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Home My WebLink About2015.09.21.CC PowerPoint Rail updateUpdate on Railroad Spur September 21, 2015 uty of I sH go Background Council discussed rail spur during winter of 2014 Discussed usage of spur Impacts of noise, loading practices Low volume on Hugo spur Schwieters Loadmaster NRI Mn Commercial intention to terminate service Impacts to businesses MHu`g o Support from Hugo CC Railroad succeeded in receiving $145,000 from State of MN Part of Transportation Bill Emergency repairs Patch for one year Repairs are nearly complete Approximately $1.1 million still needed for permanent repairs "Ii Huty o 2016 legislative session Bonding proposals being submitted now Leg. Committees to tour sites this fall Bonding request General Fund request Minnesota Freight Railroad Preservation and Infrastructure Improvement Act Citgo IsiH Statewide significance Short -line railroads Deteriorating infrastructure Abandonment is occurring Businesses are dependent on the service State funds all other types of infrastructure Including trails Surrounding states provide financial support MHu`g o MFRPII Act Grant program New siding, spur, trackage construction Track improvements, upgrading, maintenance Repair and replacement of bridges, culverts, and other important infrastructure Local Rail Services Assistance Program Loan program Existing program has limitations Requires collateral for loans MHu`g o Significance to Hugo Part of BEIP TIF District Rail spur created with CSAH 8 realignment Available for other Hugo Businesses Rail service led to investment in BEIP Economic Development / Jobs Risk of abandonment Possible (likely?) loss of businesses /jobs Future investment and economic expansion Benefits to Hugo citizens IMHUg Council Discussion Continued support Legislature's assistance in providing $1.1 million in grants for permanent repairs 9!6 Railroad Hugo Line 10 mile line extending southward 3 businesses use the line Schwieters Loadmaster Lubricants NRI All shipping occurs at the northern terminus of the Hugo Line y INHUgo Railroad Part of BEIP TIF District Hugo service Rail spur created with CSAH 8 realignment Economic Development / Jobs Rail volumes are lower than original projections NorLakes (Loadmaster) shipping of grease Schwieters —shipping of lumber Impacts of North Dakota oil boom 84 Lumber Lack of other users Recession City 11HU go Uncertain Future Hugo Line needs maintenance Deferred maintenance Low-cost, stop -gap measures Low -speed 10mph trains Significant capital project needed to upgrade line and maintain service Strict Federal safety standards Mi u`go Status Mayor Weidt, Council Member Petryk met with MN Commercial, BNSF, WCRRA, & businesses MN Commercial — Intends to discontinue rail service Low volume = low revenues Safety improvements = high costs Process to begin with STB in April 11HU o Businesses Schwieters, Loadmaster load directly into their yard / building Rail service is critical to their business Alternate rail sites, trucking, not feasible Increased truck traffic NRI trans -loads scrap remotely at the spur Alternate sites are available NRI prefers Hugo site Spur would need improvements City 11HU go What's next Short time -frame Additional meetings with businesses RR needs commitments "Take or pay" contracts Financing for capital improvements on rail line Owned by BNS F Improvements to spur to lessen impacts Discussion with WCRRA, State & Feds Grants, loan programs Additional shippers on rail line ,siHu`go What if the rail goes away? Discontinuance of service summertime Reversion to BNSF Abandonment process is lengthy Rail would remain for at least two years Abandonment might sound good to some... Rush Line Corridor — future transit line Trail advocates Nearby neighbors IMHUg What if the rail stays? Who are the users? Users may need to make long-term commitments Are improvements necessary to the spur? Depends on the users Are there additional users to lessen burden? INHU o Discussion / Direction Not a decision for the city Difficult business decisions lie ahead For Railroad and Rail users City support of impacted businesses... Facilitate meetings Contacts with agencies Develop a plan / strategy to keep rail service Assistance finding grants Economic Development Find new rail users Direction to staff IMHUg