll have the second owner of the restaurant syndrome. You'll have somebody else coming in to operate. It'll clearly be operating.

PAUL WILSON: And that's a very legitimate concern for us. How do we address that? That's a whole new, I'm going to call it a can of worms, for lack of better phraseology. And I don't mean it negatively, but obviously, we have to reopen things, don't we?

KEVIN SCHEIFFER: I don't understand that, Paul. That would be, I think, your best case scenario. We would have a perfect railroad, an extraordinarily safe railroad with the same amount of traffic it has today.

MARK STEIL: You're listening to a special Mainstreet Radio Midday from Sioux Falls. We're talking about the Dakota, Minnesota and Eastern Railroad, and its plans to become a major coal hauler and a hauler of other supplies. With us, our DM&E president, Kevin Scheiffer, and Paul Wilson, co-chair of the Olmsted County DM&E Task Force. MPR's Mainstreet Radio coverage of rural issues is supported by the Blandin Foundation, committed to strengthening communities through grant-making, leadership training, and convening.

Coming up at noon in our second hour, we'll be talking about the farm crisis and taking a closer look at why grain prices are so low. The weather forecast, cloudy this afternoon, with a few sprinkles possible in the Northeast, otherwise, mostly sunny with highs around 60. Increasing clouds tonight with frost possible in the Southeast and lows in the 30s. A chance of showers late tomorrow in the South and highs again in the 60s.

Current temperatures include Duluth at 47, Rochester, 54. Sunny skies all across the region, except for clouds in Duluth. Sioux Falls, 57, Saint Clouds at 58 degrees. And in the Twin Cities, the temperature is at 58 degrees.

If the Dakota, Minnesota and Eastern Railroad's plans come to pass, it will build new railroad tracks on the Western end of its system to connect with the Wyoming coal fields. Its existing tracks in South Dakota and Minnesota will be rebuilt to handle the coal trains. Many homeowners near the track wonder what it will be like to have several dozen trains a day possibly pass by.

Joining us now is Heidi Abdel who lives in Mankato. Good morning, Heidi.

AUDIENCE: Good morning.

MARK STEIL: Tell us how close you live to the current DM&E tracks.

AUDIENCE: We live about 100 yards from it from our front yard.

MARK STEIL: How many trains a day pass by?

AUDIENCE: Well, it's increased since we bought our home 10 years ago, but it hasn't been real bad. Like the other gentleman said, we knew when we bought our home that the train was close by.

MARK STEIL: Two trains a day, three?

AUDIENCE: Yeah, probably, three. Probably, three.

MARK STEIL: What are your Mainstreet concerns about the proposed expansion?

AUDIENCE: Well, number one, I'm just speaking for my neighborhood down here. If any homes are going to be-- homeowners are going to be displaced because of this. And if Mr. Scheiffer has an idea of how many that's going to entail.

MARK STEIL: The one concern I know you told me-- we'll ask Mr. Scheiffer that after we talk with you for a little while here. What concerns do you have about a school nearby in your neighborhood?

AUDIENCE: Well, all of the children on my side of the tracks are all considered walkers. And right now, the way-- with the trains right now, our children have to take a bus. It would be closer for them to walk to school than it would be for them to catch the bus to take them to school.

So we have a number of children that we've seen, year after year, climbing over the tracks. And right now, there's no place, there are no bypasses. There is one, a viaduct by Sibley Park, which is a little ways from our home, and another one at the end of Mound Avenue. So it's not very safe right now.

And to increase the trains, increase the speed 50 miles an hour, it's a very scary thought. And we just don't have any guarantee. We've tried to pin Mr. Scheiffer down to put something in writing for us, so that we can feel safe that if this does come through, number one, they're going to have the money to finish it, because heaven forbid, if they get 2/3 of the way through and realize that it's not feasible, where is that going to leave us?

MARK STEIL: Do you have concerns about just the noise level that you may hear in your house?

AUDIENCE: Well, it's bad now. When we moved in 10 years ago, we had an old whistle ordinance. They did not blow their whistles. Now we have them coming through and they're blowing their whistles. And it's so long and so hard that our windows rattle.

And we're on the other side of the street. We have homes that are across the street. And it's all during the night. I mean, you hear it during the night. And with the increase in trains, that's going to be 10 times worse. You can't even have your windows open in the fall or the spring because of it, getting the loud whistles at 2 or 3 o'clock in the morning every morning.

MARK STEIL: Well, thanks for joining us, Heidi.

AUDIENCE: You're welcome. Thank you for having me.

MARK STEIL: We're talking about the Dakota, Minnesota and Eastern Railroad, and its plans to rebuild its tracks and send more trains down those tracks. And with us in Sioux Falls is Kevin Scheiffer, who's president of the railroad. And in Rochester, Paul Wilson, who co-chairs Olmsted County's DM&E Task Force.

Kevin, will any homeowners be displaced by this expansion?

KEVIN SCHEIFFER: In Mankato, there should not be. If there is, there would be compensation. There's a possibility under some plans, depending on city preference. But there's no plans on the table right now from the railroad standpoint to need to do that. But if there is, there is obviously compensation.

MARK STEIL: Along the entire route of the DM&E, how many homes would be displaced?

KEVIN SCHEIFFER: On the existing right of way, virtually, none.

MARK STEIL: Another concern she had was this school of safety. And she said she'd like to pin you down on it, get something in writing.

KEVIN SCHEIFFER: Yeah, well, I can just go through the list there because I think Heidi represented-- capsulized the issues there. First of all, in putting things in writing, Heidi has heard me at a number of times in Mankato, talk about that concept. I'm a big believer of putting things in writing. That's something that I've proposed. We are doing that with communities.

We're working very closely with the city in Mankato in developing a written plan. We've looked at drafts. And that is where this process is going, to put something, not just put it in writing, but to make it very specific, answer all the questions that the community has, and make it legally binding so that it's enforceable, whether it's six months from now or six years from now.

Her point about school safety. Well, backing up, the increased traffic she talked about. That's one thing in Mankato. I think folks need to understand, the traffic is, in fact, increasing. That's not DM&E traffic necessarily. There's UP traffic there, too, and that's going over the same line. And that's going to continue to increase.

And one of the reasons it's increasing is because the coal out of the Powder River Basin is growing as we speak. And that traffic is coming through one way or the other through Mankato. And that is an issue there. With respect to--

PAUL WILSON: Could I jump in just a moment? As long as we're on the neighborhood concerns with--

MARK STEIL: Paul Wilson, who's in our Rochester studio. Sure, go ahead.

PAUL WILSON: Because we have, obviously, concerns that are similar in some of our property lines are within 60 to 100 feet. So there are somewhat-- we have a very narrow corridor. And so when I hear that you're not going to displace, possibly, any homes, I mean, that's a very legitimate concern for this area. So as long as you address that issue.

KEVIN SCHEIFFER: OK.

MARK STEIL: How about in Rochester? Any displaced homeowners there?

KEVIN SCHEIFFER: No displaced homes. What Paul is talking about is people have, over the years, built and bought homes that are very close to the railroad. There's no question about that. But that doesn't change where the railroad is at today. It's going to be there tomorrow.

So displacing, when you're talking about it, I'm thinking in the context of physically displacing it. We're not going to extend outside--

PAUL WILSON: No, it would be financially buying out the property owner, if you will. You can't expect that those folks are going to be able to have a quality of life next to a line like that, even if you had one train and you were running it through the fence.

MARK STEIL: Is there any situation where you would buy out a homeowner?

KEVIN SCHEIFFER: Sure. There are situations where we would buy out a homeowner if you had to acquire land or property outside of our existing right of way. I do not foresee that on our existing right of way.

MARK STEIL: But if the homeowner came to you and said, I tried to sell my house, I can't, or I won't be able to sell it, would you consider a buyout then?

KEVIN SCHEIFFER: That is-- you're talking about somebody who came, built their house alongside of a railroad, and now there's more traffic so they don't want to be there anymore. That's what you're talking about. And the answer to that is no. We can't do that. I don't know where you start drawing the lines.

I understand Paul's point. It's a very legitimate one. I've talked to lots of landowners adjacent to us. There are things you can do, but buying out every home, I don't know where you draw the line and where you start or stop.

MARK STEIL: You're listening to a special Mainstreet Radio Midday. And let's take another caller. Dale is on the line from Rochester. Good morning, Dale.

AUDIENCE: Good morning. This isn't the dawn of the Industrial Age anymore. People aren't thrilled with the idea of chronic crash boom, rattling scream of heavy machinery. It is a problem.

I had a question about the coal hauling aspect of the DM&E expansion. And my question is, minus the hauling of coal, is this project worthwhile? Is it feasible? Because I wish I had thought of it, but I didn't. If I knew who posed the question originally, I'd give credit.

But if I were a policymaker looking at future energy needs and looking at environmental impact and so on, it would be ridiculous to haul all that coal from Wyoming out East. The obvious thing to do would be at much less cost and much less environmental impact would be to build a power station where the coal is and move the electrons. I mean, that's a no brainer.

So back to my question, minus the coal hauling aspect, is all this feasible?

MARK STEIL: Is anybody--

PAUL WILSON: I read an interesting article I'd like to share, just a thought with you. I happen to come across it on the internet. It had to do with mining operations of coal. And I believe it would be in Kentucky, if I'm not correct, make sure I got the right state. But anyway, one of the coal states of the East where they are removing the mountain tops.

And one of the reasons they're doing that for is to easily access the coal quicker. And one of the rationale given for that was the fear and the competition, if you will, of coal coming from other areas. And they identified the Powder River Coal Basin as one of the future competition for that area. So just an interesting thought is looking at environmental issues that are beyond our doorstep.

MARK STEIL: Kevin, is there any plans from any electric utility to build a plant in the Powder River Basin in Wyoming? Or are there plans there now?

KEVIN SCHEIFFER: There are plants there now. There's one plant in Gillette, Wyoming, for example. But that's an issue that's been looked at. And we've got the plants where they're at in our service market area. They need to have coal. Whether it's somebody selling off a mountaintop in the East or somebody bringing it from the west, they need coal if people are going to turn on their lights.

MARK STEIL: Let's take another caller from Rochester. Mark is on the line. Good morning, Mark.

AUDIENCE: Yes, good morning. Just within the introduction to this whole piece, it was mentioned that the opposition is mostly concerned with safety and noise issues. I'd just like to present that there are far more issues that the opposition to this project are trying to present and bring up. I'd briefly like to mention two of those, if I may. First, being the rail service to small communities and ag. And second, environmental concerns.

That first one, we hear often that this upgraded rail service is going to actually improve service to small communities, to the agricultural community, and to small shippers of commodities. Well, we need to take a look at other areas, other cities, other states where the transition to unit coal trains has occurred, where we've actually seen a decrease in service to ag community, to grain hauling, and to small shippers.

Putting together, unit length coal-- unit length shipments, trainloads is a real problem for small communities. And these communities that think they're going to get better service had better look to some other areas of the country where that has actually not been the case, where they've lost service. That also addresses this idea of whether there'll be more or less trucks on the road.

The second issue is the environmental issue. I would argue strenuously that this project is not in the public interest. We're at a real critical historical juncture where as a nation, addressing future energy policy, we need to aggressively pursue an energy transition to the alternative renewable energies, that being wind, solar, and biomass.

MARK STEIL: Paul--

AUDIENCE: Mr. Scheiffer project, which seeks to haul more coal cheaper actually becomes a disincentive to this energy transition. And it's actually a disincentive to follow up better sulfur dioxide reduction plans, that being going to the alternatives.

MARK STEIL: Paul in Olmsted County, what sorts of questions do you hear from or concerns from small communities about this expansion? Do they think it'll be good for their economy?

PAUL WILSON: Well, there are some that are they're showing the concern, and some, perhaps, trying to keep an open door, if you will. But they are looking at access, perhaps, for existing businesses, whether or not they'll be serviced. They're looking at options, perhaps, will we be able to expand. But most of them don't have enough information to make judgments on that.

A moment ago, we talked a little bit, and I've got to go back to this real quickly, about the property value issue. I think we need to highlight that, especially in Olmsted County, because we do have significant property values within a 500 foot each side of the railway, if you will, that goes through the county, about $113 million.

And if you use a standard formula that, I believe, is often used at 10% of your value may be lost if there's some additional upgrading and those kinds of things, we're looking at about $11 million in property values that could be destroyed along the line. And hearing that, obviously, we wouldn't pay homeowners if they were very close to the track, I think that's a concern that needs to be heard.

And I know you had asked me about some specific questions. I'd like to bring those before we run out of time, because I do have a couple. One is, how many dollars would you designate or can you identify at this time for intersections, for safety, as we define it, as we look at the issues? And if in the greater scenario things, a bypass comes to pass, no pun intended, are there dollars there? Can you give me figures for that?

MARK STEIL: Kevin Scheiffer, president of the Dakota, Minnesota and Eastern Railroad.

KEVIN SCHEIFFER: OK. I'd love to address those. I do feel, questions are stacking up here, and I'd like to go back and address some of the caller's questions real briefly.

Heidi, in Mankato, asked some questions that aren't resolved. She raised a specific question about school crossing and safety there. I'm very sure we can make a safer quarter there today than they have-- safer quarter than they have today. An example, I know the Sibley and mound area that Heidi is talking about. We've looked at putting in a pedestrian underpass with a bike pass there, and actually closing some crossings and improving the pedestrian traffic and the safety there. That is a very dangerous situation in Mankato today. That's used as a playground.

PAUL WILSON: Closing crossings is an interesting thought. But when I traveled across North Dakota and talked to folks that had the Burlington Northern as they upgraded or got their trains at a higher speed, it was a real concern for them because many of these, the smaller communities, obviously, but they need those crossings. Sometimes, the crossing closing isn't the answer.

KEVIN SCHEIFFER: Paul, if I could answer these questions. We're not trying to force closings on anybody. This is in conjunction. If folks don't want it closed, that's fine with me. But the point is, it is going to be a safer corridor in Mankato.

With respect to the noise, she raised a question about noise and the whistle. And she's--

MARK STEIL: Train whistles.

KEVIN SCHEIFFER: --absolutely right. That is the single biggest noise factor. And it's there today.

MARK STEIL: Can you send trains through a city without blowing the whistle?

KEVIN SCHEIFFER: Yes. And it goes to Paul's question about how much we're willing to spend on those intersections. And if you spend enough money on those intersections, you can make it whistle-free. And we're working with communities and we have a cooperative approach to it. I am convinced there are ways to make them whistle-free, and we will fund it.

MARK STEIL: You will fund it?

KEVIN SCHEIFFER: DM&E will fund it. But those communities--

PAUL WILSON: Those are concepts.

KEVIN SCHEIFFER: --we have an agreement.

PAUL WILSON: Those are concepts, but you're not identifying facts, if you will, or figures for us.

KEVIN SCHEIFFER: No, Paul, you're wrong. There's our commitments and they've been made to some communities, not Rochester, because we haven't gotten to that stage yet--

MARK STEIL: Let's jump ahead.

KEVIN SCHEIFFER: --because you want all these--

MARK STEIL: I want to ask you one thing about Rochester, and this may clear some of the air. Will the DM&E have a detailed plan going over every crossing, dollars to be spent at some point?

KEVIN SCHEIFFER: Yes.

MARK STEIL: When will that be?

KEVIN SCHEIFFER: I listed as October 1 for our working target deadline there. I am visiting Rochester. I believe it's whether this week or next week again. And we're doing a final walk through to finalize that. And we will have that. And I think Paul is aware of that.

MARK STEIL: Let's go to another caller here. We'll come back to you, Paul, in just a moment. Mike from Edina is on the line.

Good morning, Mike.

AUDIENCE: Good morning. Hi. I'm just listening to this. I can't believe all the people calling in that aren't dealing with the fact that a lot of small towns in Southwestern Minnesota are there, just specifically because a railroad was going through them. I mean, when people build their homes next to a track, they have to expect trains going by.

One of the-- the railroad, it's traditionally been laid out across the most efficient routes and is the most efficient way to transport things. And--

MARK STEIL: Mike.

AUDIENCE: Yeah?

MARK STEIL: Do you feel this would be a good project?

AUDIENCE: I think it would be a fantastic project for rural Minnesota. And basically, I think a lot of the issues that people are raising can be addressed. But the major fact is they built next to a railroad. It's like building next to an airport and complaining about the plane noise. I mean, it just doesn't compute with me.

MARK STEIL: Paul--

AUDIENCE: This is a fantastic thing.

PAUL WILSON: Yes.

MARK STEIL: Paul--

KEVIN SCHEIFFER: Thank you, Mike.

MARK STEIL: Paul in Rochester, you're with the Olmsted County DM&E Task Force. What sorts of comments do you get from people about the noise, if the argument is posed to them that, you live by a railroad track, you have to expect that?

PAUL WILSON: I think, same what's been reiterated before, I mean, the railroad, obviously, was there, but that's not the issue. The issue is where we're at in the 20th century. This was not an active railroad. It's always been a small. It's basically been a little alley, if you will, that runs through a community that is part of town that is very closely together. So it's a little different issue.

We're not a predominantly a rural area in Olmsted County, although, obviously, parts of it are. But the bulk of the population is Metropolitan, if you will. So it's a little different flavor.

MARK STEIL: The scale of this-- the scale of this is what worries people.

PAUL WILSON: Exactly.

MARK STEIL: Let's take another caller. Doug from Milbank, South Dakota, is with us.

Good morning, Doug.

AUDIENCE: Hello. I worked for the railroad for 23 years. And in addition with some other people, we fought some of the major abandonments that have been made, such as Fergus Falls to Saint Cloud. I guess, my feeling is that Minnesota's made some bad decisions on getting rid of some of their rail corridors. Once they're gone, you can't replace them. And the DM&E is frequently the only game in town. So I think that there should be a lot of cooperation with the DM&E.

Because the Burlington Northern is pushing for 108 car unit trains for their grain traffic, frequently, the DM&E is the only carrier that will take 5 or 10 carloads at a crack for agricultural.

PAUL WILSON: OK. Can I-- that's a concern that we have raised over here. As we look at DM&E, they were formed, if I'm not correct, as to maintain the second class railroad status to take care of the smaller communities. What happens when, as Kevin has alluded, they become a first class railroad and they're not able to do that?

MARK STEIL: Kevin Scheiffer.

KEVIN SCHEIFFER: That goes back to a question that another caller raised. I really feel bad, a lot of callers are asking questions that aren't getting answered. This great concern that Paul is articulating that the other caller raised about suddenly, there's this concern by the folks who are opposed to this project, they're concerned about whether we're going to serve our existing customers. I find that somewhat ironic as well.

Our existing customers understand their business very well. They understand our business very well. And they know what kind of shape that railroad is in. They are very strongly behind this project. They are pushing it and working with us to get it done because they recognize what is at stake here. And what is at stake here is railroad service in this part of the country. It is that simple.

And that is not to say, there aren't issues or concerns out there, if 10 years from now, we do better than Mayo clinic's experts project we will, that there won't be some capacity issues. But they would rather be fighting for more access on a good railroad 10 years from now than they would trying to figure out where the railroad went five years ago. That's what this project boils down to. And our customers are very strongly behind this project because they recognize that. And people who take up this song that they're concerned about service to our existing customers should ask our existing customers, because that concern is coming from the opponents of this project who are opposed to it for different reasons.

MARK STEIL: Let's take another call. Dennis from Winona is with us.

Good morning, Dennis. Dennis, are you with us this morning?

Let's go ahead to Martin from Minneapolis. Good morning, Martin.

AUDIENCE: Yeah. Hi, there. I just want to make this quick. What about integrating public transportation into this? What about serving these communities? You're serving industrial, agriculture. How about individuals get car traffic off the roads? Maybe DM&E can be saying, we hear you about light rail. How about if we add a passenger cars or maybe even begin work on creating a dedicated track for passenger transportation as well?

KEVIN SCHEIFFER: Thank you for raising that. We are, as part of this project, bringing passenger service back onto our line for the first time in about 50 years. It is not going to be Amtrak kind of commuter service, but it will be regular tourism passenger excursion service, where you can go from one town on our line to another town on our line. People can go out to the Black Hills for a weekend or people out in the West can go to the Mississippi River for a weekend or do community exchange programs.

That is one of the truly exciting parts of this project. There is a tremendous interest for it. And it's a lot of fun. And about the only non-controversial thing about this project, which is why you don't hear much about it in the media.

MARK STEIL: We're getting close to the end of this hour. Paul, I'd like to ask you before we go, do you feel that you can actually stop this project if you're concerns and needs are not met in Olmsted County and the Rochester area?

PAUL WILSON: That hasn't really been our charge is to stop a project. It's to look at all the aspects of it, if you will. We have concerns that will be identified as we complete our studies, and those are issues that we need. And I know Kevin's very well aware of the dates that we have set for those so that as we look at that process.

But there are a couple of things that you need to remember. This is kind of an economic and social justice issue a little bit. I mean, we got to look at the economics from the local government standpoint. It isn't just the railroad that's going to be spending money, it's going to be local governments, every jurisdiction and entity along the way, because we define safety, it's not the railroad, because we have to remember, it's from our vantage point, the eyes that we see it through.

And while I understand, you have to have a safe railroad to get your products and your cars across, it's going to be how we identify it because we're the ones that have to assure the safety to the citizens of the communities that we live along that are along the line. And it just follows along those who benefit from this process and this project should be the ones who pay for the necessary things that need to be done.

MARK STEIL: Kevin.

KEVIN SCHEIFFER: If this is not a safer railroad at the end of this project than it is today, it shouldn't be built, period. We will fund that completely, period. With respect to your questions about the intersections per se, Paul, to answer your two specific questions about Rochester, I think I've made it very clear to you and I've laid out that every one of those intersections will be addressed, and you will have that in the plan we submit.

With respect to the bypass, I have explained my position on that over and over. The city notwithstanding that and the county have opted to fund another study. And I'm happy to work with you on that. But frankly, I do not see the bypass as a viable alternative. But I also would be happy to stand to be corrected on that because I'm happy to use somebody else's ideas.

MARK STEIL: Paul, is a bypass necessary for your support?

PAUL WILSON: Well, we're going to have to see how the studies come out. But obviously, there's some commissioners and on the county board, it's a different scenario because we have to take in what goes into somebody's backyard, it isn't just what's also existing, what may come.

Personally, I don't see any option within the City of Rochester that makes it a safe. Now, I could be wrong, but to me, it's from my personal vantage point, but I'm keeping a very open mind. And as I look at the whole process, that perhaps, a bypass, from my personal viewpoint, is the logical way to go.

MARK STEIL: A final thought from Kevin Scheiffer, president of the Dakota, Minnesota and Eastern Railroad.

KEVIN SCHEIFFER: I think we spent enough time on the Rochester thing. One caller asked a question about energy policy and environment I'd like to address very quickly. This is about the environment. This is about reducing SO2 emissions in the atmosphere with the cleaner source of coal.

It would be nice if we could have solar power. That technology isn't here. We have to make do with what we have. This coal in the West that we would be hauling that will be displacing the Eastern coal will produce 340,000 pounds less-- or 340,000 tons less emissions per year. And we don't take off mountaintops to get it. And finally, on the energy policy part of it, it is much reduced cost for your electricity bills.

PAUL WILSON: But perhaps, increasing global warming as we go through much of this.

KEVIN SCHEIFFER: No. No, it would reduce it.

MARK STEIL: I'm sorry, but we're going to have to bring this first hour of Midday to a close. We've been talking about the proposed expansion of the Dakota, Minnesota and Eastern Railroad. Our guests have been DM&E president, Kevin Scheiffer, and Paul Wilson, who's co-chair of the Olmsted County DM&E Task Force. Coming up after the newsbreak, we'll be talking about the farm crisis and look at the question of just why grain prices are so low.

SPEAKER 1: On the next All Things Considered, broadcasters and consumers get ready for digital television. Its promise of superior pictures carries a hefty price tag. It's All Things Considered, weekdays at 3:00 on Minnesota Public Radio KNOW FM 91.1.

MARK STEIL: You're listening to Minnesota Public Radio. It's 58 degrees at KNOW FM 91.1, Minneapolis Saint Paul. The Twin Cities weather forecast, mostly sunny with a high this afternoon, around 60 degrees.