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Railroad Line in Dbq Ind. Ctr West - i5~~~E ~~~ MEMORANDUM January 23, 2006 TO: The Honorable Mayor and City Council Members FROM: Michael C. Van Milligen, City Manager SUBJECT: Application for Funding Through the Railroad Revolving Loan and Grant Program Economic Development Director David Heiar is recommending City Council approval of an application in the amount of $750,000 to the Iowa Department of Transportation for the construction of a railroad lead line and spur in the Dubuque Industrial Center West. The $750,000 application would be broken down as a $400,000 grant and a $350,000 no interest loan to be repaid over seven years. The City would use TIF to fund the balance of the project ($750,000) and to repay the loan. I concur with the recommendation and respectfully request Mayor and City Council approval. (lJl/\/~ Michael C. Van Milligen MCVM/jh Attachment cc: Barry Lindahl, Corporation Counsel Cindy Steinhauser, Assistant City Manager David J. Heiar, Economic Development Director ,~ ~ "_.' , ~I THE CITY OF l---~\ [)CTi3LJQ1Jli ~<k-~ MEMORANDUM January 24, 2006 TO: Michael Van Milligen, City Manager FROM: David J. Heiar, Economic Development Director r:J /fl. SUBJECT: Application for Funding through the Railroad Revolving Loan and Grant Program INTRODUCTION The attached resolution provides for the approval of an application for a grant from the Iowa Department of Transportation for the construction of a Railroad lead line and spur in the Dubuque Industrial Center West. DISCUSSION One of the City Council's top priorities is the construction of a rail lead line and spur to serve the Dubuque Industrial Center West. The Bergfeld farm was acquired by the City nearly 10 years ago with the clear intent of developing an industrial area served by rail. In January 2005, preliminary plans for a rail spur were prepared by IIW Engineers and Key Railroad Development, LLC. In March the City was notified by the Canadian National (CN) Railroad that it was not possible to serve this industrial area with rail service due to the steep grade of the terrain. Since that time there have been many meetings and discussions with the CN, IIW, Key Railroad Development, GDDC, City staff, and the Iowa Department of Economic Development. A revised plan was submitted to the CN based on the safety concerns they identified with the steep grade. The preliminary plans have approval by the CN Railroad. It was necessary to increase the scope (length) of the project to meet these demands and concerns. The estimated cost of the project has increased from $1.3 million to $1.53 million. (See itemized cost sheet attached)These changes also require the acquisition of additional right-of-way. A benefit to these modified plans is that the rail spur will have the potential to serve a larger number of acres in this industrial area. The expanded lead line will serve approximately 136 acres including McGraw Hill, Nordstrom, 22 acres of the McFadden Farm, and 60 buildable acres in the Industrial Park. On December 19, 2005, the Iowa Department of Transportation announced a funding program to assist with industrial railroad projects. This new Railroad Revolving Loan and Grant Program can be utilized to construct rail spurs for new or expanding developments. Competitive applications for the first round of funding are due in Ames on February 10, 2006. Applications will only be accepted twice a year (every six months), therefore we are proposing to submit an application prior to the February 10 deadline. Currently, the IDOT has $3.6 million dollars available state wide to fund this program. IDOT will give priority funding to applications that commit to the creation of new jobs. If sufficient funds remain, the State will consider speculative applications for industrial development, like the application the City of Dubuque is proposing. In 2005, GDDC submitted proposals to ten companies that were looking for industrial sites with rail. Five of these companies visited Dubuque to look at the site. No more than half of the awarded State funds can be for grants. The IDOT prefers to loan the money to local governments and use repayments to create a continuous source of funding for rail improvements. Based on the criteria used to evaluate these applications, I am recommending that the City apply for a $400,000 grant and a $350,000 no interest loan to be repaid over 7 years. The City would use TIF to fund the balance of the project ($750,000) and to repay the loan. RECOMMENATION I recommend the City Council approve the application for $750,000 to be submitted to the Iowa Department of Transportation. ACTION STEP The requested action is for the City Council to adopt the attached resolution approving the application, and authorizing the Mayor to sign the application. F:IUSERSIDheiar\Memos to MVM\Councilltemslapplication for funding RR loan grant program.doc U 0: I! " ;; ~ ~ E: ~ ~ ~ <Xl <;2 c?J ~ fd V) i: .~ ~ .~ ~ ~ ~ > iJH Ii!. ~ ~ .g ~ == ;; Q :-g .E i"'oii~---;) {. ~ "r-/ I ~,- ...J ~ I- III W 3: a: W I- Z WN 0;;; ...J~ <(~ w~~ ::::l I- . a III 0 ::JSZ IIlzl- ::::l-CJ cwW u..::J(3 oaa: ~iila.. -::::l3: CJc= III Z o i= a.. o W !;c :E i= III W<Q I-<i' III C 07," CJ z:: Cl iii W c ~ <( z i ::i W a: a.. ~ ~ e f I- ~ Z ii: :J 0. 000 000 g g ~ o q cs: ~i~ 8888 lri ll'i 0 ci N N 0 0 000 ~~~g ~ '" ~ ~ 00000 00000 ci ci ci ci ci ::; :5 g :5 ::; ~~~~~ ~ 88 ~ ~ ..,flti ;;;~ 888 g" '" '" 00 ~ 0 g~g ~ ;; ffi8888888888 ~~~~~~~~~~~ w<"5 !liNN ~lt'i ~ w w tfl W ~ :ii :J a LD ~ LS t; b ~ LS ~ o 0 ll) 0 IX) <0 ~ ~ 0 0> M OM ..,. 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W '!; '" ~ ::! ~ 0. o o ,.; :! ..; '" ~ ~ ~ Iii CO o OJ I- U W a '" 0. -' >!: o I- RESOLUTION NO. 38-06 A RESOLUTION AUTHORIZING THE FILING OF AN APPLICATION TO THE IOWA DEPARTMENT OF TRANSPORTATION Whereas, the City Council of Dubuque, Iowa has identified the construction of a rail lead line and spur in the Dubuque Industrial Center West as a top priority, and Whereas, the Iowa Department of Transportation has funding available through the Railroad Revolving Loan and Grant Program to assist with Industrial rail projects and, Whereas, an application has been prepared for Railroad Revolving Loan and Grant Program funding in the amount of $750,000. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF DUBUQUE, IOWA: Section 1. That the submittal of an application for a $400,000 grant and a $350,000 loan from the Railroad Revolving Loan and Grant Program to fund the Dubuque Industrial Center West rail lead line and spur project is hereby approved. Section 2. That the Mayor is hereby authorized to execute, and the City Manager is hereby directed to submit said application to the Iowa Department of Transportation, together with other attachments as may be required. Passed, approved, and adopted this 6th day of February,2006. Roy D. Buol Attest: Jeanne F. Schneider, City Clerk F:\USERSlDheiarIResolution approving RISE app DICW rail.pur.doc