Good afternoon or good morning to those of you on the west.
Welcome to the talking freight seminar series.
My name is Jennifer Seplow and I will moderate today's seminar.
Today's topic is freight financing.
Please be advised that today's seminar is being recorded.
Today will go have four presenters.
Jennifer Meyer, Sharon Banks of Cascade Sierra solutions IRAs Ortiz and Tom Barnes of the southern tier rest Regional Planning and Development board.
Jennifer is an innovative finance specialist.
Which provides technical assistance to State DO T Federal Highway administration divisions and other transportation agencies across the country.
She is considered the agency's in-house expert.
In addition, to garvies, her [ indiscernible ] the state infrastructure bank program innovative and matching options and public, private partnership.
She is more than 12 years of experience in transportation and other infrastructure Finance and has assisted numerous state and local government
was developing financial plans for statewide construction programs as well as for large projects.
Ms. Meyer worked for [ indiscernible ] where she assisted in financial analyses for Federal Highway Administration, 88, state the OT's.
She holds dual degrees in applied math and local science from Brown University and recently completed [ indiscernible ] at Berkeley.
Sharon Banks is the founder and CEO of Cascade seeress solution.
She is involved in reducing diesel exhaust in Oregon.
She spent 16 years in finance.
And little local agency with big ideas.
She works in partnership with a variety of government schools to improve air quality and sustained ability in Oregon.
Her passion is designing programs using collaborative processes and market-based approaches to approve air quality and energy efficiency.
The educational background is in business and transportation logistics'.
She serves one week and a month as a transportation officer in Oregon Army National guard.
She is a team member an active member of clean city coalition and a member of the Oregon Environmental Council and the board of clean air Northwest and a member of EPA smart way transport.
Iris 40's and is an assumption of Cambridge systematics with experience in transportation financial planning.
Mr. Ortiz has been involved in a number of projects.
At the local and state level she has worked on the assessment of financial funding for several long-range transportation plans and most recently in the development of forecast models for the states of Washington and Texas.
She is a bed with it and forecasted potential funding resources for the transportation needs of several projects including the Hudson Institute 2010 and beyond,
at age the be a future directions of innovative financing, the National Chamber Foundation picture highway and public transportation finance and project 2024,
task 49 picture financing options to meet highway and transit needs miss our TS is investigating the use of public, upright near ships and she is currently developing a freight financing diet book.
She has extensive experience on the FDA new starts program conducting financial assessments of projects requesting a new start funding and also on the preparation of financial plan for transit agencies.
Prior to churn cream bridge systematics Mr. Ortiz was a research assistance where she conducted research for the Puerto Rico train or van not rail system.
Short for the Federal Highway Administration system and in Washington D.C. as an intern in cooperative education student.
Mr. Ortiz received a master's degree from MIT and a bachelor's degree in civil engineering from the University of Puerto Rico.
Tom Barnes is a senior regional economic development coordinator in New York.
Southern Tier was a three county and local government in southwestern New York state.
Tom has worked for Southern Tier West for 20 years concentrating on economic development and major project plan in science.
Southern Tier West is actively since the late 1980's and Tom has worked on this railroad projects since 1995.
Tom has a Master of Business Administration degree from Cornell University and interest doctorate from the University of buffalo.
I'd now like to go over if the logistical details prior to starting the seminar.
Today's seminar will last 90 minutes with 60 minutes allocated to the speakers and final 30 minutes for question and answer.
If during the presentation is think of a question you can type it into the smaller text box underneath the chat area on the lower right-hand side of your screen.
Presenters will be an able to answer your questions during the presentations but I will start of the question and answer session with the questions type into the chat box.
Once we get to of the questions, the operator will give you instructions on how to ask a question over the phone.
If the think of questions after the seminar you can send them to the presenters directors.
It is a great format distribution for an affirmation.
If you haven't already joined the list surf the Web address at which you can register is provided on the side on your screen.
One other thing I will mention about the questions of the chat area if you could please and indicate which question here question is directed to parade
about containing the audio and visual portion will be posted to the talking freight website within the next week due to the size of the file, recorded files are available for viewing and listening purposes only.
We encourage you to direct others in your office that may have been able to attend the seminar to access the recorded seminar.
The power point presentation will be available within the next week.
I will notify all the attendees of the availability of the power point and recording in the transcript of the seminar.
We will go ahead and get started started.
Today's topic is the rate financing.
Our first presenter will be Jennifer Meyer of the Federal Highway resource center.
If the think of a question during this or any other presentation, tied them into the chat area of the screen and send them to all participants indicate who your question is for.
Jennifer, if you would give me just a minute, I will bring up your presentation and I will let you know when you can get started.
Okay, Jennifer go ahead and get started.
My name is Jennifer and I work for the Federal Highway Administration Resource Center as Jennifer it said.
I'm going to try hard to keep to the 15 minutes allocated after I heard the biographies of all the other speakers, they have a lot to share.
And coming from the resource center which is a technical research center in a lot of different disciplines, planning, environment, a lot of other topics.
My specialty is innovative finance.
I wanted to talk first about an overview of rate in the federal highway program.
For anyone who might not be as familiar with how funding works, I wanted to give a big picture of view.
Historically, our federal transportation funding has been divided by a moat and as you probably know there is a Federal Highway Administration, Federal Transit Administration, today we haven't paid a federal crate administration.
Over the past two decades eligibility for a rate in intermodal projects have been substantially expanded in the federal highway program.
The latest transportation bill safety Luke continues this trend with increasing eligibility for freight related projects with in the highway program a couple of example projects
and some of these are not particularly new but may be of interest, intermodal freight facilities highway some interesting with regard to emission reduction projects that are air quality program.
Sharon Banks is going to discuss one example of this in an hour later part of this presentation.
I wanted to highlight that being eligible for funding under the federal aid highway program is less than half the battle.
When I get calls from people who have good projects, freight related projects that for the will crate a lot of benefits, and of congestion Management benefits, they called me and as the wrong question.
"does my project qualify for federal aid funding?
I can answer that question I could tell you what programs will qualify under.
That only gives to a hunting license to go after federal aid funding as those of you involved in planning and in the highway program know, there's not a lot of funding out there that's sitting there waiting to be used used.
You have to get into the planning process which means metropolitan areas getting involved with the Metropolitan Planning Organization
and with your Federal Highway Administration Division offices which are the first point of contact for issues of eligibility and federal aid funding in each area.
The one program I want to highlight from Safe-T Lou with it is net new money that is going into a freight related activity is the truck parking facilities program
and it's specifically designed to address the shortage of long-term truck parking and the National Highway system.
A highlight it because it's a grant program.
It's a discretionary program which federal highways we will have some discretion on and is at the actively seeking applications.
There is a permission on that side about who you should contact.
It's not a lot of money nationwide, but it would be net new money on top of what is already apportioned and allocated to each individual state that will go to this particular purpose.
Turning to innovative Finance which is the real focus of my presentation, the reason I focus on eligibility and to the federal aid program
is that if you can qualify for funding as sort of a grant program, you can qualify for any of our innovative Finance tools.
The eligibility opens the door for eligibility to innovative Finance tools.
Generally, the Federal HIghway has the final call and eligibility and should be your first point of contact if you're starting from zero and don't know where to go.
We can help with the specifics of the innovative Finance tools, but I try to emphasize we have a program that has very many offices across 50 states in two territories and that's really a great ways to go to initially.
What is innovative financing?
Why would you want to qualify?
In general term, it is tools that help leverage existing funding, tools that can attract other funding or might facilitate access to other pending.
Some of our tools help our projects access the capitol market and raising funds to bonds or private equity.
The broadest definition is any tool other than the traditional grants that helps get projects financed.
I'm going to talk about three meeting tools.
When is the state infrastructure bank or SID, the second is the state infrastructure financing Act and private activity bond which is new under Safe-T Lou.
The last two hour duty programs.
The first one is a state directed program and as we go through it you will see what that program means the state infrastructure is an entity that provides loans,
once of credit and other forms of credit enhancement to project that qualify for federal aid under title 23 which is a high waist code in the U.S. code.
It's a state controlled entity but it's greeted with federal aid funding.
It's a conscious decision by the state to take some of its funding otherwise program to projects directly and use it.
All states and territories under Safe-T Lou have the ability to create them how would a SIDs loan work?
The project sponsor applies to the state SIDs for a long let's say it's a project that was unable to get grant funding under the regular process because it might not be as high priority.
So it applies to alone for the SID to accelerate the project.
SID uses the process is developed to consider the loan application in each state has the priority to -- is possible that the state infrastructure bank
won't have sufficient funds to make a loan but that shouldn't stop you, consider that a speed bump, not a road block necessarily because under Safe-T Lou all states have the ability to put additional funding into the infrastructure bank.
It's a matter of whether they have the will and the desire to do so and whether it makes sense in their particular state.
It's possible that you look at your state SID and it won't have sufficient funding, but that can be changed.
If the application is approved and funding sufficient, the SID and Barr will negotiate terms.
And then the loan would be made.
The power constructs the project and begins repaying the loan.
The SID uses the repayment to assist other projects.
There is advantages to these loans to borrowers and it damages to state DOT's.
SID is a way to leverage your funny.
You can assist with more than one project when payments go back into the program instead of a onetime million dollar grant, it may be able to use those repayments and keep them recycled into perpetuity.
The leverage is if all you have to do is provide a loan guarantee you might be able to guarantee several projects with the same pot of money you otherwise would have devoted to a single project.
The final benefit it that SID can attract net new money to the system.
If you have a project, that a local government or a railroad or any kind of entity, a developer, a shopping mall,
anybody has an interest in but they can't get the financing up front, if you can give them low-cost financing you are bringing more money into your state's transportation system.
The bandages to the hour per flexible repayment schedule that you negotiate.
It's a maximum 35-year term.
The repayment can be delayed up to five years after construction which is important if any of your products are relying on revenue of the projects you are constructing you can be patient lender.
We can be subordinate which means if you have other lenders in the project, they like that very much because we are the first ones to take a short fall if there is one.
That might help to get other financing from a bank, for example.
I'm going to run for it through briefly the aspects of the city appeared provides loans lines and credit including intermodal freight facility a couple of difference between SID and this one thing is you apply directly to the state DOT.
Another is that only large projects, typically 50 million or greater qualify assistance.
TIFA works this way.
You apply directly to the U.S. DOT with a for an intermodal high weight railway facility.
The U.S. DOT considers the loan application.
We have a detailed application which starts with a letter of interest where we try to determine you have eligibility.
Once you have made the application, we will negotiate the terms such as the repayment schedule, the term and the collateral.
The borrower of constructs the project and repays to us.
And the U.S. DOT has jurisdiction of the project and for most of the intermodal projects will probably be the Federal Highway division office
will monitor to insure it's complies with federal requirements everything from by America and so forth.
The SID program we have the same federal requirements but depending on what other federal funding is in the project, which may have more or less DOT involvement in the monitoring.
It might be more state or more federal, depending on what kind of a delegation of authority is you have in your state.
The advantages of the loan program to borrower and U.S.
DOT DOT, from DOT perspective we can assess with a lot more projects than we could to it through a direct grant funding.
We want to attract net new money and being able and facilitate public-private partnerships.
Private borrower for not only eligible for SID but also TIFA.
From the borrower perspective, the interest rate is favorable compared to what they can find in the private market based on the Treasury rate,
the same flexible payment as a SID loan, the same maximum term, the same provision about the repayment of the week to negotiate that into each project.
We can also be a patient calendar.
Projects as a private activity bonds.
There's a little bit of confusion about this program.
We have $15 billion in authorization for private activity bonds.
But that doesn't mean -- there's a $15 billion pot of funding available for projects.
Is authorization for the issuance of bonds that will have to be repaid or that can be tax exempt, if they have privately and but in a project to any significant degree, you don't get to be exempt from the federal taxes.
That raises the cost of your Finance.
So what the program allows is to have a private partnership yet have a public sector cost of financing.
Again, you apply directly to U.S. DOT of this program.
How would that work?
Let's say privately operating intermodal facility that a public purpose, the private sponsor would apply to U.S. DOT.
We would consider the application.
We would work with the project sponsor to of the requirements, and there are a lot of requirements, among them you of ready have to have some federal aid funding and you have to find a conduit issuer.
The insured issues the bonds, provides the proceeds to the sponsor, the sponsor will build the project and makes the payment.
Again, the U.S. DOT is responsible to monitor the project for compliance with all the federal requirements.
Again, the similar advantages to sponsors and two U.S.
DOT, we want to attract net new money to this system.
Is very likely to be private funding.
For the sponsors it is cheaper financing and often you can have a piece of the financing be available for the --
let's say one part of the financing and the other part might be a loan and that might enable you to get a cheaper loans than it otherwise would have.
Want to clarify one question.
I mentioned patient lender.
That is someone when you have an equity lender in the private sector, their primary concern is getting paid on time and in full full.
I don't want to give anybody the wrong impression that you Yes DOT is not concerned about getting paid on time and in full full, but we have a greater ability because
we are not dependent on quarterly earnings reports and we don't have a profit motive to making these loans, we have the ability to work out situations such as insolvencies in way that are different from the private sector.
When we talk about being a patient Linda, we are prepared to take on risks as long as they're a public purpose behind them that might be greater than the private sector would be willing to assume.
That's what we mean by a patient lender.
The next slide gives your ideas of additional resources.
I didn't want to take any times from the other speakers so I kept this brief.
There is a lot of resources out there.
One of them is the resource center.
We have five of us around the country and we help people get projects done whether you are any kind of project sponsor.
As long as you are doing an eligible project or we can help you to an eligible project, we are there to help you make it happen.
We have on this side some information about TIFA, K3 because what I have given you is clip Notes version of all these programs and I would be happy to provide you with additional detail.
I am going to turn it back to Jennifer so she can have Tom come talk to us about the Northeast Ohio project.
Thank you, Jennifer.
Again, I want to encourage everybody if they think of questions in during the presentation, send them to all participants and indicate to your question is for.
And next presenter is Sharon Banks of Cascade Sierra solutions.
I'm going to bring up your presentation and turn it over to you.
A lot of exciting things going on here on the west coast.
I'm with Cascade Sierra solutions and we work on improving fuel economy and air quality on the I5 corridor, which of your not from the West Coast that goes from Mexico to the Canada border.
I forgot how to dance the slide.
Go ahead you can either use at the top or the hero or click on the --
I'm going to go a little bit over who we are, what we're trying to accomplish and what some of the barriers are and who are partners are, the concept of our showcase center,
the product and the everybody wins least talk about risk and how we are covering our administrative costs and some of our progress and the locations where we are planning to implement out reach centers for the trucking industry.
First of all, T SF is an organization that has gone a lot of public and pardon and is working together we're interested in saving fuel, improving our quality and slowing down change.
We are not a regulatory agency and we are not for profit.
We coordinate all kind of incentives for multiple states and the federal government to help facilitate the implementation of smart way upgrade kits.
We also have low-cost financing programs and we have trained technical people that serve the over the road trucking market.
The slide that you see now is a picture of a tract with a smart way upgrade.
It has a diesel exhaust retro russet which can reduce emissions from diesel particulate matter is anywhere from 20 percent up to 85%.
And as automatic tire inflation system which will save fuel by keeping the tires properly inflated.
It saves tires and improve safety.
We have aluminum wheels which can save about 1230 pounds off of the load which means the truck can carry more freight which means less load.
We have auxiliary power units, we have 12 different varieties of those.
Anything from a really efficient heat pump that runs on a battery down to a regular diesel fired one that uses about 85% less fuel when idling the engine
to a hybrid variety that includes a plug in option with a diesel fired auxiliary power unit.
Auxiliary power units are different from the generators.
They do generate power, but they haven't a fax systems so they can provide heating and cooling through the heater cab.
That's why truck drivers idol is because they are uncomfortable with the ambient temperature that is in their camp.
We have a whole variety of different solutions for aerodynamics and those are specifically tailored toward the type of truck and trailer combination.
We have the new single wide tires that can reduce -- or help with fuel economy up to seven or 8 percent.
Our goal is to upgrade 5,000 trucks per year with ETA smart what way upgrade kit.
Each truck and save up to 5,000 gallons of fuel per year and are estimated West Coast market is about 30,000 trucks.
The potential impact of a project like this is very large.
150million gallons of fuel saved over 600 tons of diesel particulate matter, 22,000 tons of max which is a precursor to ozone, a one half million tons of carbon dioxide.
And these numbers continue year after year and continue to accumulate year after year for as long as the truck is on the road.
Oftentimes trucks are on the road for up to 25 years.
And also provides $450 million in fuel savings every year which is money that is put right back into the U.S. economy.
What we do at Cascade CRS solutions, we break down barriers.
The first one is the awareness barrier.
There is a very low awareness of what technologies are applicable to what trucks.
What technologies are even available.
Pricing is available.
And the CSF showcase center will eliminate that there are bringing all the available products together in one location.
It's pricing with the dealer information with installer information and put a hold smart way packaged together for the driver along with financing.
The financing piece breaks down to capital cost barrier and right now our Oregon program has zero interest financing no down payment in terms over five years.
This can save the with the fuel savings can save about $1,250 a month in the payment on a smart way upgrade would be about $350.
The regulatory barrier, and on the I5, California has a number of regulations that impact trucks that do business in the state of California, and usually truck drivers find out about those regulations when they get sided.
So what CSF does, we educate helping the driver stay in compliance so he doesn't get sided.
Some of our partners.
We have EPA smart way to transport program and the west coast diesel collaborative.
We have state and local air, energy and transportation agencies.
We have representation on our board from all those agencies along the I5 corridor.
We have the organ trucking association.
We have more than 50 different technology manufactures and more than 25 dealers and we will have a lot more when we open the program in California.
We've got lots of interest there.
And then our truck stops.
The contrast of the showcase center is that we are located at truck stops.
We have multiple technologies and we have staff on site for both technical sales and finance finance.
We assist in the selection of equipment and application of the available incentives and there are a number of available incentives already on the West Coast,
but most of the eligible participants don't know about them and so we figured out they operate and figure out whether they can qualify for a grant or organ business energy tax credit credit.
We also provide a merging our distribution panel for a merging product and this is a very tough market because of the mobile nature of the customer to get a hold in the market, so lots of good products never make it.
The next few slides are pictures of some of the products.
I don't have all of them that we offer on here, but they auxiliary power unit is the first one.
These are mounted on the frame will of the truck and they have hoses to provide heating and cooling into the cab.
These are some of the aerodynamics packages.
The tires and wheels and you can see the houses that goes to the center of the axle, that is an automatic tire inflation system.
We have a short power hook up we fully supply truck stops so well at this present time there aren't enough of them and we need to supplement with auxiliary power units.
And then diesel exhaust retrofits we will be representing all of the manufacturers that are verified they are also EPA pyrophyte but we focus on car purification because most of our customers do business in the state of California.
Then, we have a fire heaters.
These can save a lot of fuel, are inexpensive and a great solution for trucks that only run the northern route.
The lease program is capitalized right now by these date Oregon State Department of Energy and Department of transportation.
Currently, the funds available are only four trucks that operate in Oregon or that are organ based pleaded.
We are working to secure additional financing with the Cal-Trans SID and the one in Washington and hoping those will be successful.
We're also working with EPA smart way with small Business Administration loans and hope to have several different financing options available by the time we open.
In our very first center should be able to open in a couple of months.
We happened to get -- recently, but we are going to open a very small center for the first one in Oregon.
We are also in the process of applying for a federal loan guarantee.
So the lease program, we buy the equipment.
We pay for installation.
We add a small amount of [ indiscernible ] we pass on the low interest rate to the driver and we carry the lease over 60 months.
Now, if we get additional grants which are very common, right now we offer 0% financing because we received a grant from the EPA that picks up the interest rate,
the way we cover administrative costs, the manufacturers and dealers pay us a 6 percent commission on sales that we generate and then in Oregon we are a 35% tax credit that we sell to an investor that has a tax liability.
This is a very unique program to Oregon and is the only way that CSF can operate to get up and running in the short amount of time that we have done.
We are working with consultants to develop a high quality to offset program.
This is in the works and we are hoping some of the field reductions that we are generating will turn into subsidies.
Any money in excess of our needs goes right back into the program we either expand the program or make the products more affordable.
The way that we manage risk.
We have really great communication with our customers customers.
Once a truck upgrades they become part of the CSF fleet and they are allowed for the back for the manufacturers and dealers of the product.
We communicate what to do in case of bankruptcy.
With some of these little businesses there is the risk of bankruptcy, we've had three on a 350 went bankrupt so far.
We just tell them to take it back to the dealer and we remove the equipment before they returned the truck to the bank.
That's worked very well.
In every single case we've recovered our equipment.
We make the dealer stand behind their products.
About one in 100 is a lemon and it just seems to break down constantly.
We've had two that we've had to remove and have had them sent back to the factory.
They have to give us another one or we don't buy any more.
We use professional credit screening procedures.
I guess I covered most of this slide already.
Our original loss reserve of -- when we first started the program we discharge $1,000 hour loss reserves and we are going to be reducing that because it is not necessary to have that large of a loss reserve.
The locations that you see on the map are where we are planning centers.
We have eight of them planned right now.
Originally, we had five.
The little green dot is going to be opening up before the end of this year and the others in Portland in Sacramento are due by July of next year
and the following centers in Seattle and the three in Los Angeles we are hoping to open by 2,008.
I don't need that one.
That is the end of my presentation.
One thing I was asked to clarify I die and who is in the room with me here, is that the $3 million from the Oregon DOT is a SID loan?
Yes, it is.
We are in the final stages of that process if anybody wants to get with me offline I would be happy to talk with them about that.
Thank you, Sharon.
We will address the questions that have been sent to Sharon in the last half hour of our seminar.
Our next presentation will be given by Iris 40's.
I will bring up your presentation and bring it over to you.
Thank you, Jennifer and thanks everyone for being here.
I am sure this is an interesting topics for all of you.
My presentation this afternoon, I titled it financing for rating infants structure a guide for a federal law funding for projects projects.
For about a year, Cambridge systematics has been working together with Office of freight management and operations in the development of the freight financing guidebook.
Today, I'm going to talk briefly about the guide book structure, what has been put in in and, if time allows, I will be presenting a few case studies of projects that have been included in the guidebook.
Why do we need a guidebook on freight financing?
There's been in freight movement, it's a public interest because not only it's a very important part a growing economy but also because of freight movement of fact people we serve on the roads, on the rail systems.
The public infrastructure, providing efficient movement is going to benefit the public and the road users as well.
On one hand we have besides the highway is being used by trucks, most of the freight infrastructure is owned mainly by the private sector
so therefore there is that clash between the public sector and been at bulk and one would consider a private investment.
Because of the efficient movement of freight is important for the public sector, we've had over the last few years a growing interest in the public sector getting involved and helping finance a lot of these projects.
Again, the state and local government experience in financing prating movement is sort of minuted, it is something that has been growing over the past decade, perhaps.
Some of these projects will require private public partnerships that are not commonly found in what would be your typical highway or other transportation investment.
And then you have the need to create a regional jurisdictional coalition just because, as Sharon was mentioning before,
she has the I5 corridor and her project is in Oregon and they are trucks in Washington and California because that corridor across that state.
You have instances were the freight issue would cover a greater area than just eight region or one state but it would encompass a cross jurisdictional boundaries.
And some of these projects because of the large -- because of the different partners require a unique blending of funding sources.
The objective of the guidebook was to provide one source that compiled information on available sources and financing tools that could be used on freight projects.
The guide book has been divided in two main sections.
The first section presents funding and financing tools.
We have not only included programs, but we have also included some of the programs that have been developed at the state level to show some of the current practice.
The second a section consists of a variety of rate projects that have been implemented over the last 10 to 15 years.
Does the first phase of this project.
We are currently working on Phase II which consists of the development of a freight financing course for this guide book.
So this slide shows a partial list of some of the funding and financing tools that have been included in the guidebook.
As a Jennifer covered, the private activity bonds, we also include other financing tools such as the -- there's a railroad program from FRA and also some potential users of the garvies bonds for the rate financing.
And we have the traditional federal funding which can be used for freight project.
It can be used for intermodal connectors.
And then we will have some other more specific and other grants that can be used for rate funding such as C-Mack which has been widely used for different types of a great projects that mainly would reduce emissions.
We have also included some other programs that are not specifically [indiscernible] programs such as economic development administration funds
which provides grant on economically distressed areas and projects that may include some Street investment.
The project is assembled in an economically distressed area and it shows that it's going to promote job creation or retention.
In this slide, just provides a list of some non-bedroll funding and financing tools.
We included some programs may be a loan and grant programs that are currently implemented in several states and are being used to support the freight investment.
Sometimes to provide loans to rail lines.
We also talked about some of the funding sources that could be used to support a great investment such as user fees or tolls.
For instance, many people should know the Alameda corridor which charges container fees and that is being used to support the concept of the project.
Also [ indiscernible ] bridge in Delaware which collects card fees for each -- rail car that crosses over the bridge.
There has also been instances where dedicated taxes within a region or have helped to Levy finding that could be used to support that and I will talk a little bit more about it.
There's also the use of equity and any kind of contributions from the private one of the final things, we have the use of the public and private activity bonds which again
because having lower interest rate we would reduce the financing costs and therefore the project costs are also reduce which makes the investment more attractive to the public sector and the private sector.
Then we have institutional arrangements such as joint development, a public-private partnerships and the creation of tax incentives 6320 corporations corporations.
This one crates nonprofit corporation made for the purpose of issuing tax incentives on behalf of the private sector.
Again reducing their financing costs in some instances it provides the benefit of tax abatement.
So the guide book includes about 50 case studies.
It covers a wide variety of type of produce, I we, rail, airport expansion, intermodal.
Also truck sizes from $400,000 projects to 2.4 billion project.
Includes a very well-known projects such as the Alameda corridor and some of the buried less known projects, and also the section of the guide book has been defined with an index
that organizes the projects by ties, by cost and by funding financing techniques so that in makes it easier for the user to find exactly what they are looking for.
The project selection -- the projects that are included were selected, we tried -- it was very interesting that most of the responses I received was like when the guide book is pretty we would like to read it.
But we got quite a few interesting case studies.
The southern tier which is going to be presented by Tom Burns later on, we also use some old resources that were out there that has some freight financing case studies and some of the work has been joined on freight projects.
The projects included in the guidebook, most of them have been completed in vegas or are currently under construction.
We have included a few that are in planning stages but those at least have some sort of binding financing strategy identified.
Today, I'm going to present three case studies.
These are the four rail projects projects.
As you can see 1.5 million to 1.5 million to 280 for a 3-track and also it consists of different combinations of funding from projects that included
some of the Fed's role eight grants or traditional funding to projects that included a Scythia loan which was only funded through state bonding.
And one of the things that these projects are also different they have some things in common.
And something that we've found as we worked on this project is the edition that local or state government had of the benefits that could be realized through the implementation of these projects.
The first one I'm going to talk about is the Dixie siding.
This was a mile long siding that was constructed south of the West Avenue highway crossing in Indianapolis.
These are heavily traveled roads roads.
The purpose of this sighting was to provide a place where to store empty trains.
This was completed and in 2003 at a cost of $1.5 million.
Prior to this construction, trains that brought from Indianapolis Power and Light company would deliver the coal and the empty cars were sent to a storage facility
which was located past the highway rail crossing on West Avenue which meant that it would disrupt traffic quite frequently and would cause significant traffic delays.
With the construction of the siding, it allows the train to be stored in here, therefore it would reduce the number of train crossing at westward avenue.
Consequently decrease congesting would be reduced.
The funding for the project with the Indiana Railroad company, Indiana DOT.
The project was funded with private, state and federal funds funds.
The Indiana River Road, they provided $850,000 for the project, and then the DOT provided a grant and [ indiscernible ] provided for a portion of the project based on the reduction of the mission at that particular location.
The second project is the Reno transportation access corridor.
This project consisted of 33 put deep trench to divert traffic in downtown Reno and this includes the construction of 11 bridges to provide crossing over this trench.
The cost was 280 million.
The interest of the city of Reno and implementing this project goes back to the early 40's.
The center core door goes from [ indiscernible ] and goes right through downtown Reno, the separating casinos and businesses from other parts of the city and was creating a barrier in that area.
In the mid nineties because of the merger of Union Pacific and Southern Pacific, that merger was seen as an opportunity to relocate the rail line and a different railway.
The merger would increase real traffic causing additional transportation safety and noise impact to the city so they did a study in 1996, and that study led to the creation of the retrack project.
In addition, to being a public private partnership as a development of funding and financing program that allowed for the funding and implementation of this project, very interesting was the success of this project break
a because the project partners in the project, they identified early on what benefit would be realized for these projects and they made sure that those benefits were the message of the benefits
that would be realized by all stakeholders were transmitted to the CD, the region, the railroad and business in order to get support for the project.
This project shows the different funding sources used.
And there is some private funding provided by Union Pacific.
The city of Reno provided some cash and revenue bonds that were issued for the project.
And through the pro-government they received some C-21 bonds and a loan for 50.5 million.
The T CL loan was recently repaid in May, 2006 to the refinancing of that.
The regional commitment amounted to $73.5 million.
In the T CL loan could be repaid including county sales and room taxes and lease in come from property will formally owned by Union Pacific
that was transferred to the city of Riga and by tax assessment and real property in downtown district that was created to support this project.
The addition to the tax contribution of 17 million they provided 77 parcels of land that were donated to the city and those parcels of land were leased back by you P. and they also donated the [ indiscernible ] above the track.
They donated the right of way which allowed the city to collect revenue from this property.
Again, this chart shows some of the sources used to repay the project and again you have the revenue from the assessment district, the lease income, the air rides,
and also the dedicated sales tax that were approved by businesses and by the city to support this project project.
Iris, this is Jennifer.
If you could try to move along and start wrapping up that would be great.
The next one, very interesting and you can read about it in the guidebook.
We subsequently learned from developing this guidebook, thymidine followed benefits and they public benefit was key for many of these projects being implemented.
The agreements reached major obstacles, we're talking about public, private sector many other stakeholders involved so it requires that all that are in agreement in order to implement the project
and past contributions are not the only revenue source, on there was some definition of land that helped with providing some revenue for implementing the projects.
The guidebook should be ready by this fall and then we are going to be developing the freight financing which should be ready sometime next year.
This is my contact information's if anyone has any questions.
Thank you, IRAs.
I will bring the slide back up when we get to the question and answer session and the introduction slide this have the contacted permission from all the presenters.
Our final presenter is Tom parts of the southern tier West Regional Planning and Development board.
Give me just a second deny will bring up your presentation and we can get started.
You can go ahead.
I'm going to be giving a whirl wind tore through our rail rehabilitation project we've been involved in.
Here is my contact information, people who are interested later I can access the power point and get this.
We are in the southwestern corner of New York State, south of Buffalo, east of Cleveland, Ohio and north of Pittsburgh, Pennsylvania.
The rail line we've been working with, the former mainline that is in six counties four in New York State and two in Pennsylvania and here is the regional where road system that operates in.
Here's a closer look at the rail line be been working on.
About 145 miles long.
As I mentioned it's a former Erie Lackawanna main line.
The six counties that it goes in are pretty world, less than 90 persons per square mile and the largest urban area served are 35,015,000.
We have a number of different manufacturing customers that are amenable to rail transportation but we're hours from nearby metro areas so accordingly, we need to get to these urban markets for our regional economy.
The problem we had was our primary east, west regional railroad and Chicago was pretty much out of service.
Ninety-five out of its 145 miles of service in the 80's and 90's.
And Conrail which had owned it for 25 years had deferred maintenance on it.
The line was redundant to the Conrail system there were able to get to the Port of New York to their Pennsylvania main line.
We fully expected Conrail to abandon the line.
We began tracking and the rail retention project in the mid 80's and in 1991,
Conrail and your state Department of Transportation reach an agreement under which Conrail was required to offer service on the line only until 1998, and they could see did formally abandon.
So in the early 90's DOT gave my organization rights to negotiate with Conrail.
What we did, we first got some federal funds from the Appalachian Regional Commission who studied the line and we realize the line could be revived and restored as an economically viable functioning line.
In other words, there was market their and they physical condition of the line had not deteriorated passing.
In the mid-90s we began negotiating with Conrail for purchase and so and north of began competing we subsequently began the gushing with North Volk seven.
There were pretty much the same as Conrail it was a redundant line it was slow shipping volume and high property taxes.
One of the states that does tax railroad real-estate pretty high high.
The late 90's we went to the service Transportation Board as a party of record, and our strategy was one to get North slope softened to continue to provide service past 1998
and to maintain the line and to address their problems of real estate property tax we would give them a 10-year abatement of various real-estate property taxes.
In the interim, this would give Norfolk 70 tax-free environment in which to operate and we would work to rehab the line and reinstate service.
At the local level, a tax abatement was about $1.2 million a year from the various tax jurisdiction, but for many of these rural communities, the railroad revenue that they got real estate taxes was more than 50 percent
of their annual operating budget so this was a crimp in a lot of our communities but we wanted every one of them and every one of them said after 98
if they rip this track of all of this revenue is going to be gone so let's recognize how important railroads are to our economy and let's move forward with this abatement process.
What we did is entered into a relationship under which Norfolk sold the real estate to a tax of abating entity to be created that entity least the rail line back to Norfolk southern for a tenure period.
There were no real estate taxes with ownership reverting back to Norfolk after 10 years and there was a pilot in the last three years graduating to 100 percent of taxes.
June, '98 just before the agreement with DOT was to expire expire, one month prior to the merger decision we reached an agreement with the DOT and Norfolk Southern and we memorialize our agreement in July, '98 decision.
In the summer of 2000 your state created a public authority in the [indiscernible] to affect this sale and leaseback arrangement,
and we are broadly representative of the four counties in New York State and one representative name from the [indiscernible].
In February, 2001 the transactions occurred.
The property transfer was consummated, the lease that was consummated and then Norfolk seven least the line to a short rail operator who became a partner.
My organization has stayed in this by contractually providing administrative and staff services.
Since 2001 we've had [ indiscernible ] first was rehab of the rail lines in the third which were just beginning was an intermodal facility project.
I want to discuss the rehab portion of this first.
The problem with us using that vehicle is that rail freight volumes are insufficient to cash flow out any debt.
We've had to rely on grants that we can't obtain and private investment to rehab line on a critical needs basis when funds become available.
We've done accordingly, six different rehab projects since 2001 beginning with an engineering base.
Here are all the different kind of things we have done.
To date, this is the rehab investment in the line.
You see the first three lines are federal.
USDOC, I mentioned them, we got something on monies for some mitigation and some storm damage.
We were eligible because the authority is a public entity.
Department of Transportation in Pennsylvania as well.
Local committees I've included property-tax abatement in there.
Counties have actually had some cash and over $10 million of cash and Bess and by the private rail operator at this point.
Here's an example of the washout along the Genesee River in Allegheny County and here is the same picture the same place after we finished.
Some of these sections of this line were reopened for the first time in over 10 years.
Companies are beginning to ship with rail and were beginning to get inquiries about site locations from other rail sensitive manufacturing companies.
I wake carriers are becoming more cost competitive as well as rail now becomes an active transportation alternative.
As of 2003, a short line carrier, WNYP obtain 30 miles of track from Corey Pennsylvania.
This now gives us 170 file mile-long rail line with a single rail operator which interconnects at each end.
We have a line which is really a function in you cannot do mainlined to track.
2001 we had one customer with less than 75 carloads per year, now we have 175 miles open and five years later we have 54,000 carloads annually in that building all the time.
Right now, we will are in the sixth phase rehab project and this is what we are doing.
Rail and ties, repaired servicing.
We're going to have this done by next spring.
This is how we are finding it.
New York State, Safe-T Lou.
This is great crossing money.
And private equity participating in this as well.
We have all six phases done by next spring and I want to emphasize these cost figure did not include the additional investment by participating shippers for their own physical plan alterations.
We anticipate an end to show the team million dollars of rehab over the next three or four years.
We are moving into an intermodal study based on which we want to see whether or not in intermodal this is the deal in our rule region will be economically viable where it ought to be decided and what it ought to have.
For getting funding from New York State Department of Transportation, the federal government.
They've invested in us previously, they want to build on their prior investment and they want to see their priorate investment be more successful.
So WNYP is providing some service to this.
Key to our success?
Let me echo what Iris said.
The recognition that regional rail free transportation is important to a world economy.
Secondly, there has to be regional perspective so that parochial interests don't sabotage the overall effort, this vision has to be there.
Thirdly, we have to have a regional project savvy organization that can lead a long-term project and we've been working on this since the mid 80's.
The fourth key is partnerships.
Who were talking about federal, state partnerships, you can see the list of federal and state agencies.
Multistate it's an initiative between New York and Pennsylvania and they public and private sector relationship and W NY P the dominions which has traveled sovereignty.
Economic development districts that Regional Planning organizations.
Six counties, 20 school districts.
Their local economic development districts and shipping companies companies.
We have a functional rail line and we've done it by bootstrapping bit by bit.
Here's my contact information.
I hope everybody enjoyed all of these presentations.
And, while the information in the slides will be available.
I will notify everybody when the sites are on line as well as a recording.
Before we move on, I'm going to bring up a slide on the this great peer to peer program.
Those of you who are new I want to briefly mention the program.
It's meant to facilitate its permission sharing between the public sector of free transportation and provide technical assistance on an as needed basis.
Have the phone number, e-mail address and the Web address showing on the screen and you can go to the website for more information.
I'm now going to go ahead and start up the question and answer session with the question posted to the chat area.
There was one question type in for Tom, and since he was last I'm going to start with that.
Then I will go through from the top of the list.
Tom, the question I have for you is how are you using railroad grade crossing sites.
We have conflicting and permission with a crossing services can be funded or whether Safe-T Lou is limited to warning systems?
We are doing servicing and the information that we've been provided is that we can reinstall rail and ties and to surfacing as well.
I'm going to go ahead and start at the top.
We will open the phone lines also.
I know that a number of questions which type in for Sharon and Jennifer and you were doing a great job of answering the questions as they were typed in.
I'm going to read through them because some people may be on the phone but haven't logged into the website.
If you could maybe summarize what you type in and add anything else if you need to what is the term for a croupier be?
Jennifer, your fund may still be on mute.
Do we still have Jennifer on the line?
A we will go through the other questions and come back to her and see if she calls in.
The next question for Sharon is this a national program that is currently available or an Oregon state program?
We started out as an Oregon program and one of our financing packages that everybody wins lease program is an Oregon based program and only how Oregon base plaited trucks qualify.
They can go anywhere but they have to be an Oregon tax payer to qualify.
The new financing we are going to be getting, we will have financing that we can help any driver regardless of where they come from.
It won't probably be 0%, but we are going to work to get grants and subsidies and C02 offsets to try to offset the interest rate.
But within 60 days we should have a program that can work anywhere.
The next question we have for you is what is the average cost to retrospect a prep with the smart way technology and how many trucks have been retrofitted to date?
We have 350 trucks to date and the average cost is anywhere from 15 to $25,000.
The higher end number includes state of the art emission control device and that's where the difference is.
The next question for you is of the 350EP use installed how many trucking companies or owner operators does that represent?
I don't have that exact number, but the largest fleet that we've done is 40 have gone through our financing program.
We have done a couple of other fleets that attend trucks, five trucks, 20 trucks but the vast majority
more than half are owner operators that own more than one truck and we focus on this route because those are the oldest and dirty as trucks on the road.
They also have the most room for improvement for fuel economy devices.
Trucks were manufactured and diesel was $0.95 a gallon.
The fuel cost wasn't as big of an issue as it yesterday.
There's a second part to that question.
Do you know of a nonprofit that might be interested in incapable of setting up something similar on the ecoterrorists such as the I-95 quarter?
I don't know of anybody decide Cascade Cirrus solutions that are doing this at the moment.
We've had a lot of other corridor collaborative said are forming around the country ask us for technical advice and how you set this up but I haven't heard of anybody that has actually opened up a center.
We did design our business plan so that each center runs fairly independently and that is a program that could be replicated easily and go nationwide in the future.
Has there been any interest from larger fleet operators in the program?
With larger fleets we do have quite a few fleets that we work with.
We typically just to consulting services because here in Oregon the larger fleet can qualify for the tax credit and that is a big incentive for them were the smaller fleet,
sometimes they don't have a very big tax liability and they would rather have a low cost payment per month than to get the tax credit credit.
In that case, we own the equipment and carry it on lease and see it gets the tax credit and that helps pay our administrative costs.
Have you considered coordinating your program with truck idle production technology and if not, do you see a benefit of pursuing such an initiative in the future?
Shore power is one of our partners in the project and they are one -- that the company and idle air our two truck stop private enterprises that are out there.
The biggest problem with truck stop it's not everywhere and in most areas especially the urban areas, there's no -- that's high dollar value land.
There's not enough parking spaces and usually these truck stop electrification systems that go in might have 50 spaces, 25 to 50 or maybe 100 spaces to plug in
but there are thousands of trucks a day going to those truck stops so it's just a piece of the puzzle and there's a lot of other places as well work trucks idol.
The idle at warehouses.
Any place they can find a place to park is where they are going to idol.
Unlike the onboard systems.
At least at this point until we have electrification readily available.
I think that we need to do both and we need to do everything we can to save fuel.
To rehab Jennifer back on the line?
She has not reconnected.
It says should dialed back in but is still on hold.
Let me see if I can locate her.
I will go on to some of the other questions in the meantime.
Tom, I have another question for you.
As I understand the original rail owner Norfolk southern receive the REA line back in 10 years and would have received approximately $60 million that these back over the period of time.
That seems particularly generous generous.
Do I understand this correctly?
What for getting in the meantime is were getting a functioning railroad system that we were in danger of losing that was our priority was to retain rail service.
Have we had any luck in getting Jennifer on?
She's back on the line now.
Jennifer and we will go back to the questions I had for you.
As I mentioned before, I know you had taken some answers but for those people who may just be calling in and not on line we will go ahead and discuss them again.
What is the term will for the pad?
There is no fixed term for a private activity fund.
The reason we don't fix the term is a bond has to be issued by a public government shall authority that serves as the issue of record and the term for their bonds is determined by whenever bonding authority they have.
So with the Ohio development authority they have rules or base it on the thank of the project will lead.
There are requirements about how quickly you have to spend the proceeds but there's no fixed term for the private activity bond.
The next question I have a dozen additional obligational authority come with the truck parking fund?
From my reading of this, it does.
I'm not an expert.
But I just looked at the provisions under Safe-T Lou and comes with obligational authority.
The amount of funding is reduced each year by the overall program limitations.
So 6.5 million available, this year it will be something like 5.8 million available and that will come with its own of late.
Part of the program application process will be to determine whether that zero a will come to that lending state as 80% or 100 percent of the project.
It's possible some states will only get 80% obligation to match their grant.
That's what the federal register notice says and I will be glad to post that language from the Federal Register notice on the call.
Maybe we could do is if you could send that to me I could send it out with the follow up information.
I don't see any more questions types in.
Sometimes as presenters you make questions I don't see to any of you have any additional that I may have missed?
If not, what we will do, Eric, if we can give everybody directions asking questions over the phone?
The 80's and gentlemen in the would like to ask a question question, please press star followed by one on your telephone.
It's a question has been answered, press star followed by two.
Please press star when Mack to begin and stand by for your worst question.
It appears we have no audio questions at this time.
In that case, since it doesn't seem like there are any more questions typed in, I'm sorry.
I see one more question.
Can you provide the contact in the mission for the truck parking facilities program.
Was that on your side, Jennifer?
Yes, it was.
If folks want I can't type it into that Web section as well if they want it quicker.
Quickly we get this on at the site?
Probably in about a week.
I'll put it in.
While we are waiting for that that, one last question came in.
Does anyone have any suggestions on how to address this issue in an airport existing truck rest facilities are lacking?
The cost of new facilities is exorbitant with property acquisition and other issues.
I there any suggestions or ideas ideas?
I will open this up to all the presenters and let anyone who has any thoughts on this jump in in.
This is Sharon.
That's one of the reasons why high of been kind of a proponent of on board technology is and I'll think if we can support the on board technology market that there will be improvements to it in the future,
I can for see hydrogen options, I can foresee even some similar base options and improved battery technology that can provide on board.
On board gives not only the ability to have the heat, air conditioning and power wherever the truck goes,
but it also reduces those emissions where the driver has a place to park and that's really the reason why I lean more towards the on board board.
We do promote truck stop electrification for those areas where its available or if you have a dedicated fleet that goes from .8 to . be from one warehouse to another and does multiple trips,
those kind of solutions are great for a truck stop electrification, but most of the trucks, -- one of the styles of electrification, they have to have on board connection to it anyway.
In that case and hybrid APU is probably better solution.
To the person who posted this question I'd suggest may be posting this to the list serve and see if there's anybody who might have additional suggestions or ideas
I did find the slide in Jennifer's contact information and I have that showing right now.
With that, since I don't see any other questions we will wrap up.
I want to thank all born presenters for a great seminar today and thank you everybody for attending today's seminar.
The seminar -- the recording and the power point and a transcript will be available with in the next week and I will e-mail everybody in attendance to let you know when it's available.
The next seminar will be held on October 18th and it's called planning for hazardous materials materials.
I also encourage you to join the freight Planning list serve if you haven't already done so.
With that we will close for today and thank you everybody