Railroad Line in Dbq Ind. Ctr West -
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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
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THE CITY OF l---~\
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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
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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