INDUSTRIAL RAIL CORRIDOR EXPANSION PROJECT

Transcription

1 INDUSTRIAL RAIL CORRIDOR EXPANSION PROJECT FY 2017 FASTLANE Submitted to: US Department of Transportation Submitted by: Port of Longview, Washington December 2016 Project Type: Small ($63 million) Location: Rural

2 FASTLANE FY 17 Industrial Rail Corridor Expansion Project Project Name: Port of Longview Industrial Rail Corridor Expansion Project Previously Incurred Project Cost $500,000 Future Eligible Project Cost $62,000,000 Total Project Cost $62,500,000 NSFHP Request $32,200,000 Total Federal Funding (including NSFHP) $33,200,000 Are matching funds restricted to a specific project component? If so, which one? Is the project or a portion of the project currently located on National Highway Freight Network? No Yes Is the project or a portion of the project located on the National Highway System? Does the project add capacity to the Interstate System No Is the Project in a National Scenic Area? No No Do the project components include a railway-highway grade crossing or grade separation project? No Do the project components Include an intermodal or freight rail project, or freight project within the boundaries of a public or private freight rail, water (including ports), or intermodal facility? Yes If answered Yes to either of the two component questions above, how much of requested NSFHP funds will be spent on each of these components? 100% State(s) in which project is located? Small or large project Also submitting an application to TIGER for this project? Urbanized Area in which project is Located, if Applicable Population of Urbanized Area Is the Project Currently Programmed in the: WA Small No NA Non-urbanized area - 63,952 TIP No STIP No Port Projects not included, but recommended as a priority to state (see section 8) MPO Long Range Transportation Plan Yes State Long Range Transportation Plan No State Freight Plan Yes

3 FASTLANE FY 17 Industrial Rail Corridor Expansion Project i CONTENTS 1 Project Description Project Size National and Regional Significance Project Elements Supported by NSFHP Funds Expected Users of the Project Transportation Challenges and How the Project Will Address These Project Location Detailed Description of Project Location Connection to Existing Infrastructure Project Parties Sources and Uses of Project Funds Evidence of Stable and Reliable Capital Previously Incurred Funds Detailed Project Sources and uses Merit Criteria Economic Outcomes Mobility Outcomes Safety Outcomes Community and Environmental Outcomes Partnership and Innovation Cost Sharing Cost Effectiveness Project Costs Project Benefits Elimination of Grade Crossing Delays Unit Train Cost Efficiency Benefits Cost-Benefit Results Small Project Requirements Project Readiness Technical Feasibility Project Schedule Required approvals Environmental permits and reviews Public engagement State and Local Approvals and Planning Project Risks and Mitigation Strategies... 25

4 FASTLANE FY 17 Industrial Rail Corridor Expansion Project 1 1 PROJECT DESCRIPTION The Port of Longview (Port) constructed the Port s Industrial Rail Corridor (IRC) in the early 2000s to provide more efficient access to existing import/export facilities, to stimulate economic growth within Washington s Cowlitz County, the Pacific Northwest (PNW) and the country, and eliminate the negative impacts associated with at grade crossings in the local community. The focus of this FASTLANE project is a further expansion of the IRC. The proposed IRC Expansion Project consists of relocating the original IRC north, to accommodate three new through tracks, six new sidings, and to allow for increased train clearance lengths of 8,500 feet and greater. These improvements will provide much needed unit train access and staging for current customer and future tenants on redeveloped and underutilized berths that are currently underutilizing the freight capacity of the Port. This proposed FASTLANE project will cost $62 million in future eligible costs and will produce a benefit cost ratio of 1.36 at a 7 percent discount rate, and 2.25 at a 3 percent discount rate. As a major driver of our nation s global freight economy, the Port has identified the IRC Expansion Project as the critical next step in growing their facility to retain existing, and attract new, global importers of American-made goods. The IRC Expansion Project, which will be completed in 2019, will create the necessary rail connection to the future through track and staging area for the Port s planned development at Barlow Point Terminals, expected to be partially developed and operational by Figure 1 Industrial Rail Corridor Expansion Project

5 FASTLANE FY 17 Industrial Rail Corridor Expansion Project PROJECT SIZE The Port s IRC Expansion project will be completed in two phases, and will cost a total of $62 million, classifying it as a small FASTLANE project. The Port has already expended $500,000 on eligible project costs for preliminary engineering, right-of-way acquisition, and environmental reviews. The Port is requesting $37.2 million in FY 2017 FASTLANE Funding, and is prepared to provide the remaining amounts through state commitments, available Port funds, and private investment from project partners. 1.2 NATIONAL AND REGIONAL SIGNIFICANCE The Port of Longview is the first deep-draft, full-service operating port on the Columbia River at river mile 66 in southwest Washington State. The Columbia River, which connects to the Pacific Ocean, is a leading gateway in international trade, the second-largest grain exporting river channel in the world, and the point of embarkation for cargo originating from over 40 states. The Port s cargo handling specialties include all types of bulk cargos and breakbulk commodities such as Figure 2 Port of Longview Aerial View steel, lumber, logs, grain, minerals, fertilizers, agricultural products, pulp, paper, wind energy, and with the purchase of a second mobile harbor crane in 2014, single and dual pick, heavy-lift cargo. In the American Association of Port Authorities (AAPA) Port Ranking by Cargo Report of 2013, the Port of Longview was ranked the 41st largest port in the country shipping 13.7 million tons domestically and internationally. GLOBALLY - The Port was ranked the 19th largest foreign freight exporter in the country and 2nd largest in Washington, illustrating that this FASTLANE project would enhance America s global freight economy by providing even more opportunities for shippers to access the Port s facilities by rail. 1 In 2014, the Port completed a market analyses that found regional ports had moved a total of 63.8 million tons, or 6.3 percent of total US of non-containerized tonnage in The region has averaged 2.8 percent per annum in tonnage growth and is expected to continue at this rate AAPA Report

6 FASTLANE FY 17 Industrial Rail Corridor Expansion Project 3 The region has historically been, and continues to be, heavily reliant on demand in North and Southeast Asia to drive export volumes. The Port of Longview, like the rest of the region, is export-centric. Export bulk products include grains, cereals, oil seeds, wood products, and inorganic chemicals. The Port s new Export Figure 3 Port of Longview Major Destinations Grain Terminal (EGT), which is the first modern facility constructed in the last 25 years, is the biggest in the PNW. EGT exports primarily wheat and soybean and is responsible for 75 percent of Longview s volumes. The Port also does its share of imports, including salt, minerals, iron/ steel, inorganic chemicals, and fertilizer. Project cargo is another growth area - these are large and heavy unitized commodities (capital equipment) produced both in the US and globally that need to be transported by ocean-going vessels between origin and destination countries. Project cargos include steel, equipment, transformers, and wind generation cargo. The Port is positioned well to meet the future forecasts estimating that Asia will continue to be dependent upon agriculture, livestock and related inputs (feed and fertilizers) to support its steadily increasing population. NATIONALLY To take full advantage of the project growth trends in in the global markets, the Port must ensure its facilities can keep up with demand, and with the existing limited rail access to existing and planned berths, it is unlikely it will be able to reach its full import/export potential without the IRC Expansion Project. The Port also ships and receives 2.5 million tons domestically, making it the 81 st largest domestic port in the country. Although the majority of its trade is done internationally, as an export-centric port, it plays a nationally significant role in getting domestic products abroad. Since the majority of the Port's products are bulk, rail is the best mode to move the cargos and the expansion of the IRC will enable the Port to meet future cargo needs.

7 FASTLANE FY 17 Industrial Rail Corridor Expansion Project 4 REGIONALLY - Regionally, the Port is the intersection where local commitments and global connections meet. Locally, it improves connections between people and centers of employment, education, and services in southwest Washington. For nearly 100 years, the Port has drawn customers from around the globe, bringing with them new employment opportunities and tax revenue for the region. The Port has become a vital fixture in the local landscape and a major source of economic support for families, businesses, and schools throughout Cowlitz County. The Port contributes to community revitalization- The Port is one of the Northwest's premier transportation hubs, and in addition to supplying the community with goods, it also creates direct and induced family-wage jobs for thousands in Longview and Cowlitz County. Indirectly, those workers and servicing businesses buy goods and services near the Port, creating secondary jobs, and increasing local spending which provides a positive ripple effect throughout the local economy. Port-related activities employ 10 percent of the workers in Cowlitz County and Figure 4 Port of Longview Employees in Cowlitz County, WA support another 9,100 jobs with shippers and other related businesses. The Port provides an honest day s work, a livable wage, and certainty for families today and tomorrow by enhancing rail capacity and increasing tonnage that travels through the Port. As the key to unlocking development at the Barlow Point site, the IRC Expansion Project will create jobs associated with the new facilities and new businesses associated with additional rail shipments. 1.3 PROJECT ELEMENTS SUPPORTED BY NSFHP FUNDS The Port is requesting $37.2 million, or 60 percent of the project s cost, in FY 2017 FASTLANE funds for the project. This funding would be used to accelerate the proposed project by completing design and the environmental review process in 2017, with construction beginning in Funds will be used to relocate the original IRC north to accommodate three new through tracks, six new sidings, and to allow for increased train clearance lengths of 8,500 feet and greater. The new running tracks and Arrival and Departure (A&D) tracks will be available to all rail customers providing additional rail capacity to the Port. This results in a much higher degree of resiliency, operational efficiency, and capacity to the port and connected rail

8 FASTLANE FY 17 Industrial Rail Corridor Expansion Project 5 network. This rail network will be available for cargo types such as agriculture, energy, break-bulk including high and wide cargos, and cargo that the Port would like to keep off of the local, regional, and national road networks. The IRC Expansion Project will reduce freight transport costs for trucks and trains due to the reduction and/or prevention of increased congestion, and it will reduce emissions as more cargo can be moved by rail instead of truck. 1.4 EXPECTED USERS OF THE PROJECT Commodity forecasts show that the emerging markets in Asia, the Middle East, Latin America, and Africa will continue to drive demand for food and agriculture products as well as construction and industrial related commodities. Because the US is endowed with an abundance of these products, our domestic exports will continue to be in demand throughout the world. Thus, the Port of Longview is well positioned to serve as an active import and export gateway for these bulk and breakbulk commodities. Figure 5 Existing Industrial Rail Corridor While the Benefit Cost Analysis focuses on known intended users, the ultimate purpose of the project is to attract new businesses requiring rail and terminal access and foster job growth. Sufficient cargo and rail volume growth has been identified to justify the project. By increasing the currently limited rail capacity on the terminal, this project will relieve local and regional traffic congestion caused by trucking cargo. Increased use of the rail capacity on the terminal will be achieved immediately upon completion, which will help the following project users or beneficiaries: EXISTING AND FUTURE FREIGHT RAIL SHIPPERS - Increased rail reliability, on- time delivery, and operating costs reductions will result as this project improves rail fluidity. The availability of A&D tracks and new running tracks will increase on-time arrivals and departures and improve rail

9 FASTLANE FY 17 Industrial Rail Corridor Expansion Project 6 fluidity for the Port and others in the Longview vicinity. This will support the continued economic output of the Port as well as begin to address future rail needs as the Port continues along its path of growth and the build out of their 285 acre expansion at Barlow Point. The Port s IRC Expansion Project is regionally significant and is eligible for National Freight Highway Program funding in the biennium. The project is recognized and prioritized as a Tier 1 Freight Multimodal Project by the Washington State Freight Advisory Committee (WAFAC), Washington State Department of Transportation (WSDOT), and Washington State Freight Mobility Strategic Investment Board (FMSIB). The additional running tracks more than double the capacity and flexibility for train movements along the IRC. On average, the Port s current rail network handles 14,000 cars per year (trains are either broken up into strings or come in manifest service, where a train holds a mixed type of cars and cargoes). The EGT facility (see Figure 1) brings in approximately 600 unit trains ( cars/ 72,000 cars) per year. These unit trains enter the IRC and then are directed to the EGT owned facility track system that can handle up to six unit trains (four full, two empty). With improved capacity and efficiency for unloading at EGT and at the Port, the A&D tracks will add the ability to hold up to six unit trains entering or departing from the Port s industrial area. Currently, an EGT train can be positioned, unloaded and dispatched in six to eight hours. With the improved access created by this project, this cycle-time could be reduced to four hours, a percent operational improvement over today's experience. Pacific Fibre, a major shipping client with a plant located next to the Port, will greatly benefit from the IRC Expansion Project by allowing them access to the Port s existing IRC trackage for their current facility. Additionally, the relocation of the corridor will allow Pacific Fibre the ability to expand their business which is dependent on unfettered access and rail consistence which is currently restricted by existing Port operations. LOCAL RESIDENTS Keeping the cargo off city and regional roads will reduce roadway congestion for everyone moving into, out of, or through, the area. Added rail capacity in the Port district, provides the Port the ability to in-fill its under-used property and facilities to generate additional Port revenues, as well as generate additional local and state tax collections due to a higher utilization of current and future facilities.

10 FASTLANE FY 17 Industrial Rail Corridor Expansion Project TRANSPORTATION CHALLENGES AND HOW THE PROJECT WILL ADDRESS THESE The IRC Expansion Project will introduce several key benefits associated with the increased rail capacity. Key benefits are highlighted below, and associated transportation challenges are addressed within this section.

11 FASTLANE FY 17 Industrial Rail Corridor Expansion Project 8 LACK OF LAST-MILE RAIL CONNECTION OPTIONS - Job growth in Cowlitz County is currently limited by the Port s inability to capture commodity movements through Longview due to inadequate last mile transportation options for shippers. In interviews conducted during the development of the Port s Master Plan process, stakeholders in an array of industries identified transportation as their number one concern. Responses included lack of adequate transportation, cost of transportation, or expense of getting product to customer. Respondents directly cited limited rail capacity at the Port as a deterrent to doing business with the Port. Customers commented that traffic congestion on SR 432 and near the Port s front door was also a contributor to increased transportation costs. CONGESTION AT NEARBY INTERSECTIONS - Modest growth in truck traffic is forecast through 2035, but, combined with expected increases in vehicular traffic, the level of service (LOS) at the SR 432/SR 433 intersection will fall to nearly LOS F by These delays will translate into a loss of economic productivity for the region. On average, 30 percent of the daily traffic on SR 433 is truck freight traffic. Even using conservative scenarios, by year 2035, the annual loss of economic productivity for truck freight is estimated at $1.1 million (2013 dollars). Bottleneck traffic congestion negatively impacts customers, residents, and tourists and the resulting idling traffic increases emissions. Providing more rail capacity at the terminal would allow for cargo to be converted from truck to rail at the Port, improving the air quality for local residents. Longview suffers from transportation challenges to move both people and freight. The Port is located at the Southeast corner of SR 433 and SR 432 (Industrial Figure 6 Industrial Way Intersection Way). It is also close to the Highlands residential district, which has a disproportionately high level of poverty (20 percent) and an unemployment rate hovering around 8 percent. The outcome is that the community needs greater access to transportation alternatives. The limited public bus system helps, but many more people could be served more efficiently with safe access within and around the port area by reducing truck traffic on nearby roads. This would improve pedestrian and bike access from the nearby neighborhoods to all city services and amenities regardless of time of day or ability to pay.

12 FASTLANE FY 17 Industrial Rail Corridor Expansion Project 9 HOW THE IRC EXPANSION PROJECT ADDRESSES THESE CHALLENGES - The Port plans to construct a completely new railyard with three 9,500-foot running tracks and six new 8,500- foot unit train siding tracks. The additional running track capacity will allow three simultaneous train movements. The additional sidings will provide storage for up to six unit trains. With these new tracks, the IRC Expansion Project provides necessary operational efficiencies for holding or storing trains until either the terminal or mainline is ready to receive the complete unit trains. These added tracks will increase capacity for the Port's rail system and reduce interference beyond the Port as trains will not have to be held on the mainline or other sidings awaiting delivery into the Port. Outbound trains can be held until the mainline is ready to receive them, but the Port will still have three running tracks upon which three trains can pass. This added rail storage and flexibility will improve highway and rail safety, mobility, capacity, provide congestion relief and alleviate future congestion along SR 432, the roadways within and surrounding the industrial area and the rail corridor. As a part of the National Highway Freight Network (NHFN), the Port's IRC Expansion Project will help address current rail limitations in the state and regional freight transportation system. Without the addition of staging tracks that can each hold a unit train, added Port trains for new and growing businesses could interfere with other trains on the mainline or on another distant siding until there is sufficient track length available in the Port to arrive an incoming train. On the outbound leg, without a place to store the departing train on port property, the Port's rail network comes to a standstill as the system clears space to allow for the outgoing train to be dispatched on the BNSF mainline. The project provides unrestricted access to the Port. The Port s IRC Expansion Project will improve the state and regional freight intermodal and freight rail performance by adding capacity and flexibility to the NHFN. The additional storage and three running tracks will eliminate rail blockages and allow simultaneous train movements for arrivals and departures. These Port rail improvements have been selected and prioritized by WAFAC to improve the efficiency and effectiveness of the State s freight system.

13 FASTLANE FY 17 Industrial Rail Corridor Expansion Project 10 2 PROJECT LOCATION 2.1 DETAILED DESCRIPTION OF PROJECT LOCATION The Port of Longview is the first deep draft, full-service operating port spanning 835-acres on the Columbia River, 66 miles from the Pacific Ocean in Southwest Washington State. As shown in Figure 6, the property borders along the Lewis and Clark Bridge, connecting Washington and Oregon. The Port is located in the rural area of Cowlitz County, home to a population 103,000 as of The county has nearly 8 percent unemployment, 2 percent higher than Washington State s average. Compared with the state and nation, Cowlitz County s adults 25 years and older are likely to have a maximum education of high school diploma or some college education. In 2014, only 15 percent of Cowlitz County adults had a bachelor s or advanced degree, as opposed to 30 percent nationally and 33 percent statewide. The difference is due in large part to the occupational structure of the County, which has substantially fewer jobs that require a four-year degree or higher education. The Port provides 10 percent of the county s jobs and is a critical component in the continued betterment of the local residents. Figure 7 Regional Map 2.2 CONNECTION TO EXISTING INFRASTRUCTURE The IRC Expansion Project will become an integral part of the Port s ability to fully utilize the existing shipping, rail, and trucking infrastructure in the region, including unlocking the

14 FASTLANE FY 17 Industrial Rail Corridor Expansion Project 11 maximum economic potential from recent federal investments to the Columbia River. Additionally, investments continue to be made on the Mouth of the Columbia River Jetty Rehabilitation Project to protect navigation and ensure the safety of mariners, and their navigation systems that allow the Columbia River to operate smoothly for the trade benefit of the country and the community. This IRC Expansion Project will enhance freight capacity by tying into the area s existing infrastructure along the river, rails, and roadways. In 2010, the Columbia River Deepening Project was completed in partnership between the federal government, the state of Washington, the state of Oregon, and six regional ports. This $183 million investment increased the river depth from 40 feet to 43 feet in order to ensure the Columbia Snake River System could handle increased cargo loads in this nationally significant trade corridor. The Terminal is located 66 miles from the mouth of the Pacific Ocean on the Columbia River. The river channel is federally authorized and maintained at 43 feet Columbia River Datum (CRD) and Terminal berths match the channel depth. The two-lane vehicular bridge has an 1100-foot horizontal and a 195-foot vertical clearance for river traffic. Two railroads, the BNSF Railway (BNSF) and Union Pacific Railroad (UP), provide direct rail service to the Port s industrial sites and marine facilities. The Portowned 1.5-mile IRC provides direct and uninterrupted rail service to Port customers from the BNSF mainline that parallels Interstate 5 as shown in Figure 6. This project map also shows the Terminal location relative to highways and the BNSF and UP shared mainline, which connects services provided by the Port in the PNW to the Great Lakes via the Great Northern Corridor. The Port is strategically located close to major truck transportation routes - only three miles from the Interstate 5 (I-5) north-south corridor, 45 miles north from the east-west Interstate 84 (I-84) corridor in Oregon, and approximately 120 miles southwest from the east-west Interstate 90 (I-90) corridor in Washington. Access to I-5 is via State Route 432. The Port of Longview also serves many industries in Northwest Oregon, located directly across the Columbia River via the Lewis and Clark Bridge. At the local level, several regional transportation projects are underway to facilitate the movement of cargo efficiently and safely along the local industrial corridor in support of our international trade goals. These investments support robust growth in cargo handling at the Port of Longview and ensure continued success for local partners along the corridor, such as Pacific Fibre Products, Inc., Pacific Lumber and Shipping, LLC, KapStone Paper and Packaging Corporation, Weyerhaeuser Corporation, and the City of Longview s Mint Farm Industrial Park, among others.

15 FASTLANE FY 17 Industrial Rail Corridor Expansion Project 12 3 PROJECT PARTIES PROJECT SPONSOR - The Port of Longview is the sole project sponsor and the grant recipient. The Port has been in operation since 1921 and is overseen by a locally elected, three-member board of commissioners responsible to the voters for port operations. The Port is authorized to levy 45 cents per $1,000 of assessed value of table property, which is used for Port operations and capital projects. LOCAL PARTNERS The Port works closely with the Cities of Longview and Kelso and Cowlitz County in their planning efforts to ensure that Port projects are in alignment with local and regional economic development efforts. As the largest city in Cowlitz County, Longview serves as the regional hub. Regional coordination is essential to the vitality of the Kelso/ Longview region. Planning and coordination is a key aspect of economic development, environmental planning and restoration, and transportation system funding and improvement in the region. The Port has worked diligently to include public and private sector stakeholder participation in the project. STATE PARTNERS The Port works closely with Washington State DOT (WSDOT), and this project has been approved by the state as a Tier 1 multimodal freight project to be included into the state s prioritized list of projects. RAILWAY SUPPORTER- BNSF has played a pivotal role in the planning and design of the proposed rail layout. The Port, customers and consultants have provided engineering expertise to the design of the rail plans and operations plan. BNSF has brought significant staff expertise, time and effort toward executing the many steps required to properly plan and appropriately design this project. LETTERS OF SUPPORT are attached as Appendix B of this report and can also be found at this for the project may be found on the Port s FASTLANE webpage.

16 FASTLANE FY 17 Industrial Rail Corridor Expansion Project 13 4 SOURCES AND USES OF PROJECT FUNDS EVIDENCE OF STABLE AND RELIABLE CAPITAL The estimated cost for the IRC Expansion Project is $62 million. The Port is requesting $37.2 million in FASTLANE funds to match $ 1 million in other federal funds from the National Highway Freight Program (NHFP) programmed through the state, $13.1 million from the Port and $10.7 million from private partners. Negotiations are currently underway with private parties invested in developing the IRC Expansion in coordination with developments occurring at both the Bridgeview Terminal and Berth 4. It is the Port s policy to require capital improvement funding in any rail expansion directly associated with the development of a new facility, or expansion of an existing facility. The Port is currently reviewing responses to the Bridgeview Terminal RFP, and negotiations are actively occurring with applicants regarding cost share participation. It is anticipated that these funds will be secured by the time of FY 2017 FASTLANE award obligations. The Port has experience working closely with private partners to obtain these types of investments directly tied to benefits of a private entity accessing the Port. 4.1 PREVIOUSLY INCURRED FUNDS The project has already begun the environmental and planning processes tied to the IRC Expansion project, and has incurred $500,000 in costs associated with surveying, geotechnical studies, preliminary engineering, and right-of-way acquisition. In addition, the Port has already purchased property to be used as a wetland mitigation site and is in the process of working with a consultant to prepare a wetland mitigation plan. 4.2 DETAILED PROJECT SOURCES AND USES The table bellows the total project costs ($62 million) associated with the IRC Expansion Project. A 15 percent contingency ($8 million) has been absorbed in each line item and will be available for any unforeseen additional expenses associated with the project.

17 FASTLANE FY 17 Industrial Rail Corridor Expansion Project 14 Table 1 Project Sources and Uses Item Description Cost FASTLANE Funds Other Federal Funds Port Funds Private Partner Funds Design and Environmental Process $5,600,000 9% $2,000,000 $500,000 $2,000,000 $1,100,000 Right of Way and Mobilization $5,500,000 9% $4,000,000 $0 $1,500,000 $0 Site Work and Embankment $10,100,000 16% $10,100,000 $0 $0 $0 Utilities $4,200,000 7% $2,100,000 $0 $1,100,000 $1,000,000 Track Work $31,000,000 50% $19,000,000 $500,000 $4,500,000 $7,000,000 Management & Administration $5,600,000 9% $0 $0 $4,000,000 $1,600,000 TOTAL ESTIMATED COST $62,000, % $37,200,000 $1,000,000 $13,100,000 $10,700,000 5 MERIT CRITERIA 5.1 ECONOMIC OUTCOMES The IRC Expansion Project will maximize the Port s rail capabilities and enable the Port to fully realize their economic potential via the freight industry in the PNW. As the last-mile connection to the Great Northern Corridor freight rail infrastructure, the project will provide shippers with economic advantages as movement by rail is less expensive than truck transportation. This improved rail capacity is a valuable resource which will create new opportunities for the Port and its customers. Figure 8 Pulp shipments being loaded by crane A more fluid rail system will reduce train wait / dwell times. Thus, the overall average train speed will increase because operational efficiencies will decrease wait time. While

18 FASTLANE FY 17 Industrial Rail Corridor Expansion Project 15 the applicant supports increasing rail speed limits, this project s improvements will allow the trains to better meet and benefit from the existing rail line speed limits As an economic engine for the county, the Port s purpose is to provide opportunities to help attract new and expanding businesses to the region and assist existing companies to grow to facilitate job growth and economic prosperity for the community. Increased rail capacity and flexibility will provide the Port with an additional tool when working with potential tenants and customers. The expected growth for trade related businesses will create new jobs paying wages above the county average wage. Figure 9 Wind generation equipment unloaded by rail to ship Port improvements in Longview were included in the Great Northern Corridor Coalition s request to Congress to be designated as a Project of National or Regional Significance in With the increased rail capacity, customers will have improved access to rail with the ability to move their products directly between ship and rail. These customers will achieve an average savings of $0.071 per ton mile or an estimated savings to the port s shippers over $500 per 100 tons. The IRC Expansion Project, with its added rail capacity and flexibility, is a key to the success of other proposed Port redevelopment plans and proposals. The Port is evaluating three proposals for the Bridgeview Terminal project that will redevelop and operate bulk mineral export operations from existing Berths 1 and 2. Further, the Port s Berth 4 is up for redevelopment and the Port is evaluating further growth options as well. Likewise, the Port s development plans for new, added berths at the recently purchased Barlow Point property will rely upon the expanded IRC for efficient movement and storage of unit trains. The added rail capacity will take trucks off of the already congested local roadways. 5.2 MOBILITY OUTCOMES The project will provide more transportation choices for freight movement by building additional rail capacity and flexibility. The completion of the IRC Expansion Project is essential in expanding transportation choices for freight and for satisfying the economic opportunities provided by the growth of the Port. The ability to increase exports via rail

19 FASTLANE FY 17 Industrial Rail Corridor Expansion Project 16 rather than trucks will enhance the quality of life throughout the region by taking trucks off the local roads and regional highways. This will reduce congestion and improve mobility for the citizens and visitors of the region. Based on a benefit cost ratio analysis, economists found that delays due to grade crossing produce 61,738 hours of delay for each and 41,172 for freight trucks each year, potentially costing the region over $23 million by 2025 if the issues is not corrected. Based on information gathered in the SR 432 Highway Improvements and Rail Realignment Study, the following was found: A large percentage of vehicles (approximately 40 percent) traveling through the study area are heavy vehicles, which is likely due to the composition of the surrounding industrial land uses. Many of these trucks are delivering logs and other wood products for export. The Port s IRC Expansion Project will improve the efficiency of the roadway network in the Longview area by providing an alternate path for trains to the Port with fewer at-grade crossings. All trains servicing the existing Port facilities can avoid three major at-grade crossings with the City of Longview s roadway network. The prospect of unit trains blocking three major roadways several times per day is of great concern to neighboring industries. The elimination of unit train impacts to the roadway system will reduce congestion, emissions, and costs for the neighboring manufacturers and exporters. The Port s IRC Expansion Project will improve the efficiency of the rail network in the Longview area and beyond. At present, the neighboring tracks are used for switching operations that cut, and later reassemble, trains bound for the Port. With future growth, these switching operations could affect the regional rail network. A Rail Traffic Controller (RTC) simulation model of the 2035 No-Build Case indicates that improvements must be planned for the Longview rail network to support and sustain additional growth. The project will alleviate the congestion from Portrelated switching operations. Many switching operations will be eliminated since the Port will no longer have to cut and later reassemble unit trains. And other manifest switching will be moved to the new Port sidings and will remain clear of the neighboring tracks. The added through-tracks and sidings will add capacity to the Port s rail system and reduce interference beyond the Port as trains will not have to be held on the mainline or other sidings awaiting delivery into the Port; and departing trains from the Port can be held until the mainline is ready to receive them, all the while the Port still has three running tracks upon which trains can pass. This study suggests that the IRC Expansion Project will prevent roadway congestion and related costs by reducing rail related blockages of public streets. The study also suggests that the IRC Expansion Project will improve the efficiency and effectiveness of the Longview rail network. REDUCING HIGHWAY GRIDLOCK A single freight train can take the load of several hundred trucks off the nation s overcrowded highways. Moving freight by rail also reduces the need for costly new roads and helps cut maintenance costs of existing ones. Freight

20 FASTLANE FY 17 Industrial Rail Corridor Expansion Project 17 railroads have installed new idling reduction technologies, such as stop-start systems that shut down a locomotive when it is not in use and restart it when needed. Plus, improved rail lubrication reduces friction in the wheel-rail interface, saving fuel and reducing wear and tear on track and locomotives. New, highly advanced computer software systems calculate the most fuel-efficient speed for a train over a given route, determine the most efficient spacing and timing of trains on a railroad s system, and monitor locomotive functions and performance to ensure peak efficiency. Having the rail capacity to move the Port s cargo by rail will help minimize congestion for all vehicular traffic including non-truck traffic moving through the area. Due to the proximity of the Port terminals to SR432 and 433, any cargo that can be moved by rail will improve public safety and mobility. This will also reduce anticipated congestion and decrease local emissions by reducing idling vehicles sitting in traffic. 5.3 SAFETY OUTCOMES The IRC is a sealed corridor so there have been no crossing accidents since its opening in A safety assessment report was completed for a nearby traffic intersection on Industrial Way and the following safety issues were found: From September 1, 2007 to August 31, 2012, there were 456 total crashes, including 150 injury, 297 property damage only, nine unknown and no fatal incidents. Figure 10 Grade-crossing at Industrial Way The most common crash types for the study intersections and segments were rear-end, angle, sideswipe and fixed-object. The most common crash contributing factors were failure to yield, following too closely, fatigue/inattention and excessive speed. The SR 432 (Industrial Way)/SR 433 (Oregon Way) signalized intersection has the highest number of reported crashes compared to all other study intersections. Shipping cargo by rail to and from the inland destinations will improve the safety of the entire transportation corridor on which the cargo is moved. The current fatality rate in the US is 1.08 per 100 million vehicle miles. Due to lack of data on less severe accidents, only fatalities were calculated. If data on all levels of accidents were available, this savings

21 FASTLANE FY 17 Industrial Rail Corridor Expansion Project 18 would be considerably higher. The project will increase safety by reducing truck traffic on local streets, thereby enhancing safety for both motorized and non-motorized movements. 5.4 COMMUNITY AND ENVIRONMENTAL OUTCOMES COMMUNITY DEVELOPMENT AND INVOLVEMENT: As one of the first ports in the state of Washington, the Port of Longview has long prided itself on its hard working labor force and deep roots in the state s blue-collar industries. A collection of longshoremen, millwrights, and other laborers and operators, supported by a hands-on management team, devise custom solutions and innovations that ultimately help businesses thrive. As a team, the Port works for the community as an economic driver for a variety of industries and businesses within Longview and the surrounding area. The Port of Longview creates jobs, supports local programs and contributes revenue back to the community to continually improve the quality of life for its residents. This project is located in one of the six the Low Income Census Tracts (LICT) within the City of Longview. Three additional tracts are adjacent to the Port s tract. The primary benefit of redevelopment and connectivity will be felt by the residents of these six census tracts as the Port s tonnage growth and prosperity will bring jobs, and additional investment for amenities, housing and services provided to these underserved neighborhoods. This project has been in the Port s planning documents for the last five years and was studied in the 2014 SR 432 Highway Improvements and Rail Realignment Study. All Port planning documents are available for public comment both in writing and at Commission meetings prior to their approval. The Port actively participates in an inclusive, transparent and comprehensive outreach effort for both the public and news media audiences. The goal is to inform and engage private, commercial, and public interests both along, and adjacent to the corridor early in the process to identify issues to address upfront. Stakeholders and the public were invited to participate throughout the process. ENVIRONMENTAL BENEFITS This project will provide an environmentally friendly transportation option for the Port s cargo owners. Trains, on average, are four times more fuel efficient than trucks. That means that moving freight by rail instead of trucks reduces greenhouse gas emissions by an average of 75 percent. 5.5 PARTNERSHIP AND INNOVATION PARTNERSHIP The Port considers the local community a critical partner in the IRC Expansion project and believes that public and stakeholder engagement is critical to the success of this project. The Port and its partners will continue to employ innovative approaches through social networks, project website, blog postings, and use of creative inperson engagement techniques such as dot-mocracy. As discussed in Section 3, Project Parties, the Port works closely with the City of Longview and Cowlitz County to ensure any investment to the Port is aligned with the local strategic

22 FASTLANE FY 17 Industrial Rail Corridor Expansion Project 19 goals for the area. The collaborative inter-jurisdictional approach of the local municipality, City of Longview, and Cowlitz County are critical components of the success of this project to date and will continue to serve as a distinguishing feature of the project. This community s goals are job creation, community revitalization, and improved transportation systems for people and freight. Everyone is working together toward these interdependent goals. The Port has also partnered with private developers, Class 1 railroad, and nearby businesses to successfully plan and design the IRC Expansion project in order to best meet the needs of the intended users. As discussed in Section 4, Grant Funds, Sources and Uses of the Project Funds, this unique public-private partnership includes significant private investment, and leverages existing federal, local, and private investments that have already been made to the Port and the nearby infrastructure. The Port and its partners are looking at a range of innovations to enhance this project. The design team will investigate newer technologies, materials, and techniques for the modernization of the rail design materials, embankment impacts, and long term maintenance. The project will emphasize the importance of building resilient infrastructure that will improve rail and roadway networks in the region. These improved networks will enhance mobility for regional and international trade. The activities under this funding grant will include exploration of innovative project delivery and financing options. 5.6 COST SHARING As discussed in Section 4. Sources and Uses of Project Funds, the Port is currently undergoing negotiations with private partners who have sent in proposals to develop Bridgeview Terminal and redevelop Berth 4. The Port has extensive experience negotiating with private partners to secure capital investments associated with the new Port projects. These funds will be secured by the time of FASTLANE grant obligations. 6 COST EFFECTIVENESS The Port of Longview s proposed Industrial Rail Corridor would create a new rail connection into the Port that would accomplish two primary goals: This new corridor would allow the Port s terminals to be directly served by unit trains with more than 100 cars, allowing for much more economical transportation of bulk goods. The other major benefit of this development is that the new corridor would eliminate three grade crossings that cause expensive delays for vehicular traffic. 6.1 PROJECT COSTS Project costs are projected to total $62 million over two years with a net present value of $56 million at 7 percent and $59 million at a 3 percent discount rate.

23 FASTLANE FY 17 Industrial Rail Corridor Expansion Project PROJECT BENEFITS Elimination of Grade Crossing Delays As described in Section 5 of the narrative, the project will eliminate three grade crossings. Each day an estimated 846 cars and 564 cars experience delays at these grade crossings and the average delay is 12 minutes. The resulting delays total 61,738 hours of delay for cars and 41,172 hours of delay for heavy trucks. These vehicle counts and average delays may both be expected to increase over time and 1 percent per year growth is included in the projections. Multiplying these totals by Value of Time dollar rates results in total costs of over $2 million per year, with a net present value of $23 million at a discount rate of 7 percent. All of these costs can be avoided by the proposed project. Unit Train Cost Efficiency Benefits As described in Section 6 of the narrative one of the principal benefits of the project is that it will allow direct service of unit trains to Port terminals. This new corridor would allow the Port s terminals to be directly served by unit trains with more than 100 cars rather than the much shorter trains that can currently reach Port terminals. Unit trains are operated on long-haul routes and significantly reduce per unit transportation costs. Port operations currently cannot accommodate full length unit trains through their facilities. Unit trains brought to the Port have to be cut in to sections or brought in manifest. Operationally, having to cut trains into sections and maneuvering them around and through the Port rail infrastructure versus keeping the train intact with the locomotive power results in considerable expense to the Port, railroads and to customers. Volumes of cargo and carloads to Port terminals have been projected for Berth 4, Berth 5 the new Bridgeview terminal and for Barlow Point based on minimum annual guarantees, five year analysis and projections, and negotiated lease terms. Volumes, carloads per train, numbers of trains per day all vary by terminal. Based on these factors, a cost savings per carload is then applied to these projected carloads to provide a total transportation cost savings by terminal. Projected volumes by terminal are as follows: At Barlow Point carloads are projected to increase from 17,000 carloads per year beginning in 2020 to 122,000 carloads in 2024 and beyond. Volumes at the new Bridgeview terminal are expected to begin at 7,000 per year in 2019 and grow to 13,000 per year in Volumes at Berth 4 are projected to total 44,000 per year beginning in Berth 5 carload volumes are expected to remain steady at 7,500 per year The total of these unit train efficiency cost savings amounts to over $50 million in net present value at a 7 percent discount rate. Net present values of unit train cost savings for specific terminals at a 7 percent discount rate are included in the summary table below.

24 FASTLANE FY 17 Industrial Rail Corridor Expansion Project 21 Table 2 Benefits by Project Element Benefits ($) Elimination of Time Delays at 3 Grade Crossings $22,859,760 Unit Train Operating Efficiencies - Barlow Point $34,455,099 Unit Train Operating Efficiencies - Bridgeview Terminal $3,231,286 Unit Train Operating Efficiencies - Berth 4 $13,003,922 Unit Train Operating Efficiencies - Berth 5 $2,194,412 Eliminate Cost Of Temporary Grade Crossings $564,062 Total Benefits $76,308, COST-BENEFIT RESULTS As shown in the table below, at a 7 percent discount rate the net present value of project costs is $56 million compared to total project benefits of $76 million, with a resulting benefit cost ratio of At a 3 percent discount rate project costs are marginally larger but benefits are much greater, yielding a cost benefit ratio of Table 3 BCA Results Benefit Cost Analysis 7 % Discount 3% Discount Project Cost $55,987,422 $59,289,283 Project Benefits $ 76,308,540 $ 133,174,904 Net Benefit $20,321,118 $73,885,621 Benefit Cost Ratio SMALL PROJECT REQUIREMENTS While it is a small FASTLANE project of less than $100 million, the Port s IRC Expansion Project will have a large impact on the surrounding region, the state, and the nation s freight economy. Table 3 on the following page provides Control-Click links to each section that further details why this small projects meets all the requirements.

25 FASTLANE FY 17 Industrial Rail Corridor Expansion Project 22 Table 4 Small Project Requirements FASTLANE Requirement Link to details in the application 1 Does the project generate national or regional economic, mobility, safety benefits? Yes. Section 1.2 Nation and Regional Significance, and Sections 5.1, 5.2, and 5.3 under Merit Criteria provide evidence of these benefits. 2 Is the project cost effective? Yes. Section 6 explains the Project has a cost benefit ratio of 2.25 at a 3 percent discount rate and of 1.36 at a 7 percent discount rate. 3 Does the project contribute to national goals associated with the Federal-aid highway program. Including: safety, infrastructure condition, congestion reduction, system reliability, freight movement and economic vitality, environmental sustainability, and reduced project delivery delays? 4 Is the project based on the results of preliminary engineering? 5 Does the project have one or more state and dependable funding or financing source to construct, maintain, and operate this project? And are contingency amounts available to cover unanticipated costs. 6 Can this project be easily and efficiently completed without other federal funding or assistance available to the project? 7 Is the project reasonably expected to begin construction not later than 18 months after the fate of funding obligation? Yes. The Project addresses each of these goals. Further support for this claim can be found in Section 1.2 Nation and Regional Significance, and Sections 5.1, 5.2, and 5.3 under Merit Criteria that outline specific economic, mobility, and safety benefits, and Section 6 Cost Effectiveness. Yes. As noted in Section 8 the project completed PE in Yes. As evidenced under Section 4 Sources and Uses of Project Funds, the Port is prepared to contribute funds to these capital improvements, the state will support a portion of the project, and private partners are in the process of being secured to complete this project. At this time, the project cannot occur without FASTLANE funds. As the most trade-dependent state in county (per capita), Washington has limited resources to support its numerous critical ports. This project has been recommended as a Tier 1 Freight Project, it has not been fully funded through available state funds at this time. Yes. As stated in Section 0 Project Schedule under Project Readiness. The project is on schedule to begin construction in PROJECT READINESS 8.1 TECHNICAL FEASIBILITY The project is technically and financially feasible. The IRC Expansion Project is financially feasible. The budget summary is located in the Appendix. The project is included in the Port s capital improvement program and the Port will provide the matching funds through a combination of cash and financing. The IRC Expansion Project will be managed following public procurement standards complying with federal and state law to ensure that risks are mitigated prior to and during

26 FASTLANE FY 17 Industrial Rail Corridor Expansion Project 23 construction. The project budget has been developed internally with the help of consultants with extensive port planning experience, and with input from BNSF. The estimates are conservative with $8 million of added contingency to accommodate uncertainties with site conditions or real estate prices. As a public port authority, procurement and construction will meet all county, state and federal requirements. The Port, City, County, and Economic Development Agency of Cowlitz County have closely Figure 11 Project Schedule collaborated over the past decade to implement economic development projects that create jobs and strengthen the entire community. The Port s Planning and Finance Departments have the capacity to manage a federal grant of the requested size with strong internal processes and controls. Over the past five years, the Port has been awarded 2 federal grants totaling nearly $1 million. The Port complies with audit requirements performed under OMB Circular A-133. FASTLANE 2017 Project audit requirements will be the responsibility of the Port as the Grantee. Please note that no administrative cost allowance is being requested in this grant application as these costs will be covered by the Port. 8.2 PROJECT SCHEDULE Initial tasks associated with the IRC Expansion Project have already begun, with preliminary engineering under way and the environmental processes initiated. If the requested FASTLANE grant amount is awarded to the project, the funding package will be complete, and construction can begin in REQUIRED APPROVALS Environmental permits and reviews NEPA AND SEPA - Washington State has adopted a State Environmental Policy Act (SEPA) process that mirrors the National Environmental Policy Act (NEPA). Port authorities are granted the ability to lead the SEPA process if they are the project proponent and meet

27 FASTLANE FY 17 Industrial Rail Corridor Expansion Project 24 regulation requirements. The Port meets the requirements for leading this process and therefore, will be the SEPA Lead Official for this project. The Port has also retained a consultant to lead the development of the SEPA checklist and corresponding NEPA documentation, associated studies required, and lead meetings with participating agencies and organizations that may include, but are not limited to, Washington State Department of Ecology (Ecology), Washington State Department of Fish and Wildlife (WDFW), Cowlitz County, City of Longview, US Army Corps of Engineers (USACE), Cowlitz Public Utility District, emergency service providers, Port tenants, adjacent property owners, and environmental interest groups. The consultant has begun initial work on development of the SEPA environmental checklist, associated studies, and wetland investigations. As this project did not initially anticipate needing federal funding, it has not begun the NEPA process, however the consultant team managing SEPA is starting to undertake the NEPA process and is actively coordinating with necessary agencies. This process will continue once full funding for the project has been identified. WETLAND MITIGATION The Port s consultant will complete a wetland delineation along the proposed IRC Expansion Project from the Port of Longview s connection with the Longview Switching Company Yard to International Way. Jurisdictional surface waters will be identified, flagged and mapped (wetland boundaries or ordinary high water marks (OHWM)). A Wetland Mitigation Plan is currently under development, and the Port has already purchased land to be used for wetland mitigation if necessary. Public engagement The goal is to inform and engage private, commercial and public interests both along and adjacent to the corridor early in the process to identify pertinent issues early. Stakeholders and the public were invited to participate throughout the strategic plan process, which included discussion regarding the need for the IRC Expansion Project and the future use of Barlow Point. Additional public engagement regarding that state s prioritization of this project is discussion below. State and Local Approvals and Planning In 2016, Washington State Department of Transportation (WSDOT) was required to work with stakeholders to provide a list of prioritized freight transportation projects for consideration for funding in the fiscal biennium because port projects had not previously been included in the Statewide Transportation Improvement Plan (STIP). WSDOT worked closely with the Washington State Freight Advisory Committee, the Washington State Freight Mobility Strategic Board, and local Metropolitan Planning and Rural Transportation Planning Organizations across the state to submit an agreed upon list of priority freight projects. Four public meetings hosted jointly by their organizations occurring between May and October Projects were placed in three tiers based on scheduled year for PE, ROE, or construction activities. Ranging from Tier 1 (projects schedule from ) and Tier 3 (projects scheduled from ). The Port of Longview IRC Expansion Project was recommended by the Cowlitz Council of Governments as a Tier 1 Multimodal Freight Project and was accepted by WSDOT in October 2016.

28 FASTLANE FY 17 Industrial Rail Corridor Expansion Project 25 This project has been in the Port's planning documents for the last five years and was studied in the 2014 SR 432 Highway Improvements and Rail Realignment Study. All Port planning documents are available for public comment both in writing and at Commission meetings prior to their approval. The Port will administer an inclusive, transparent and comprehensive outreach effort for both the public and news media audiences. This project was also included in the Port s Comprehensive Scheme of Harbor Improvements, Master Plan, Strategic Business Plan, and in the Five Year- Capital Improvement Plan. Cowlitz County and the City of Longview both recognize the importance and need of port industry and freight rail infrastructure in the their current and proposed updates to their Comprehensive Plans. 8.4 PROJECT RISKS AND MITIGATION STRATEGIES The Port routinely conducts community and stakeholder outreach as part of their planning processes to ensure that resident and stakeholder concerns on specific plans and projects are adequately addressed. Feedback has been favorable overall. The Port is committed to honoring all commitments made through their planning process, maintaining strong communication, and diligently implementing the Port s Master and Strategic Plans. This experience, combined with the project specific mitigation factors planned for potential risk areas described below, will help keep project risks low, and manageable. Table 5 Project Risks and Mitigations