TIGER3 Discretionary Grant
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1 P&L Shortline Railroad Upgrade & Shuttle Train Loader Facility TIGER3 Discretionary Grant 2011 Project Type: Freight Rail Funding Amount Requested: $5,905,000 TIGER ID: Kara Riebold67471 DUNS Number: Port of Whitman County Joseph Poiré, Executive Director 302 N. Mill Street Colfax, WA (509) office (509) fax
2 TABLE OF CONTENTS PROJECT SUMMARY... 1 COST COMPETITIVE TRANSPORTATION OF REGIONAL AGRICULTURAL COMMODITIES TO MARKET... 3 I. PROJECT DESCRIPTION... 5 II. PROJECT PARTIES... 8 III. GRANT FUNDS AND SOURCES/USES OF PROJECT FUNDS IV. SELECTION CRITERIA STATE OF GOOD REPAIR ECONOMIC COMPETITIVENESS & LIVABILITY EVIRONMENTAL SUSTAINABILITY SAFETY JOB CREATION AND NEAR-TERM ECONOMIC ACTIVITY BENEFIT-COST ANALYSIS SUMMARY V. PROJECT READINESS AND NEPA PROJECT SCHEDULE ENVIRONMENTAL APPROVALS NEPA LEGISLATIVE APPROVALS STATE AND LOCAL PLANNING VI. FEDERAL WAGE RATE CERTIFICATION VII. MATERIAL CHANGES TO PRE-APPLICATION i P a g e
3 TABLE OF FIGURES Figure 1: Track Conditions on the P&L Rail Line... 1 Figure 2: Map PCC Rail System... 5 Figure 3: Bridge 17.6, Pile 5, Bent Figure 4: Bridge 29.0, Pile 5, Bent LIST OF TABLES Table 1: Supporters of the P&L Shortline Railroad Upgrade and Shuttle Loader Facility Project... 9 Table 2: Project Costs Related to Rail Upgrade Table 3: Project Costs Related to Construction of the Shuttle Loader Facility Table 4: Total Project Costs and Share of Costs Funded by TIGER3 Discretionary Grant Table 5: Washington State Investment in the Palouse River and Coulee City Rail Line (PCC) Table 6: Summary of Infrastructure Rehabilitation Completed by WSDOT Table 7: Benefit-Cost Analysis Summary Totals Table 8: Project Schedule LIST OF SUPPORTING DOCUMENTATION The following supporting documents can be view via the following web link: A. Federal Wage Rate Certification B. Letters of Support C. Benefit-Cost Analysis D. Benefit-Cost Analysis Supporting Documentation E. P&L Rehabilitation and Upgrade Project Construction Schedule F. P&L Rehabilitation and Upgrade Project Cost Estimate G. P&L Rehabilitation and Upgrade Project Maps H. NEPA Categorical Exclusion Checklist I. Report: Modal Comparison of Domestic Freight Transportation Effects on the General Public J. Report: Palouse River and Coulee City Railroad Rehabilitation K. Report: PCC Normalized Maintenance Report (Work Element #2) L. Report: PCC Operational/Loading Condition Priority Analysis (Work Element #3) M. Report: PCC Rail System Capital Maintenance Priority Plan (Work Element #5) N. Report: Purchase and Rehabilitation of the Palouse River and Coulee City Railroad Track O. Shuttle Train Loader Facility: Hydraulic Project Approval P. Shuttle Train Loader Facility: Conditional Use Permit Q. Shuttle Train Loader Facility: Construction Storm Water Permit ii P a g e
4 PROJECT SUMMARY The Port of Whitman County seeks $5,905,000 in federal stimulus funding from the Transportation Investment Generating Economic Recovery Discretionary Grants 2011 program (TIGER3) to rehabilitate and upgrade an approximately 29-mile stretch of the P&L branch of the Palouse River and Coulee City (PCC) railroad system serving Eastern Washington. Funding this rehabilitation and upgrade project, the P&L Shortline Railroad Upgrade and Shuttle Train Loader Facility Project, upgrades the P&L branch track structure to sustainable and appropriate condition and bridges to the level required by the Federal Rail Administration (FRA) in order to accommodate 286K lb. rail cars and provides reliable rail access a new private sector $16 million commercial grain storage and loading facility. The Washington State-owned rail line connects rural shippers located in the eastern Washington State communities of Whitman, Spokane and Stevens Counties, to their global markets. Highlights of the project are as follows: 1. Rehabilitation and upgrade of the P&L rail line resulting in long-term system viability. Currently, track conditions on the P&L are insufficient for sustained and efficient operations associated with long and heavy trains, and the bridges do not comply with the FRA s bridge regulations for 286K cars. BNSF gives priority to these 110-car Efficiency Trains (also called Shuttle Trains), which only use the 286K cars. Without upgrades to the track and bridges, the private sector will not be able to get shuttle trains Figure 1: Track Conditions on the P&L Rail Line to and from its future $16 million shuttle train loader facility. TIGER3 funds will be used to replace defective ties, perform rail joint maintenance, upgrade timber bridges along the track, replace defective crossings, ditch for track drainage and surface, line, and dress the track to bring the line to a sustainable condition and into compliance with FRA standards. Annual revenues of past rail operations have been insufficient to fund sustainable longterm repairs and appropriate upgrades to the track and bridges. With state resources exhausted, the Port of Whitman County seeks grant funding to facilitate rehabilitation and upgrades to the track conditions to enable increased shipments, bringing revenues necessary for this line to become a self-sustaining asset for the State. 1 P a g e
5 2. Completion of a $16 million Shuttle Train Loader Facility. Construction of this privately funded and owned facility reduces truck miles traveled to transport area grain to market, putting additional money in the farmers pockets, reducing truck traffic and wear on roads, and enabling businesses to meet the demands of export markets in a cost effective manner. 3. Ensured economic competitiveness for the region. Without the option of rail routes, barge is the only transportation option for the producers to market. With both systems viable, there is a competitive balance. 4. Committed support from regional agricultural companies, grower organizations, government agencies, and local, state, and federal elected officials. The collaboration efforts of state and local government and both public and private entities strengthen the impacts of this project. 5. Ensured project completion by September The Port of Whitman County is a proven successful project administrator of both federal and state funded projects. The NEPA application for Categorical Exemption is in the final stages. Engineering work will begin as soon as TIGER funds are awarded. HDR Engineering is anticipated to be contracted for the project because of the firm s extensive history of completing work for the Washington State Department of Transportation (WSDOT) on the P&L. The project schedule guarantees the obligation of all TIGER3 funds before the September 30, 2013 deadline. The impetus of this project is the transportation of agricultural commodities in a more efficient manner, resulting in a reduction of transportation costs, maintenance on local roads, and fuel consumption. The project provides positive economic impacts to the region including additional long-term jobs, direct jobs during construction of the project, increased income for area farmers and the development of storage and transportation facilities along the rail line. In addition, this project increases the volume on the rail line each year as business grows, providing a long-term solution for maintaining the State s asset. 2 P a g e
6 COST COMPETITIVE TRANSPORTATION OF REGIONAL AGRICULTURAL COMMODITIES TO MARKET Washington, the fourth largest wheat producing state in 2011, exports approximately 85% of its wheat. The remaining 15% is sold to the domestic market. In the eastern portion of the state lie the fertile rolling hills known as the Palouse. This region produces approximately 30% of the state s wheat for export. To reach market export destinations, area producers truck the wheat to rail loading facilities on the Palouse River and Coulee City (PCC) shortline railroad or to barge loading facilities along the Snake River. The current state of the shortline rail does not provide a cost competitive option for regional producers. As a result, producers must choose between a better price at the river often resulting in increased truck miles or trucking to a rail loading facility for a reduction in truck miles but an increase in freight costs to market. The P&L Shortline Railroad Upgrade and Shuttle Train Loader Facility Project provides an alternative option for area farmers. With the upgrades to the P&L branch of the PCC, a private grain cooperative, Cooperative Agricultural Producers, Inc. (Co-Ag), commits to building a $16 million 110-car shuttle loading facility. Construction of this facility will make the shortline railroad competitive with loading prices at the river, and with reduced truck miles, regional producers will receive a better return. The reduction of truck miles will have a public benefit as well but in the reduction of required road maintenance as well as a reduction in CO 2. The contents of this application demonstrate how this project will meet the following objectives: Reduce transportation costs of moving regional agricultural products to market. Lessen maintenance on local roads and reduce fuel consumption. Provide additional employment opportunities in rural communities through both longterm jobs and direct project construction jobs. Enhance the income for area farmers through competitive transportation options. Support a private sector investment of $16 million for storage and transportation facilities along the rail line. Increase the annual volume shipped on the rail line each year, providing additional revenue as a long-term solution for maintaining the State s asset. To accomplish these goals, the Port of Whitman County seeks $5,905,000 to fund track structure repairs and Co-Ag commits to contributing $16,375,882 to construct the 110-Car Shuttle Train Loader Facility. The benefits of this project strongly align with the TIGER3 Primary Selection Criteria. State of Good Repair. The project restores a valuable section of the state-owned P&L shortline to accommodate 286,000 gross weight cars. As a result, the private sector will construct a $16 million Shuttle Train Loader Facility and Loop Track which will increase efficiency and usage of this shipping option. The projected shipping volume will increase from approximately 1,450 cars per year to over 4,400 cars per year after these 3 P a g e
7 improvements creating a self-sustaining source of revenue for ongoing maintenance of the track along the P& L line of the PCC. Economic Competitiveness. Creation of long-term, low cost rail transportation for shippers on the P&L line is essential for continued operation of these companies. Livability. Restoration of this rail line will ensure the survival of a vital freight transportation link allowing the region to conduct trade through the most cost effective integrated transportation modes. Thus providing area farmers with greater profits. In addition, the construction of the new facility will provide additional employment opportunities. The increased revenues for local farmers and businesses will contribute to sustaining economically healthy rural communities. Environmental Sustainability. Over long distances, railroads move products more efficiently than trucks on highways. Likewise, the longer the train, the more efficient the transportation of the freight. Maintaining short-rail systems reduces our nation s dependence on oil and reduces greenhouse gas emissions. This project takes over 5,652 truckloads off the road annually. Safety. According to the NHTSA, 1 of every 7 highway fatalities involves heavy trucks. Accident rates per train-mile traveled are significantly lower than that for trucks. This project reduces the annual truck miles by 1,705,913. Job Creation and Near-Term Economic Activity. Project completion creates or retains 25 full-time jobs plus benefits and 111 construction jobs. The reduced freight costs of 2 cents per bushel puts an additional $250,000 into farmers pockets annually. In addition, the project meets the requirements for the following Secondary Selection Criteria: Innovation. The TIGER program targets funding for the most competitive transportation infrastructure projects in the nation. While all proposals may demonstrate need, the funded projects must illustrate more than just need. In a similar fashion, many of the shortline railroads have experienced deferred maintenance. This proposals singles out the P&L shortline because of the commitment of the shippers on the line to build a new facility that will ensure the long-term viability of the line. If not for the $16 million private investment, this project would meet a restoration need without the promise of future sustainability. Partnership. The Port of Whitman County maintains a lengthy and successful track record of working with community leaders, private industry, and local and state government agencies to provide opportunities for economic growth in the Eastern Washington region. The public/private partnership demonstrates a good use of tax payer money as it generates a ratio of three private dollars for every one public dollar invested. This illustrates the importance of this project and substantiates the federal grant request. 4 P a g e
8 I. PROJECT DESCRIPTION Part of the Palouse River and Coulee City Railroad (PCC), the P&L branch runs from Marshall, Washington to the Idaho border, near Moscow, Idaho, and from Palouse, Washington, directly east to the Idaho border where it meets a line owned by Watco Companies Incorporated. The approximate 30-mile stretch of rail to be rehabilitated runs from milepost 0.0 in Marshall, WA, Spokane County ( , ) to milepost 30.2 near Oakesdale, WA, in Whitman County ( , ). Figure 2: Map PCC Rail System. The P&L branch (blue) connects to the national rail system at Marshall. 5 P a g e
9 Currently three major grain companies have access to loading grain by rail on the P&L: Cooperative Agricultural Producers, Inc. (Co-Ag) loading in Spangle, Plaza, Rosalia, McCoy, and Oakesdale Palouse Grain Growers, Inc. loading in Palouse Pacific Northwest Farmers Cooperative, Inc. loading in Fallon Historically, companies along the P&L could only ship 26 cars at the maximum. Because this option was not economical for the elevators along the line or for the BNSF, shipping by rail was not competitive with shipping truck-to-barge to the river terminals. Due to the transportation costs and inefficiencies, the majority of the grain was not shipped by rail. This created losses for the up country grain elevator companies and the operator of the shortline railroad. To stay financially solvent, the shortline operator had to subsidize the rail shipping with car storage. For the past three years, Co-Ag worked with BNSF to obtain a shuttle train rate (110-car unit). Through negotiations, BNSF agreed to allow Co-Ag to ship 110-car units by a co-loading arrangement, allowing the shipper to load the cars at various locations. This agreement was made on a temporary basis, with the understanding that a shuttle train loader facility must be built in the imminent future. There are multiple reasons why the temporary co-load arrangement does not serve the best interests of either BNSF or Co-Ag. It is extremely dangerous and inefficient to load, requiring more labor (men working double shifts) and the use of multiple storage facilities. With the co-load arrangement, the train does not stay in one piece as it would if the loading were taking place at a shuttle loading facility. It is cumbersome for the shortline operator to switch into multiple loading locations, disconnect a specific number of hopper cars, and switch back out onto the mainline to continue movement to the next loading location. Because the hopper cars are disconnected from the locomotives, there are other methods that must be used to move the hopper cars under the loading spout. The brakes must be released by hand to move the cars during loading, forcing the loading crew to be on the tracks. Breaking the cars from the locomotives also requires that the air brakes be reset before the loaded cars can be moved after load, which takes more time and utilizes more fuel while the locomotives wait for the process to be complete. In response to the need for a more economical loading solution, Co-Ag has committed to constructing a 110-car shuttle loader facility and loop track. This facility will provide a cost competitive shipping option for regional producers and ensure increased revenues that the rail line operator needs to continue future operations. Co-Ag s proposed Shuttle Train Loader Facility and loop track in the McCoy siding area will possess the capability of loading 110-car shuttle trains in less than 15 hours, per BNSF specification. The loop track will start at approximately milepost (mainline turnout: 47d N and 117d W) and extend over 11,000 feet (Co-Ag Office building and east extents of railroad construction: 47d N and 117d W). The loop track will hold up to 110 covered hopper cars and 4 locomotives. The facility will also be able to unload railcars used to transfer grain from all of the other rail facilities on the P&L. Co-Ag is projecting to load 4,400 cars per year, shipping 16,368,000 bushels of wheat each year. This will increase the usage of the P&L from approximately 1,450 cars to over 4,400 cars per year. 6 P a g e
10 Over the past five years, the Washington State Department of Transportation (WSDOT) made minor track and in-kind bridge repairs to keep this portion of the P&L in safe and passable operating condition. However, the repairs were limited, and insufficient to provide a sustainable infrastructure suitable for anticipated shuttle train traffic/tonnage and necessary operating speeds. The Federal Railroad Administration (FRA) put in effect a new rule (law) pertaining to railroad bridges in This rule is CFR Title 49 Part 237 entitled Bridge Safety Standards. Among other things, the law requires that railroad bridges be rated for capacity and that underrated bridges must be upgraded as necessary to accommodate current (or anticipated) traffic. Most of the bridges on the P&L are believed to be underrated for 286,000lb gross weight (286K) cars. Because the shuttle trains use 286K cars only, the upgrades to the bridges are required if the shuttle facility is to be built. The rule also requires that this railroad put in place a bridge management program by September of 2012 and part of that includes the Figure 3: Bridge 17.6, Pile 5, Bent 2 rating of all bridges and a plan to repair or upgrade the bridges or impose operations restrictions. Annual revenues of the current and past rail operations have been insufficient to fund sustainable and normalized maintenance to the track and bridges. With state resources exhausted, the Port of Whitman County seeks grant funding to facilitate the necessary rehabilitation and upgrades to restore the track segment to a condition that would allow increased shipments and revenues necessary to become a self-sustaining asset for the State. REGIONAL PROJECT BENEFITS A benefit-cost analysis of the project was conducted by regional economist, Steven Peterson from University of Idaho and the assistance of Jackie Tee, Project Manager at Cooperative Agricultural Producers, Inc. (Co-Ag). The analysis resulted in a benefit/cost ratio of 2.43 using a 3% discount rate and 1.44 using a 7% discount rate. The analysis compared two scenarios: continuation of the status quo, eventually resulting in track abandonment due to the state of disrepair and rehabilitation of the track as described in the project proposal. The project produces the following regional benefits over a 20-year period at a 3% discount rate: Net transportation savings of $54.7 million Net road damage savings of $10.5 million Net safety savings of $10.8 million Net reduction in CO 2 emissions of $397 thousand Total net benefits of $54.1 million 7 P a g e
11 II. PROJECT PARTIES The grant recipient will be the Port of Whitman County. As a member of the Palouse River and Coulee City Rail Authority, the Port works to encourage a balanced multi-modal transportation system serving agriculture, commerce, and industry. The Port formally participates in the State Transportation and Rail Plans on a regular basis and partners with local railroads to preserve and enhance rail service to its constituents in Whitman County as well as eastern Washington. The Port of Whitman County is a proven successful project administrator of both federal and state funded projects. The most recent grant activity includes the following awards: Granting Agency: Federal Aviation Administration & 2012 POWBAC Apron Design and Construction Grant - $80,000 design (underway) $590,000 construction (anticipated summer of 2012) & 2007 POWBAC Taxiway Reconstruction Design and Build Grant - $1,079, Airport Layout Plan Grant - $60,000 Granting Agency: U.S. Department of Commerce Sub-recipient of NoaNet BTOP1 Telecommunications Grant - $9.8 Million (Currently designed & under construction) Granting Agency: Washington State Department of Commerce -CERB (Community Economic Revitalization Board) Pullman Industrial Park West Utility Extension Project: $1,000,000 Loan (underway) Telecommunication Feasibility Study - $25, Green IT Feasibility Study - $25, Henley Court Building Design and Construction Phase 1 -$800,000 Grant & Loan Henley Court Building Design and Construction Phase 2 & 3 - $1,000,000 Grant & Loan Granting Agency: WA State Department of Transportation Wilma Water & Telecommunications Line Design & Construction Grant - $150,000 Granting Agency: WA Department of Commerce Innovation Partnership Zone Designation and Grant - $1,000,000 The Port of Whitman County maintains a lengthy and successful track record of working with community leaders, private industry, and local and state government agencies to provide opportunities for economic growth in the Eastern Washington region. Cooperative Agricultural Producers (Co-Ag) is a farmer-owned cooperative located in the heart of the Palouse Region of Eastern Washington and Northern Idaho. Co-Ag formed in 1998 through a merger of three area cooperatives, Oakesdale Grain Growers, Rosalia Producers, 8 P a g e
12 and Fairfield Grain Growers. The three companies realized that if combined, they would be able to be more efficient, offer more services, and be more competitive in the market place. There are over 640 members of the cooperative and the management of the company is overseen by a seven-member grower Board of Directors. The company receives wheat, barley, pea, and lentil crops at 21 elevator locations throughout the region which extends through the counties of Stevens, Spokane, and Whitman in Washington State and the counties of Benewah, Kootenai, and Bonner in the state of Idaho. Shipping is diversified as the company has ownership in a barge loading facility on the Snake River and has rail loading facilities on both the BNSF and the UP railroad systems. Co-Ag s main office is located in Rosalia, Washington, with branch offices in Tekoa, Oakesdale, and Fairfield, Washington. Co-Ag s drive to carry out its mission, To grow profitability, retire shareholder equity, and provide sound employment opportunities while striving to keep the local communities strong, exemplifies the company s strengths as a partner for this project. In addition, Co-Ag has committed $16,375,882 to the construction of a Shuttle Train Loader Facility and Loop Track for this project. Many organizations, businesses, local governments and legislators highly support the partnership efforts of the Port of Whitman County and Co-Ag on the P&L Shortline Railroad Upgrade and Shuttle Train Loader Facility Project. The broad support is evidenced by the following table listing the supporters who have supplied letters describing their rationale for backing this project. Table 1: Supporters of the P&L Shortline Railroad Upgrade and Shuttle Loader Facility Project Legislators Government Businesses Organizations - U.S. Representative - Washington State - AVISTA Corp. - Washington Cathy McMorris Rodgers Department of Transportation - Cooperative Agricultural Association of Wheat Growers - U.S. Senator Patty - Port of Whitman Producers, Inc. - Washington Grain Murray County - Washington and Commission - U.S. Senator Maria Idaho Railway - Agri-Business Cantwell - Pacific Northwest Council - State Senator Mark Schoesler (Dist. 9) Farmers Cooperative, Inc. - Washington Dry Pea and Lentil - State Representative - Pacific Northwest Commission Joe Schmick (Dist. 9) Grain and Feed Association - Idaho Pea and Lentil Commission - State Representative Susan Fagan (Dist. 9) - BNSF Railway - Western Pea and Lentil Growers Association - U.S. Pea and Lentil Association 9 P a g e
13 III. GRANT FUNDS AND SOURCES/USES OF PROJECT FUNDS The Port of Whitman County seeks $5,905,000 in TIGER Discretional Grant funds. The tables below outline the project costs for the rail upgrade and the shuttle loader facility. Grant funds requested will be used directly to rehabilitate and upgrade the existing track structure and bridges of the P&L rail line. This project is 100% located in the rural regions of Southern Spokane County and Whitman County, Washington. Even though a match is not required for rural projects, the private sector commitment to this project provides over a 100% match. Funding for the privately owned shuttle loader facility will be provided 100% by Co-Ag. Co-Ag s commitment to funding this facility is outlined in its letter of support, which can be viewed via the following web link: Table 2: Project Costs Related to Rail Upgrade Activity Total Cost Defective Tie Replacement (24% of existing ties) $2,642,016 Rail Joint Maintenance (all joints) $15,975 Surface, Line and Dress Track + Ballast Distribution $616,712 Timber Bridge Upgrades for 286K Load Capacity $1,192,000 Timber and Steel Bridge Maintenance $165,841 Defective Crossing Replacement (approx. 200 ft.) $96,800 Ditching for Track Drainage $137,045 Subtotal of Items $4,866,389 Engineering (5% of subtotal) $243,319 Construction Management (3.5% of subtotal) $173,372 Environmental Permitting/Mitigation (4% of subtotal) $194,656 Tax (7.8% of bid items and additional items) $427,263 GRAND TOTAL $5,905, P a g e
14 Table 3: Project Costs Related to Construction of the Shuttle Loader Facility Description Total Cost Facility Construction $10,500,000 Electrical Line $316,368 Land Costs $552,214 Loop Track Rail Construction $2,138,500 Mobilization, Bonds, Surveying $273,200 Excavation, Culverts, Wetlands $1,300,600 Rail Contingency $350,000 Bank Related Closing Costs $75,000 Loan Fees $120,000 Legal and Other Professional Fees $250,000 Contingency $500,000 Total Shuttle Loader Facility Costs $16,375,882 The following table provides an overview of the total project costs, percentage of project costs that would be paid for with TIGER Discretional Grant funds, and the percentage share of project costs that would be paid for by the private sector party. Table 4: Total Project Costs and Share of Costs Funded by TIGER3 Discretionary Grant Funding Source Funding Amount Total Project Cost Percentage of Total Project Cost Co-Ag $16,375,882 $22,280,882 74% TIGER3 Grant Funds $5,905,000 $22,280,882 26% IV. SELECTION CRITERIA STATE OF GOOD REPAIR In 2007, the State of Washington acknowledged the importance of rail to the State s economy and completed its purchase of the three shortline railroad tracks, known as the Palouse River and Coulee City Railroad (PCC). The State recognized that closure of the lines would force producers to truck grain long distances and affect their ability to meet market demand during seasonal periods when roadway load restrictions and closures are in effect. In addition, without the shortline rail system, congestion and maintenance costs on roadways would increase. WSDOT s report, Purchase and Rehabilitation of the Palouse River and Coulee City Railroad Tracks is available via the following web link: Due to the maintenance neglect the shortline system suffered under Class I railroad operators, the Washington State Legislature made $8.6 million available for grant to any intergovernmental entity or local rail district provided the funds were used only to refurbish the recently purchased 11 P a g e
15 PCC rail line system (Chapter 518, Section 713). In response to this legislation, Grant County, Lincoln County, Spokane County and the Port of Whitman County signed an interlocal agreement in March of 2008 to form the PCC Rail Authority. The Washington State Department of Transportation (WSDOT) identified and prioritized refurbishment for the PCC rail line and the $8.6 million of state allocated money. WSDOT s report Palouse River & Coulee City Railroad: Detailed List of Proposed Rehabilitation Work Items can be viewed via the following web link: The table below shows the history of the state s investment. Table 5: Washington State Investment in the Palouse River and Coulee City Rail Line (PCC) WSDOT s Purchase and Rehabilitation of the PCC Rail Line $5.8 M Purchase of the PV Hooper and P& L Branches in 2004 $9.7 M Purchase of the entire CW Branch and additional property and the operating rights of the other two branches in 2007 $3.6 M Funds provided in the biennium for immediate rehabilitation $8.6 M Funds provided in the biennial budget, available to a rail district or intergovernmental entity to rehabilitate the lines $27.7 M Total As a result of the state s investment, the P&L branch underwent $2.1 million in rehabilitation efforts as detailed by the table below: Table 6: Summary of Infrastructure Rehabilitation Completed by WSDOT Description Furnish and Install New Cross Ties MP 1-38 Rehabilitate to Class 2 MP Rehabilitate to Class 1 MP Rehabilitate to Class 1 Unit EA EA EA Work Units Funded in ,163 2, Furnish and Unload Ballast TN 3,561 Surface Line and Dress Track TF 39,776 Even after utilizing this money for track improvement, lines remain in desperate need of additional rehabilitation to improve the reliability and efficiency of the system. Currently, the bridges on the line are not rated as capable for ongoing 286K train operations. The existing bridges are primarily timber frame and pile trestles with nominal 15 spans and 4 stringer cords. 12 P a g e
16 Additionally, other in-kind replacements of defective existing bridge members need to be performed in order to allow the 286K capacity improved bridges to function as such. HDR, a state selected engineering firm, prepared the order of magnitude scope, quantities, and estimate for the TIGER grant application as identified to upgrade 29.2 miles of the existing P&L rail line, posted on the following web link: The work activities align with the State s effort and plans to maintain the PCC rail system in a state of good repair and are primarily based on a study performed for the WSDOT and the PCC Rail Authority by HDR in 2010 entitled PCC Rail System Capital Maintenance Requirements Study. This study (also referred to as Task AG) provided three documents: PCC Normalized Maintenance Report (Work Element #2), PCC Operational/Loading Condition Priority Analysis (Work Element #3), and PCC Rail System Capital Maintenance Priority Plan (Work Element #5). Each of these documents are available via the following web link: The Priority Plan document provides information directly relevant to the purposes of the grant; which is to sufficiently upgrade and maintain the P&L such as to be capable of handling 286K train operations at nominal Class 2 speeds (25 mph) in a sustainable condition based on a maintenance cycle of 7 to 10 years. The most critical aspect of the 286K upgrade pertains to the bridges. The majority of the in-kind bridge repairs represent the appropriate level of rehabilitation (or capital maintenance) that would allow the line to perform in a low risk, sustainable state at Class 2 speeds and Figure 4: Bridge 29.0, Pile 5, Bent 2 286K loads for a 7 to 10 year period. Based on the Normalized Maintenance Report, the cost per mile per year to maintain the P&L rail line is about $21,000 per mile/ per year (including all primary physical plant aspects). If the rail maintenance portion is excluded from the cost (which should be deducted because the north end of the P&L rail line is all 286K capable rail in fair to good condition), the cost per mile is about $17,500 per mile per year. At 10 years, the approximate 29.2 miles would need just under $5.1 million in capital maintenance. This is just over the construction amount requested in TIGER3 funds. Thus, the project should provide a sustainable railroad segment for the next 7 to 10 years, depending on rail traffic volumes. A formal engineering load rating review analysis has not been performed on the P&L rail line bridges to determine if the existing bridge bents are 286K load capable. The funds requested specifically for the bridges are based on expected upgrade components for the bridges. Detailed project maps showing bridge locations and the location of the new shuttle train loader facility can be viewed via the following web link: 13 P a g e
17 Current demand for improved rail services and the need for cost competitive shipping options warrant the rehabilitation efforts outlined below: Replacement of 22,017 ties (24% of existing ties) Joint maintenance on all joints Surface, line and dress the track, plus ballast distribution Replacement of defective caps and stringers, and the installation of additional stringers Capital maintenance required for a five-year period (to be completed before September 2013) Replacement of approximately 200 feet of defective crossings Ditching required for track drainage Funding of this project secures the long-term viability of the shortline railroad owned by the State of Washington and run by Washington and Idaho Railway (WIR). Currently the traffic on the railroad generates less than 50% of the revenue necessary to keep the rail line in repair and operating efficiently. As a short-term solution, the income received by storing railcars on the shortline compensates for the shortfall. This project increases the volume on the rail line each year as the business grows, providing a long-term solution for maintaining the State s asset. The projected growth in rail car traffic on the P&L shortline increases the viability of this railroad system. The 110-car shuttle trains come in with BNSF locomotives, thus freeing up the locomotives of the WIR to handle the needs of other customers and reducing delays in service. The new track and facility reduces the loading time by approximately five hours, improving the efficiency for both the WIR and BNSF railroads. If left unimproved, the declining state of the P&L rail line would threaten the efficiency of the entire PCC system and the mobility of agricultural products and the economic growth of Eastern Washington due to poor track conditions. ECONOMIC COMPETITIVENESS & LIVABILITY One of the project outcomes includes increased volume on the rail line each year as business grows. Through construction of the $16 million facility, Co-Ag commits to shipping by rail to keep the rail option available for the region. Project completion provides the opportunity for partnerships between Co-Ag and other cooperative and grain companies in the area for increased rail usage. Creation of long-term, low cost rail transportation for shippers on the P&L line is essential for continued operation of these companies. If the companies cannot continue operations, the jobs lost would negatively affect the surrounding rural communities. Upgrades to the P&L rail line ensure the longevity of this vital freight transportation link, allowing the region to conduct trade through the most cost effective integrated transportation modes. In effect, the project provides area farmers with greater profits. In addition, the construction of the new facility will provide additional employment opportunities. The increased revenues for local farmers and businesses will contribute to sustaining economically healthy rural communities. Upon completion of the project, Whitman County residents will benefit from 14 P a g e
18 the property tax collected on the new privately owned loop track and shuttle loader facility valued at $16,375,882. EVIRONMENTAL SUSTAINABILITY Maintaining short-rail systems reduces greenhouse gas emissions and our dependence on oils. Moving wheat, barley, lentils, and other freight via short-line rail is a more energy-efficient way to transport freight compared to truck transportation. Bulk rail freight uses only a fraction of the fuel that it takes to carry the same products by truck. The railroad sector can move 1 ton of cargo 413 miles for the same amount of fuel as it takes a truck to haul it 155 miles. (The supporting report, Modal Comparison of Domestic Freight Transportation Effect on the General Public, by the Texas Transportation Institute can be viewed via the following web link: Fuel costs make up a very large part of truck costs. For that reason, truckers pass on any fuel price increase almost as soon as it happens, while it takes a large fuel price increase to affect rail rates. Thus, the decrease in fuel consumption that the rail option provides somewhat protects Washington and Idaho shippers, and their competitive position in world markets from the effects of the rising fuel prices. The more fuel prices rise, the greater will be the shippers savings from having a rail option with a reduced dependence on oil. Additionally, the emissions comparison between rail and truck transportation shows that fewer emissions are generated by moving products via railroad. Reduced Truckloads for Products to Market The greatest benefits from the project are the net transportation savings from reduced trucking of grain. With the construction of the Shuttle Loader Facility, the projected number of truck trips to the rail loading facility increases as a result of additional bushels being hauled to the shuttle loading facility from farm storage and other commercial grain storage and handling facilities, rather than being hauled to the river for barge transport. This reduces the truck-to-barge mileage. A projected 6,500,000 bushels of wheat will be loaded and shipped directly from storage facilities along the P&L shortline to the private sector loading facility. Another 9,868,000 bushels will be trucked to the loading facility from an average distance of 50 miles round trip. Without the project, all 16,368,000 bushels will be trucked an average of 150 miles round trip to the port at Central Ferry. This project reduces annual truck miles by 1,705,913 and saves 284,319 gallons of fuel, resulting in a net CO 2 reduction of 1,907 tons. In real dollars, the result is a net annual transportation savings of $3,673,564 and $26,692 in annual CO 2 savings. Increased Rail Volume Shipping in larger volumes on the rail also lessens the number of trips for the locomotives, further reducing fuel consumption and carbon emissions. Co-Ag s average annual railcar shipment for 2009 was 912 cars per year. With this project, the company projects to ship 4,400 cars in the first year, with that amount increasing to 6,700 by year The projected annual increase reflects Co-Ag s intent to work with other area shippers to move their grain to market. These commercial grain companies include Pacific Northwest Farmers Cooperative, Primeland Cooperative, Stateline Processors, Palouse Grain Growers and the Inland Empire Milling Company. Their letters of support can be viewed via the following web link: 15 P a g e
19 SAFETY As deferred maintenance grows, the situation begins to affect operations and then safety. This project will contribute to two forms of improved safety: 1) reduced truck accidents as a result of fewer trucks on the roads, and 2) improved safety on the railroad through observing proper maintenance. Reduction of Transportation Related Injuries and Fatalities Safety-related statistics from the Texas Transportation Institute for truck and rail freight transportation show, on a rate per ton mile basis, that there is 1 fatality in the railroad sector for every 6.8 fatalities in the highway sector. With respect to comparison of injuries, there is 1 injury in the railroad sector for every 17.3 injuries in the highway sector. As described in the section above, this project reduces the number of truck miles traveled each year by 1,705,913. This reduced truck traffic will save lives and reduce accidents. The net safety savings is $728,212. Increased Rail Line Safety In addition to the regional safety aspects, this project enhances personnel safety at the existing rail loading locations. With the current co-load arrangement, Co-Ag loads cars at three different locations at the same time. Each location requires a minimum crew of five employees. Due to the limited amount of qualified workers available in the surrounding rural communities, Co-Ag is unable to sufficiently staff split shifts to load all of the cars at the various locations. The cars require manual movement because the BNSF locomotives do not provide the power at the rail loading sites when the railcars split up for different locations. With an average load time of 15 hours, and only short breaks, the crews battle the fatigue of manual movement of the railcars and frequently harsh weather conditions. This combination increases the safety risks for workers down on the track as they manually release the airbrakes on the cars to move them. The new facility and loop track mitigates the longs hours and limitations of qualified employees. The loading can be completed in less than 12 hours by a crew of four people, allow for a split shift if necessary. In addition, the BNSF engines will move the rail cars, instead of the Co-Ag workers. JOB CREATION AND NEAR-TERM ECONOMIC ACTIVITY Construction of the Shuttle Loader Facility will directly create a minimum of five full-time jobs, at a minimum hourly wage of $12/hour, for an annual payroll creation of $185,000 plus benefits. As more grain is brought in and moved by rail, this number will increase to staff weekend and split shifts. Conversely, without this project, the BNSF will revoke the co-load arrangement resulting in an increase in truck shipments and forcing a change in the structure of the grain company. As farm sizes grow, Co-Ag loses business to wheat being trucked to the river directly by the producer for an increase price of a couple cents per bushel rather than relying on the local elevator company. The only way to compete is to reduce shipping prices. Without the 110-car shuttle rates, Co-Ag may not survive in the current financial environment. Co-Ag employs 49 full-time workers in Southern Spokane County and Northern Whitman County. During the harvest season, this number increases to over 100 employees. Without the ability to compete for the business of larger farm operations, Co-Ag foresees losing twenty full-time jobs in the near future. This project retains these $16/hour jobs for an annual payroll preservation of $750,000 plus benefits. 16 P a g e
20 BENEFIT-COST ANALYSIS SUMMARY A benefit-cost analysis of the project was conducted with the assistance of regional economist, Steven Peterson from University of Idaho and Jackie Tee from Co-Ag. The analysis resulted in a benefit/cost ratio of 2.43 using a 3% discount rate and 1.44 using a 7% discount rate. The analysis compared two scenarios: continuation of the status quo, eventually resulting in track abandonment due to the state of disrepair and rehabilitation of the track as described in the project proposal. This benefit-cost analysis adhered to the specifications outlined in the TIGER3 NOFA and Appendix A. The systematic approach studied a 20-year timeline using both 3% and 7% discount rates starting in 2012 and ending in The supporting documentation for the costbenefit analysis including a description of the methodology can be viewed at Table 7: Benefit-Cost Analysis Summary Totals Year Baseline Costs Baseline Benefits Baseline B/C Discount Rate 7% Discount Rate 3% 2011 $ (22,280,882) $ - $ (22,280,882) $ (22,280,882) $ (22,280,882) 2012 $ - $ 5,131,851 $ 5,131,851 $ 4,796,122 $ 4,982, $ - $ 5,131,851 $ 5,131,851 $ 4,482,357 $ 4,837, $ - $ 5,131,851 $ 5,131,851 $ 4,189,119 $ 4,696, $ - $ 5,131,851 $ 5,131,851 $ 3,915,065 $ 4,559, $ - $ 5,131,851 $ 5,131,851 $ 3,658,939 $ 4,426, $ - $ 5,131,851 $ 5,131,851 $ 3,419,569 $ 4,297, $ - $ 5,131,851 $ 5,131,851 $ 3,195,859 $ 4,172, $ - $ 5,131,851 $ 5,131,851 $ 2,986,784 $ 4,051, $ - $ 5,131,851 $ 5,131,851 $ 2,791,387 $ 3,933, $ - $ 5,131,851 $ 5,131,851 $ 2,608,773 $ 3,818, $ - $ 5,131,851 $ 5,131,851 $ 2,438,105 $ 3,707, $ - $ 5,131,851 $ 5,131,851 $ 2,278,603 $ 3,599, $ - $ 5,131,851 $ 5,131,851 $ 2,129,536 $ 3,494, $ - $ 5,131,851 $ 5,131,851 $ 1,990,220 $ 3,392, $ - $ 5,131,851 $ 5,131,851 $ 1,860,019 $ 3,293, $ - $ 5,131,851 $ 5,131,851 $ 1,738,335 $ 3,198, $ - $ 5,131,851 $ 5,131,851 $ 1,624,613 $ 3,104, $ - $ 5,131,851 $ 5,131,851 $ 1,518,330 $ 3,014, $ - $ 5,131,851 $ 5,131,851 $ 1,419,000 $ 2,926, $ - $ 5,131,851 $ 5,131,851 $ 1,326,168 $ 2,841,381 Total $ (22,280,882) $ 102,637,019 $ 80,356,137 $ 32,086,020 $ 54,068,102 Benefit Cost Ratios P a g e
21 V. PROJECT READINESS AND NEPA PROJECT SCHEDULE Commencement of work activity using TIGER3 funds is scheduled to start in the second quarter of 2012, assuming TIGER3 funds have been awarded and obligated by that date. The remaining quarter-by-quarter expenditures will be distributed in relation to the project schedule detailed in the table below: Table 8: Project Schedule Work Activity Q Q Q Q Q Q Sept Project Coordination/Planning Initial Engineering Inspections Bridge Rating Environmental Permitting Final Engineering Preparation of Bid Packages Bid Period Award and Contract Procurement of Materials Construction Track Construction Bridges ENVIRONMENTAL APPROVALS State and local permits for the portion of the track rehabilitation and upgrades will be attained as required by each jurisdiction: Washington State Department of Fish and Wildlife, Spokane County and Whitman County. The work activities for the Shuttle Loader Facility and Loop Track will be funded by the private sector. There are no federal or state environmental permits needed. An application for a conditional use permit from Whitman County is under review. A construction storm water permit and hydraulic approval have been received. Evidence of this process can be viewed at the following web link: NEPA The Port of Whitman County worked together with WSDOT to complete the Federal Railroad Administration (FRA) Categorical Exclusion checklist for the proposed project to comply with the requirements of the National Environmental Policy Act (NEPA), and is available via the following web link: The NEPA process is not yet complete. Approval of the Categorical Exclusion by the FRA, the federal lead agency, should be completed within the next six months. The project has not moved farther in the environmental 18 P a g e
22 process because the Port did not expect to have the ability to apply for federal funds before this funding opportunity arose. It is now anticipated that without the TIGER3 grant funds, the project will not be constructed. The support for a categorical exclusion is outlined below: All work activities for the P&L rehabilitation to be funded by TIGER3 are consistent with the two following potential categorical exclusions under FRA Procedures for Considering Environmental Impacts, 64 FR (May 26, 1999): Maintenance of: existing railroad equipment; track and bridge structures; electrification; communication, signaling, or security facilities; stations; maintenance-of-way and maintenance-of-equipment bases; and other existing railroad-related facilities. Replacement, reconstruction, or rehabilitation of an existing railroad bridge, including replacements with a culvert, that does not require the acquisition of a significant amount of right-of-way. Washington State Dept. of Transportation performed a Biological Analysis and effect determination in the fall of 2008 for the activities associated with this proposal as well as other proposed rail line maintenance activities within the region. The analysis determined that the maintenance activities would have no effect on any ESA threatened or endangered species or their critical habitat. The proposed project limits occurs over numerous aquatic features ranging from irrigation ditches to intermittent washes & drainages to the Palouse River. Due the nature of the region, most waterways are seasonal washes that deliver sediment-laden runoff only during snowmelt and rainfall in the spring. Most of the work will occur upon ballast material of the existing railroad fill prism. The prism is highly disturbed due to train traffic, maintenance of railroad infrastructure, and herbicide treatment. Accordingly, vegetation at the fill prism toe of slope is mainly absent or is dominated by weed species that are adaptable to the disturbance regime. Wetlands may be located along the rail line in areas adjacent to sections of track that will be upgraded, but construction would be limited to the existing subgrade prism and would not result in any additional fill that would impact wetlands. No historic resource, transportation, noise, vibration, air quality, hazardous material, hazardous waste, property acquisition, community disruption, environment justice, wetland, floodplain, coastal zone, farmland, construction, cumulative or safety and security impacts are anticipated as a result of the project. LEGISLATIVE APPROVALS There are no required legislative approvals. Evidence of strong legislative support at both the federal and state level, in addition to a recommendation from the Washington State Secretary of Transportation can be seen in the letters of support received for this project via the following web link: STATE AND LOCAL PLANNING This project upon award will be added into the relevant STIP plan. 19 P a g e
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