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Talking Freight - Completed TIGER Program Freight Projects: Reports from the Project Sponsors

April 17, 2013

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Jennifer Symoun
Good afternoon or good morning to those of you to the West. Welcome to the Talking Freight Seminar Series. My name is Jennifer Symoun and I will moderate today's seminar. Today's topic is Completed TIGER Program Freight Projects: Reports from the Project Sponsors.Before I go any further, I do want to let those of you who are calling into the teleconference for the audio know that you need to mute your computer speakers or else you will be hearing your audio over the computer as well.

Today we'll have three presenters. Katherine Trapani of the Quonset Development Corporation, Megan McClory of the Ohio Rail Development Commission, and Katy Brooks of the Port of Vancouver, Washington.

Katherine Trapani is the Planning Manager for Quonset Development Corporation. In this capacity she handles planning, real estate, grant writing and administration. Prior to this position she was the Transportation Planning Supervisor for Rhode Island Statewide Planning and the Principal Planner for the Rhode Island Port Authority, which is the organization that preceded the Quonset Development Corporation.

Megan McClory is the Secretary-Treasurer of the Ohio Rail Development Commission. She is responsible for all fiscal activities related to the agency's $20 million annual budget, including financial management, project financing, and property transactions. She has also administered federal Recovery Act-funded projects totaling over $63 million. Before coming to the ORDC in 2007, Ms. McClory spent more than 7 years at the Ohio Office of Budget and Management as a Budget/Management Analyst and Chief of the General Government Section.

Katy Brooks is the Community Planning and Outreach Manager for the Port of Vancouver. She has worked in the port and transportation industry since 1990 in public outreach, environmental and transportation policy development. She has been with the Port of Vancouver since 2006. Katy's port experience includes surface transportation, maritime shipping, aviation and industrial development. She has led communications and public policy development on a variety of transportation projects. Katy's experience also includes strategic communications and policy development on air emissions, water quality and environmental clean ups. She is on the board of directors for Cascade Sierra Solutions, a nonprofit organization dedicated to saving fuel and reducing emissions from heavy-duty diesel engines.

Today's seminar will last 90 minutes, with 60 minutes allocated for the speakers, and the final 30 minutes for audience Question and Answer. If during the presentations you think of a question, you can type it into the chat area. Please make sure you send your question to "Everyone" and indicate which presenter your question is for. Presenters will be unable to answer your questions during their presentations, but I will start off the question and answer session with the questions typed into the chat box. If we run out of time and are unable to address all questions we will attempt to get written responses from the presenters to the unanswered questions.

The PowerPoint presentations used during the seminar are available for download from the file download box in the lower right corner of your screen. The presentations will also be available online within the next few weeks, along with a recording and a transcript. I will notify all attendees once these materials are posted online.

One final note: Talking Freight seminars are eligible for 1.5 certification maintenance credits for AICP members. In order to obtain credit for today's seminar, you must have logged in with your first and last name or if you are attending with a group of people you must type your first and last name into the chat box. I have included more detailed instructions in the file share box on how to obtain your credits after the seminar. Today's webinar is not yet available on the AICP web site but I will send out a notice once it is.

For those of you who are not AICP members but would like to receive PDH credits for this webinar, please note that FHWA does not formally offer PDFs, however, it may be possible to receive PDHs for your participation in Talking Freight if you are able to self-certify. To possibly receive PDHs, please download the agenda from the file download box and submit this agenda to your respective licensing agency. FHWA does not guarantee the licensing agency will accept Talking Freight for PDHs and it is up to the attendee to discuss this with the licensing agency. FHWA will not provide anything other than the agenda. Attendees will have to self-certify that they attended each seminar; FHWA will not provide a certificate or verification of attendance.

Finally, I encourage everyone to please also download the evaluation form from the file share box and submit this form to me after you have filled it out.

We're now going to go ahead and get started. Today's topic, for those of you who just joined us, is Completed TIGER Program Freight Projects: Reports from the Project Sponsors. As a reminder, if you have questions during the presentation please type them into the chat box and they will be answered in the last 30 minutes of the seminar. Our first presenter will be Katherine Trapani of the Quonset Development Corporation.

Katherine Trapani
Thank you Jennifer, good afternoon everyone. It's a fine day in Rhode Island. I'll be talking about the Quonset wind energy and surface transportation project. What you're seeing is an image of the Port of Davisville which is part of the Quonset Business Park. Before I present the TIGER project, I'd like start with some background about what we are, where we are to provide you with some context. The Quonset Business Park is a multimodal park with a port and an airport. We have 3200 acres, 1400 of which is developable, of that, 932 acres has license leased or sold, 108 acres are under negotiation, and we have 366 acres available. So the take away from this is we do have room to grow. We have 170 companies here; some of our largest ones are Electric Boat, Toray Plastics, Ocean State Job Lot, NORAD and we have 9100 employees.

Quonset Business Park is in North Kingston Rhode Island. We are in southern New England region between Boston and New York. We are located along the I-95 corridor, Amtrak's northeast corridor, and the M-95 Marine corridor, with access to North Atlantic shipping lanes. Quonset is on the west shore of Narragansett Bay. We have multimodal transportations facilities for both freight and passengers. The Port of Davisville has two piers - we have daily freight rail service from Seaview Transportation that connects to the Providence and Worcester railroad along the northeast corridor. The Route 403 Highway, which is shown in yellow, provides access to Route 4and Interstate 95. We have an airport with a 7500-foot main runway, and an instrument landing system. For passengers we have a bus service, ferry to Martha's Vineyard, and a bike path that runs from Route 1 to Narragansett Bay. The park is comprised of two former Navy bases. The Quonset Naval Air Station closed about four years ago, and the Davisville Construction Battalion Center closed 20 years ago. We have a rich military history here that includes the iconic Quonset huts and the Fighting Sea Bee statute. You can see the Sea Bee motto - "The difficult we do at once, the impossible takes a bit longer."

The organization that I work for, which is the recipient of the TIGER grant, is the Quonset Development Corporation. We're a quasi-state agency and the local redevelopment authority for the Navy bases. We manage and develop the property, provide water and wastewater utilities, and we are also a port authority.

The Port of Davisville is actually a fairly small port. We have two piers with 4500 feet of pier space. We have 31 feet of water, and in 2012 we had 160 ship calls. We specialize in roll-on roll-off, or RORO cargo. We brought in 172,000 new vehicles in 2012. We also have fish and project cargo that comes through the port. We have a bonded yard, on dock rail, we're in the foreign trade zone and we have no harbor maintenance tax.

This slide shows where the RORO traffic is coming from. We have Subaru from Japan, Volkswagen from Mexico, and Volkswagen, Audi, Porches, and Bentleys from Europe. Additionally, Fords are shipped to Davisville from the Midwest by rail. All of these are distributed by rail to North East markets.

This slide shows our intermodal capabilities. The NORAD and Seafreeze movements are very routine, but I've also included some examples of recent things we have done. The Americas Cup Containers arrived by ship last summer and they were off-loaded at Davisville and trucked to Newport for the races. Afterwards, everything was brought back to Davisville and loaded on a train to San Francisco. We also have done a barge to ship transfer of a catamaran hull and a 220-ton transformer off-load.

So, with that as background I'd like to tell you about the TIGER project now:

Again, QWEST stands for Quonset Wind Energy and Surface Transportation. It is a TIGER I grant that was stimulus funded advertised primarily as a port project. It was administered by the Maritime Administration, and the purpose was to maintain a state of good repair, as well as to expand our port capabilities. Like all TIGER projects, they offer economic, environmental, safety and congestion benefits. Looking at the time line, we submitted our application in September of 2009. We received our award notice six months later, and our project agreement six months after that. In the meantime, we completed our NEPA documentation, which in our case was an environmental assessment, not a full EIS, and MARAD issued a categorical exclusion. We started design right away, because it was self-funded and part of our match. We put six projects out to bid, the construction of which took 2.5-years since the port was open for business the entire time. All the construction was phased to allow the port to remain open. The crane procurement took about a year, and we did a monthly progress report to MARAD while construction was going on. We are now finished and closing out our projects, and have begun performance reporting. This will last for three years, ending in 2015, making the whole project a six-year effort.

The 'WE' part of QWEST is wind energy. Deepwater Wind is the State's selected wind developer, who has a power purchase agreement with National Grid, which is our electric service, along with the right to build an eight turbine wind farm off of Block Island in state waters. Block Island is located right around here. They are also in a lease auction process right now, bidding for rights to do a thousand megawatt farm in federal water. There are other projects planned for eastern states, and what you're seeing on the map here is the southern tip of the New Jersey to Cape Cod. Deepwater Wind has 47 acres of land under agreement here at Quonset, which is hard to come by in northeast.

The 'ST' part of QWEST is surface transportation, which will both enhance our current intermodal operations as well as our rail interface. It will also allow us to expand the types of cargo we handle, especially containerized freight from a once to twice per week barge service, and also project cargo. We were awarded $22.3 million of our $45 million dollar request, essentially everything that was located within the port. We used that on six different projects that are shown in this slide. Pier 1, Pier 2, crane operations, port terminals, and rail and road improvements.

This image shows our project with the same color coding you saw in the pie chart. I'll have one slide on each of these projects, just keep in mind that Pier 1 is the skinny pier, Pier 2 is the wide pier where the crane is located. We have on-dock rail shown in orange and two crane pads are shown in green. The road projects are shown in yellow and that consists of a resurfacing, haul road, and new entrance roads. Terminals are shown in magenta.

Pier 1 is a wooden pile pier. This is primarily used for RORO cargo; it was built by the Navy in 1943 with the deck replacement in 1951. Certainly it's old and needed some work, we did some deck repairs, but the most significant improvement was the new fender system, which required substantial below deck repairs. These could only be down at low tide, and new batter piles were installed. We also replaced the lighting.

Pier 2 is the coffer dam wharf structure that was built in 1956. The Google Earth image shows the project quite well. You can see the new pavement, the two crane platforms, and the crane beams on the east face. [Pointing.] The crane pad and the second crane pad. The other picture shows one of the five new corner fenders that were installed on this corner of the pier.

Here's our brand new 140-ton mobile harbor crane. It was manufactured in Germany by Gottwald; we did get a Buy American waiver, and we requested but did not receive a cargo preference waiver for this purchase. It cost a bit more to transport a crane on U.S. vessel than a foreign flag vessel. Anybody considering a crane purchase should be aware of this and budget for transportation costs.

Again, the Google Earth image shows the finished project quite well. The image on the right shows the on-dock rail.

Prior to the TIGER grant, we invested in a new bulk head and building demolition. Then what we were able to do with the TIGER grant is turn the raw land into two terminals. Terminal four is the RORO terminal which is paved and striped, and terminal five is the wind terminal, which is gravel and it shows up white on the Google Earth image because the gravel mix contains a lot of crushed recycled concrete. Both terminals have water-quality structures and comply with storm water regulations.

We were also able to use the TIGER fund to construct a spur to a warehouse that we own and lease out, as well as rebuild the track inside the port gate. Our previous rail project stopped outside the gate, and now we are able to support the weight of the double stacked containers.

Last but not least, the roadway projects consist of a simple resurfacing of Davisville road to Pier 1, and a new heavy haul road to Pier 2for oversize and overweight loads, and a new entrance road and guard house.

Again, this project is best viewed from space. You can see the new entrance road configuration with the islands and the lanes which we didn't have before, and the heavy haul roads.

The TIGER grant makes up about half of the port investments in the last five years or so. QDC has made some investments to match the grant, with design, Pier 1 utilities and Pier 2 electric. In addition to that, we have funded projects with other grants from the Economic Development Administration, Department of Homeland Security, a revenue bond and a general obligation bond. This is in addition to many other state and Federal investments elsewhere in the park, and off-site highway and freight rail infrastructure. We really needed these investments not only to grow the port but to maintain the business we already have. Fortunately we were able to piece it all together with a big boost from the TIGER program.

So what is in our future? We are seeing strong growth in RORO cargo, and actually we will have an announcement coming out Friday, which I can't tell you what that is. We're working hard to get a Marine Highway service underway. The hurdle to that at this point, is finding outgoing cargo because the cost of returning empty containers blows the rate for incoming containers. We have some strong leads on project cargo, both wind and non-wind. There are many factors that will impact our growth. As we all know, we can't control the economy. It's possible that the Panama Canal expansion will present some opportunities for Davisville as well as the entire I-95 corridor. Highway congestion and the cost of fuel will also impact Marine Highways. There have been conversations about doing away with the harbor maintenance tax, which would likely impact us, and perhaps not in a good way, because that is a competitive advantage that we have. Certainly auction of the offshore wind development rights will also affect us.

The Federal Highway Administration asked me to talk about the grant administration duties. Hopefully no one has any illusion that Federal Government will write you a fat check and walk away; it doesn't work that way. TIGER I was funded from the stimulus program, and had extra reporting. If any of you had a stimulus grant, you can feel my pain - the reporting consisted of quarterly reports of vendor payments, and job hour reporting, per individual. We had 11 consultants, six contractors, and 36 subcontractors for ten quarters, so do the math on that; it's a lot of work. We did create 36 full time construction jobs. The Maritime Administration reporting consisted of monthly progress reports, which is a financial snapshot, progress on each project, and a Gant chart. Also, annual project report, annual financial report, and quarterly performance reports. For three years following completion and that consists of port throughput. Administratively, you just have to go through the grant agreement process, we had a couple of grant amendments; we did our environmental documentation, you have to follow competitive procurement procedures and incorporate different contract requirements, we did a small business disadvantaged business enterprise plan. MARAD has a very aggressive goal of 31% DBE. We requested reimbursement through their on line system, and I'm working on my 23rd invoice right now. I have submitted 64 change orders for approval. Again, we had a Buy American waiver request, which was granted, Cargo Preference Act waiver request, which was not granted. We were audited by the US DOT Office of the Inspector General, and we did well. I didn't enjoy it that much, but we certainly did okay. All in all, it went smoothly, the MARAD staff was helpful and a pleasure to work with, and certainly we are grateful for the grant.

Just to wrap up, this photograph shows the first time that we used the crane. We off loaded two sections of a wind turbine tower, which was installed not far from here and you can see that that was a tandem lift with the second crane, and that is all I have. Thank you very much.

Jennifer Symoun
All right. Thank you. Our next presentation will be given by Megan McClory of the Ohio Rail Development Commission. I'd like to remind everybody if you do think of a question, to please type it into the chat area and we will get to the question after the presentations. Megan, you can go ahead.

Megan McClory
Thank you, and thank you for the invitation to present to the Talking Freight audience. We are really proud of the ORDC, the work that we do here, and what we've been able to do in partnership with CSX on the National Gateway Initiative.

Along with me today are Matt Detrich our Executive Director, and Julie Kaercher our Public Information Officer. They're here to help with any questions that come up at the end that I can't answer.

I wanted to talk today about the ORDC, who we are and what we do. I'm going to be talking about the National Gateway project and then talk about how the TIGER award really helped to advance that initiative, and presented opportunities and challenges along the way.

The ORDC is a state agency; we are an independent agency within the Department of Transportation. We are the home of all of the non-regulatory rail related services. We have 15 commissioners, and among them are the state directors of transportation and economic development. They really help us bridge the gap between transportation and economic development where it's related to rail. The commission was created in 1994 and basically united all of the rail related functions, the non-regulatory side, into a single one stop shop.

We have three major areas in which we work. We have a budget of about $20 million per year, and about three quarters of that is for grade crossing safety. That primarily consists of light and gate installations at at-grade highway railroad crossings. We have a total of about $5 million per year, $2 million in grants, and $3 million in loan assistance that we provide direct freight rail project assistance. We do everything there from rehabilitation of short line railroads to assisting companies with switches and spurs from Class I railroads. We also do special freight projects and among those is the National Gateway. In addition to that, we have administered a total of about $70 million in American Recovery and Reinvestment Act funds. We're also administered a series of diesel emission reduction grants, and several congressional allocations. With these projects we really try to bring our economic development and our rail related expertise to help development projects in the state.

The CSX National Gateway is an initiative that was developed by CSX as a public private partnership. It consists of rail infrastructure and intermodal terminal projects. To create a more efficient transportation link between Mid-Atlantic ports and the Midwest, the National Gateway Initiative is expected to help yield nearly $10 billion in net public benefits. This calculates out to more than $22 in public benefits for every dollar of public investment.

The National Gateway project itself is outlined on the map on this slide. There are intermodal terminals that have been constructed in northwest Ohio, and in Chambersburg, Pennsylvania. These two terminals are complete. There are additional terminals under development in Pittsburgh, an expansion in Baltimore, and another expansion in Charlotte. Along the rail corridor itself, there are 61 clearance locations, and those have a variety of different natures to them. There are some road bridge removals, bridge replacements, track lowering, tunnel modifications and tunnel removals along the entire corridor.

One of the earlier challenges with the TIGER application was determining how to segment the project. Often the logical termination for projects was state boundaries, and that didn't make sense when we were talking about double stacked vertical clearance for railcars. The Phase I which ended up receiving the TIGER award is from the Northwest Ohio Terminal to the Chambersburg Terminal in Pennsylvania. Phase II was from Chambersburg to Baltimore, and Phase III from Baltimore down to the port in Wilmington.

CSX did the heavy lifting in terms of the TIGER application, and the cost benefit analysis that was required as part of that. They calculated benefits over a 30-year period, and those primarily consisted of logistics and savings for shippers, and then public savings as a result of traffic diverted from highway corridors to the rail corridor. Those calculations included safety benefits as well as environmental benefits.

As part of the TIGER application, CSX provided a state by state breakdown of the public benefits. For Ohio, the expected public benefits totaled nearly $1.7 billion, with the potential to create 20,000 jobs, and save more than $350 million in shipping and logistics costs for Ohio companies. However, the biggest reason that ORDC became involved in the project was the construction of the terminal in Northwest Ohio. That project was privately funded by CSX, and cost $175 million. The earlier projections were for the creation of about 200 jobs. They're at about 300 jobs now since the terminal began operation, and the operation there has already led to expansions of other intermodal facilities in the state. One is in Columbus, and one is just north of Columbus in Marion. That improved intermodal service for Ohio businesses was a big incentive for us to get involved as a state agency.

Phase I totaled at $190 million, which does not include the terminal, this is just the clearance and the railroad infrastructure projects. The TIGER I grant is $98 million of that corridor and ORDC is the funding administrator. We are the official recipient of the funds, and we signed the grant agreement with the U.S. DOT that does cover the four-state corridor. The work is being overseen by the Eastern Federal Lands Highway Division of Federal Highway Administration.

I will talk a bit more about Eastern Federal Lands as we go along in the presentation because their value has really been priceless to this project.

Additional funding included an allocation of ARRA funds from the Federal Highway Administration that came to the state of Ohio. There was a congressional allocation that assisted that, which was not quite enough for the project on its own and so there were some other funds there.

There was a state stimulus program that the state of Ohio did before the American Recovery and Reinvestment Act. There was $10 million provided from that program. The Commonwealth of Pennsylvania provided $35 million for projects within Pennsylvania, and then CSX is covering the balance of Phase I --which is about $25 million. CSX announced the National Gateway Initiative in 2008 here in Columbus, and we applied for the TIGER award along with CSX in September of 2009. The award was received in 2010 and the TIGER agreement was executed later that year. Construction began in early 2011, and Phase I is anticipated to be completed by July of this year. The expected completion date for the entire corridor is 2015. CSX, almost two years ago now, committed to fund all of the remaining clearance projects in Phase II and Phase III.

When CSX brought the National Gateway project to Ohio for our consideration, we saw a lot of benefits for the state. The other states along the corridor, I believe, saw the same thing. There was a multistate coalition developed to support the initiative-- it included Ohio, Pennsylvania, Maryland, Virginia, West Virginia, North Carolina, and the District of Columbia. That coalition has stayed in contact throughout the project, and we've been able to work together through various issues as they've come up. For the TIGER award itself, we needed to enter into a number of agreements to make the funding happen across the multistate corridor. We do have a multistate memorandum of agreement between the ORDC representing Ohio, the state DOTs, in Pennsylvania, West Virginia, Maryland, and then with Eastern Federal Lands Highway Division.

I think probably the most significant of the opportunities presented by the TIGER award was the ability to leverage the private investment for public benefit.

One of the smaller but ancillary benefits was when the TIGER award was announced we started to talk about how it was going to be administered. We talked to Eastern Federal Lands, and they were just completing the Heartland Corridor project with Norfolk Southern. They had experience with railroad projects, vertical clearance and working with multiple states. So, CSX offered funding for Eastern Federal Lands to administer the TIGER award. That was another contribution that really helped to move the project forward.

There were several challenges that came up along the way, which I don't think is unusual for a project that has a unique nature size and scope like the National Gateway does. One of the first challenges that we faced was during the environmental process. There was not a lot of clarity initially, as far as whether FRA or FHWA would have jurisdiction, and those two modal agencies have individual procedures for the NEPA process. There was significant discussion between the states and the Federal agencies to determine how that would work, and in the end, the two modal agencies both signed the environmental agreement.

The project has significant geographic and financial scope, and when we looked at the possibilities, we determined that only Eastern Federal Lands had the jurisdiction for the multistate corridor, and so they were able to act in all of the states as opposed to working through the individual division offices of FHWA. I mentioned previously that CSX offered to pay for the project oversight costs that Eastern Federal Lands would incur. One of the difficulties that we realized was that CSX could not directly grant money to Eastern Federal Lands. So, we kind of had a two-step process where CSX awarded a grant to ORDC, and then we awarded a grant to Eastern Federal Lands. We were able to pass through the administration funds in that way.

The last challenge that I think many public-private partnerships face is the ability of the public agencies to contract with private entities. In the end, ORDC was the only entity involved with this project that had clear legal authority to be able to sign for a multistate award. We were able to sign the grant agreement with U.S. DOT, and then share responsibility with the states along the corridor through the memorandum of agreement that we all developed.

Again, I appreciate the opportunity to present on the Ohio Rail Development Commission and the TIGER award that helped facilitate the National Gateway. On the last slide here, I have contact information if anyone has any questions, and also an overhead shot of the intermodal facility in Northwest Ohio. Thank you.

Jennifer Symoun
Alright, thank you, Megan. Again, I encourage everybody to post questions here for all our presenters, we do have one final presentation and that will be given by Katy Brooks of the port of Vancouver. Katy, I will bring up your presentation and you can go ahead.

Katy Brooks
Great, thanks Jennifer. Hi everybody, good morning and afternoon. This presentation is on the Port of Vancouver's freight rail project. Specifically, the West Vancouver freight access project, which we applied for and received a TIGER II grant in 2010.

Just to orient you to the port of Vancouver in Washington, we're across from the Columbia River from Portland to Oregon on the west coast. We are primarily an export port; the majority of our cargo tonnage is bulk, with 85% of our cargo being exports. We generate about 2300 jobs here. We operate on about 800 acres, and earn around $1.6 billion in economic benefit on an annual basis. We're a pretty good sized port, probably third or fourth largest in the state of Washington. Our partners up in Tacoma, Seattle, and down in the Columbia River system, are other representatives of Washington state ports. We are charted by the state of Washington, starting 101 years ago, with two things: industrial development and maritime trade.

I want to orient you a little bit about what the West Vancouver Freight Access project does. This is a bird's-eye view looking down on probably about 2/3rds of our property. We are primarily exports and bulk exporters, rail is a big deal to us, and we are looking to substantially expand in exports for a variety products. The freight access project does essentially three things. Along the Columbia River is the Union Pacific railroad. The Burlington northern Santa Fe railroad comes in from the east, and goes all the way to Chicago and down to Houston. This area is called the 'Vancouver Y'. It is a nightmare to get across because currently all our grain trains and other commodities come in and go over what we call the hill track, and into the port. It blocks everything going east, west, and north south on the national system on the west coast; for some 40 to 45 minutes at a time. This is something the national rail folks are really interested in fixing.

The primary component of the West Vancouver Freight Access project is constructing brand new rail entrance into the port here on the southern edge. It goes underneath that rail bridge, we call it a trench, engineered right along the waterfront, and then through the southeastern end of the port. So that's the big chunk of the first phase of what we were doing. The other issue that we're trying to resolve is the ability and capacity for unit trains. That involves two things. First of all, the development of a loop track on our west end that allows us to handle union trains and also allows us to handle them without decoupling; it's state-of-the-art continuous movement. The additional lines and colors you see in here are storage area for unit trains to serve our individual tenants.

As I mentioned, we handle grains and mineral bulks-- On our west end we're going to begin exporting around 8 million tons of potatoes per year with the new tenant. We also import automobiles - Subaru in this area, break bulk, and lots and lots of energy, pulp, lumber and steel. We have a very diverse cargo mix, and it requires a lot of substantial storage area as we pull in the trains, break them apart, send them to each of our customers and get them out. The whole idea was to design a rail project that stream lines the flow of rail, almost like a heartbeat pumps things in off main line, then pumps it out without disruption to the main line itself. The railroads are really interested in this as are our sister ports up and down the western sea board because particularly because our trains at time block their railed cargo going up this main line. So, that gives you a little orientation to the project.

We were a TIGER II recipient; this was US DOT funded instead of the stimulus funding. The entire project cost is $270 million, and we received a total of $10 million from TIGER II. We were fortunate to receive other Federal funds in addition to that, but we had to target two very discrete projects that we could deliver in a short time frame that would have huge impact to the overall project and had independent utility. This first project we identified is called the Gateway Overpass Project. It will create an overpass into our western terminal area. This allows rail to flow freely as well as unimpeded vehicular access to a couple of terminals by removing a grade conflict. The TIGER funds were about $8.8 million and the port ponied up the rest of around $1.2 million in order to separate the entrance into the terminals from the actual flow of rail freight.

The second portion of what we used our TIGER II funding for was to support our grain terminal. United Grain Corporation is our grain operator here at the port. They export around 3 to 3.5 million (depending on the year) tons of wheat per year. Much of the grain silo structure is brand new. It was about an $85 million private investment as a result of our rail project. United Grain Corp. is not only increasing grain exports, but they're including soy and corn exports. It was really important to re-configure and improve the rail service that goes into this crucial and very high volume tenant. The project, Grain Sub B, essentially provides more storage tracks that allow to you bring in unit trains, break them up into larger blocks that allow the pass-through to go much more quickly and efficiently, benefitting our operator and its existing and upcoming operations. We used about $1.2 million of our TIGER funds for this project. The port put in a little over $500,000 along with some state money from the Freight Mobility Strategic Investment Board, which is a more or less an advisory board to the Washington State legislature on allocating freight project funding. It is a separate group that focuses on freight and has its own budget that informs the legislative budget.

I wanted to share just some nuggets of what we found useful when we did this application. As you all know, the TIGER selection process is super competitive, and we actually submitted an application in TIGER I. We came out of it having talked to a lot of folks with some takeaways, and advice that helped us. So there are several criteria in TIGER II that were highlighted. One was, like all the TIGERs, what's the job creation? TIGER II is when the Obama administration put out the export initiative, and so export generation was very much a part of the TIGERII application process. Our project had a good story to tell there. The West Vancouver Freight Access project was all about the expansion of primarily exports from pot ash to gains, and other bulk materials mined in the Midwest. We did two things-a cost benefit analysis, and also an economic impact analysis, and I highly recommend doing these as part of your application. Our project is generating over 1800 construction jobs per year, and 400 permanent jobs. Potash exports, and also the expansion of several other current tenants realized a lot more efficiency as a result of these two projects. It was also important to demonstrate state of readiness for the project, and I noticed in the two previous presentations these folks had their ducks in a row. You really have to show a strong readiness and that you are at a point in your project when you can actually execute and deliver, and provide the results. This is what Congress and U.S. DOT were looking for from this TIGER grant program. We began construction in months of the application, our application process went fairly smoothly, and we're nearing completion at this point.

A couple of other things: State of good repair and this is really key in this particular TIGER application process, was the contribution to the national system. As ports, this became really relevant to us, because there was a specific criterion. We were pretty new in applying for things of this nature, and one of the criteria was that it has to benefit the national network and can't be about one port competing against another. You have to actually show independently how it would benefit the United States public. We spent a lot of time trying to figure out what that meant. What this project did was not only more than triple our capacity of rail service, but it also provided more than 40% improvement of capacity to the national system in this area. That was using 2025 growth projections. So that's a 40% improvement over what we have now, including the growth we expect from between now and 2025. It was pretty profound for rail capacity and velocity. This was the real key in our application and also in getting a partner -BNSF Railway.

Safety was of course, was an issue. We limited a grade crossing conflict that would been extremely problematic. As our rail increased, so did the roadway traffic to and from our terminals.

Partnerships and endorsements-- we spent a lot of time talking to a lot of folks, and there were some very natural partners in this progress. Some of them I mentioned earlier, were the rail companies who were very much behind us in moving this forward and removing the conflict at the Vancouver Wye rail convergence. We spoke a lot to our state partners, and also our tenants. Roadway and rail conflicts across the country, and certainly in the Pacific Northwest, have been on the forefront of a lot of our radar screens and the public's. What we wanted to make sure of back then, is that everybody understood what we were doing and how it would improve the flow of traffic and eliminate a couple of grade crossings. Not only within our facility, but out externally to our facility as well. We see that as an issue moving forward, so which meant we needed neighborhood endorsement as well, and also a lot of public understanding about what we were up to.

Some of the challenges looking backward with our 20/20 glasses on are when you have a humongous project that's more than $270 million; $10 million in a TIGER grant doesn't sound like a heck of a lot. It really did mean that you had to demonstrate independent utility, target specific projects that were really important in making it work. I also meant leverage a whole heck of a lot of other money. We were lucky enough to receive about $15 million from the High Speed Rail grant because we freed up that at-grade conflict at the entrance of the port, allowing high speed corridor to be developed and unimpeded by our traffic. In addition to that, we had received ARRA funds for the loop track I alluded to earlier, state funds along with port funding as well. Independent utility and leveraging those precious dollars you get in this grant project with other dollars, is key.

Another issue was oversight. Initially we were unclear on who would be the oversight agency for us. Originally it looked like it was going to be MARAD. The challenge with that is our rail project NEPA was through the FHWA, so the whole idea of redundancies and having to redo aspects of the NEPA in order to apply it to the TIGER grant was of real concern to us. We're very fortunate that folks at U.S. DOT understood that, worked with us, and at the end of the day, the FHWA ended up being the sponsor for our project. This was extremely useful and streamlined a heck of a lot for us. It saved us a lot of time, money and resources.

The next advice is about performance measures. A couple of folks in today's presentation have mentioned the challenges they present. Through the TIGER process, performance measures really came to the forefront on the national scene (at least in my world it did) and as we were trying to figure out what is it that FHWA, U.S. DOT and Congress want to see as a result of their investment. You could go a lot of different ways and I think we maybe got a little more robust than we needed to, because the follow-up and the tracking as was mentioned earlier, was really tedious. You want to make sure that you provide information that makes sense, and can be looked across jurisdictional lines while comparing apples and apples, instead of apples and, I don't know, kumquats; something that has completely different value from the other. So we focused on our annual grain volume. We focused on how many traffic roadway conflicts occurred, and we'll monitor that going forward, and of course, the quarterly reports on job generation for construction and also permanent long-term. So, less is more in ensuring you're measures are meaningful and transferable back in Washington, DC.

The results of our TIGER II grant, as I mentioned, attracted a heck of a lot of business. Over $200 million in private investment from BHP Billiton, one of the largest mining companies in the world to export pot ash. United Grain Corp put in $85 million for grain, soy and corn exports, and more investment for steel and propane distribution. There are even more possibilities popping up as a result of having an efficient rail system that we and the U.S. Government invested in.

So the project status: Gateway Overpass should be done by the end of November. They just put in the final girder and are building the bridge itself as we speak. Grain Sub B was completed, I believe, last September, so we've been operating on that for quite a while.

And I think that is it. Here's my contact information if anybody has any questions, or wants follow-up.

Questions & Answers

Jennifer Symoun
All right. Well thank you Katy. We're now going to go ahead and start off the Q&A session. I see they're having some questions typed in. I encourage everybody to continue typing in questions if you think of them. We do have about a half an hour to address questions.

Let's see. Katy I'm going to start with a question for you since you just finished up your presentation.

You mentioned that you had to be ready to implement, react quickly with respect to proposing a shovel ready project. Did you get any feedback, positive or negative, during the process inquiring why the funding was necessary if you had already gone through the expense and planning for the project? In other words, it appears that the project may already happen, why should the grant be awarded?

Katy Brooks
It was a process. There were lots and lots of follow-up phone calls and exchange of information. So, the short answer to that is yeah, they will ask a lot of questions. You will have to report on your progress on a quarterly basis and certainly be working with them up to the point you're granted the money. We had a list originally of several projects for them to choose from and what we asked was a lot more, and we got a little less than half. When we found out that we weren't going to get as much funding as we asked for, we honed our projects and priorities. We used the projects that we knew were the most important, and we were ready to push the "go" button. We went out to let contract, I think, if I remember correctly it was within six months. Hopefully that answers your question.

Jennifer Symoun
Alright, thank you. Another question for you: how was the economic benefit analysis prepared by the port of Vancouver different from the cost benefit? What was the cost of the economic benefits analysis report and what specifically was emphasize in the economic benefits analysis?

Katy Brooks
We had an external consultant help us with this, and, what we did is two things. The cost benefit analysis provided the cost and benefit to the U.S. System from our project. It also was based on a 7% discount cost, and a 3% discount, to cover our bases. I can get into more detail if you want to follow up with me specifically. The economic benefit was all about how many jobs specifically are you going to produce locally and regionally. So economic impact included job generation.

Jennifer Symoun
Alright, thank you. We'll move onto some questions for Megan. Did any of the public ports in Ohio expect interest in partnering on your TIGER project and are you working together on any other project today?

Megan McClory
Yes, we have worked with ports in Ohio in the past. We administered a couple of projects with the Port of Toledo in northwest Ohio regarding their facilities. In terms of this specific TIGER application, it wasn't really applicable in this case, because any of the ports would have been in the same position that we were, being a public agency, partnering with CSX as an entity and their privately owned infrastructure. We didn't see a need to partner in that way with the ports, but, yes, we're continuing to partner with ports in Ohio.

Jennifer Symoun
The next question is to all the presenters: what would you consider a break even when prying more TIGER funds for projects like this. How much grant is worth the additional oversight and reporting? So, Katherine we'll start with you?

Katherine Trapani
I don't know if there's a right answer to that question. I think it depends on the capacity of your organizations; Quonset Development Corporation is a small office. But we have substantial experience in grant administration and construction project management so we were able to take this on with our current staff. So I guess that's about all I can add to that.

Jennifer Symoun
Thank you. And Megan?

Megan McClory
I think in some way our answer is similar to Katherine's. I think it depends on the capacity of the organization. We were fortunate to be actually in the same building as the Ohio Department of Transportation and they were already administering ARRA funds. We were able to piggyback on the systems they had in place. I think it depends on your options for funding. We don't have a lot of opportunity for state funding for multimodal projects. Prior to TIGER, much of the Federal funds that were available were not eligible for more multimodal projects. Without that, we didn't have a lot of other places to look for the scope of funding that we needed for the project, so we kind of just took the reporting and the performance measures and all as part of the package.

Katy Brooks
I would agree there is no black and white answer. From our perspective, we had to hire a full-time person to administer grants. It's not just because of TIGER, but we've received a lot of other grants from state and Federal, and we're pursuing as many as we possibly can. You do have to look at adding person-power to manage reporting, because it is a pretty intense process to track. In addition to that, I think that it's not a monetary consideration, but certainly a huge consideration for us was the Buy America policy. This factor is really tough in the port world. I'll tell you that a lot of the equipment that we purchase, and a lot of the aspects of operating an international port, are at times unavailable in the U.S. There are other aspects that we would have also have liked to get Federally funded, but the Buy America provision prevented us from it, because we knew there was no place in the U.S. that we'd be able to find what we needed. Back then, we were still sorting whether you could get an exemption.

Jennifer Symoun
Alright, thank you. We have a question in there regarding the administrative oversight and reporting requirements for TIGER V. Unfortunately, we don't have anybody on the speaker line right now from Federal Highway or U.S. DOT that can answer that. If there is anybody who wants to type in a response to that, feel free to.

I don't see any other questions at this time. So it seems like we might be ending a little bit early right now. I'm going to go ahead and start reading the, the closing remarks, and if anybody wants to type in any further questions, I can definitely and go back to that. I do want to thank everybody for attending today. I want to thank our three presenters as well. The recorded version of this event will be available within the next few weeks on the Talking Freight website. The next seminar will be held on May 15. More information about the topic of this seminar and a link to register will be available soon. I will send a notice out through the Freight Planning LISTSERV once it is available. I encourage you to join the Freight Planning LISTSERV if you have not already done so.

Enjoy the rest of your day!

Updated: 5/6/2013
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