Loading...
HomeMy WebLinkAbout2010/12/13 - ADMIN - Agenda Packets - City Council - Study SessionAGENDA DECEMBER 13, 2010 6:30 p.m. CITY COUNCIL STUDY SESSION – Council Chambers Discussion Items 1. 6:30 p.m. Future Study Session Agenda Planning – December 20, 2010 and January 10, 2011 2. 6:35 p.m. Civic/Recreational Facilities Survey 3. 7:20p.m. Freight Rail 4. 8:50 p.m. 2011 Budget 5. 9:35 p.m. Communications / Meeting Check-in (Verbal) 9:40 p.m. Adjourn Written Reports 6. Business Terms for Development Contract with Hardcoat Inc. (7317 West Lake St.) 7. Governmental Accounting Standards Board (GASB) Statement 54 Implementation 8. Selection of City Auditor Auxiliary aids for individuals with disabilities are available upon request. To make arrangements, please call the Administration Department at 952/924-2525 (TDD 952/924-2518) at least 96 hours in advance of Meeting Date: December 13, 2010 Agenda Item #: 1 Regular Meeting Public Hearing Action Item Consent Item Resolution Ordinance Presentation Other: EDA Meeting Action Item Resolution Other: Study Session Discussion Item Written Report Other: TITLE: Future Study Session Agenda Planning – December 20, 2010 and January 10, 2011. RECOMMENDED ACTION: Council and the City Manager to set the agenda for a Special Study Session December 20, 2010 and the regularly scheduled Study Session on January 10, 2011. POLICY CONSIDERATION: Does the Council agree with the agendas as proposed? BACKGROUND: At each study session, approximately five minutes are set aside to discuss the next study session agenda. For this purpose, attached please find the tentative agenda and proposed discussion items for a Special Study Session scheduled for December 20, 2010 and the regularly scheduled Study Session on January 10, 2011. Please note that no study session is scheduled for Monday, December 27. FINANCIAL OR BUDGET CONSIDERATION: None. VISION CONSIDERATION: None. Attachment: Future Study Session Agenda Planning December 20, 2010 and January 10, 2011 Prepared by: Debbie Fischer, Office Assistant Approved by: Tom Harmening, City Manager Study Session Meeting of December 13, 2010 (Item No. 1) Page 2 Subject: Future Study Session Agenda Planning Special Study Session, Monday, December 20, 2010 – 6:30 p.m. Tentative Discussion Items 1. Meet with Recommended Auditors - Administrative Services (45 minutes) Several members of HLB Tautges Redpath, LTD, the recommended auditors that would be working on the St. Louis Park audit, will provide a brief presentation on their firm and answer any questions that Council may have for them. End of Meeting: 7:15 p.m. Reports: LCDA Grant November Monthly Financial Report Study Session, Monday, January 10, 2011 – 6:30 p.m. Tentative Discussion Items 1. Future Study Session Agenda Planning – Administrative Services (5 minutes) 2. STEP Presentation – Administrative Services (20 minutes) Jackie Olafson, Director of STEP, will be in attendance to share the harsh realities of what is happening in St. Louis Park regarding food and shelter. STEP will present statistical information comparing 2009 to 2010. 3. NORC Presentation – Administrative Services (20 minutes) Annette Sandler, Director of Aging and Disabilities Services at Jewish Family and Children’s Service of Minneapolis, will be in attendance to provide an update on the NORC (Nurturing Our Retired Citizens) program supporting our community and the Park Nicollet Successful Aging Initiative. 4. Meadowbrook Presentation – Administrative Services (20 minutes) Linda Trummer, Outreach Coordinator for Meadowbrook Collaborative will be in attendance to provide an update to Council on its ongoing mission to meet the needs of the Meadowbrook community in the areas of health, education and safety. 5. 2011 Annual Legislative Update – Administrative Services (60 minutes) Senator Ron Latz, Representative Ryan Winker, Representative Steve Simon and Commissioner Gail Dorfman are being invited to discuss St. Louis Park’s legislative priorities and the outlook for the 2011 legislative session, which starts on January 4, 2011. 6. Communications/Meeting Check-in – Administrative Services (5 minutes) Time for communications between staff and Council will be set aside on every study session agenda for the purposes of information sharing. Reports: Redevelopment Agreement Bikemasters Park Nicollet Redevelopment Contract End of Meeting: 8:40 p.m. Meeting Date: December 13, 2010 Agenda Item #: 2 Regular Meeting Public Hearing Action Item Consent Item Resolution Ordinance Presentation Other: EDA Meeting Action Item Resolution Other: Study Session Discussion Item Written Report Other: TITLE: Civic/Recreational Facilities Survey. RECOMMENDED ACTION: Staff requests direction on the policy question noted below. POLICY CONSIDERATION: Is the City Council comfortable with staff proceeding with the community survey process relating to civic and recreational facility needs? BACKGROUND: At the City Council Study Session on August 23, 2010 staff presented a proposal for moving forward on the exploration of the need for additional civic and/or recreational facilities in the community. Undertaking such an effort originates from the 2005/2006 Vision St. Louis Park process and the resulting Strategic Directions adopted by the City Council. To insure that any future improvements are grounded in strong community support and data that demonstrates the problem we are trying to solve or the opportunity we are trying to address, Council directed staff to move ahead with selecting a consulting firm to help develop and undertake a survey. This survey is intended to build off the results of Vision and go much deeper in identifying specifically what is missing in the community from a civic and or recreational facility perspective. Staff feels this is an important first step to take. By having the community specifically identify what is missing will provide the Council with good information on the types of facilities or amenities it might wish to consider adding to the community. Once the City Council has this information, subsequent steps can be taken to bring the communities desires to fruition. At their September meeting, the Parks and Recreation Advisory Commission (PRAC) reviewed the comments from the Vision process. They created a list of themes that came out of Vision in the areas of civic space and community recreation facilities. The following themes were given to the consultant to use in creating survey questions: aquatics (indoor and outdoor), artificial turf (with or without a dome), adult exercise area (walking track and equipment), art facilities (display and education), gathering places for people of all ages (including meeting rooms), indoor unstructured multi use space (gyms), healthy lifestyle/exercise class space (for yoga, Tai Chi etc…), lighted athletic fields to provide more opportunity during spring and fall, indoor playground, access to natural areas and trails, and Frisbee golf. SELECTION OF CONSULTANT AND DEVELOMENT OF QUESTIONS Staff sent out a Request for Proposal (RFP) and has selected Schoenbauer Consulting, LLC to assist staff in developing questions and undertaking the survey to help assess what is missing in our civic and recreation spaces. Schoenbauer Consulting, LLC is made up of the team of Kathy and Jeff Schoenbauer. They have been conducting research for nearly 30 years. Jeff’s experience is mainly in the area of park, open space and trail planning and design. Kathy has extensive experience in survey work and research projects including project design, instrument Study Session Meeting of December 13, 2010 (Item No. 2) Page 2 Subject: Civic/Recreational Facilities Survey design, data gathering, analysis and action planning, facilitation for surveys, focus groups and secondary research. Kathy’s recent experience includes implementing a community outreach program for the Minneapolis Park and Recreation Board in which a community-wide survey was done as a part of the process. The Schoenbauer team also finished a qualitative research project for the DNR in an effort to gain an understanding of the factors that underlie the declining participation in nature related activities. The attached survey uses the themes that emerged from the 2005/2006 Vision St. Louis Park process. It was designed so that residents would be able to complete the survey on-line or via paper copy in minimal time. It uses a combination of questions that require residents to select an answer as well as a few questions that allow them to write comments. We anticipate the survey to take less than 10 minutes to complete. NEXT STEPS: Staff will begin to get the word out now that we will be conducting a community recreation survey in January. We will contact the local media, and use our website, social media, neighborhood associations, youth associations, Lenox, Historical Society, Friends of the Arts and other organizations to have them assist in informing residents that a survey will soon be available. Staff intends to begin the survey process throughout the month of January. While we hope that most people will take the survey online, paper copies will also be available. Parks and Recreation staff along with the consultant, Schoenbauer Consulting LLC, will be present at the council meeting to discuss the survey. FINANCIAL OR BUDGET CONSIDERATION The fee for Schoenbauer Consulting, LLC is $8,750 plus direct expenses. This is within the amount budgeted in the Parks and Recreation operating budget. VISION CONSIDERATION: This topic is directly related to the results of Vision St. Louis Park and one of the adopted Strategic Directions that “St. Louis Park is committed to being a connected and engaged community” and the related Focus Area of “Exploring creation of a multi-use civic center, including indoor/winter use”. Attachment: Survey Prepared by: Cindy S. Walsh, Director of Parks and Recreation Approved by: Tom Harmening, City Manager © Copyright 2010 by Schoenbauer Consulting, LLC. All rights reserved. 1 Your input is needed! The City of St. Louis Park is conducting a city-wide survey of residents and your input is needed to help us determine the top priorities for future community park, recreation and civic facilities. Your input is very important to us. Please log onto: www.stlouispark.org and click on “Take the survey.” If you do not have access to the Internet, please complete the questions below and return no later than January 31st, 2011 to The Rec Center or City Hall (see last page for address). The survey will take less than 10 minutes to complete. Please respond to each question from the perspective of your household. (Complete one survey per household, please.) Your input is important in helping us shape our community! Every household that completes a survey will receive a pool pass! Translations of this survey into other languages can be obtained by calling 952.924.2540. Thank you for your time and effort…..Cindy Walsh, Director, Parks & Recreation Department Please circle the number that best represents your opinion. “1” means you strongly disagree with the statement; “5” means you strongly agree with the statement. In the City of St. Louis Park ….. Strongly Disagree Neither Disagree or Agree Strongly Agree 1. Public parks and recreation are important to my household’s quality of life. 1 2 3 4 5 2. The City of St. Louis Park is doing a good job of providing for my household’s park and recreation needs. 1 2 3 4 5 Following is a list of park and recreation facilities that were identified during the recent City Visioning process. We need your help in determining “what’s missing” in parks and recreation in St. Louis Park. Please indicate how important you think it is to add each facility to the City. “1” means it is not all important to add the facility; “5” means it is extremely important to add the facility to those already offered to residents. Possible additional park/recreation facility Not at all Somewhat Extremely 3. Swimming pool - indoor 1 2 3 4 5 4. Upgrades to, or expansion of, current outdoor water park 1 2 3 4 5 5. Indoor track 1 2 3 4 5 6. Indoor exercise equipment 1 2 3 4 5 7. Indoor playground 1 2 3 4 5 8. Natural open spaces 1 2 3 4 5 9. Trails for multiple uses 1 2 3 4 5 Study Session Meeting of December 13, 2010 (Item No. 3) Subject: Community Recreation Survey Page 1 © Copyright 2010 by Schoenbauer Consulting, LLC. All rights reserved. 2 10. Lighted athletic fields (existing fields) 1 2 3 4 5 11. Artificial turf with a dome 1 2 3 4 5 12. Artificial turf without a dome 1 2 3 4 5 13. Art facility for visual arts (painting, sculpture, etc.) 1 2 3 4 5 14. Art facility for performing arts (dance, music, etc.) 1 2 3 4 5 15. Indoor recreation space/gyms for multiple uses 1 2 3 4 5 16. Indoor spaces for healthy living classes (general exercise, yoga, tai chi, etc.) 1 2 3 4 5 17. Disc golf course 1 2 3 4 5 18. Public meeting space 1 2 3 4 5 19. Other recreation facility; please specify:________________________________ __ 1 2 3 4 5 20. Of the facilities listed above, please select the 3 facilities that you think are most important to add to those offered by St. Louis Park’s Park & Recreation. … Swimming pool – indoor … Upgrades or expansion of existing water park … Indoor track … Indoor exercise equipment … Indoor playground … Natural open spaces … Trails for multiple uses … Lighted athletic fields (existing fields) … Artificial turf with a dome … Artificial turf without a dome … Art facility for visual arts (painting, sculpture, etc.) … Art facility for performing arts (dance, music, etc.) … Indoor recreation space/gyms for multiple uses … Indoor spaces for healthy living classes (general exercise, yoga, tai chi, etc.) … Disc golf course … Public meeting space … Other recreation facility: please specify:__________________________________ Study Session Meeting of December 13, 2010 (Item No. 3) Subject: Community Recreation Survey Page 2 © Copyright 2010 by Schoenbauer Consulting, LLC. All rights reserved. 3 To what extent do the following limit you/your household’s use of public parks, trails and participation in recreation activities or programs? Not at all Some A great extent 21. Lack of time* 1 2 3 4 5 22. Lack of transportation 1 2 3 4 5 23. Too far to travel 1 2 3 4 5 24. Cost of programs & facilities 1 2 3 4 5 25. Facilities are not suited to my needs 1 2 3 4 5 26. Programs are not to my liking 1 2 3 4 5 27. Cultural barriers 1 2 3 4 5 28. Lack of information about facilities and programs 1 2 3 4 5 29. Level of quality of parks and facilities 1 2 3 4 5 30. Personal health issues 1 2 3 4 5 31. Cultural beliefs & restrictions 1 2 3 4 5 32. Concern about personal safety 1 2 3 4 5 33. Companion – no one to do things with 1 2 3 4 5 34. Don’t feel welcome by other park users 1 2 3 4 5 35. Don’t feel welcome by park staff 1 2 3 4 5 36. Facilities are not physically accessible to me 1 2 3 4 5 37. Hours that facilities are open 1 2 3 4 5 *NOTE: If we decide to include a question about barriers, I suggest we include a follow up question to dig down deeper on time responses – both for adults and youth. 38. What is missing in parks and recreation in St. Louis Park, that if present, would make St. Louis Park a better place to live? 39. If you could change one thing about park and recreation facilities in St. Louis Park, what would that one thing be? 40. Please describe what you think should be included in gathering places. 41. In what other ways could the City of St. Louis Park make a positive difference in meeting the park and recreation needs of your household? Study Session Meeting of December 13, 2010 (Item No. 3) Subject: Community Recreation Survey Page 3 © Copyright 2010 by Schoenbauer Consulting, LLC. All rights reserved. 4 42. If, under the current budget, we could not pay for “What’s missing in parks and recreation,” how much would you be willing to invest per month to achieve what’s missing? … $0/month … $3/month … $6/month … $9/month … Other:______________________ 43. Any additional comments? Study Session Meeting of December 13, 2010 (Item No. 3) Subject: Community Recreation Survey Page 4 © Copyright 2010 by Schoenbauer Consulting, LLC. All rights reserved. 5 PLEASE TELL US ABOUT YOURSELF The following questions will help us better understand the needs of different groups of people. Your responses are completely confidential. Check only one response per question, unless otherwise indicated. 1. Which neighborhood do you live in? NOTE: we will insert a map here. … Amhurst … Aquila … Birchwood … Blackstone … Bronx Park … Brooklawns … Brookside … Browndale … Cedar Manor … Cedarhurst … Cobblecrest … Creekside … Crestview … Eliot … Eliot View … Elmwood … Fern Hill … Kilmer Pond … Lake Forest … Lenox … Meadowbrook … Minikahda Oaks … Minikahda Vista … Minnehaha … Oak Hill … Pennsylvania Park … Shelard Park … Sorensen … South Oak Hill … Texa Tonka … Triangle … Westdale … Westwood Hills … Willow Park … Wolfe Park … Don’t know 2. Are there people in your household (Check all that apply): ‰ Under 18 years old ‰ 18 - 34 years old ‰ 35 – 54 years old ‰ Over 55 years old 3. Where does your household get information about St. Louis Park parks and recreation? (Check all that apply) … News media … Online … Neighbor association … Athletic association … Word-of-mouth … Recreation centers … Park brochures & publications … Other: ________________________ Optional – We will need this information if you want to receive a free pool pass! Your name: Email: Mailing address: Phone: THANK YOU FOR PARTICIPATING IN THIS SURVEY! Study Session Meeting of December 13, 2010 (Item No. 3) Subject: Community Recreation Survey Page 5 © Copyright 2010 by Schoenbauer Consulting, LLC. All rights reserved. 6 Please complete online (log onto: www.stlouispark.org and click on “Take the survey) or mail no later than January 31st, 2011 to: The Rec Center Attention: Parks & Recreation Survey 3700 Monterey Drive St. Louis Park, MN 55416 City Hall Attention: Parks & Recreation Survey 5005 Minnetonka Blvd. St. Louis Park, MN 55416 Study Session Meeting of December 13, 2010 (Item No. 3) Subject: Community Recreation Survey Page 6 Meeting Date: December 13, 2010 Agenda Item #: 3 Regular Meeting Public Hearing Action Item Consent Item Resolution Ordinance Presentation Other: EDA Meeting Action Item Resolution Other: Study Session Discussion Item Written Report Other: TITLE: Freight Rail. RECOMMENDED ACTION: The purpose of the Study Session is to (1) provide background information on several items related to railroads in order to provide a foundation for understanding the TC&W routing decision, and (2) to discuss next steps for the city to undertake in relation to TC&W rail routing and rail issues. POLICY CONSIDERATION: What are the next steps the city should take regarding the future routing of TC&W freight rail traffic? BACKGROUND: On November 29, 2010 the City Council and School Board jointly met to hear presentations on two studies initiated by Hennepin County related to the routing of TC&W freight rail in St. Louis Park. These studies were conducted in response to the City’s Resolution 10-071 that requested Hennepin County to more fully evaluate the potential routes for TC&W freight trains identified in the 2009 “TCWR Freight Rail Realignment Study”. Attached is a background report from the firm SEH that provides answers to many of the questions that the city has been asking about railroad regulation and safety. This report was prepared by Dave McKenzie, SEH Inc., the city’s freight rail engineer, and includes background information on railroad rerouting, railroad regulation, safety, operations, environmental process, and issues related to SWLRT. Mr. McKenzie will be in attendance at the meeting and will make a presentation to the City Council. He will also provide an initial analysis of the alternative studies undertaken by the County, along with recommendations for further study. EVALUATION OF THE STUDIES: There were many specific requests provided in the resolutions passed in July by the City Council (attached). The key things the city was looking for from these studies as expressed in the resolutions were: a. Thorough and careful analysis establishing whether or not there was any other viable TCW freight rail route; b. Identification of appropriate mitigation for the MNS route; c. Full evaluation of all 6 options identified in 2009; d. Evenly applied and consistent criteria and analysis for all options including cost estimates; and, e. Sufficient detail in a format that makes it possible to fully understand the impacts of all the alternatives on SLP. Study Session of December 13, 2010 (Item No. 3) Page 2 Subject: Freight Rail The two studies presented on November 29th did not address the MNS route option since that is the focus of a separate study still underway. Work is still in progress on the MNS route and it would be premature to reach any conclusions on that option until the MNS Study is completed. With regards to options other than the MNS, some criteria identified by the City have been met and others have not. However, while the level of detail and analysis varies greatly from option to option, and some information is still missing, it is still possible to draw some conclusions about the viability of some of the options. Several of the alternatives identified in the County’s studies do not appear viable; only three alternatives besides the MNS route appear worthy of further analysis and consideration. They are: 1. Co-locating freight rail, light rail and the regional trail in Kenilworth; 2. Locating freight rail and light rail in Kenilworth, and moving regional trail; and, 3. Utilize freight rate subsidies for TC&W to operate on routes to the west of the Twin Cities. NEXT STEPS ON FREIGHT RAIL ALTERNATIVES: Staff recommends the City take the following steps: 1. The City should initiate further study of the potential for each of the three potential alternative solutions to the TCW freight rail routing issue. 2. The City should continue detailed analysis of the potential benefits and costs to St. Louis Park of each of these three alternatives and the MNS route. The point of the analysis would be to understand which route(s) are in the best long term interests of the City. There are pros and cons to each alternative and it is critical for the City to fully understand the impacts of each alternative on our community both from a freight rail and SWLRT perspective. 3. Continue to involve the community, its organizations and neighborhoods in the process. 4. Continue to work with MNDOT, Hennepin County, the Railroads and the Met Council on finding appropriate solutions. The rail solution will need the support of these entities to be successful. 5. All three of the alternatives worthy of further analysis involve stakeholders beyond those at the table to date (e.g. Minneapolis, Three Rivers, etc.). This will add to the complexity and scope of the process necessary to find a solution. A means of effectively reaching out to these stakeholders will be needed. 6. Continue to participate in the MNS study and work to find the best possible MNS route and mitigation plan for this alternative. CRITERIA FOR A FUTURE DECISION: The challenge for the City moving forward will be how to achieve its twin goals of minimizing freight rail impacts in the community and supporting the successful implementation of SWLRT. For LRT to proceed, a means of accommodating freight rail still needs to be found, whether it is in St. Louis Park or elsewhere. Study Session of December 13, 2010 (Item No. 3) Page 3 Subject: Freight Rail The goal is successful implementation of SWLRT with as little freight rail activity in St. Louis Park as possible; and, complete and effective mitigation of any freight rail negative impacts. Whatever the freight route option ultimately chosen, a sound solution to the freight rail issue will need to be: • Physically viable • Financially viable • Acceptable to involved agencies • In the best long term interest of St. Louis Park • Timely A successful timely solution will require the cooperation and consensus of many stakeholders and agencies working together. The complexity of the issues and the dispersed responsibilities and authority for decision making means no one entity can find and implement a solution. There is a reason why this issue is still left unresolved more than 10 years after it first surfaced; this is not any easy problem to solve and trade-offs will inevitably need to be made. FINANCIAL OR BUDGET CONSIDERATION: The primary financial impact of the freight rail studies for the City is staff time and consultant expense necessary to review documents and provide input. As we move forward costs will be incurred for consultants to assist the city. The exact amount is difficult to estimate at this time. Funding would come from the Development Fund. VISION CONSIDERATION: SWLRT, Freight Rail planning and station area planning are consistent with the City’s strategic vision to be a connected and engaged community. Attachments: Memo from SEH, Inc. City Council Resolutions 10-070 and 10-071 Prepared by: Meg McMonigal, Planning and Zoning Supervisor Reviewed by: Kevin Locke, Community Development Director Approved by: Tom Harmening, City Manager MEMORANDUM TO: City Council Members FROM: Dave McKenzie, P.E. Samuel Turrentine, Transportation Planner DATE: December 8, 2010 RE: Technical Memorandum #1 SEH No. STLOU 114331 This memorandum provides background information on the existing regulatory framework of the railroad industry, an overview of federal railroad safety standards (e.g., track, at -grade crossing, and train operating standards), a description of current train operations in St. Louis Park, and provides preliminary comments on the Hennepin County freight rail studies. RAILROAD REGULATION In May 2004, the League of Minnesota Cities (LMC) published an informational memorandum titled Railroads and Cities which outlines many of the areas in which federal and state agencies regulate railroads and the ways in which cities may regulate railroad issues within their communities. The LMC memorandum describes local jurisdictional authority over railroads as being limited. For informational purposes, a copy of the LMC memorandum is included in Attachment A. Table 1 identifies public agencies with oversight and/or program responsibility for railroads under the existing regulatory framework. Table 1 – Existing Regulatory Framework for Railroads Agency/Entity Responsibility and Involvement Private Railroad Companies • Each railroad has the primary responsibility to ensure its own track meets or exceeds the standards prescribed in the FRA track safety regulations and to perform regular and routine track inspections. This includes establishing a track inspection and maintenance program, training its inspectors to identify non-compliant track conditions, making any necessary repairs, and maintaining accurate records of these actions. • Individual railroads establish the number of trains that travel per day and the times they are scheduled to travel. Federal Federal Highway Administration (FHWA) • Administers federally-funded programs, several of which are available for highway-rail crossing safety improvements. • Establishes standards for traffic control devices and systems at crossings and publishes them in the Manual on Uniform Traffic Control Devices (MUTCD). • The agency is part of the U.S. Department of Transportation (USDOT). Federal Railroad Administration (FRA) • Maintains the national Railroad Accident/Incident Reporting System that contains information reported by the railroads on all crossing collisions. • Serves as custodian of the National Highway-Rail Crossing Inventory that contains the physical and operating characteristics of each crossing. • Conducts field investigations of selected railroad collisions including crossing collisions. • Investigates complaints by the public pertaining to crossings and makes recommendations to the industry as appropriate. • Regulates rail safety in five disciplines, including tracks, signal and train control, operating practices, Study Session Meeting of December 13, 2010 (Item No. 3) Subject: Freight Rail Page 4 Agency/Entity Responsibility and Involvement mechanical equipment, and hazardous materials. • Issues regulations governing track, wayside signal and train control systems, highway-rail grade crossing automatic warning device systems, mechanical equipment (i.e. locomotives and rail cars) and railroad operating practices. • Enforces regulations regarding rail transport of hazardous materials issued by the Pipeline and Hazardous Materials Safety Administration (PHMSA). • Oversees railroad compliance of more than 2,000 regulations by conducting routine and targeted inspections, audits and special assessments of railroad operations. • Retains the right to issue compliance orders, special notices for repair, disqualification orders, injunctions and emergency orders. • Does not regulate the length of time a train may block a grade crossing. • FRA rail safety rules address standing (idling) trains that unnecessarily activate grade crossing warning devices such as flashing lights and gate arms. • Focuses on preventing rail trespassing, not enabling it by making the behavior safe. • Sponsors research into railroad and crossing safety issues. • The agency is part of the USDOT. Surface Transportation Board (STB) • Regulates interstate shipments of freight. • Resolves freight rate and rail service disputes. • Authorizes track abandonments. • Authorizes construction of new lines of rail except for sidings and spurs. • Authorizes mergers and creation of railroad companies. • Successor agency to the Interstate Commerce Commission. • The STB is an independent, bipartisan adjudicatory agency organizationally housed within the USDOT. Federal Transit Administration (FTA) • Administers federal funds for intracity transit projects. • Publishes an annual Safety Management Information System report that compiles and analyzes transit safety and security statistics reported through FTA’s National Transit Database (safety data include highway-rail grade crossing collisions). • The agency is part of the USDOT. Environmental Protection Agency (EPA) • Enforces air, water, and noise standards (the air and water standards are of general application to other industries, the noise standards are specific to railroad equipment and operations). State Minnesota Department of Transportation (Mn/DOT) • Responsible for developing the Minnesota Comprehensive Statewide Freight and Passenger Rail Plan (“State Rail Plan”). • Determines appropriate warning devices at -grade crossings. • The commissioner of transportation has the authority to order closure, vacation, relocation, consolidation, or separation of public at-grade crossings. • Administers the Railroad–Highway Grade Crossing Safety Improvement Program for the State of Minnesota. Minnesota Pollution Control Agency (MPCA) • Enforces clean air, ground, and water rules (the MPCA doesn’t enforce noise regulations, it measures noise levels for compliance with federal standards). Local Regional Railroad Authorities (RRA) • Promotes and preserves transit development and implement interim uses of rail corridors. • Owns railroad corridors. • Operates a railroad. County/Cities • Responsible for the design, construction, and maintenance of the roadway approaches to public at- grade crossings. • Negotiate with Railroads for crossing improvements. • Conduit for public funding of railroad projects. Sources: USDOT FHWA Railroad-Highway Grade Crossing Handbook—Revised Second Edition. FRA Fact Sheets for News Media. Study Session Meeting of December 13, 2010 (Item No. 3) Subject: Freight Rail Page 5 RAI LROAD SAFETY Railroad safety is complex and interwoven sets of rules developed by the railroad and the Federal agencies. There are three distinct areas of rule making: 1) Track Safety Standards, 2) Highway-Rail Grade Crossing Safety Standards, and 3) Train Operating Standards. This memorandum will only highlight these areas and is not a complete set of rules. Track Safety Standards The FRA track safety standards govern the condition of the track and provide a framework to determine what is safe and how to operate on track based on its condition. The FRA’s federal track safety standards generally focus on four main areas: • Track Structure: Rails, crossties, track switches, tie plates, and rail fastening systems • Track Geometry: Track gage, alignment, elevation, curvature, and track surface • Road Bed: Drainage and vegetation (vegetation cannot obstruct signs and signals ) • Track Inspection: Frequency and quality of inspection, special inspections, and recordkeeping For additional detail, please see the FRA Track Standards and Inspection Fact Sheet in Attachment B of this memorandum. Highway-Rail Grade Crossing Safety Standards Federal regulation defines a “highway-rail grade crossing” as a location where a public highway, road, street or private roadway crosses one or more railroad tracks at grade. A highway-rail grade crossing can either be public, private, or pedestrian. A public crossing is the location where railroad tracks intersect a roadway which is part of the general system of public streets and highways and is under the jurisdiction of and maintained by a public authority and open to the general traveling public. Usually both highway approaches to a public crossing are maintained by a public authority. A private crossing is a highway-rail crossing which is on a private roadway which may connect to the general system of public streets and highways but is not maintained by a public authority. Private crossings are found on farms and in industrial/commercial complexes or they provide access to recreational and residential areas. A pedestrian crossing is a separate designated intersection where pedestrians but not vehicles, cross a track. The USDOT FHWA Railroad-Highway Grade Crossing Handbook - Revised Second Edition divides highway-rail grade crossings into two components . Each component and corresponding elements is described in Table 2. Study Session Meeting of December 13, 2010 (Item No. 3) Subject: Freight Rail Page 6 Table 2 - Components of a Highway-Rail Grade Crossing Component Elements Description Highway Component Driver • Responsible for obeying traffic control devices, traffic laws, and the rules of the road. Vehicle • The design and operation of a railroad grade crossing must take into account the numbers and types of vehicles that can be expected to use it. Pedestrians • One difference between the driver and a pedestrian at a grade crossing is the relative ease with which a pedestrian can enter the trackway even if pedestrian gates are provided. Roadway • A major component of the crossing consists of the physical aspects of the highway on the approach and at the crossing itself. The following roadway characteristics are relevant to the design and control of highway-rail grade crossings: location (urban or rural); type of road (arterial, collector, or local); traffic volumes; geometric features (number of lanes, horizontal and vertical alignment, sight distance, crossing angle, etc.); crossing surface and elevation; nearby intersecting highways; and illumination. Traffic Control Devices • Traffic control systems for highway-rail grade crossings include all signs, signals, markings, and illumination devices and their supports along highways approaching and at railroad crossings at grade. The function of these devices is to permit safe and efficient operation of highway and rail traffic over crossings. Railroad Component Train • The design of traffic control systems at crossings must allow for a wide variation in train length, train speed, and train occurrence. Track • Track includes rail, ties, ballast, crossing surface, and sight distance. These provide the interface between the rail system and the road system. The railroad normally pays for this. Sources: USDOT FHWA Railroad-Highway Grade Crossing Handbook—Revised Second Edition. In the remainder of this section, the following elements are described in greater detail. • Traffic Control Devices • Pedestrians • Establishing a Quiet Zone Traffic Control Devices Element The Minnesota Manual on Uniform Traffic Control Devices (MUTCD) contains standards for traffic control devices that regulate, warn and guide road users along all roadways within the State of Minnesota. Warning devices installed at highway-railroad grade crossings can be either passive or active systems . Passive warning devices include advance warning signs and any combination of crossbucks, stop, and yield signs installed at the crossing. Active warning devices include any combination of advance warning signs in conjunction with any combination of flashing light signals (with or without gates), which are activated by a train approaching the crossing. Pedestrians Element The USDOT FHWA Railroad-Highway Grade Crossing Handbook - Revised Second Edition emphasizes that it is important to understand four contributing factors that may motivate pedestrians to enter railroad right -of-way (identified below) in order to establish effective preventive measures. 1) As a consequence of urban development, railroads often act as physical dividers between important, interrelated elements of communities. 2) Railroads have always attracted juveniles as “play areas.” Study Session Meeting of December 13, 2010 (Item No. 3) Subject: Freight Rail Page 7 3) At or near commuter stations, passengers frequently use short cuts before or after boarding a train. 4) Some people are prone to vandalism. The Handbook identifies several types of preventative measures that might be employed, including: • Fencing or Other Devices for Enclosing Rights-of-Way; • Grade Separation; • Additional Signing; • Safety Education; and • Surveillance and Enforcement. According to the FRA, the railroad operating environment is an inherently hazardous one for which railroad employees receive extensive safety awareness training. Trespassers do not have the benefit of this knowledge nor are they aware of current and pending train movements, and by failing to properly use designated crossing locations such as highway-rail grade crossings and dedicated pedestrian access paths, are susceptible to life-threatening injuries or death. Establishing a Quiet Zone Findings from the City’s Whistle Quiet Zone Assessment completed in 2006 indicate that three Quiet Zones are possible for the City (north CP track, south CP track, and east/west CP track). A Quiet Zone is a section of a rail line at least one half mile in length that contains one or more consecutive public highway-rail grade crossings at which locomotive horns are not routinely sounded. Under the Train Horn Rule, locomotive engineers must sound train horns for a minimum of 15 seconds, and a maximum of 20 seconds, in advance of all public grade crossings, except: • If a train is traveling faster than 45mph, engineers will not sound the horn until it is within ¼ mile of the crossing, even if the advance warning is less than 15 seconds. • If a train stops in close proximity to a crossing, the horn does not have to be sounded when the train begins to move again. • There is a “good faith” exception for locations where engineers can’t precisely estimate their arrival at a crossing. For additional detail, please see The “Train Horn” Final Rule Summary in At tachment C of this memorandum. Train Operating Standards Train operation rules directly involve how a train is operated including speed, dispatching, car inspection, locomotive inspections, train handling and rail car switching. These rules are complex and do not directly impact the City. RAILROAD RIGHT-OF-WAY REQUIREMENTS Railroad r ight -of-way is defined as property owned or controlled by a railroad. The needed right -of -way width is determined by the number of tracks, drainage requirements, embankment width, and available land. Typical railroad right -of-way is 100 feet, but could vary between 20 and 300 feet. Table 3 identifies the existing railroad right-of-way for the rail segments of interest within the City (see corresponding exhibit in Attachment D). Study Session Meeting of December 13, 2010 (Item No. 3) Subject: Freight Rail Page 8 Table 3 – Existing Railroad Right-of-Way for the Rail Segments of Interest Rail Segments of Interest Right-of-Way Description CP Rail MN&S Sub Between CP Rail Bass Lake Spur and BNSF Wayzata Subdivision Mainline • North of 27th Street width varies from 280 feet to include triangle shaped parcel formerly used for interconnect to BNSF mainline. • Righ t-of-way is 66 feet between 27th Street and Minnetonka Blvd, south of Minnetonka Blvd. • Right-of-way consists of several parcels varying in width from 34 feet to 145 feet with a typical width of approximately 100 feet. South of CP Rail Bass Lake Spur • North of 39th Street right-of-way is composed of several parcels varying in width from 80 to 153 feet. • Between 39th Street and Excelsior Blvd, right -of-way width is 66 feet constant. • South of Excelsior, right-of-way varies from 66 to approximately 164 feet. CP Rail Bass Lake Spur East of CP Rail MN&S Sub • The right-of-way over this segment is divided into two parallel parcels. • CP owns the south half (about 70 feet), and HCRRA owns the north half of this right-of-way (about 100 feet). • The total right-of-way width varies from 75 feet to 235 feet. West of CP Rail MN&S Sub • The right-of-way over this segment is divided into two parallel parcels. • CP owns the south half (about 70 feet), and HCRRA owns the north half of this right-of-way (about 100 feet). • The total right-of-way width is constant, measuring between 164 and 170 feet over this entire segment. CP Rail Interchange Track (Interconnect or Switching Wye) • There are only a few right-of-way parcels owned by the CP over the length of the interconnect. • Much of the segment is located within easements on private property. • The right-of-way that remains varies in width from 31 to 90 feet. Source: St. Louis Park Railroad Report, 1999. SEH, Inc. Clearance The minimum statutory vertical clearance between the railroad and highway is 22 feet. FHWA has a design standard of 23 feet and the railroads would prefer 24 or 25 feet. Mn/DOT has a standard of 16 feet 4 inches for roadways under a track. Local streets can be as low at 14 feet 6 inches. The minimum s tatutory horizontal width is 8 feet 6 inches on tangent track. It increases on curved track. This clearance standard is for areas such as a bridge pier, a loading dock or passenger station platform. Mainline track or frequently used areas need a larger safety or buffer zone. This buffer zone is not well defined in rules but 25 feet is a generally considered the minimum. This allows for space in an emergency but also for maintenance and drainage issues. The FRA is also using 25 feet as a minimum flagging distance for railroad employees. Flagging distance means that if a person is within that distance, they should know or be accommodated by someone that is aware of current train operations. EXISTING CONDITIONS The current role of St. Louis Park’s active railroad corridors is for freight movement. In general, trains run within private railroad right -of-way. This, and Federal statutes, allow railroad companies to set their own schedules and operate 24 hours a day, seven days a week, without City regulation. As stated on CP Railway’s website, the number of trains can change at any time – traffic can either increase or decrease, the number given is merely a snapshot in time. Table 4 provides an overview of current train operations. Study Session Meeting of December 13, 2010 (Item No. 3) Subject: Freight Rail Page 9 Table 4 – Existing Train Operations Rail Segments of Interest Description CP Rail MN&S Sub CP Railway • Operates one local train, round trip, 5 days per week (approximately 10-30 cars). TC&W (Trackage Rights) • TC&W is currently not running trains on the MN&S line. • TC&W currently has the right to operate on the MN&S corridor, both north to get to the Camden river terminal in north Minneapolis as well as south to get to the Savage river terminals. • TC&W also has the option of running north on the MN&S Sub to CP’s Humboldt yard to get into Minneapolis and St. Paul. CP Rail Bass Lake Spur CP Railway • N/A TC&W (Trackage Rights) • Regular Operations (5 days/week and 6 days/week) o 1 eastbound train (< 80 cars) bound for CP’s St. Paul Yard during the AM. o 1 eastbound train (~ 30 cars) bound for Minnesota Commercial’s Main Rail Yard in the Midway and Union Pacific’s Western Avenue Yard during the AM. o 2 westbound trains bound for Hopkins during the PM. • Longer “Unit” Trains (full trainloads of one commodity) o Ethanol = approximately 1 loaded and 1 empty ethanol unit train per week (typically 80 cars in length). o Coal = approximately 2 loaded coal trains per month (typically 123 cars in length). CP Rail Interchange Track (Interconnect or Switching Wye) CP Railway • Serves one industrial customer. TC&W (Trackage Rights) • TC&W uses this interchange point to reach the Camden river terminal in north Minneapolis (to the north) as well as the Savage river terminals (to the south). Due to current market conditions, this movement is not currently occurring but could resume if market conditions favoring movement of grain by barge develop. • TC&W also has the option of running north on the MN&S Sub to CP’s Humboldt yard to get into Minneapolis and St. Paul. • TC&W uses this interchange point for locomotive maintenance movements and to interchange with Progressive Rail Incorporated. Source: Twin Cities and Western Railroad Summary of Train Operations Memorandum (dated August 2010). MN&S Freight Rail Study Website and Project Management Team Materials. Existing and forecast train operations are discussed in greater detail in the Twin Cities and Western Railroad Summary of Train Operations Memorandum (dated August 2010) and the Frequently Asked Questions (FAQ) Section of the MN&S Freight Rail Study Website. A copy of both of these documents is included in Attachment E of this memorandum. Table 5 provides an overview of the existing conditions at each at-grade crossing for the rail segments of interest (see Attachment F for corresponding exhibit). Study Session Meeting of December 13, 2010 (Item No. 3) Subject: Freight Rail Page 10 Table 5 – At-Grade Crossing Summary for the Rail Segments of Interest Rail Segments of Interest Crossing # Location 24-Hour Traffic Count Crash History at Crossing (1999-2008) Existing Control Recent or Planned Improvements CP Rail MN&S Sub North of BNSF Wayzata Subdivision Mainline #854230K Cedar Lake Road 12,207 (2009) Rear -End Collision at Crossing (2006) Overhead Flashers None Between CP Rail Bass Lake Spur and BNSF Wayzata Subdivision Mainline #854231S W. 28th Street 1,303 (2009) None Stop Signs with Crossbucks None #854232Y W. 29th Street 109 (2004) None Stop Signs with Crossbucks None #854233F Brunswick Avenue (North) N/A (Pedestrians Only) None None Roadway Crossing Closed 2005. Pedestrian Crossing Constructed 2006. #854234M Dakota Avenue 4,583 (2009) Rear -End Collision at Gates (2006) Flashers and Gates Gates and New Concrete Surface Constructed 2005. #854235U Library Lane No Count Available None Flashers Programmed for Gate Installation in 2011/2012. #854236B Lake Street 4,017 (2009) Collision With Train (2002) Overhead Flashers #854237H Walker Street 2,805 (2009) None Flashers None South of CP Rail Bass Lake Spur #379742T Brunswick Avenue (South) N/A (Pedestrians Only) None None Roadway Crossing Closed 2003. Pedestrian Crossing Constructed 2004. #854241X Alabama Avenue 3,025 (2009) None Flashers Programmed for Gate Installation in 2011/2012. #854242E Excelsior Boulevard 25,500 (2007) None Overhead Flashers and Gates None #854243L W. 41st Street 976 (unknown) None Stop Signs with Crossbucks None #854244T W. 42nd Street 258 (unknown) None Stop Signs with Crossbucks None #854245A Brookside Avenue North 1,160 (unknown) Collision With Train (2007) Flashing Lights None #854246G Brookside Avenue South Unknown None Flashing Lights None CP Rail Bass Lake Spur East of CP Rail MN&S Sub #397741L & #185195B Wooddale Avenue 6,700 (2007) None Overhead Flashers and Gates None #187142J Ottawa Avenue 8,700 (unknown) None Overhead Flashers and Gates None West of CP Rail MN&S Sub None N/A N/A N/A N/A N/A CP Rail Interchange Track (Interconnect or Switching Wye) #379744G Oxford Street 3,300 (unknown) None Crossbucks None #379745N Louisiana Avenue 10,500 (2007) None Overhead Flashers None Source: Kimley Horn and Associates. FRA Office of Safety Analysis - Generate Crossing Inventory and Accident Reports. Study Session Meeting of December 13, 2010 (Item No. 3) Subject: Freight Rail Page 11 ENVI RONMENTAL REVIEW REQUIREMENTS Since railroads are privately owned, it is obvious that the sources of funds to operate, maintain, and improve a freight railroad are drawn from private capital. Public freight rail investment, as currently being proposed, can trigger federal and/or state environmental review requirements. It is also helpful to understand the interaction between the environmental review document(s) and the negotiated railroad agreement between HCRRA and the private freight rail companies. Federal Environmental Review Requirements The National Environmental Policy Act (NEPA) of 1969 requires that social, economic, and environmental (SEE) considerations be included in the planning of projects that receive federal funding. The NEPA process is actually an "umbrella" term for compliance with over 40 environmental laws, regulations, and executive orders. The extent of environmental studies and depth of analysis is dependent on the complexity of the project and its anticipated effects. The documentation may range from short environmental determination statements to extensive and complex studies with preparation of an Environmental Impact Statement (EIS). Listed below are the three classes of actions which prescribe the level of documentation required in the NEPA process. • Class I Actions: are those that significantly affect the environment and require an Environmental Impact S tatement (EIS). • Class II Actions: do not individually or cumulatively have significant environmental effects and are considered Categorical Exclusions (CE). Generally, no formal public involvement is required. • Class III Actions: are those not clearly Cla ss I or Class II, where the significance of the environmental impacts is uncertain; they require the preparation of an Environmental Assessment (EA) to assist in determining the need for an EIS. Should environmental analysis and interagency review during t he EA process find a project to have no significant impacts on the quality of the environment, a Finding of No Significant Impact (FONSI) is issued. Federal regulations have general thresholds established for identifying the process and documentation required. Since federal funds have not been identified for the possible rerouting of freight, the current project associated with the MN&S Freight Rail Study is not following a federally-funded project development path. Instead, t he MN&S Freight Rail Study includes preparation of a state Environmental Assessment Worksheet (EAW) for the proposed route to meet state environmental review requirements. It should be noted that any government unit with approval authority can order a discretionary EAW if it determines that the project may have the potential for significant environmental effects. The state’s environmental review program is based on the Minnesota Environmental Policy Act (MEPA) of 1973 which established a formal process for investigating the environmental impacts of major development projects. The consultant team for the MN&S Freight Rail Study is currently proposing to include a technical appendix with the state EAW that will outline the additional issues requiring evaluation to obtain federal environmental approval. The preparation of a federal environmental review document is likely to be necessary if federal funding becomes available for the project. State Environmental Review Requirements The state EAW document is designed to provide a brief analysis and overview of the potential environmental impacts for a specific project (emphasis added) and to help the R esponsible Governmental Unit or RGU (identified as Mn/DOT for the MN&S Freight Rail Study) determine whether a state Environmental Impact Statement (EIS) is necessary. The RGU is the governmental unit determined to have the greatest authority to approve or disapprove a project. The EAW consists of a standard list of 31 questions and is meant to set out the basic facts of the project’s environmental impacts to screen projects Study Session Meeting of December 13, 2010 (Item No. 3) Subject: Freight Rail Page 12 that may have the potential for significant environmental effects. The EAW is not meant to approve or disapprove a project, but is simply a source of information to guide other approvals and permitting decisions. The EAW is subject to a 30-day public review period before the RGU makes a decision about whether the project also needs a state EIS. Overall, the state EAW process consists of four basic steps: 1.) the project proposer supplies complete data to the RGU; 2.) the RGU prepares an EAW; 3.) the public comments during a 30-day period; and 4.) the RGU makes a decision about the need for an EIS, based on the EAW, comments received and comment responses. The following flow chart (Figure 1) describes the typical steps of the state environmental review commenting process. Figure 1 - Overview of the State Environmental Review Commenting Process Source: A Citizen’s Guide: Commenting on Environmental Review Projects. Environmental Quality Board. SOUTHWEST LIGHT RAIL TRANSIT (LRT) PROJECT HCRRA recommended LRT 3A or the Kenilworth-Opus-Golden Triangle alignment as the locally preferred alternative (LPA) in November 2009. The Metropolitan Council formally amended the region's long-range Transportation Policy Plan (TPP) at its meeting on May 12, 2010, completing the locally preferred alternative (LPA) selection process for the Southwest Transitway. Plans to implement LRT in the Kenilworth Corridor have assumed the removal of the freight rail tracks and the relocation of freight rail service. Throughout the LRT process, it has been disclosed that freight rail operations would be relocated under a separate action. The Southwest LRT Draft Environmental Impact Statement (DEIS) is currently under review by the FTA. Railroad Agreement between HCRRA and the Private Freight Rail Companies To facilitate the connection of TC&W to the east, HCRRA rehabbed the Kenilworth Corridor as a temporary route and facilitated an agreement between BNSF, CP, and TC&W to provide trackage rights into and through St. Paul. HCRRA is responsible for providing an acceptable alternative alignment to Document Preparation Complete An environmental review document is made ready for public notice. Notification in the Environmental Quality Board (EQB) Monitor The Responsible Governmental Unit (RGU) provides the necessary information to the EQB for a notice for publication in the EQB Monitor. The RGU must do this at least one week prior to the EQB Monitor’s next publication date. Public Comment Period Begins When the EQB Monitor is published, officially noticing the document’s availability, the public comment period begins. During this time interested parties can review the document and submit written comments to the RGU. Public Comment Period Ends, RGU Reviews Comments Once the public comment period is over, the RGU reviews all timely and substantive comments. The RGU determines whether it is necessary to make a substantive response to comments. RGU Response to Comments For an EAW, Draft EIS and Draft AUAR, the RGU is required to prepare a response to every timely and substantive comment it receives. RGU Makes a Decision Once the public comment period is complete and all comments have been evaluated, the RGU is always required to make an official decision regarding the environmental review process. RGU Distributes its Final Decision and its Response to Public Comments Once a final decision has been made, the RGU distributes a notice of the decision and a response to comments to individuals who submitted a timely and substantive comment. Study Session Meeting of December 13, 2010 (Item No. 3) Subject: Freight Rail Page 13 TC&W if they are required to relocate or seek to relocate from the current alignment for any reason. According to the agreement, any re-route must be a safe, economical, and efficient route for TC&W. ALTERNATIVES Freight rail studies that have been prepared to date include: • St. Louis Park Railroad Report, 1999. • Analysis of Coexistence of Freight Rail, Light Rail Transit (LRT) and Trail, August 2009. • TCWR Freight Rail Realignment Study, November 2009. • The Mn/DOT Statewide Freight Rail Plan, 2010. • Twin Cities and Western Railroad Summary of Train Operations, August 2010. • Freight Rail Study Evaluation of TCWR Routing Alternatives, Prepared for HCRRA, Prepared by Amfahr Consulting, November 2010. • Kenilworth Corridor: Analysis of Freight Rail / LRT Coexistence, Prepared for HCRRA, Prepared by R. L. Banks & Associates, Inc., November 2010. • MN&S Freight Rail Study (Currently Underway). The universe of alternative freight routes, based on the above studies, is identified in Table 6. Table 6 – Identified Universe of Alternative Freight Routes Primary Studies Alternative Freight Routes Freight Rail Study Evaluation of TCWR Routing Alternatives, Prepared for HCRRA, Prepared by Amfahr Consulting, November 2010. Western Connection Chaska Cut-Off Midtown Corridor Highway 169 Connector Kenilworth Corridor: Analysis of Freight Rail / LRT Coexistence, Prepared for HCRRA, Prepared by R. L. Banks & Associates, Inc., November 2010. Kenilworth Corridor - Scenario 1: All Three Grade Alignments At-Grade - Scenario 2: Trail Relocated - Scenario 3: Bicycle Trail on Structure - Scenario 4: LRT on Structure - Scenario 5: LRT in Tunnel - Scenario 6: Freight and LRT Share Use of Track - Scenario 7: LRT Single Track MN&S Freight Rail Study (Currently Underway) MN&S Sub Alignment Preliminary comments on the “Amfahr” and “R.L. Banks” freight rail studies are provided in Tables 7 through 9. Study Session Meeting of December 13, 2010 (Item No. 3) Subject: Freight Rail Page 14 Table 7 - Preliminary Comments on “Amfahr” Study Route Alternatives Western MN Connection Chaska Cut-Off Midtown Corridor Hwy 169 Connector Description Reroute All TC&W Traffic West Through Granite Falls On The BNSF Reroutes Traffic Thru Chaska On The Union Pacific Railroad Reestablish Freight Traffic In The 29th Street Corridor Reestablish Freight Traffic On BNSF Abandon Track From Hopkins To St. Louis Park Cost (millions) Construction R/W Total Cost ? $100.4 $9.8 $129.8 $192.8 $2.8 $195.6 $73.6 $38.0 $121.6 Positive • Current RR Alignments • Bypass of St. Louis Park • New Customers In Chaska • Acceptable RR Profile • Bypass of St. Louis Park Negative • Complete Change In TC&W Traffic Pattern • Acquiring Trackage Rights From BNSF • New Minnesota River Crossing • Profile Grade Issues • Acquisition of 25 Housing Units • Acquiring Trackage Rights From UP RR • Conflicts With Midtown Transit Options • Track Conditions East of River • Acquisition of 131 Housing Units • Acquiring Trackage Rights From BNSF Additional Information Needed? • Does a Rate Subsidy Make Sense? • Additional Cost Information • Additional Cost Information • Additional Cost Information • Additional Cost Information Comments • Additional Information On Traffic Patterns And Costs • Not Viable • Not Viable • Not Viable Study Session Meeting of December 13, 2010 (Item No. 3) Subject: Freight Rail Page 15 Table 8 – Preliminary Comments on “R.L. Banks” Study (Scenarios 1 – 4) Route Alternatives Scenario #1 Scenario #2 Scenario #3 Scenario #4 Description Freight Rail, SW LRT And Trail All In Same Corridor Freight Rail And SWLRT Same Corridor; Trail Relocated Trail Above SW LRT And Freight Rail SW LRT Above Freight Rail And Trail Cost (millions) Construction R/W Total Cost $30-38 $21 $51-59 $43-55 $65 $109-120 $71-88 $112-139 Positive • Minimum Disruption To TC&W RR • Minimum Disruption To TC&W RR • Minimum Disruption To TC&W RR • No Additional R/W Is Needed • Minimum Disruption To TC&W RR • No Additional R/W Is Needed Negative • Acquisition of 33 to 57 Housing Units1 • Complicates Station Areas • Parkland Impacts • No Grade Separation At Cedar Lake Parkway2 • Additional LRT Bridge • Acquisition of 117 Housing Units1 • Major Disruption To Trail System • Complicates Station Areas • Parkland Impacts • No Grade Separation At Cedar Lake Parkway • Additional LRT Bridge • No Grade Separation At Cedar Lake Parkway • Complicates Station Areas • Isolated Trail • Visual Impact • No Grade Separation At Cedar Lake Parkway • Complicates Station Areas • Expensive • Visual Impact Over Lake Street Additional Information Needed? • Detailed Cost Estimates • Detailed Cost Estimates • Detailed Cost Estimates • Detailed Cost Estimates Comments • Assumes LRT Was Fixed Alignment • Freight Track On West Side • Additional Study Needed If LRT Alignment Can Be Adjusted • Assumes LRT Was Fixed Alignment • Freight Track On East Side • Additional Study Needed If LRT Alignment Can Be Adjusted • Freight Track On West Side • Not Viable • Freight Track On West Side • Not Viable 1 Source: Kenilworth Corridor: Analysis of Freight Rail / LRT Coexistence, R. L. Banks & Associates, Inc., November 2010. 2 Notes: Southwest LRT current plans show grade separation at Cedar Lake Parkway. Study Session Meeting of December 13, 2010 (Item No. 3) Subject: Freight Rail Page 16 Table 9 – Preliminary Comments on “R.L. Banks” Study (Scenarios 5 – 7) Route Alternatives Scenario #5 Scenario #6 Scenario #7 Description SW LRT In Tunnel; Freight Rail And Trail On Grade Freight Rail And SW LRT Share Track And Trail SW LRT On One Track; Freight Rail On One Track And Trail Cost (millions) Construction R/W Total Cost $203-230 $35-43 $31-38 Positive • Minimum Disruption To TC&W RR • No Property Acquisition • No Additional R/W Is Needed • Minimum Disruption To TC&W RR • No Additional R/W Is Needed Negative • No Grade Separation At Cedar Lake Parkway • Complicates Station Areas • Ground Water Issues • Very Expensive • No Grade Separation At Cedar Lake Parkway • Complicates Station Areas • Additional LRT Bridge • Major Disruption To TC&W Schedule • No Grade Separation At Cedar Lake Parkway • Complicates Station Areas • Additional LRT Bridge • Major Impact to LRT Capacity/Operations Additional Information Needed? • Detailed Cost Estimates • Detailed Cost Estimates • Detailed Cost Estimates Comments • Freight Track On West Side • Not Viable • Freight Track On West Side • Freight Trains Allow For 3 Hours/Day In Early Morning • Not Viable • Freight Track On West Side • Not Viable NEXT STEPS Although the three HCRRA studies have different levels of detail and analysis, it is possible to narrow down the viability of some options. Our review of the 12 options suggests that only four are reasonable options for further study. The four options ar e: 1. Co-locating the freight rail, LRT and trail in the Kenilworth Corridor 2. Locating freight and LRT in the Kenilworth Corridor and relocating the commuter regional trail to another corridor 3. Freight rate subsidies for TC&W to operate to the west of the Twin Cities 4. Relocate the freight traffic to the MN&S corridor. In the Kenilworth Corridor the unanswered question is developing the best alignment for a combined freight track and LRT track in the same corridor. The current alignment was designed to provide the best alignment for the LRT. After this is established the issues of right of way, trail location, parkland impacts can be evaluated. The freight rate subsidy options needs to be quantified. How much would it really cost? The study of the reroute onto the MN&S corridor is ongoing and the impacts are not defined at this time. The additional information that will need to be evaluated includes: • What width is needed for freight rail, LRT and the regional trail? • What right of way is available in the Kenilworth Corridor? Study Session Meeting of December 13, 2010 (Item No. 3) Subject: Freight Rail Page 17 • What are the parkland (4f) issues and can they be mitigated? • How does the presence of freight rail affect the design and operation of the LRT stations? • Understanding of the costs of freight rail and LRT and how it will be split? • What is the cost of a freight rail subsidy and how to pay for it? • How does the freight rail location affect the development and redevelopment within the City? • How do these alternatives affect other stakeholders outside of the City? • What is the long-term implication of each of these alternatives? The goal is the successful implementation of the Southwest LRT with as little freight impact to St. Louis Park. Attachments • Attachment A: Railroads and Cities, League of Minnesota Cities (LMC) Informational Memorandum (May 2004) • Attachment B: FRA Track Standards and Inspection Fact Sheet • Attachment C: The “Train Horn” Final Rule Summary • Attachment D: Existing Railroad Right-of-Way Ownership Map • Attachment E: Twin Cities and Western Railroad Summary of Train Operations Memo (August 2010) & MN&S Freight Rail Study Website - Frequently Asked Questions Section (Existing and Forecast Train Operations) • Attachment F: Existing At-Grade Railroad Crossings Map sbt s:\pt\s\stlou\114331\sam\tech memo #1\seh memo 120810.docx Study Session Meeting of December 13, 2010 (Item No. 3) Subject: Freight Rail Page 18 Attachment A Railroad and Cities, League of Minnesota Cities Informational Memorandum (May 2004) Study Session Meeting of December 13, 2010 (Item No. 3) Subject: Freight Rail Page 19 GOVERNING & MANAGING INFORMATION Railroads and Cities 465.1 May 2004 The League of Minnesota Cities provides this publication as a general informational memo. It is not intended to provide legal advice and should not be used as a substitute for competent legal guidance. Readers should consult with an attorney for advice concerning specific situations. © 2007 League of Minnesota Cities All rights reserved Study Session Meeting of December 13, 2010 (Item No. 3) Subject: Freight Rail Page 20 Railroad Highlights 1. Who regulates railroads? V A number of state and federal agencies regulate railroads. Cities also have some limited ability to regulate railroads. The following federal agencies regulate trains: • Federal Railroad Agency (FRA) • Surface Transportation Board (STB) • Federal Highway Administration (FHWA) • National Transportation Safety Board (NTSB) • Environmental Protection Agency (EPA) Railroads are also regulated at the state level. The following state agencies regulate railroads: • Minnesota Department of Transportation, Office of Freight, Railroads and Waterways (OFRW) • Minnesota Pollution Control Agency (MPCA) Local jurisdictions, such as cities, counties, and towns, also have some ability to regulate certain aspects of railroads. But this authority is rather limited because of the degree to which the federal and state agencies have control. 2. Can cities ban train horns? ;Ò A city cannot ban the use of locomotive horns, unless the city follows procedures in the federal train horn rule. This interim federal rule regulating the use of locomotive horns was published on Dec. 18, 2003. It will take effect on Dec. 18, 2004. The rule requires that locomotive horns be sounded at virtually all public highway-rail crossings in the United States. Any community in the country can keep an existing quiet zone or establish new quiet zones if all the complex procedures described in the rule are followed correctly. FRA approval may be required for either pre-rule quiet zones or new quiet zones. The federal rule pre-empts state and local regulations regarding the use of train horns. 3. Can cities regulate noise from trains? Most noise regulation for railroads occurs at the federal level. Cities probably have little authority to regulate in this area. !! 2 League of Minnesota Cities Study Session Meeting of December 13, 2010 (Item No. 3) Subject: Freight Rail Page 21 4. Can cities zone railroad property? Cities may enforce zoning regulations on some railroad property. Generally, a city may impose its zoning regulations on land that is not being used for railroad purposes. However, cities are more limited in their ability to regulate land that is being used for railroad purposes. 5. Can cities regulate train speed? W Cities appear to have little ability to regulate train speeds. Maximum speeds that are allowed on tracks are set by the FRA. State statute allows the Minnesota Department of Transportation (Mn/DOT) to set safe speeds at crossings, but some believe this authority is pre-empted by the federal regulations. 6. Whose responsibility is it to maintain and pay for grade crossings? Railroads are responsible for maintaining and repairing railroad grade crossings and their surfaces. The costs to improve, repair or maintain a grade crossing may be shared jointly with the owner or lessee of the track, the road authority having jurisdiction over the public highway involved and funds available from Mn/DOT. Cities are responsible for costs to improve, repair or maintain sidewalks adjacent to highway-rail crossings. 7. Can cities tax railroad property? s Property owned by railroads is taxable, but the procedure for taxing such property varies depending on how the land is used. If the land is not used for railroad purposes, the valuation and taxing procedure is the same one that the city would use for other property within the city. If the land is used for railroad purposes, the process is different. The Department of Revenue determines the market value of the land using a complex formula. The values are apportioned to local taxing jurisdictions and certified to each respective county after an equalization formula has been applied. The taxing jurisdictions then proceed in the same manner as they would for other property in the city. 8. Can special assessments be put on railroad property? Cities may levy special assessments against railroad property for the cost of improvements that benefit that property. Notice must be given to the railroad in the same manner as other property owners, and the assessment amount cannot exceed the value that the improvement has to the property. $ Railroads and Cities 3 Study Session Meeting of December 13, 2010 (Item No. 3) Subject: Freight Rail Page 22 9. Can the cost of abating a nuisance be levied against railroad property and collected with its property taxes? Sometimes railroad property can fall into disrepair or become a dumping ground for appliances or trash. These conditions can become a threat to public health. Cities can address such situations in their nuisance ordinances and require that the property be cleaned up. The city may also provide that it will abate the nuisance if it is not cleaned up and bill the railroad for the cost of the cleanup. The city’s ordinance may provide for making unpaid service charges to abate nuisances a special assessment against the property. 10. Who can put traffic signs at railroad crossings? All traffic signs and signals must be approved by Mn/DOT before they can be installed at railroad crossings. Signs and signals must meet certain criteria for signs and signals found in the Manual on Uniform Traffic Control Devices. 11. Who is liable for accidents at railroad crossings? Responsibility for accidents at railroad crossings is a fact determination that must be made for each individual accident after considering the specific circumstances of the incident. The federal train horn rule is intended to remove liability from the railroads for failure to sound the horn at highway-rail crossings within a quiet zone. However, since damages and losses from such accidents are usually substantial, everyone who might have contributed to the circumstances will probably be included in a lawsuit. This could include the railroad, the owners of any property that is damaged, anyone who was injured or killed (or one of their relatives), the manufacturer of whatever was being transported by the railroad, and quite possibly the city, among others. / 12. What can city officials do to help residents who have complaints about railroads? If the complaint deals with an area that is controlled by federal or state law, city officials should communicate this fact to the resident. The complaining person should be provided with the name and phone number of both the railroad and the appropriate regulatory agency so he or she can contact them with their complaint. In addition, the city should contact the railroad directly to make it aware of the complaint. Even in areas where a city is without formal regulatory powers, a railroad will want to maintain good relations with the community. 4 League of Minnesota Cities Study Session Meeting of December 13, 2010 (Item No. 3) Subject: Freight Rail Page 23 City officials might also suggest the person contact his or her state or federal lawmaker about changes to existing legislation. Cities can also work towards encouraging such legislative changes. If the complaint deals with an area where the city has power to regulate, the city can contact the railroad about remedying the situation. If an agreement cannot be reached with the railroad, the city could consider passing and/or enforcing an ordinance. 13. Where can cities get further information? The League of Minnesota Cities has other information that discusses issues relating to railroads. Call the League’s Research and Information Service at (651) 281-1200 or (800) 925-1122 for further information. Railroads and Cities 5 Study Session Meeting of December 13, 2010 (Item No. 3) Subject: Freight Rail Page 24 Table of Contents ......................................................................................................................... 2 Railroad Highlights Part I. ..................................................................................................................... 7 Introduction ........................................................................................... 7 Part II.Railroad regulatory agencies ......................................................................................................................... 7 B.Federal ............................................................................................................................. 8 C.State ........................................................................................................... 8 D.Local regulation ....................................................................................................... 9 Part III.Railroad crossings E. ......................................................................................................... 9 Bridges and tunnels ............................................................................................................. 10 F.Grade crossings ......................................................................................................................... 12 G.Safety Part IV. .......................................................................................................................... 13 Noise ................................................................................................................ 14 H.Train horns ............................................................................................................ 17 I.Other train noise ..................................................................................................................... 18 J.Scheduling ............................................................................................................................. 18 Part V.Speed ............................................................................................... 19 K.Grade crossing speeds L. .................................................................................................................. 19 Track speeds M. ........................................................................................................... 20 Signal systems ........................................................................................................ 20 N.Contents of train Part VI. ................................................................................................... 21 Railroad equipment ............................................................................................................ 21 Part VII. Railroad property ........................................................... 21 O.Acquisition and disposal of railroad property ................................................................. 22 P.Condemnation of railroad property by cities ............................................................................................................ 23 Q.Property taxes ................................................................................................... 24 R.Special assessments .................................................................................. 25 S.Maintenance of railroad property T. ........................................................................................................................... 26 Zoning ................................................................................................ 28 Part VIII.Railroad emergencies ........................................................................................... 28 U.Response to emergencies ..................................................................................................................... 29 V.Liability 6 League of Minnesota Cities Study Session Meeting of December 13, 2010 (Item No. 3) Subject: Freight Rail Page 25 Part I. Introduction Railroads have played an important role in the development of the United States and in the growth of Minnesota. When trains first reached the western U.S., the population of the West Coast exploded as people could now travel faster and more efficiently. Freight trains made it easier to ship products and the mining, logging, and agriculture industries began growing rapidly. Today, freight trains are an important means of transporting large amounts of goods to various shipping ports that link many Minnesota businesses to the world market. With growth, however, problems can also arise. As cities grow and more trains run through cities more frequently, traffic congestion and noise can become issues. This memo discusses many of the more common concerns cities must deal with when a railroad runs through city limits. It also outlines many of the areas in which federal and state agencies regulate railroads, and the ways in which cities may regulate railroad issues within their communities. Many different types of railroads operate within Minnesota. Railroads are classified as Class I, Class II or Class III, with Class I railroads having the larger operating revenues. The Surface Transportation Board (STB) determines the classification of each railroad based upon its annual operating revenues. These classifications are used for accounting and reporting standards. Regional and short-line railroads are lighter density lines that have been spun off by a Class I carrier. 49 C.F.R. § 1201.1 – 1. See Information about Minnesota’s Railroads www.dot.state.mn.us/ofrw/ railroads.html. Part II. Railroad regulatory agencies The railroad industry is regulated at various levels. Although primarily controlled at the federal level, the state also has jurisdiction in some situations. Local regulation is more limited. B. Federal Many federal regulatory agencies regulate railroad equipment and operations. The following agencies are among those that commonly regulate railroads: • Federal Railroad Administration (FRA). The FRA regulates rail safety in five disciplines, including tracks, signal and train control, operating practices, mechanical equipment, and hazardous materials. The FRA is part of the U.S. Department of Transportation. The FRA can be contacted at 1-800-724-5040. Railroads and Cities 7 Study Session Meeting of December 13, 2010 (Item No. 3) Subject: Freight Rail Page 26 • Surface Transportation Board (STB). The STB has jurisdiction over many different areas. The important ones relating to railroads include railroad rate and service issues, rail restructurings (such as mergers and line sales, construction, and abandonment), and some related labor issues. The STB can be contacted at (202) 565-1500. • Federal Highway Administration (FHWA). The FHWA maintains several highway safety programs and funds to improve railway- crossing safety. This office is primarily responsible for administering federal funds to help with these costs. The agency is part of the U.S. Department of Transportation. The FHWA can be contacted at (651) 291- 6100. • National Transportation Safety Board (NTSB). The NTSB is responsible for independent accident investigation in several areas. With regard to railroads, the NTSB investigates accidents in which there is a fatality or substantial property damage or accidents that involve a passenger train. It also investigates highway accidents, including railroad crossing accidents. The NTSB can be contacted at (630) 377- 8177 or (202) 314-6000. • Environmental Protection Agency (EPA). The EPA enforces air, water, and noise standards. The air and water standards are of general application to other industries, but the noise standards are specific to railroad equipment and operations. The EPA can be reached at 1-800-621-8431. C. State The following state agencies are also involved in regulating railroads: • Office of Freight, Railroads and Waterways (OFRW). This office deals with a number of railroad areas, including track repair and removal, accident reports, railroad/traffic signals, grade crossing safety, signs, signals, and surfaces, among others. This office is part of the Minnesota Department of Transportation (Mn/DOT) and also part of the Office of Freight and Commercial Vehicle Operations (OFCVO). Contact Mn/DOT at (612) 296-3000 or (800) 657- 3774 or (800) 627-3529 (TTY) or the League for the name and phone number of individuals within OFRW and their area of specialty. The MPCA can be contacted at (651) 296-6300 or 800- 657-3864 or TTY 651-282- 5332. • Minnesota Pollution Control Agency (MPCA). The MPCA enforces clean air, ground, and water rules. Although it doesn’t enforce noise regulations, it does measure noise levels for compliance with federal standards. D. Local regulation Regulation at the local level is generally rather limited. However, cities currently appear to have some ability to regulate the following areas: 8 League of Minnesota Cities Study Session Meeting of December 13, 2010 (Item No. 3) Subject: Freight Rail Page 27 Use of locomotive horns. A federal rule published Dec. 18, 2003, and effective Dec. 18, 2004, pre-empts state or local government regulations as to the use of locomotive horns. However, a city can maintain a qualified existing quiet zone or establish a new quiet zone by following all the complex procedures set out in this federal train rule. A quiet zone is a section of a rail line that contains one or more consecutive public crossings at which locomotive horns are not routinely sounded. See Part IV - A - Train horns. • Special assessments. Cities can use special assessments to collect the costs of improvements that will benefit railroad property. The amount assessed may not exceed the increase in the market value of the property as a result of the improvement. The cost of nuisance abatement may also be collected using special assessments. See Part VII - D - Special assessments and E - Maintenance of railroad property. See Part VII - C - Property taxes. • Property taxes. Cities can collect property taxes from railroad property, but the valuation of the property is done by the state in most circumstances. See Part VII - F - Zoning. • Zoning. Cities can enforce their zoning regulations against some types of property owned by railroads. Generally, a city cannot use its zoning regulations to prohibit property being used for railroad operating purposes, but other non-operating property may be made to comply with local zoning regulations. Part III. Railroad crossings Railroads cross other public rights-of-way in different fashions. The most common is the grade crossing, where the railroad and the highway/street share an intersection at the same level. In addition to this type of crossing, there are overpasses (where the railroad passes above the street or highway) and underpasses (where the railroad passes beneath the street or highway). This memo only addresses public crossings, although the information may also apply to private rail crossings. E. Bridges and tunnels If a grade crossing is found to be hazardous, the commissioner of Mn/DOT may order several remedies. Two of these options are to separate the grade and provide either an underpass (tunnel) or an overpass (bridge) for the tracks. The commissioner of Mn/DOT will also determine the cost of installing and maintaining such structures. The cost is usually divided between the railroad authority and the road authority (city, town or county). Minn. Stat. § 219.40, subd. 1. Also see Part III - B - 7 - Dangerous crossings—how to proceed. Railroads and Cities 9 Study Session Meeting of December 13, 2010 (Item No. 3) Subject: Freight Rail Page 28 F. Grade crossings According to Mn/DOT, there are 5,093 public rail crossings and 3,254 private rail crossings in Minnesota. State statute defines a “grade crossing” as the intersection of a public highway and the tracks of a railroad on the same plane or level. This definition does not include street railways within a city’s limits. Minn. Stat. § 219.16. Federal regulation defines a “highway-rail grade crossing” as a location where a public highway, road, street or private roadway crosses one or more railroad tracks at grade. This definition also includes sidewalks and pathways that cross railroad tracks. 49 C.F.R. § 234.5. Cities retain the primary duty and responsibility with respect to the maintenance and repair of public sidewalks in the right of way adjacent to a highway-rail grade crossing. A city should adopt a policy for street and sidewalk maintenance, inspection, and repair and follow their policy. For more information, see the LMCIT information memo, “Streets and Sidewalks.” Sternitzke v. Donahue’s Jewelers, 83 N.W.2d 96 (1957); Donalk v. Moses, 94 N.W.2d 255 (1959); Kopveiler v. Northern Pac. Ry. Co., 160 N.W.2d 142 (Minn. 1968). 1. New grade crossings The commissioner of Mn/DOT must approve all new grade crossings. The city and the railroad can agree to the new crossing and then seek approval from the commissioner. If the city and the railroad cannot agree, either can file a petition with the commissioner to decide on any of the following matters: Minn. Stat. § 219.072; .Minn. R. § 8830.2700 • Whether a new crossing is needed. • Where the new crossing should be located. • The type of warning devices required. The petition must set forth the facts and submit the matter to the commissioner for determination. The commissioner will give reasonable notice to hold a hearing and issue an order determining the matters submitted. If the commissioner approves the new grade crossing, he or she may also direct that the costs be divided between the railroad company and the city as the parties may agree. If the city and the railroad do not agree on the division of costs, the commissioner may determine the amount on the basis of benefit to each. Mn/DOT is seeking to reduce the number of grade crossings in the state. Because of this, it may be difficult for cities to get approval of a new grade crossing. Minn. Stat. § 219.073. 10 League of Minnesota Cities Study Session Meeting of December 13, 2010 (Item No. 3) Subject: Freight Rail Page 29 2. Changes of grade State law also sets requirements for grade crossing changes. When a railroad company changes or raises the grade of its tracks at a crossing, it must also grade the approaches on each side in order to make the approach and crossing of the tracks safe for vehicles. Minn. Stat. § 219.08. 3. Grade crossing improvements The Federal Highway Administration (FHWA) has adopted a regulation providing that federal aid projects for grade crossing improvements do not require railroads to share in the cost of improvements. 23 C.F.R. § 646.210 (b). The regulation also states that state laws requiring railroads to share in the cost of work for the elimination of hazards at railroad crossings do not apply to federal aid projects. 23 C.F.R. § 646.210 (a). 4. Maintenance/upgrades It is the responsibility of the railroad (both the owner and the lessee) to keep a grade crossing surface safe and passable for vehicles in a manner consistent with federal track safety standards. Minn. Stat. § 219.071, subds. 1, 2. If a grade crossing surface needs improvement, repair or maintenance, the work may be paid jointly by the railroad company, its lessee, the road authority, and available state and federal funds. 5. Closing crossings In recent years, Mn/DOT has sought to reduce the number of grade crossings in Minnesota. Minn. Stat. § 219.073. Public bodies and railroad companies may agree to the vacation, relocation, consolidation or separation of grades at grade crossings. If they cannot agree on the relocation, manner of construction, or a reasonable division of expenses, either may file a petition with Mn/DOT, which will hold a hearing to make a determination. Minn. Stat. § 219.074. 6. Signs and signals State statute requires that a railroad company must maintain a proper and conspicuous sign wherever its lines cross a public road. If a railroad fails to do this, it must pay $10 for each day it fails to meet the requirement. The money must be paid to the municipality with authority over the public road the railroad crosses. Minn. Stat. § 219.06. Mn/DOT regulates railroad warning signs and crossing stop signs. Municipalities must get permission from Mn/DOT in order to install a new sign or to remove an existing sign. It is a crime to remove, damage or destroy any railroad sign or device without permission from Mn/DOT. Minn. Stat. §§ 219.17 -.20; ; . Minn. Stat. § 219.26 Minn. Stat. § 219.30 Railroads and Cities 11 Study Session Meeting of December 13, 2010 (Item No. 3) Subject: Freight Rail Page 30 A stop sign is required at each grade crossing if necessary for the reasonable protection of life and property. The commissioner of Mn/DOT determines whether conditions exist that make it necessary for people to stop before the crossing. A city may submit a petition to the commissioner if it would like a stop sign installed at a crossing. Minn. Stat. § 219.20. The Mn/DOT commissioner also has the power to determine if safety issues warrant the railroad installing additional devices or signals. However, the public authority responsible for safety and maintenance of the roadway that crosses the railroad tracks may install additional or alternative safety measures to maintain an existing quiet zone or establish a new quiet zone subject to the federal train horn rule. Local authorities must notify all involved well before installing additional or alternative safety measures at a grade crossing. Minn. Stat. § 219.24. See Part IV-A Train Horns 1. Federal Train Horn Rule. The Mn/DOT commissioner may designate additional warning sign requirements if necessary for the protection of life and property. If an additional warning sign is required, the road authority pays the cost and maintenance of the sign. Minn. Stat. § 219.19. The U.S. Dept. of Transportation regulates signal systems to ensure the safe maintenance, inspection, and testing of signal systems and devices at railroad highway grade crossings. The regulation is done through the Surface Transportation Board (STB) and the Federal Railroad Administration (FRA). 49 U.S.C.A. § 20504; 49 U.S.C.A. § 20134 (b); 49 C.F.R. § 234.1-234.6. 7. Dangerous crossings—how to proceed The commissioner of Mn/DOT may investigate and determine whether a railroad crossing over a street or public highway is dangerous to life and property. If the crossing is found to be dangerous, the commissioner may order the crossing protected in any reasonable manner, including requiring the railroad to separate the grades. Minn. Stat. § 219.14. City councils, county boards, township boards, and railroad companies may submit petitions asking the commissioner to determine if a railroad crossing a street or highway appears to be dangerous to life and property. The petition must give reasons for the allegation. Upon receiving the petition, the commissioner must investigate the matters contained in the complaint and, when necessary, initiate a hearing. Minn. Stat. § 219.39. G. Safety Safety is an important issue to railroads, public roadway authorities, and the general public. Sight lines, obstructions to view and traffic, and maintenance of the crossing and its signs and signals are important for ensuring safety. Also see Part VIII - B – Liability. 12 League of Minnesota Cities Study Session Meeting of December 13, 2010 (Item No. 3) Subject: Freight Rail Page 31 1. Sight lines/view Railroads are generally responsible for keeping obstructions from blocking the view of motorists or pedestrians who will cross their tracks at railroad crossings. The governing body of a municipality may require the removal of an obstruction to a railroad right-of-way in order to provide an adequate view of oncoming trains at a railroad crossing. Removal of such obstructions may be required of any of the following: Minn. Stat. § 219.384, subd. 1. • The railroad company. • The road authority. • An abutting property owner. The municipality must give written notice that the obstruction interferes with the safety of the public traveling across the railroad crossing. Minn. Stat. § 219.384, subd. 1. If the obstruction is not removed within 30 days after the written notice, a fine may be imposed. The amount of the fine is $50 for each day the situation remains uncorrected, and may be recovered in a civil court action. Minn. Stat. § 219.384, subd. 2. 2. Signals The U.S. Department of Transportation has adopted regulations to ensure safe maintenance, inspection, and testing of signal systems and devices at railroad highway grade crossings. The state also regulates the installation of signs and signals at grade crossings. 49 U.S.C.A. § 20134 (b); 49 C.F.R. § 234.1-234.6. See discussion in previous section. 3. Traffic obstruction A railroad is prohibited from allowing a standing train, car, engine or other railroad equipment to block a grade crossing for longer than 10 minutes. This prohibition does not apply in First Class cities that regulate street obstruction by ordinance. Minn. Stat. § 219.383, subd. 3. Part IV. Noise Residents who live near railroad right-of-ways sometimes complain about noise and vibration from railroads. Federal or state laws pre-empt local control of these issues. However, the train horn rule, discussed in the next section, now provides an opportunity for cities to mitigate the effects of train horn noise by establishing new “quiet zones.” The rule also details actions communities with pre-existing “whistle bans” can take to preserve the quiet they are accustomed to. Railroads and Cities 13 Study Session Meeting of December 13, 2010 (Item No. 3) Subject: Freight Rail Page 32 H. Train horns Train horns are warning devices used to signal railroad employees and others. They are used to warn the public that a train is approaching a crossing. They are also used to tell railroad employees what the engineer is about to do (stop, back up, pull forward, etc.). Engineers blow their locomotive horns at all public crossings unless a city has passed an ordinance to prohibit the practice. The train horn rule, a federal rule, published Dec. 18, 2003, and effective Dec. 18, 2004, pre-empts city ordinances that prohibit the sounding of locomotive horns unless the city has met the rule’s extensive criteria to either maintain an existing quiet zone or establish a new quiet zone. See Part IV - Federal Regulations. Minn. Stat. § 219.166 preempted by 49 C.F.R. § 222.7. 1. Federal regulation The train horn rule, a federal regulation published on Dec. 18, 2003, and effective on Dec. 18, 2004, requires that locomotive horns be sounded at virtually all public, highway/rail at-grade crossings in the United States. The rule contains additional provisions that set a maximum sound level for locomotive horns and limits sound directed to the side. 49 C.F.R. § 222. The rule does not apply to the use of locomotive horns on: 49 C.F.R. § 222.5. • A railroad that exclusively operates freight trains on track that is not part of the general railroad system of transportation. 49 C.F.R. § 222.5. • Passenger railroads that operate at a maximum speed of 15 miles per hour and only on track that is not part of the general railroad system of transportation. 49 C.F.R. § 222.5. • Rapid transit operation within an urban area that is not connected to the general railroad system of transportation. The basic premise of the train horn rule is to permit quiet zones only if overall safety is equivalent to crossings where train horns are sounded. The two types of quiet zones allowed under the rule are new quiet zones or pre- rule quiet zones. Some information on each type of quiet zone is provided below. However, cities must work with the city attorney and the FRA to ensure that a particular quiet zone complies with the detailed requirements of the rule. 49 C.F.R. § 222, Appendix C Guide to Establishing Quiet Zones. Tammy Wagner, Region 4 Highway Crossing Manager 1-800-724-5040. 49 C.F.R. § 222.39. 2. New quiet zone In order for a quiet zone to be qualified under this rule, the lack of the train horn must not present a significant risk with respect to loss of life or serious personal injury, or the significant risk must have been compensated for by other means. The rule provides four basic ways in which a quiet zone may be established. 49 C.F.R. § 222, Appendix C. • One or more supplemental safety measures as identified in the rule are installed at each public crossing in the quiet zone. 14 League of Minnesota Cities Study Session Meeting of December 13, 2010 (Item No. 3) Subject: Freight Rail Page 33 • The quiet zone risk index is equal to, or less than, the nationwide significant risk threshold without implementation of additional safety measures at any crossings in the quiet zone. • Additional safety measures are implemented at selected crossings resulting in the quiet zone risk index being reduced to a level equal to, or less than, the nationwide significant risk threshold. • Additional safety measures are taken at selected crossings resulting in the quiet zone risk index being reduced to at least the level of risk that would exist if train horns were sounded at every public crossing in the quiet zone. The supplementary and alternative safety measures, which a local government most likely will have to pay for, must comply with extensive requirements of Appendix A and B of the rule. 49 C.F.R. § 222, Appendix A and B. The FRA has created the “Quiet Zone Calculator,” a web-based tool that allows local jurisdictions to research the feasibility of creating a quiet zone in their community that complies with FRA’s train horn rule. City planners, traffic engineers, and other transportation professionals are the anticipated users of the calculator. Quiet Zone Calculator www.fra.dot.gov/Content3.asp ?P=1337. The Quiet Zone Calculator allows users to access the FRA-maintained national grade crossing inventory and FRA highway-rail grade crossing accident records, select a series of crossings, test proposed safety implementation plans that are in compliance with the horn rule, and generate summary reports. The user will be able to create multiple scenarios for new quiet zones as well as for zones that already have a whistle ban. See “Pre-rule quiet zones” discussion in next section. The calculator will determine the risk level for the proposed quiet zone corridor. The risk level will then be evaluated to determine whether quiet zone criteria have been met. If not, supplemental safety measures can be applied to reduce the risk until the criteria have been met. 1. Pre-rule quiet zones A pre-rule quiet zone is a quiet zone that contains one or more consecutive grade crossings subject to a whistle ban that has been actively enforced or observed as of Oct. 9, 1996, and Dec. 18, 2003. 49 C.F.R. § 222, Appendix C Guide to Establishing Quiet Zones. The rule treats pre-rule quiet zones slightly differently than new quiet zones. This is a reflection of the fact that some communities have restricted train horns sounding in their jurisdiction for quite some time and wish to continue that restriction. According to the FRA, there are a number of cities in Minnesota with existing whistle bans that may qualify as a pre-rule quiet zone. Cities with an existing whistle ban that wish to maintain the whistle ban as a pre-rule quiet zone, should work with the city attorney to meet the extensive requirements for a pre-rule quiet zone. Railroads and Cities 15 Study Session Meeting of December 13, 2010 (Item No. 3) Subject: Freight Rail Page 34 The rule provides that an existing whistle ban may qualify for automatic FRA approval as a pre-rule quiet zone in one of three ways: See Status of Existing Whistle Bans www.fra.dot.gov/Content3.asp ?P=1390. • By installing a supplemental safety measure (SSM) at each public crossing in the quiet zone. • By having a quiet zone risk index that is equal to or less than the national significant risk threshold. • By having a quiet zone risk index that is equal to or less than twice then the national significant risk threshold, and ensuring there have been no relevant collisions at any of the public crossings during the past five years Ultimately, the FRA’s Quiet Zone Calculator must be used to determine whether an existing whistle ban qualifies for automatic approval under the rule. The calculator will allow the user to identify the crossings that are in the whistle ban. The user will then be able to update the relevant data elements for each crossing so that the actual conditions are used in the risk calculations. This is the only way to actually determine an existing whistle ban’s status under the rule. Quiet Zone Calculator www.fra.dot.gov/Content3.asp ?P=1337. Train horns will not sound in existing whistle ban areas if the city states an intention to the FRA and others to maintain a pre-rule quiet zone and do whatever is required within five years of publication. Again, cities must consult legal counsel to ensure all the legal requirements of the rule are met for either a new quiet zone or a pre-rule quiet zone. Pre-rule quiet zones that do not meet the requirements for automatic approval, must meet the same requirements as new quiet zones as discussed above. In other words, risk must be reduced through the use of supplemental or alternative safety measures so that the quiet zone risk index for the quiet zone has been reduced to either the risk level that would exist if locomotive horns sounded at all crossings in the quiet zone or to a risk level equal to or less than the nationwide significant risk threshold. In general, pre-rule quiet zones must meet these requirements by Dec. 18, 2008. 49 C.F.R. § 222.41(b)(2). It is important to note that even in a quiet zone, a train horn may be sounded in an emergency situation, at the sole discretion of a locomotive engineer, to provide a warning to vehicle operators, pedestrians, trespassers or crews on other trains if such action is appropriate in order to prevent imminent injury, death or property damage. 49 C.F.R. § 222.23. Several federal regulations set maximum noise levels for certain railroad equipment. Although many operations and equipment are regulated and have maximum noise levels, horns that are operated as warning devices are generally exempt from these limits. 49 C.F.R. § 210.3 (b)(3). 16 League of Minnesota Cities Study Session Meeting of December 13, 2010 (Item No. 3) Subject: Freight Rail Page 35 Audible warning devices on trains must meet minimum sound level requirements. Federal regulation requires each lead locomotive to be equipped with an audible warning device that produces a minimum sound level of 96 dBA at 100 feet forward of the locomotive in its direction of travel. 49 C.F.R. § 229.129. 2. State regulation State law, probably pre-empted by the federal train horn rule, says it is a misdemeanor for an engineer driving a train to fail to do the following: Minn. Stat. § 219.567 probably pre-empted by 49 C.F.R. § 222.7. • Ring or sound the bell at least 80 rods (440 yards or 1,320 feet) from the intersection. • Continue to ring or sound the bell at intervals until the train has completely crossed the road or street. I. Other train noise Not only noise from train horns can disturb residents. The noise from railroad operations has also been an issue in some communities. This has included such things as engine noise and switching and car coupling operations. 1. Federal regulation Federal statutes and regulations set standards for railroad noise. The following type of operations and equipment have maximum noise levels that cannot be exceeded: 49 C.F.R. § 210.3. • Noise emission. 42 U.S.C.A. § 4916. • Locomotive cab noise. 49 C.F.R. § 229.121. • Stationary operations of locomotives. 40 C.F.R. § 201.11. • Moving operations of locomotives. 40 C.F.R. § 201.12. • Car coupling operations. 40 C.F.R. § 201.15. • General railroad noise standards. 49 C.F.R. § Pt. 210, App. A. The Federal Railroad Administration (FRA) may grant a waiver of compliance with any FRA noise regulation if it is in the public interest and consistent with railroad noise abatement and safety. The waiver may be subject to any condition the administrator deems necessary. 49 C.F.R. § 210.11. Railroads and Cities 17 Study Session Meeting of December 13, 2010 (Item No. 3) Subject: Freight Rail Page 36 2. State regulation State noise regulations are generally not enforced against railroads. However, the Minnesota Pollution Control Agency (MPCA) measures noise from railroads to determine compliance with federal standards. 3. Local regulation No state or political subdivision may adopt or enforce any noise emission standards for the operation of railroad equipment unless the standard is identical to the Environmental Protection Agency (EPA) regulation. A state or political subdivision may still establish and enforce regulations on noise and the operation or movement of any product if the EPA administrator and the U.S. Secretary of Transportation agree that both of the following situations exist: 42 U.S.C.A. § 4916 (c). • The local regulation is necessitated by special local conditions. • The local regulation is not in conflict with any of the federal regulations. J. Scheduling The number of trains that travel per day and the times they are scheduled to travel is generally not regulated at the state or federal levels. Scheduling is established by individual railroads. Cities are unlikely to be able to regulate this area, as it would probably be seen as a restriction of interstate commerce. Part V. Speed Although both the state and federal government regulate train speed, the majority of this regulation occurs at the federal level. Only crossing speeds are regulated by the state. Federal law provides maximum speed limits for trains based upon the contents of the train and the classification of the track. The commissioner of Mn/DOT sets safe speed limits for trains with regard to crossings. In most cases, local regulation of train speed is probably pre-empted by these federal and state agencies. In February 1999, a city petitioned the commissioner of Mn/DOT to impose a speed limit of 10 miles-per-hour for trains operating on a railroad line that went along a city street. The city felt the segment of track is unique because it runs down the middle of the street. As a result, a large number of grade crossings and pedestrian and vehicle traffic make the area particularly unsafe. 18 League of Minnesota Cities Study Session Meeting of December 13, 2010 (Item No. 3) Subject: Freight Rail Page 37 The railroad filed opposition to the city’s petition, and a contested case hearing was held before an administrative law judge (ALJ) in April 1999. The ALJ issued a written recommendation agreeing with the city’s position. Consistent with this recommendation, the commissioner issued an order setting a 10 miles-per-hour speed limit along the track until the railroad and the city could improve the safety and warning mechanisms and reduce visual clutter in the area. The railroad appealed the ALJ’s decision, arguing that the commissioner’s authority to impose railroad speed limits is completely pre-empted by federal regulations. The Minnesota Court of Appeals disagreed, however. It held that the commissioner’s authority is not pre-empted by federal law. In the Matter of the Speed Limit for the Union Pacific Railroad through the City of Shakopee, 610 N.W.2d 677 (Minn. App. 2000). K. Grade crossing speeds State statute allows a city council or a railroad to petition the commissioner of Mn/DOT to consider setting a reasonable speed limit for trains that cross public highways or streets in the city. The commissioner may hold a public hearing before setting a speed for the operation of an engine or train. Minn. Stat. § 219.383, subd. 1, 2. Despite the existence of this statute, some feel the federal regulation of track speed pre-empts state authority to regulate in this area. An early Minnesota Supreme Court decision held that a city ordinance that set a speed limit for trains meant that a railroad company was negligent for an accident that occurred when the train was exceeding the speed limit. It is quite possible such an ordinance could be pre-empted at the state or federal levels today, given the date of this case (1876). Fritz v. First Division of St. P. & P.R. Co., 22 Minn. 404 (1876). Many cities have sought voluntary compliance with railroads due to special circumstances, such as railroad tracks that are near schools, etc. L. Track speeds The construction and design of railroad tracks are also important with regard to the maximum speed a train can travel. Track speeds based upon the track construction and design are regulated at the federal level. Regulations require that tracks meet certain standards in order to be designated as a certain class of track. The class of a track determines at what maximum speed trains can travel along it. The following table indicates the classes of tracks and the respective speeds that may be traveled on each class: Railroads and Cities 19 Study Session Meeting of December 13, 2010 (Item No. 3) Subject: Freight Rail Page 38 Track class (Note: If a track does not meet the requirements for its intended class, it is reclassified to the next lowest class of track.) Speed for passenger trains (mph) Speed for freight trains (mph) 49 C.F.R. § 213.9 (b). 10 10 Excepted track Class 1 track 10 15 Class 2 track 25 30 Class 3 track 40 60 Class 4 track 60 80 Class 5 track 80 90 Class 6 track 110 110 49 C.F.R. § 213.307 (a). Class 7 track 125 125 Class 8 track 160 160 Class 9 track 200 200 This memo does not discuss the detailed structural requirements of each class of track. For further information regarding track classifications, cities should contact the FRA. M. Signal systems The types of signal systems a railroad has can also affect the speed that a train may travel. The FRA requires that certain block signal systems be in place before a train can travel at speeds greater than 59 mph (passenger trains) or 49 mph (freight trains) on the appropriate class of track. Special signal systems are required to exceed 79 mph. 49 C.F.R. § 236.0 (c), (d). Signal systems are tested by Mn/DOT to ensure the signal will allow enough warning time given the speed that trains will travel on it. If the signal does not allow adequate warning, Mn/DOT requires it be replaced with one that will. N. Contents of train As noted above in the discussion of track classes, there are different speeds for trains depending upon their content. Freight and passenger trains are allowed to travel at different maximum speeds on the same stretch of track. There are sometimes additional restrictions for trains carrying hazardous materials. Contact the FRA for further details on hazardous material shipments. Also see Part VIII - A - 2 - Hazardous material shipments. 20 League of Minnesota Cities Study Session Meeting of December 13, 2010 (Item No. 3) Subject: Freight Rail Page 39 Part VI. Railroad equipment Both state and federal statutes contain requirements for railroad equipment. As such, cities are unlikely to be able to regulate in this area. The following areas are regulated by state and federal law or regulation: • Locomotive engines and visibility. 49 U.S.C.A. § 20143. • Train length. Federal regulation pre-empts state law or regulations in this area. The U.S. Supreme Court found that states could not enforce statutes that limit the number of cars a train could have. It was found to be a restriction of interstate commerce and was held unconstitutional. Burlington Northern R. Co. v. State of Minnesota, 882 F.2d 1349; Southern Pacific Co. v. Arizona, 325 U.S. 761 (1945). • Visibility of railroad cars. 49 U.S.C.A. § 20148. • Tracks. 49 U.S.C.A. § 20142. Part VII. Railroad property This section deals with railroad real estate in the following areas: • Acquisition and disposal of railroad property. • Condemnation of railroad property by cities. • Property taxes. • Special assessments. • Maintenance of railroad property. • Zoning. O. Acquisition and disposal of railroad property Depending upon how a specific piece of land has been acquired by a railroad, there may be restrictions on the use of that land or the ability of the railroad to sell, lease or abandon the land. It may be important for a city to understand these restrictions if it is seeking to buy railroad property. For example, a railroad must offer private leaseholders the “right of first refusal” or the first opportunity to purchase real property within a right-of- way that is either being abandoned or offered for sale. Hofman Oil Co., Inc. v. City of Princeton, (No. C9- 01-819) 2002 WL 4598 (Minn. Ct. App. Jan. 2, 2002). Railroads and Cities 21 Study Session Meeting of December 13, 2010 (Item No. 3) Subject: Freight Rail Page 40 Railroads acquire real property in a number of different ways. Some land may have been part of a federal land grant that was made to many railroads by Congress during the 1860s. Some railroad charters may mention specific portions of land and contain limits on its use or sale. Other land may have been acquired by purchase or eminent domain. Railroad corporations have the power to acquire land by purchase or eminent domain. This applies to any land that is needed for roadways, spur and side tracks, rights-of-way, depot grounds, yards, grounds for gravel pits, machine shops, warehouses, elevators, depots, station houses, and all other structures necessary for the use and operation of the road. Minn. Stat. § 222.27. A municipality and a railroad may agree upon the manner, terms, and conditions under which a municipal right-of-way may be used or occupied by the railroad. A railroad may use condemnation to acquire property over other public rights-of-way. Minn. Stat. § 222.26. Sometimes the United States government, the state of Minnesota, or another government authority authorizes the change of a public watercourse (such as a stream, river, harbor, etc.). In such a situation, a railroad may acquire property using eminent domain if it is interested in the change of the watercourse for the purpose of enlarging or improving their property. Minn. Stat. § 117.38-.41. Federal statute requires that a railroad must file an application with the Surface Transportation Board before it can abandon any part of a line. 49 U.S.C.A. § 10903. P. Condemnation of railroad property by cities The only state statute that specifically addresses condemnation of railroad property is found in the economic development chapter and deals with the clean-up of contaminated railroad property. The railroad property must meet all of the following criteria under this statute in order to use this authority: Minn. Stat. § 117.57. • It must not be a line of track that is required to be abandoned under federal law unless the abandonment has been approved. Minn. Stat. § 117.57, subd. 1(1). • It must not be currently used for any of the following: Minn. Stat. § 117.57, subd. 1(2). • Switching. • Loading or unloading. • Classification activities. (Note: Storage, maintenance, and repair activities are not included in the above activities.) • The land to be taken must contain pollution or the threatened release of pollution. Minn. Stat. § 117.57, subd. 1(3). 22 League of Minnesota Cities Study Session Meeting of December 13, 2010 (Item No. 3) Subject: Freight Rail Page 41 • The authority must intend to develop the property, and have a plan for its cleanup and development within five years to maximize its market value. Minn. Stat. § 117.57, subd. 1(4). There are some additional restrictions on the use of this type of eminent domain that should also be considered. Municipalities that want to use eminent domain to acquire railroad property should consult with their attorney before deciding to use this process. Q. Property taxes Cities may levy property taxes against property that is owned by railroads. Property that is not used for railroad operating purposes is valued and taxed by local taxing jurisdictions in the same manner as other properties. This means the local assessor determines the classification and market value of railroad non-operating property for property taxation purposes. Minn. Stat. § 270.81, subd. 2; Minn. R. § 8106.0600. The taxing procedure for railroad operating property, however, is done differently. The market value of property used for railroad purposes is annually determined by the Department of Revenue using a complex formula. The values are then apportioned to local jurisdictions and certified to each respective county after an equalization formula has been applied. At this point, the local taxing jurisdictions proceed in the same manner as for other commercial and industrial properties that are being taxed. Minn. Stat. §§ 270.80-88. The Department of Revenue determines if particular property owned by a railroad is classified as operating property or non-operating property. Minn. Stat. § 270.81, subd. 3. Federal statute prohibits discriminating against railroad operating property when determining the market value of the land for taxing purposes. This means railroad transportation property may not be assessed at a higher ratio to true market value than the ratio of other commercial and industrial property in the same jurisdiction. 49 U.S.C.A. § 11501. All railroad companies operating in Minnesota are required to file an annual report with the Department of Revenue. The information on this report is used for railroad property tax purposes. Basically, the Department of Revenue does the following: Minn. Stat. § 270.82; Minn. R. § 8106,0300, subp. 1. • Valuation. This determines the fair market value (sales price) of the railroad’s property. Minn. Stat. § 270.84 and Minn. R. § 8106.0400. • Allocation. This determines how much of the market value is attributable to Minnesota. Minn. R. § 8106.0500. • Apportionment. This determines how much of the market value is apportioned to each local taxing jurisdiction that contains railroad property. Minn. Stat. § 270.86, subd. 1; Minn. R. § 8106.0700. • Equalization. This is an adjustment that is made to the final apportioned figures to ensure the railroad property values coincide with the values of other commercial and industrial properties within each county. Minn. Stat. § 270.86, subd. 2; Minn. R. § 8106.0800. Railroads and Cities 23 Study Session Meeting of December 13, 2010 (Item No. 3) Subject: Freight Rail Page 42 Cities really only become involved after the value of the railroad property has been determined by the state and certified to the county auditor. The taxing procedure is the same as for other properties the city taxes. For further information on railroad property taxes, contact the Department of Revenue, Property Tax Division. Dept. of Revenue, Property Tax Division (651) 556-6091. R. Special assessments Cities are apparently able to levy special assessments against railroad property for the cost of improvements that benefit those properties. Notice must be given to the railroad in the same way that notice is given to owners of other property. As with any special assessments, the assessment amount cannot exceed the increase in market value of the property as a result of the improvement. (For more information, see the League research memo that discusses special assessment procedures in more detail.) See Local Improvement Guide (515a1a.3). 1. Supporting statutes, decisions, and opinions Federal statutes do not address special assessments and railroad property. Since the federal statutes are silent, state and local regulation would appear not to be pre-empted. The state special assessment statutes address the ability of municipalities to recover unpaid special assessments from railroad rights-of-way. A lawsuit may be brought by the municipality to enforce the collection of the indebtedness, unless a different method of collection is provided for by any contract between the railroad right-of-way owner and the municipality. Minn. Stat. § 429.061, subd. 4. It may be a challenge for cities to determine the market value of the land as well as the increase in market value of the land due to the improvement. Valuation of railroad land is discussed in another section of this memo. See previous discussion on property taxes. In a 1962 opinion, the attorney general concluded that a city could specially assess property owned by a railroad company for a street, curb, and gutter project. A.G. Op. 408c (Oct. 8, 1962). In two different earlier opinions, the attorney general’s conclusion was similar, finding that the cost of a water main could be assessed to railroad property if the property was benefited by the improvement. A.G. Ops. 624-D-10 (Jun. 14, 1950) and (Aug. 24, 1950). In several early court decisions, the Minnesota Supreme Court found that railroad property could be specially assessed for the cost of improvements that benefited the property. However, the assessment must not exceed the particular benefit to the specific property. In re Improvement of Superior Street, Duluth, 172 Minn. 554 (1927); Minnesota Transfer Ry. Co. v. St. Paul, 165 Minn. 8 (1925); and State v. Great Northern Ry. Co., 165 Minn. 22 (1925). City of Owatonna v. Chicago, R. I. & P. R. Co., 450 F.2d 87 (8 Cir.) (1971). th 24 League of Minnesota Cities Study Session Meeting of December 13, 2010 (Item No. 3) Subject: Freight Rail Page 43 2. Example of a city assessment policy The practice in a larger Minnesota city is not to assess railroad operating property for the cost of improvements that benefit the property. Although the city has the power to levy special assessments for improvements on railroad right-of-way property, it chooses not to levy assessments against this type of property for the following reasons: See also Part VII - E - Maintenance of railroad property. • The difficulty in establishing the value of the property. • The difficulty in establishing the value of the improvement to the property. Even though the city does not specially assess railroad right-of-way property, it will assess property that is not being used as a right-of-way. This generally includes excess property or property that the railroad might lease for non-railroad use. However, the city will specially assess all railroad properties for nuisance abatement, regardless of whether it is used as a railroad right-of-way. See discussion of nuisance abatement in next section. Under this city’s policy, when the railroad objects to a special assessment amount for an improvement, the city reaches a compromise with the railroad regarding the amount. This compromise appears to be similar to the practice that many cities follow when handling objections to special assessment amounts from other landowners who object to their assessment amounts. The city has found this approach to be less expensive and time- consuming than going to court to recover an unpaid assessment. S. Maintenance of railroad property Occasionally, railroad property can fall into disrepair or become a dumping ground for appliances or garbage. These conditions can become serious threats to public health. Cities can address these situations in their nuisance ordinances, and provide for making unpaid service charges to abate nuisances a special assessment against the property. See Model Nuisance Ordinance (400a.3). When a nuisance is found to exist on railroad property, a city should first make the owner of the property aware of the condition. Should the problem not be remedied, the city could proceed under its nuisance ordinance to clean up the problem and assess the cost under the special assessment statutes. Minn. Stat. § 429.101, subd. 3. Both property owner and lessee can be held responsible for the cost of cleaning up property. In a case where the property is leased, the city should make both the owner and the person leasing the property aware of the condition. The city could try to bill directly or assess the cost to the property under the state’s special assessment statutes. Railroads and Cities 25 Study Session Meeting of December 13, 2010 (Item No. 3) Subject: Freight Rail Page 44 A larger Minnesota city’s practice is to levy special assessments on railroad properties for nuisance abatement, regardless of whether the property is used as a railroad right-of-way. Unlike local improvements, it is easy to document a nuisance and the cost of abating the nuisance. The railroad generally has not questioned bills or special assessment amounts for nuisance abatement. See Part VII - D - Special assessments. If the railroad has an easement over property, rather than owning title to the land under the property, the city can seek to recover the charges in a court action—although special assessments may still be used to collect the cost of the clean-up. The responsibility to keep the property in a nuisance-free condition is that of the landowner, who can collect the costs from the railroad company. T. Zoning It seems unlikely that cities have the ability to use zoning regulations to prohibit land from being used for railroad operating purposes. However, cities may be able to enforce some aspects of their zoning regulations on land owned by railroads. If land is owned by a railroad and used for non- railroad purposes, all zoning regulations are likely applicable. No federal or state statutes specifically address the zoning of railroad property. Likewise, no Minnesota court decisions address this issue. However, several court decisions from other states have dealt with local zoning of railroad property. Although these decisions have limited application in Minnesota, they indicate a general trend that appears to be consistent. Thus, there is a good chance that a court decision could be similar in Minnesota, especially given the federal laws that have been considered in these other cases. In a 1955 Texas court decision, the court found that a city’s zoning ordinance could not be used to prohibit the railroad from building an extension of a track on property already owned by the railroad. Although the landowners who protested the extension of the track believed the land would need to be zoned commercial rather than residential, the court found the following: Gulf, C. & S.F. Ry. Co. v. White (1955, Tex Civ App) 281 SW2d 441. • The state had a sovereign interest in railroads. • A state law allowed the railroad to acquire property through eminent domain to use it for the purpose that was sought. • The municipality was prohibited from passing an ordinance that conflicts with something that the state law would allow. The California Court of Appeals came to a similar conclusion in a more recent decision. It found that railways and railroads of a governmental entity were exempt from local zoning regulations. Rapid Transit Advocates, Inc. v. Southern Cal. Rapid Transit Dist. (1986, 2nd Dist) 185 Cal App 3d 996. 26 League of Minnesota Cities Study Session Meeting of December 13, 2010 (Item No. 3) Subject: Freight Rail Page 45 The Surface Transportation Board (STB) was also asked to deal with a local zoning matter. The issue considered was whether state and local environmental, building, and land use permits could be required for an upgrade of a section of a railroad line. Surface Transportation Board Decision (STB Finance Docket no. 33200, July 1, 1997). In this 1997 agency decision, the STB held it had exclusive authority over the construction and operation of rail lines that are part of the interstate rail network. The STB also concluded that if such additional local regulation was allowed, it would be burdensome for the railroad and would serve to restrict interstate commerce. As a result, the power to authorize or deny the construction of railroad lines using a local permit process was not allowed. Surface Transportation Board Decision (STB Finance Docket no. 33200, July 1, 1997). The Minnesota attorney general has addressed railroad and zoning issues in a few, rather dated opinions. In a 1952 opinion, a person was considering constructing a warehouse on a portion of the railroad right-of-way. The city asked if it had the right to zone the use of property on a railroad right-of- way. The attorney general concluded that nothing in the state zoning statutes or the state statutes on railroad right-of-ways would exempt railroad property from a city’s zoning ordinance. It should be noted, however, that no mention of federal laws are made in this opinion. A.G. Op. 59-a-32 (Jan. 24, 1952). In a 1944 opinion, the attorney general considered whether a city’s zoning ordinance could prevent the building of a railroad track. The facts in this situation were that a railroad might acquire playground property in a residential district using eminent domain. The city asked if the condemnation of the land could be stopped either because the land had been dedicated for park purposes or because it was zoned for residential use. A.G. Op. 817 (Oct. 2, 1944). The opinion declared that the railroad could not acquire a public playground for right-of-way use unless the use was consistent with its use as a playground. Whether or not the use was consistent was a fact determination that may need to be determined in court. The attorney general also found that the city’s zoning ordinance could not prevent condemnation of right-of-way through a residential district. A.G. Op. 817 (Oct. 2, 1944). Given the conclusions of the court decisions from other states and the STB decision, it would seem unlikely a city could use zoning regulations to prohibit construction or use of railroad operating property. However, such construction can likely be made to meet regulation standards such as the Americans with Disabilities Act accessibility guidelines, the state building and fire codes, and local setback and other design standards. Property used for non-railroad purposes may be considered proprietary and thus be subjected to local zoning controls, including regulations that prohibit certain construction and use. City councils should consult with their city attorneys before attempting to enforce zoning regulations on any railroad properties. Railroads and Cities 27 Study Session Meeting of December 13, 2010 (Item No. 3) Subject: Freight Rail Page 46 Part VIII. Railroad emergencies Railroad emergencies are usually very serious. Injuries are often severe, property damage great, and other dangers can erupt such as fires or chemical spills. During such emergencies, local public safety departments will likely be called upon to respond. U. Response to emergencies When a crash, derailment, fire or other incident occurs, there may be several situations that need to be addressed. There certainly will be some property damage, and very likely there will be people who have sustained injuries. But there may also be a release of chemicals. Fires must sometimes be handled differently if certain chemicals are involved. If a chemical is toxic, an evacuation may need to occur. EPA 24-hour emergency number: 651-649-5451 or 800-422-0798. TTY 24-hour emergency number: 651-297-5353 or 800-627-3529. 1. Responding entities When a railroad accident or emergency occurs, there are several entities that will likely be involved. It is important that the many different organizations responding to the emergency are able to work together efficiently to deal with the situation. Canadian Pacific Railway publishes a document designed to help local public safety officials and other agencies coordinate efforts when responding to an emergency. The following are the common players who typically respond to railroad emergencies: A copy of “Working Together for a Safer Tomorrow” is available from Phil Marbut of Canadian Pacific Railway, (612) 904-6133. • Local. This includes local police, fire, and ambulance. Generally, these are the first departments to arrive at the scene of an accident, fire or spill. Since these departments are usually the first to respond, they must assess the situation to the best of their abilities and establish a first response to the situation. This includes helping the injured, controlling crowds, and the first possible response to environmental hazards that exist because of the incident, such as fires or chemical spills. • State and federal agencies. These agencies will generally have involvement during the assessment and clean-up stage. They often have strict procedures that must be followed after an accident or chemical spill, such as drug testing of the engineer, clean-up procedures, and accident investigation. • Railroad. The railroad will be involved throughout the incident. It knows its equipment and the contents of the train. 28 League of Minnesota Cities Study Session Meeting of December 13, 2010 (Item No. 3) Subject: Freight Rail Page 47 • Manufacturers. Companies that have shipped freight on the railroad will also be involved. They need to know what has happened to their shipments for business purposes. They are also in the best position to know the possible hazards that may surround the product they are shipping. Local public safety departments can get a 24-hour emergency number from their railroad company. Public safety departments should keep the number in a safe and accessible place. The number is a special emergency number public safety officials can use to report train accidents and should not be used for any other reason. 2. Hazardous material shipments The U.S. Department of Transportation is responsible for regulating hazardous materials, substances, and waste. The Environmental Protection Agency (EPA) also regulates hazardous substances and waste. For example, labeling of cars, placement of cars within a train, and train speed are regulated at the federal level. Each train crew carries a sequential listing of all the cars and their contents, as well as emergency instructions for the handling of the materials if a release occurs. The railroad industry offers training to local public safety officials. Cities should contact the railroad directly for information about coordinating training. Canadian Pacific Railway offers training and will help to coordinate training. This training includes classes on rail facilities; rail equipment; and the interaction of railroad employees, local response personnel, and other agencies that may respond to a train accident. For further information on emergency response training for railroad accidents, contact Phil Marbut, Canadian Pacific Railway, (612) 904-6133. V. Liability It is not easy to determine who is responsible for an incident involving a railroad. Such conclusions are not usually made until considering all the factors that contributed to an accident. However, the following generalizations may be made based upon decisions of the courts over the years: • Railroads. Railroads are often found liable for accidents if the crossing or tracks have not been properly maintained. They are also responsible for the actions of their engineers or employees for errors or speeding. The federal train horn rule is intended to remove liability from the railroads for failure to sound the horn at highway-rail crossings within a quiet zone. Federal Register Vol. 68, No. 243 Thursday, December 18, 2003 p. 70607. • Victims. Victims of train accidents sometimes are responsible for the accident if they have trespassed or ignored signals or warnings. Railroads and Cities 29 Study Session Meeting of December 13, 2010 (Item No. 3) Subject: Freight Rail Page 48 • Cities. Cities may be subject to claims for quiet zones and other types of regulation. Cities also have a general responsibility to maintain their streets and sidewalks, including those that approach railroad crossings. However, discretionary immunity may protect a city from liability exposure if reasons for the council’s decisions are well documented in the council meeting minutes. Liability for an accident must be determined on a case-by-case basis. It is possible that defective equipment or hazardous weather conditions could also be factors that can contribute to an accident. 1. Grade crossing surfaces Several Minnesota court decisions have indicated that railroads have a duty to maintain grade crossing surfaces. The Minnesota Supreme Court found that whether the railroad’s failure to maintain its grade crossing surface was more negligent for an accident than a motor vehicle driver’s inattention was a decision for the jury. Smrt v. Duluth, Winnipeg & Pac. Ry., 265 N.W.2d 815 (Minn. 1978). In a 1921 decision, the same court found that a city could compel a railroad company to pave its crossing at the railroad’s own expense. State ex rel. City of Fairmont v. Chicago, St. P., M & O Ry. Co., 148 Minn. 91 (1921). Likewise, the cost of expanding a new city street across a railroad company’s tracks was properly imposed upon the railroad. Chicago, M & St. P. Ry. Co. v. LeRoy, 124 Minn. 107 (1914). The Minnesota attorney general has also concluded that a railroad must maintain the part of a town road that crosses a railroad right-of-way. A.G. Op. 369-K (May 5, 1933). 2. Obstructed views Railroads have been held responsible for accidents that occurred because of obstructions that kept motorists from seeing approaching trains. In one situation, trees and weeds had been allowed to grow on a railroad right-of- way and blocked a motorist’s view of a crossing. The Minnesota Supreme Court found the railroad had a duty to correct the dangerous condition of the crossing. A similar decision was reached in a 1975 decision where evidence showed that proper view was obstructed by a railroad’s signal house. Bryant v. Northern Pac. Ry. Co., 221 Minn. 577 (1946); Bray v. Chicago, R.I. & P.R. Co., 232 N.W.2d 97 (Minn. 1975). A railroad may be found negligent if conditions obstructing or interfering with the view of the train on the crossing are caused in whole or in part by the railroad’s acts or omissions. Munkel v. Chicago, M., St. P. & P.R. Co., 202 Minn. 264 (1938). 3. Signs Both railroads and cities share responsibility to warn of a crossing. Railroads must maintain a sign at all railroad crossings. Public road authorities, including cities, are responsible for advanced warning signs that are off the railroad right-of-way. The road authority is also responsible for pavement markings. Minn. Stat. § 219.06 and Minn. R. § 8830.0800, .0600, and .0900. 30 League of Minnesota Cities Study Session Meeting of December 13, 2010 (Item No. 3) Subject: Freight Rail Page 49 4. Fires All railroads operating in Minnesota are liable for all reasonable expenses to put out fires caused as a result of their railroads. If a local fire department extinguishes a fire, it can receive reimbursement from the railroad by submitting a claim to the railroad within 60 days after the first full day after the fire was extinguished. The claim must include the following information: Minn. Stat. § 219.761. • The basis for the claim. Minn. Stat. § 219.761, subd. 2. • The time, date, and place of the claim. • The circumstances of the claim. • The itemized cost incurred for the claim. 5. City discretionary immunity Cities should remember they may have discretionary immunity from liability for many decisions or actions involving railroad crossings. In one situation, a city decided not to close a street that led to a hazardous railroad crossing. The Minnesota Supreme Court found that the city’s decision involved a “legislative judgment balancing the risks and convenience the crossing presents,” and concluded that the decision was protected by discretionary immunity. Young v. Wlazik, 262 N.W.2d 300 (Minn. 1977) (overruled on other grounds by Perkins v. Nat. RR. Passenger Corp. 289 N.W.2d 462 (Minn. 1979). In a 1993 decision, the Minnesota Court of Appeals held that the state was protected by discretionary immunity for its decision not to upgrade a railroad crossing. The state had considered financial constraints, limited funding, and safety considerations in making its decision not to upgrade the crossing. McEwen v. Burlington Northern R. Co., 494 N.W.2d 313 (Minn. App. 1993). Keeping good records will help protect the city from lawsuits regarding its legislative decisions. City councils should document the reasons for any decisions they make regarding railroad issues. . For example, a city might document why a street or sidewalk repair near a grade crossing may be undertaken at a later date rather than immediately. Railroads and Cities 31 Study Session Meeting of December 13, 2010 (Item No. 3) Subject: Freight Rail Page 50 Attachment B FRA Track Standards and Inspection Fact Sheet Study Session Meeting of December 13, 2010 (Item No. 3) Subject: Freight Rail Page 51 Class of Track FRA’s track safety standards establish nine specific classes of track (Class 1 to Class 9), plus a category known as Excepted Track. The difference between each Class of Track is based on progressively more exacting standards for track structure, geometry, and inspection frequency. Furthermore, each Class of Track has a corresponding maximum allowable operating speed for both freight and passenger trains. The higher the Class of Track, the greater the allowable track speed and the more stringent track safety standards apply. Railroads determine the Class of Track to which each stretch of track belongs based upon business and operational considerations. Once the designation is made, FRA holds railroads accountable for maintaining the track to the corresponding standards for that particular class. If through regular maintenance and inspection efforts a railroad discovers that a section of its track fails to meet the specified federal standard, the railroad is required to make appropriate repairs to maintain that Class of Track designation, or downgrade the track segment to a lower Class of Track to which the federal standard can be met. Track Inspection Requirements Under FRA regulations, each railroad has primary responsibility to ensure its own track meets or exceeds the federal safety standards. This includes railroad inspectors performing track inspections at specified minimum frequencies based on the Class of Track, the type of track, the annual gross tonnage operated over the track, and whether it carries passenger trains. Railroads are required to maintain accurate records of regular and ad hoc track inspections subject to review and audit by FRA federal inspectors at any time. Class of Track Minimum Track Inspection Frequency Excepted Track Weekly Class 1,2, and 3 Mainline or Sidings Weekly, or twice weekly if the track carries passenger trains or more than 10 million gross tons of traffic during the preceding year. Class 1, 2 and 3 Not Mainline or Sidings Monthly Class 4 and 5 Twice Weekly Class 6, 7, and 8 Twice Weekly Class 9 Three Times a Week Establishing Track Speed Track speed is determined by the Class of Track. Railroads can change the Class of Track (and thus increase or decrease the track speed) whenever it deems appropriate and without prior notification to, or approval by, the FRA. FRA’s interest is in ensuring the railroad maintains the track to the appropriate federal safety standards for that Class of Track. In addition, local or state governments cannot establish their own train speed limits over highway-rail grade crossings or through urban settings unless they can meet an extremely high legal standard. That is, federal preemption exists unless it can be demonstrated that a more stringent speed restriction is necessary to eliminate or reduce a local safety or security hazard; Study Session Meeting of December 13, 2010 (Item No. 3) Subject: Freight Rail Page 52 that such local or state provision is not incompatible with a Federal law, regulation, or order; and that it does not unreasonably burden int erstate commerce. Furthermore, the safest train is one that maintains a steady speed, and locally established speed limits would result in hundreds of individual speed restrictions along a train’s route. This would not only cause train delays, but it could actually increase the chance of a derailment as every time a train must slow down and then increase speed, buff and draft forces (those generated when individual freight cars are compressed together or stretched out along a train’s length) are introduced. This increases the chance of derailment along with the potential risk of injury to train crews, the traveling public, and those living and working in surrounding communities. Class of Track Maximum Allowable Speed for Freight Trains Maximum Allowable Speed for Passenger Trains Excepted Track 10 mph N/A Class 1 10 mph 15 mph Class 2 25 mph 30 mph Class 3 40 mph 60 mph Class 4 60 mph 80 mph Class 5 80 mph 90 mph Class 6 N/A 110 mph Class 7 N/A 125 mph Class 8 N/A 150 mph Class 9 N/A 200 mph Track Inspection Technology Prior to the mid-1970s, track inspection was primarily performed visually. Since then, the development of measurement technologies fitted on moving equipment has greatly increased the accuracy and speed of inspections, and has been a major contributing factor in the decline of track-caused derailments. Railroads initially developed Gage Restraint Measuring Systems (GRMS) to assess the ability of their track to maintain proper gage (the distance between two rails). To advance the science of automated track inspections even further, FRA developed its own Automated Track Inspection Program (ATIP) outfitted with custom-made vehicles equipped with state-of-the-art technology to help identify track flaws that could lead to train derailments. FRA now has five such cars in service that will inspect approximately 100,000 miles of track each year. In January 2008, the ATIP reached the milestone of surpassing its one millionth mile of track inspected. The ATIP cars are primarily used on high-volume traffic density rail lines that carry the majority of hazardous materials transported by rail, as well as passenger trains. They are also used to quickly respond and evaluate routes where the integrity of track is suspected or known to be substandard. The ATIP cars use a variety of technologies to measure track geometry characteristics. The measurements are recorded in real-time and at operating speed. The precise location of problem areas are noted using global positioning system (GPS) technology and shared immediately with the railroad so appropriate corrective actions can be taken. FRA’s Study Session Meeting of December 13, 2010 (Item No. 3) Subject: Freight Rail Page 53 newest ATIP car also video records every 50 feet of track bed, which are analyzed by track inspectors and the railroad. The nation’s Class I, or largest railroads all operate similar cars while regional and short line railroads sometimes arrange to have such cars inspect their track under contract. In addition, some railroads have installed Vehicle Track Interaction devices in locomotives to measure high impacts, which instantly alert track maintenance personnel of abnormalities and potential problems areas. Similarly, Visible Joint Bar Detection Systems use a high-speed camera placed on a service truck to scan for broken joint bars. In addition, FRA operates a high rail car with a Joint Bar Inspection System to spot cracks in continuous welded rail. Technological advances currently being tested include a more refined high-speed photo inspection system that will take a high-resolution picture of the joint bars, and use pattern- recognition software to automatically detect cracks which are difficult to see. A laser vision system is being tested that will scan the track and track bed for anomalies, and ground penetrating radar shows promise to inspect track bed and soil conditions. Driven by FRA research, the industry will soon initiate ultrasound and laser testing of rails to detect internal flaws, fatigue and minute cracks. Track Speed and Highway-Rail Grade Crossings The potential danger of a train /vehicle collision present at a highway-rail grade crossing is a separate issue from train speeds. The physical properties of a train moving at almost any reasonable operating speed generally, if not inevitably, prevent it from stopping in time to avoid hitting an object on the tracks. In more than 37 percent of collisions between trains and motor vehicles at public grade crossings, the train was operating at less than 20 mph. In addition, there is little evidence that wholesale reductions in train speeds will reduce the risk that such grade crossing collisions will occur. Decades of experience and research have shown that prevention of grade crossing incidents is more effectively achieved through the use of roadway warning signage, active warning devices such as flashing lights and gates, and strict observance by motorists of applicable traffic safety restrictions, precautions and laws. For more information on Federal Track Safety Standards, see 49 CFR Part 213. For more information on the FRA Automated Track Inspection Program, visit http://atip.fra.dot.gov/ FRA Office of Public Affairs (202) 493-6024 www.fra.dot.gov June 2008 Study Session Meeting of December 13, 2010 (Item No. 3) Subject: Freight Rail Page 54 Attachment C The “Train Horn” Final Rule Summary Study Session Meeting of December 13, 2010 (Item No. 3) Subject: Freight Rail Page 55 THE “TRAIN HORN” FINAL RULE Summary 1. Overview: $ The Final Rule on Use of Locomotive Horns at Highway-Rail Grade Crossings, published on April 27, 2005, is intended to: . Maintain a high level of public safety; . Respond to the varied concerns of many communities that have sought relief from unwanted horn noise; and . Take into consideration the interests of localities with existing whistle bans. $ Currently, state laws and railroad operating rules govern use of the horn at highway-rail grade crossings. When this rule takes effect, it will determine when the horn is sounded at public crossings (and private crossings within “quiet zones”). $ This Final Rule was mandated by law1, and was issued by the Federal Railroad Administration (FRA) after consideration of almost 1,400 public comments on the Interim Final Rule (IFR) (68 FR 70586) published December 18, 2003. $ Consistent with the statutory mandate requiring its issuance, the rule requires that locomotive horns be sounded at public highway-rail grade crossings, but provides several exceptions to that requirement.2 $ Local public authorities may designate or request approval of, quiet zones in which train horns may not be routinely sounded. The details for establishment of quiet zones differ depending on the type of quiet zone to be created (Pre-Rule or New) and the type of safety improvements implemented (if required). $ Horns may continue to be silenced at Pre-Rule Quiet Zones, provided certain actions are taken. $ Intermediate Quiet Zones (whistle bans that were implemented after October 9, 1996 but before December 18, 2003) may continue to have the horns silenced for one year (until June 24, 2006), provided certain actions are taken. After which time they must comply with the provisions for a New Quiet Zone if the horns are to remain silent. 149 U.S.C. 20153. Disclaimer: This is a summary of the Final Rule for initial briefing purposes only. Entities subject to the rule should refer to the rule text as published in the Federal Register on April 27, 2005. Study Session Meeting of December 13, 2010 (Item No. 3) Subject: Freight Rail Page 56 $ The rule goes into effect on June 24, 2005. $ Pre-Rule Quiet Zones in the six county Chicago region are excepted from the provisions of this rule pending further evaluation of the data. 2. Requirement to sound the locomotive horn: $ Outside of quiet zones, railroads must sound the horn 15-20 seconds prior to a train’s arrival at the highway-rail grade crossing, but not more than 1/4 mile in advance of the crossing. Note: Most State laws and railroad rules currently require that the horn be sounded beginning at a point 1/4 mile in advance of the highway-rail grade crossing and continued until the crossing is occupied by the locomotive. Under the rule, for trains running at less than 45 mph, this will reduce the time and distance over which the horn is sounded. This will reduce noise impacts on local communities. $ The pattern for sounding the horn will remain, as it currently exists today (two long, one short, one long repeated or prolonged until the locomotive occupies the highway-rail grade crossing). $ Locomotive engineers may vary this pattern as necessary where highway-rail grade crossings are closely spaced; and they will also be empowered (but not required) to sound the horn in the case of an emergency, even in a quiet zone. $ The rule addresses use of the horn only with respect to highway-rail grade crossings. Railroads remain free to use the horn for other purposes as prescribed in railroad operating rules on file with FRA, and railroads must use the horn as specified in other FRA regulations (in support of roadway worker safety and in the case of malfunctions of highway-rail grade crossing active warning devices). $ The rule prescribes both a minimum and maximum volume level for the train horn. The minimum level is retained at 96 dB(A), and the new maximum will be 110 dB(A). This range will permit railroads to address safety needs in their operating territory (see discussion in the preamble). $ The protocol for testing the locomotive horn will be altered to place the sound-level meter at a height of 15 feet above top of rail, rather than the current 4 feet above the top of the rail. Cab-mounted and low-mounted horns will continue to have the sound-level meter placed 4 feet above the top of the rail. Note: The effect of this change will be to permit center-mounted horns to be “turned down” in some cases. The previous test method was influenced by the “shadow Disclaimer: This is a summary of the Final Rule for initial briefing purposes only. Entities subject to the rule should refer to the rule text as published in the Federal Register on April 27, 2005. Study Session Meeting of December 13, 2010 (Item No. 3) Subject: Freight Rail Page 57 effect” created by the body of the locomotive to indicate a lower sound level than would otherwise be expected several hundred feet in front of the locomotive (where the crossing and approaching motorists are located). $ The effect of these changes will reduce noise impacts for 3.4 million of the 9.3 million people currently affected by train horn noise. 3. Creation of quiet zones: $ The rule provides significant flexibility to communities to create quiet zones, both where there are existing whistle bans and in other communities that heretofore have had no opportunity to do so. $ The Final Rule permits implementation of quiet zones in low-risk locales without requiring the addition of safety improvements. T This concept utilizes a risk index approach that estimates expected safety outcomes (that is, the likelihood of a fatal or non-fatal casualty resulting from a collision at a highway-rail crossing). T Risk may be averaged over crossings in a proposed quiet zone. T Average risk within the proposed quiet zone is then compared with the average nationwide risk at gated crossings where the horn is sounded (the “National Significant Risk Threshold” or “NSRT”). FRA will compute the NSRT annually. The effect of this approach is that horns can remain silenced in over half of Pre-Rule Quiet Zones without significant expense; and many New Quiet Zones can be created without significant expense where flashing lights and gates are already in place at the highway-rail grade crossings. $ If the risk index for a proposed New Quiet Zone exceeds the NSRT, then supplementary or alternative safety measures must be used to reduce that risk (to fully compensate for the absence of the train horn or to reduce risk below the NSRT). $ The Final Rule– T Retains engineering solutions known as “supplementary safety measures” for use without FRA approval. T Retains explicit flexibility for the modification of “supplementary safety measures” to receive credit as “alternative safety measures.” For instance, Disclaimer: This is a summary of the Final Rule for initial briefing purposes only. Entities subject to the rule should refer to the rule text as published in the Federal Register on April 27, 2005. Study Session Meeting of December 13, 2010 (Item No. 3) Subject: Freight Rail Page 58 shorter traffic channelization arrangements can be used with reasonable effectiveness estimates. T Adds a provision that provides risk reduction credit for pre-existing SSMs and pre-existing modified SSMs that were implemented prior to December 18, 2003. T Continues education and enforcement options, including photo enforcement, subject to verification of effectiveness.3 $ The public authority responsible for traffic control or law enforcement at the highway-rail grade crossing is the only entity that can designate or apply for quiet zone status. $ FRA will provide a web-based tool for communities to use in performing “what if” calculations and preparing submissions necessary to create or retain quiet zones. The tool may be found at http://www.fra.dot.gov. $ In order to ensure proper application of the risk index, the National Highway-Rail Crossing Inventory must be accurate and complete. In the absence of timely filings to the Inventory by the States or Railroads, local authorities may file updated inventory information, and railroads must cooperate in providing railroad-specific data. $ FRA regional personnel will be available to participate in diagnostic teams evaluating options for quiet zones. $ Once a quiet zone is established (including the continuation of Pre-Rule or Intermediate Quiet Zones pending any required improvements), the railroad is barred from routine sounding of the horn at the affected highway-rail grade crossings. $ See below for discussion of Pre-Rule Quiet Zones and New Quiet Zones. 3The rule neither approves nor excludes the possibility of relying upon regional education and enforcement programs with alternative verification strategies. FRA is providing funding in support of an Illinois Commerce Commission-sponsored regional program. The law provides authority for use of new techniques when they have been demonstrated to be effective. Disclaimer: This is a summary of the Final Rule for initial briefing purposes only. Entities subject to the rule should refer to the rule text as published in the Federal Register on April 27, 2005. Study Session Meeting of December 13, 2010 (Item No. 3) Subject: Freight Rail Page 59 Horns may continue to be silenced at Pre-Rule Quiet Zones if– . The average risk at the crossings is less than the NSRT; or . The average risk is less than twice the NSRT and no relevant collisions have occurred within the past 5 years; or . The community undertakes actions to compensate for lack of the train horn as a warning device (or at least to reduce average risk to below the NSRT). Train horns will not sound in existing whistle ban areas if authorities state their intention to maintain “Pre-Rule Quiet Zones” and do whatever is required (see above) within 5 years of the effective date (June 24, 2005) (8 years if the State agency provides at least some assistance to communities in that State). A “Pre-Rule Quiet Zone” is a quiet zone that contains one or more consecutive grade crossings subject to a whistle ban that has been actively enforced or observed as of October 9, 1996 and December 18, 2003. To secure Pre-Rule Quiet Zone status, communities must provide proper notification to FRA and other affected parties by June 3, 2005 and file a plan with FRA by June 24, 2008 (if improvements are required). Disclaimer: This is a summary of the Final Rule for initial briefing purposes only. Entities subject to the rule should refer to the rule text as published in the Federal Register on April 27, 2005. Study Session Meeting of December 13, 2010 (Item No. 3) Subject: Freight Rail Page 60 New Quiet Zones may be created if– All public highway-rail grade crossings are equipped with flashing lights and gates; and either– T After adjusting for excess risk created by silencing the train horn, the average risk at the crossings is less than the NSRT; or T Supplemental Safety Measures are present at each public crossing; or T Safety improvements are made that compensate for loss of the train horn as a warning device (or at least to reduce average risk to below the NSRT). Detailed instructions for establishing or requesting recognition of a quiet zone are provided in the regulation. 4. Length of quiet zones: $ Generally, a quiet zone must be at least ½ mile in length and may include one or more highway-rail grade crossings. $ Pre-Rule Quiet Zones may be retained at the length that existed as of October 9, 1996, even if less than ½ mile. A Pre-Rule Quiet Zone that is greater than ½ mile may be reduced in length to no less than ½ mile and retain its pre-rule status. However, if its length is increased from pre-rule length by the addition of highway-rail grade crossings that are not pre-rule quiet zone crossings, pre-rule status will not be retained. 5. Supplementary and alternative safety measures: $ Supplementary safety measures are engineering improvements that clearly compensate for the absence of the train horn. If employed at every highway-rail grade crossing in the quiet zone, they automatically qualify the quiet zone (subject to reporting requirements). They also may be used to reduce the average risk in the corridor in order to fully compensate for the lack of a train or to below the NSRT. T Temporary closure used with a partial zone; T Permanent closure of a highway-rail grade crossing; T Four-quadrant gates; Disclaimer: This is a summary of the Final Rule for initial briefing purposes only. Entities subject to the rule should refer to the rule text as published in the Federal Register on April 27, 2005. Study Session Meeting of December 13, 2010 (Item No. 3) Subject: Freight Rail Page 61 T Gates with traffic channelization arrangements (i.e., non-mountable curb or mountable curb with delineators) at least 100 feet in length on each side the crossing (60 ft. where there is an intersecting roadway); T One-way Street with gate across the roadway. $ Alternative safety measures may be applied such that the combination of measures at one or more highway-rail grade crossings reduces the average risk by the required amount across the quiet zone (so-called “corridor approach”). T Any modified supplementary safety measure (e.g., barrier gate and median; shorter channelization); or T Education and/or enforcement programs (including photo enforcement) with verification of effectiveness; or T Engineering improvements, other than modified SSMs; or T Combination of the above. • The rule provides that pre-existing SSMs and pre-existing modified SSMs will be counted towards risk reduction. 6. Recognition of the automated wayside horn: $ The rule authorizes use of the automated wayside horn at any highway-rail grade crossing with flashing lights and gates (inside or outside a quiet zone) as a one-to-one substitute for the train horn. $ Certain technical requirements apply, consistent with the successful demonstrations of this technology. $ The Federal Highway Administration (FHWA) has issued an interim approval for the use of wayside horns as traffic control devices. Communities interested in employing this option should contact FHWA to ensure that they comply with the provisions of the interim approval. 7. Special circumstances: $ A community or railroad that views the provisions of the rule inapplicable to local circumstances may request a waiver from the rule from FRA. $ A railroad or community seeking a waiver must first consult with the other party and seek agreement on the form of relief. If agreement cannot be achieved the party may still request the relief by a waiver, provided the FRA Associate Administrator determines that a joint waiver petition would not be likely to contribute significantly to public safety. Disclaimer: This is a summary of the Final Rule for initial briefing purposes only. Entities subject to the rule should refer to the rule text as published in the Federal Register on April 27, 2005. Study Session Meeting of December 13, 2010 (Item No. 3) Subject: Freight Rail Page 62 Disclaimer: This is a summary of the Final Rule for initial briefing purposes only. Entities subject to the rule should refer to the rule text as published in the Federal Register on April 27, 2005. $ FRA grants waivers if in the public interest and consistent with the safety of highway and railroad users of the highway-rail grade crossings. 8. Summary of major changes to the Interim Final Rule • The final rule provides a one-year grace period to comply with New Quiet Zone standards for communities with pre-existing whistle bans that were in effect on December 18, 2003, but were adopted after October 9, 1996. These communities are considered “Intermediate” Quiet Zones under the final rule. • The final rule addresses quiet zones that prohibit sounding of horns during the evening and/or nighttime hours. These are referred to as Partial Quiet Zones. • The final rule requires diagnostic team reviews of pedestrian crossings that are located within proposed New Quiet Zones and New Partial Quiet Zones. • The final rule requires quiet zone communities to retain automatic bells at public highway-rail grade crossings that are subject to pedestrian traffic. • The final rule extends “recognized State agency” status to State agencies that wish to participate in the quiet zone development process. • The final rule contains a 60-day comment period on quiet zone applications. • The final rule requires public authorities to provide notification of their intent to create a New Quiet Zone. During the 60-day period after the Notice of Intent is mailed, comments may be submitted to the public authority. • The final rule provides quiet zone risk reduction credit for certain pre-existing SSMs. • The final rule provides quiet zone risk reduction credit for pre-existing modified SSMs. • The final rule contains a new category of ASMs that addresses engineering improvements other than modified SSMs. Additional information, including the full text of the Final Rule, the Final Environmental Impact Statement, and background documents, are available at http://www.fra.dot.gov. Study Session Meeting of December 13, 2010 (Item No. 3) Subject: Freight Rail Page 63 Attachment D Existing Railroad Right-of -Way Ownership Map Study Session Meeting of December 13, 2010 (Item No. 3) Subject: Freight Rail Page 64 CP Rail MN&S SubAverage Number of Trains/Day = 2 Speed = 10 M.P.H.CP Rail Bass Lake SpurAverage Number of Trains/Day = 4-5 Speed = 25 M.P.H.CP Rail Interchange Track (Switching Wye)Average Number of Trains/Day = 1-2 Speed = 10 M.P.H.UV3UV25UV25?A100?A7?A100?A7Saint Louis ParkHopkinsEdinaFigureX3535 VADNAIS CENTER DR.ST. PAUL, MN 55110PHONE: (651) 490-2000FAX: (651) 490-2150WATTS: 800-325-2055www.sehinc.comMap Document: (S:\PT\S\Stlou\114331\GIS\Maps\Fig0X_CurrentTrainROW.mxd)12/2/2010 -- 12:12:47 PMRAILROAD ROW OWNERSHIPRAILROAD FREIGHT RELOCATION STUDYSaint Louis Park, MinnesotaProject: STLOU 114331Print Date: 12/01/2010Map by: SrHProjection: Hennepin County NAD83 ftSource: Mn/DOT, Mn/DNR, LMIC, City of St. Louis Park, and SEH Inc.This map is neither a legally recorded map nor a survey map and is not intended to be used as one. This map is a compilation of records, information, and data gathered from various sources listed on this map and is to be used for reference purposes only. SEH does not warrant that the Geographic Information System (GIS) Data used to prepare this map are error free, and SEH does not represent thatthe GIS Data can be used for navigational, tracking, or any other purpose requiring exacting measurement of distance or direction or precision in the depiction of geographic features. The user of this map acknowledges that SEH shall not be liable for any damages which arise out of the user's access or use of data provided.LegendRailroadsRailroad ROWPrivate OwnershipPublic OwnershipMunicipal BoundariesO1,00001,000500FeetStudy Session Meeting of December 13, 2010 (Item No. 3) Subject: Freight Rail Page 65 Attachment E Twin Cities and Western Railroad Summary of Train Operations Memo (August 2010) MN&S Freight Rail Study Website - Frequently Asked Questions Section (Existing and Forecast Train Operations) Study Session Meeting of December 13, 2010 (Item No. 3) Subject: Freight Rail Page 66 R.L. BANKS & ASSOCIATES, INC. 2107 Wilson Blvd., Suite 750, Arlington, VA 22201 703.276.7522 703.276.7732 (Fax) transport@rlbadc.com 6 Beach Road, #250 Tiburon, CA 94920-0250 415.889.5106 415.889.5104 (Fax) rlbasf@aol.com ___________________________________________ www.rlbadc.com August 5, 2010 Memorandum To: Ms. Katie Walker, Transit Project Manager Ms. Ia Xiong, Administrative Manager Housing, Community Works, & Transit Hennepin County Public Works 417 North Fifth Street, Suite 320 Minneapolis, MN 55401 From: Francis Loetterle, Ph. D., AICP, Director – Transportation Planning Walt Schuchmann, Vice-President – Operations Planning Subject: Twin Cities and Western Railroad Summary of Train Operations The Twin Cities and Western Railroad Company (TC&W) is a regional rail system operating 234 miles of railroad between the Twin Cities to the east and Appleton on the west (Figure 1)1 . TC&W’s operating headquarters is at Glencoe. Operating crews are based at Glencoe, Montevideo, Winthrop and Hopkins. Operations commenced July 27, 1991 over what was formerly known as the “Ortonville Line” operated by the Soo Line (now Canadian Pacific Railway) between Minneapolis/St. Paul, MN and Milbank, SD. Prior to TC&W and Soo Line operation of this line, it was part of the Milwaukee Road’s Main line to the Pacific Northwest. This main line was originally built in the 1870’s by the Hastings & Dakota Railway.2 1 http://www.aar.org/~/media/AAR/InCongress_RailroadsStates/Minnesota.ashx 2 http://www.tcwr.net/general-public-2/company-overview/ Study Session Meeting of December 13, 2010 (Item No. 3) Subject: Freight Rail Page 67 Figure 1 Source: http://www.tcwr.net/wp-content/uploads/2009/02/tcw-service-map.pdf TC&W interchanges directly with the following railroads operating in the Minneapolis/St. Paul area including:  Canadian Pacific Railway  Union Pacific Railroad  Minnesota Commercial Railway and  Progressive Rail Incorporated. TC & W interchanges carload freight with the following railroads via the Minnesota Commercial Railway:  BNSF Railway  CN Other connections include:  BNSF Railway at Appleton MN;  Sisseton Milbank Railroad (SMRR) at Milbank, SD; Study Session Meeting of December 13, 2010 (Item No. 3) Subject: Freight Rail Page 68  Minnesota Commercial Railway at St. Paul, and  Progressive Rail (via CPRS) at Lakeville and Bloomington. TC & W receives unit coal trains directly from BNSF in downtown Minneapolis. The TC&W owns and operates the Minnesota Prairie Line, Inc. (MPL). MPL is the agent/operator of 94 miles of track between Norwood and Hanley Falls, MN, which is owned by the Minnesota Valley Regional Railroad Authority.3 TCW and MPL connect at Norwood, MN. TC&W’s traffic base consists largely of coal, grains (corn, wheat, barley), soybeans, sugar, beet pulp pellets, lumber and other forest products, canned vegetables, edible beans, molasses, distillers dried grain (DDGs), fertilizers, crushed rock and agricultural machinery.4 Principal shippers/receivers on the TC&W include:  An ethanol plant in Granite Falls;  A sugar beet plant at Reubel;  Grain elevators at several locations and  An ethanol plant in Winthrop (on the MPL). Operations TCW operates several crews daily on the western portions of its lines serving customers and consolidating railcars for movement to the Twin Cities. Six days per week a westbound train departs Hopkins in the evening to take inbound cars from connecting railroads in the Twin Cities to Glencoe. At Glencoe, the inbound cars are exchanged for outbound cars assembled from customers on both TC&W lines and those cars are brought east to Hopkins. Early the next morning, two TC&W crews come on duty at Hopkins and split the previous night’s train from Glencoe into two local delivery trains. One of these trains is bound for the Canadian Pacific’s St. Paul Yard. The other train is bound for Minnesota Commercial’s Main Rail Yard in the Midway and Union Pacific’s Western Avenue Yard. The CP connection handles up to about 80 cars per day and the MNCR/UP train handles about 30 cars. Both of these crews proceed east from Hopkins to the Twin Cites, normally traversing the Kenilworth Corridor around 8:00 am. The crews exchange cars with connecting railroads during the day and make their way back to Hopkins, normally passing through the Kenilworth Corridor in the afternoon. The time that these crews return varies significantly but typically occurs between 4 pm and 8 pm. The variation in the return time is affected by how quickly the crews are able to exchange cars with the connecting carriers and upon how much conflicting rail traffic is encountered at the destination yards and on the trips to and from. This pattern may be augmented by extra movements on Sunday when the traffic volume warrants. In addition to the regular pattern of operations described above, TC&W operates approximately one loaded and one empty ethanol unit train per week and about two loaded and two empty coal 3 http://www.tcwr.net/general-public-2/company-overview/ 4 Ibid. Study Session Meeting of December 13, 2010 (Item No. 3) Subject: Freight Rail Page 69 4 7/22/10 trains per month. Ethanol unit trains are typically 80 cars in length. These trains do not run at a fixed time of day but rather are operated at the convenience of the major connecting railroads. These trains all use the Kenilworth Corridor except for the empty coal trains which are delivered to BNSF at Appleton. Other types of trains may be operated as business becomes available. For example, in recent years TC&W operated a dedicated train of intermodal containers on flatcars between an intermodal grain loading facility at Montevideo and the CP Shoreham Yard. This train carried identity preserved grains and would typically operate through the Kenilworth Corridor at night. Also, TC&W at times delivers loaded cars originated on its lines to a barge terminal at Savage or to a barge terminal at Camden for transloading. This movement occurs or doesn’t depending upon the relative prices of grain and grain transportation. As a smaller regional railroad, it is necessary for TC&W to mesh its operations with those of its much larger connecting railroads, especially CP and UP. TC&W’s current operating pattern is based upon the need to deliver outbound cars to connecting railroads in the morning so that they may be switched and incorporated into outbound trains scheduled later in the day. Similarly, inbound cars for TC&W tend to arrive at the connecting yards at night and are switched and available for TCW crews to pick up during first shift the next day. Hence the operation through the Kenilworth Corridor of both TCW’s daily freight trains and the ethanol and coal trains is determined by the operating requirements of TC&W’s major connections. Between Interstate County Highway 62 and Lake Street, the TC&W operates on track owned by the CP. Between Lake Street and Cedar Lake Junction, the TC&W operates on track owned by the Hennepin County Regional Rail Authority. East of Cedar Lake Junction, TC&W uses the tracks of other railroads to reach the interchange yards mentioned above or the Camden barge terminal. At Cedar Lake Junction, eastbound TC&W trains enter the BNSF Wayzata Subdivision. TC&W eastbound trains hold at Cedar Lake Junction or Cedar Lake Parkway (depending upon train length and where the train can hold without blocking any street crossings) until advised over the radio by the BNSF dispatcher that they have permission to enter BNSF trackage and proceed east. BNSF cooperates with TC&W to expedite TC&W’s movement but if traffic is heavy on the single-track BNSF line, TC&W crews must wait for it to clear. To transfer to the CP tracks running north-south through St. Louis Park the TC&W utilizes the steeply graded switchback sidings at ‘Skunk Hollow’ in the vicinity of Louisiana Avenue. Longer trains must be broken into shorter sections in order to make this transfer. TC&W uses this interchange point to reach the Savage barge terminal. Due to current market conditions, this movement is not currently occurring but could resume if market conditions favoring movement of grain by barge develop. The TC&W also uses this interchange point for locomotive maintenance movements and to interchange with Progressive Rail Incorporated. Although TC&W does not handle any doublestack container traffic at this time 5 , it does have sufficient vertical clearances on its lines to do so. 5 The identity preserved grain movement used single-stacked containers on flatcars. Study Session Meeting of December 13, 2010 (Item No. 3) Subject: Freight Rail Page 70 FREQUENTLY ASKED QUESTIONS How many trains are currently operating in the Kenilworth Corridor; what length are these trains and what type of cargo do they carry? From Twin Cities & Western (TCW) railroad: Freight traffic can and does vary a lot depending on business and economic decisions made by the railroads as they accommodate customer needs. At this time, the following characterizes traffic in the Kenilworth Corridor, but see question #3 to learn more: Currently the Twin Cities & Western (TC&W) operates two trains into the Twin Cities from Hopkins six to seven days per week. Both trains work in and out of the Hopkins/Minnetonka/St. Louis Park area. Between the two trains there is an average of 50 - 75 cars and seasonally can exceed 100 cars. They carry grain on the way to St. Paul and return via the same route. TC&W also runs longer “unit” trains. The number of unit trains varies per week. Some weeks there might be none and some weeks there might be 3, with an average of 5 - 7 unit trains per month, at an average length per train of 80 to 100 cars. These unit trains are carrying ethanol or coal. The ethanol trains return via the same route. The coal trains return via another route, not along the Kenilworth line. While typical train loads currently traveling on the Kenilworth line carry grain with fewer numbers of trains carrying ethanol and coal, other materials may also be transported based on customer needs. What are TCW’s growth plans? From Twin Cities & Western (TCW) railroad: We have been growth oriented since we purchased the rail line in 1991, but our growth depends on the growth of the south central Minnesota economy. Since we are a short line, you do not see “through” train traffic on our line (compared to Seattle-Chicago train traffic that goes over the BNSF through Minnesota, etc.). It is highly unlikely, but not impossible that through traffic would use our line to get from points east of Minnesota to points west of Minnesota – never say never, but not on the horizon now. We have seen a change in interest in shipping via rail once fuel prices rose a few years ago, so I would think we will see moderate growth going forward. 15 years ago we could Study Session Meeting of December 13, 2010 (Item No. 3) Subject: Freight Rail Page 71 not have foreseen the growth in the ethanol industry, so today we cannot predict beyond 3 years what additional possibilities are out there. With respect to grain, we currently have the right to operate on the MN&S corridor, both north to get to the Camden river terminal in north Minneapolis as well as south to get to the Savage river terminals. The river market is largely dependent on the rates the ocean ships charge to get to Asia from the Pacific Northwest ports compared to the US Gulf ports. In the period 1998-2002, the rates favored shipping to Asia via the US Gulf through the Panama Canal to Asia (we shipped over 6000 cars via the MN&S track), but since 2002 the rates have favored the Pacific Northwest ports. With the expansion of the Panama Canal scheduled for completion in 2013, we may very well see a return of that traffic, but that traffic will traverse the MN&S regardless of whether the re-route occurs or not. How many trains are currently operating on the MN&S Line; what length are these trains and what type of cargo do they carry? From Canadian Pacific: Canadian Pacific is the only company running trains on the MN&S line today. TCW has trackage rights, but is not currently running trains on the MN&S line. The Canadian Pacific (CP) operates one local assignment, round trip, 5 days per week on this property. The length of t he train is variable, as a number of the commodities on the line are seasonal in nature. Typically, the size ranges between 10-30 cars per day. Generally, the commodities going through this area include salt (water softening and deicing), plastic pellets, scrap materials (mostly metal), lumber, brick and cement. Due to the downturn in the economy and construction, in particular, volumes over the last two years have been low. Volumes tend to be heaviest in April - October during the building season. Most of the salt moves in the fall, when companies decide to build up their inventories before winter; however, a snowy and icy winter can trigger additional loads if deicing demand gets high. In addition, the line serves a transload/warehouse facility in Bloomington which can take any type of commodity (including food grade), so the commodity mix can change easily depending upon the client using the warehouse. Study Session Meeting of December 13, 2010 (Item No. 3) Subject: Freight Rail Page 72 Attachment F Existing At-Grade Railroad Crossings Map Study Session Meeting of December 13, 2010 (Item No. 3) Subject: Freight Rail Page 73 RAILROAD FREIGHT RELOCATION STUDYLegend!>Railroad CrossingRailroadsMunicipal BoundariesInterstate HighwayUS Trunk HighwayMinnesota Trunk HigwayCounty State Aid HighwayMunicipal State Aid StreetCounty RoadTownship RoadMunicipal StreetRamp02,000 4,0001,000FeetExisting At GradeRR Crossing!>!>!>!>!>!>!>!>!>!>!>!>!>!>!>!>!>!>854244T854243L854242E854241X379745N379744G185195B854236B854234M854233F854232Y854231S854237H854235U854230K187142J854245A854246GUV3UV17UV25UV20UV5UV17UV17?A100?A7?A100?A7KL169KL169Saint Louis ParkMinneapolisHopkinsEdinaMinnetonkaGolden Valley3535 VADNAIS CENTER DR.ST. PAUL, MN 55110PHONE: (651) 490-2000FAX: (651) 490-2150WATTS: 800-325-2055www.sehinc.comMap Document: (S:\PT\S\Stlou\114331\GIS\Maps\FigXX_ExistingAtGradeRRCrossing.mxd)12/8/2010 -- 2:30:00 PMOThis map is neither a legally recorded map nor a survey map and is not intended to be used as one. This map is acompilation of records, information, and data gathered from various sources listed on this map and is to be used forreference purposes only. SEH does not warrant that the Geographic Information System (GIS) Data used to prepare thismap are error free, and SEH does not represent that the GIS Data can be used for navigational, tracking, or any otherpurpose requiring exacting measurement of distance or direction or precision in the depiction of geographic features. Theuser of this map acknowledges that SEH shall not be liable for any damages which arise out of the user's access or use ofdata provided.Saint Louis Park, MinnesotaMap by: SrHProjection: Hennepin County NAD83 ftSource: Mn/DOT, Mn/DNR, LMIC, City of St. Louis Park, and SEH Inc.Project: STLOU 114331Print Date: 11/10/2010Study Session Meeting of December 13, 2010 (Item No. 3) Subject: Freight Rail Page 74 Study Session Meeting of December 13, 2010 (Item No. 3) Subject: Freight Rail Page 75 Study Session Meeting of December 13, 2010 (Item No. 3) Subject: Freight Rail Page 76 Study Session Meeting of December 13, 2010 (Item No. 3) Subject: Freight Rail Page 77 Meeting Date: December 13, 2010 Agenda Item #: 4 Regular Meeting Public Hearing Action Item Consent Item Resolution Ordinance Presentation Other: EDA Meeting Action Item Resolution Other: Study Session Discussion Item Written Report Other: TITLE: 2011 Budget. RECOMMENDED ACTION: No formal action is requested or required at this time. The purpose of this study session discussion is to check in on the 2011 budget, prepare for approval of the 2011 levy, and provide an overview of two non-tax supported budgets for the Housing Rehab Fund and Development Fund. POLICY CONSIDERATION: • What levy amount does the City Council wish to adopt as a property tax levy for 2011? • What other information would the City Council like to receive regarding this matter? ITEMS FOR DISCUSSION AT THE STUDY SESSION: 1. The Levy Over the past several months continued discussions regarding the 2011 Budget have taken place with the City Council. On September 7, 2010 the City Council adopted a resolution and set the Preliminary Property Tax Levy of $23,562,306, which is an increase of $1,096,913, or approximately 4.88% from 2010. The City Council also adopted a Preliminary HRA Levy of $1,028,888 for infrastructure purposes, which is a $14,453 decrease, or approximately a 1.39% decrease from 2010. Truth in Taxation Hearing was on Monday December 6th reflecting the 4.88% levy. At the study session Staff will review information regarding tax levy options and make any adjustments as directed by Council to prepare for the December 20th meeting on adoption of the levy. 2. Housing Rehab Fund Kevin Locke, Community Development Director and Michele Schnitker, Housing Supervisor will provide an overview of the Housing Rehab Fund budget and related programs (see attached). Staff will provide materials and answer Council questions. 3. Development Fund Kevin Locke, Community Development Director will provide an overview of the budget for this fund (see attached) and answer Council questions. BACKGROUND Current Budget Status Update • 2011 levy increase of 4.88%, or $1,096,913 from the 2010 Levy. • The debt service levy decreased by $361,705 from 2010, due to the retirement of bonds. Study Session Meeting of December 13, 2010 (Item No. 4) Page 2 Subject: 2011 Budget • Of the total 2011 preliminary levy increase amount: - $550,779 is being proposed to the General and Park and Recreation Funds operational budgets and - $907,839 is being applied to capital needs. Property Tax Levy Attachment 1 titled “Proposed Levy Options for 2011 and 2012” shows several levy options available to the City Council if it should desire to revisit the certified preliminary levy. Line 7 option reflects the 4.88% increase as set by Council for the 2011 Preliminary levy. Estimates for 2012 are very preliminary and based on the same level of service delivery with modest increases in operation costs, which is similar to 2011. Financial Impact to Residential Property Owners Based on current Council direction, the approximate cumulative City effect on a residential property at the median value of $223,400 for Pay 2011 would be approximately $150 for the year, or approximately $12.50 per month. This figure includes the cumulative impact of utility rate adjustments for a family of four using 30 units of water per quarter (22,500 gallons), a 60 gallon solid waste service, and a franchise fee increase of $1.50 per month ($.75 per utility/month). If Council chooses a levy increase of 4.00%, the cumulative impact would be approximately $142 per year or approximately $11.80 per month using all of the other assumptions listed above. If Council chooses a levy increase of 2.95%, the cumulative impact would be approximately $133 per year or approximately $11.10 per month using all of the other assumptions listed above. Staff will be available to provide the City Council with estimates for other scenarios at the study session if so requested. FINANCIAL OR BUDGET CONSIDERATION: The decisions we make over the next month will shape the course of the City’s levy for the next several years. We must carefully consider both the immediate and long-term effects on our ability to provide services to our constituents. VISION CONSIDERATION: All areas of Vision are taken into consideration by Department Directors in preparing budgets, CIP, and other future directions. Attachments: 1 – Proposed Property Tax Levy Options for 2011 and 2012 2 – Housing Rehab Fund Budgets 3 – Development Fund Budget Prepared by: Nancy Deno Gohman, Deputy City Manager Brian Swanson, Controller Kevin Locke, Community Development Director Approved by: Tom Harmening, City Manager CITY OF ST. LOUIS PARKProposed Levy OptionsFor 2011 and 2012Levy YearLevy AmountTotal Change Percent Change201022,465,393$ 11,700$ 500,000$ 138,300$ 650,000$ 2.98%2011 Levy Options1) 2011 w/(38)K GF22,254,472$ (361,700)$ (38,300)$ -$ (400,000)$ -0.94%9.28%2) 2011 w/$551K GF22,654,472$ (361,700)$ 550,779$ -$ 189,079$ 0.84%7.35%3) 2011 w/551K GF & 361K Capital23,016,172$ (361,700)$ 550,779$ 361,700$ 550,779$ 2.45%5.66%4) 2011 w/551K GF & 474K Capital23,128,472$ (361,700)$ 550,779$ 474,000$ 663,079$ 2.95%5.15%5) 2011 w/551K GF & 597K Capital23,251,472$ (361,700)$ 550,779$ 597,000$ 786,079$ 3.50%4.59%6) 2011 w/551K GF & 709K Capital23,363,472$ (361,700)$ 550,779$ 709,000$ 898,079$ 4.00%4.09%7) 2011 Max Levy 23,562,306$ (361,700)$ 550,779$ 907,834$ 1,096,913$ 4.88%3.21%2012 (Projected)w/602K to Gen. Fund 24,319,655$ 1,062,600$ 602,583$ -$ 1,665,183$ Debt Service ChangeGeneral Fund and Park and Rec. Change Capital ChangeLevy Estimate for 2012Study Session Meeting of December 13, 2010 (Item No. 4) Subject: 2011 Budget Page 3 CITY OF ST LOUIS PARK 2011 Budget Department: Housing Rehab Roll-up Business Unit: 2007 2008 2009 2010 2011 2011 2011 Actual Amount Actual Amount Actual Amount Adopted Budget Requested Budget New Programs Adopted Budget REVENUES GENERAL PROPERTY TAXES 4016 PENALTIES/INTEREST (129)(347) (2,373)0 0 0 0 4017 PAYMT IN LIEU OF TAXES 0 0 0 0 0 0 0 4018 MARKET VALUE HOMESTEAD 0 0 0 0 0 0 0 GENERAL PROPERTY TAXES (129)(347) (2,373)0 0 0 0 INTERGOVERNMENTAL STATE 4368.421 Operating grants 0 (71,228)0 0 0 0 0 4369 OTHER STATE REVENUE 0 0 0 0 0 0 0 INTERGOVERNMENTAL 0 (71,228)0 0 0 0 0 CHARGES FOR SERVICES GENERAL GOVERNMENT 4610 APPLICATION FEE 0 0 0 0 0 0 0 4618.519 HIA Prepayments (212,174)10 (38,385)0 0 0 0 4619 ADMINISTRATION FEES (35,413) (15,162) (10,868)0 0 0 0 CHARGES FOR SERVICES (247,587) (15,152) (49,253)0 0 0 0 SPECIAL ASSESSMENTS 5101 COLLECTED BY CITY (35,671) (102,782)0 0 0 0 0 5102 CURRENT (19,604) (117,365) (208,778)0 0 0 0 REVENUE FROM OPERATIONS (302,991) (306,874) (260,704)0 0 0 0 OTHER INCOME MISC OTHER INCOME 8062 PROCEEDS FROM SALE (278,047) (267,017)0 0 0 0 0 8065 SALE OF SALVAGE (615) (2,268)0 0 0 0 0 8101 INTEREST ON INVESTMENTS (36,766)0 (6,311) (20,000)0 0 0 8102 OTHER INTEREST 0 0 0 0 0 0 0 8130 CONTRIBUTIONS/DONATIONS (17,000)0 0 0 0 0 0 8170 ADMINISTRATION FEES 0 0 0 0 0 0 0 8171 REVENUE BOND FEES (492,123) (492,001) (552,062) (540,000) (600,000)0 (600,000) 8200 MISC REVENUE (66,818) (63,401)0 0 (500,000)0 (500,000) MISC OTHER INCOME (891,369) (824,687) (558,373) (560,000) (1,100,000)0 (1,100,000) TOTAL OTHER INCOME (891,369) (824,687) (558,373) (560,000) (1,100,000)0 (1,100,000) TOTAL REVENUES (1,194,360) (1,131,561) (819,077) (560,000) (1,100,000) 0 (1,100,000) EXPENDITURES PERSONAL SERVICES SALARIES 6011 SALARIES - REGULAR EMPL 162,466 178,151 157,482 158,600 160,300 0 160,300 6012 OVERTIME 0 0 0 0 0 0 0 PERA 6063 PERA - COORDINATED 10,012 11,579 10,627 11,100 11,620 0 11,620 FICA 6076 SOCIAL SECURITY 9,914 11,072 9,889 9,800 9,795 0 9,795 6077 MEDICARE 2,358 2,592 2,321 2,300 2,325 0 2,325 INSURANCE 6084 LIFE INSURANCE 459 496 458 500 465 0 465 6085 LONG TERM DISABILITY 369 415 268 500 360 0 360 6088 EMPLOYERS CONTRIBUTION 16,838 18,574 16,069 16,100 17,410 0 17,410 OTHER 6102 WORKERS COMPENSATION IN 0 0 0 0 0 0 0 6102.240 League of MN Cities de 980 1,291 1,284 1,300 1,250 0 1,250 6105 VEHICLE ALLOWANCE 576 576 576 600 580 0 580 PERSONAL SERVICES 203,972 224,746 198,974 200,800 204,105 0 204,105 SUPPLIES 6211 OFFICE SUPPLIES 2,096 67 2,025 0 0 0 0 6212 GENERAL SUPPLIES 300 300 634 0 0 0 0 SUPPLIES 2,396 367 2,659 0 0 0 0 SERVICES & OTHER CHARGES 6410 GENERAL PROFESSIONAL SE 1,190 1,250 1,250 1,250 1,250 0 1,250 LEGAL 6550.750 Civil 4,805 5,384 8,026 0 0 0 0 6630 OTHER CONTRACTUAL SERVI 421,206 1,329,348 1,292,155 879,500 875,500 0 875,500 6630.822 Rehab Advisor 24,580 24,291 16,935 0 0 0 0 6630.823 Design Services 11,375 15,675 7,200 0 0 0 0 6630.825 Remodel Tour 8,144 8,356 6,816 0 0 0 0 6630.826 Program Marketing 5,482 3,612 (1,488)0 0 0 0 6630.827 Discount Loans & Rebates 0 1,000 6,381 0 0 0 0 6630.828 Green Remodeling Visits 0 0 3,400 0 0 0 0 POSTAGE 6700 POSTAGE 0 1,956 0 0 0 0 0 COMMUNICATIONS 6950 LEGAL NOTICES 715 365 715 0 0 0 0 7050 PRINTING & PUBLISHING 217 0 0 0 0 0 0 INSURANCE 7106 PUBLIC LIABILITY INSURA 2,693 3,548 4,498 3,500 4,645 0 4,645 RENTALS 7502 RENTAL EQUIPMENT 0 0 0 0 0 0 0 7502.873 MSC 0 0 0 0 0 0 0 EMPLOYEE DEVELOPMENT 7601 SUBSCRIPTIONS/MEMBERSHI 80 0 212 0 0 0 0 7602 TRAINING 641 753 1,417 0 0 0 0 7620 TRAVEL/MEETINGS 0 44 0 0 0 0 0 7621 MEETING EXPENSE 72 69 70 0 0 0 0 7622 MILEAGE-PERSONAL CAR 188 334 326 0 0 0 0 SERVICES & OTHER CHARGES 481,388 1,395,985 1,348,313 884,250 881,395 0 881,395 CAPITAL OUTLAY 7801 LAND 397,238 0 0 0 0 0 0 CAPITAL OUTLAY 397,238 0 0 0 0 0 0 EXPENDITURES 1,084,994 1,621,098 1,549,946 1,085,050 1,085,500 0 1,085,500 OTHER EXPENSE Study Session Meeting of December 13, 2010 (Item No. 4) Subject: 2011 Budget Page 4 CITY OF ST LOUIS PARK 2011 Budget Department: Housing Rehab Roll-up Business Unit: 2007 2008 2009 2010 2011 2011 2011 Actual Amount Actual Amount Actual Amount Adopted Budget Requested Budget New Programs Adopted Budget TRANSFERS OUT 8511 GENERAL 93,797 83,983 86,055 86,255 88,515 0 88,515 8511.965 P.A. Revenue Bond 99,000 99,000 99,000 99,000 99,000 0 99,000 8518 TECHNOLOGY REPLACEMENT 1,016 0 0 0 0 0 0 TOTAL TRANSFERS OUT 193,813 182,983 185,055 185,255 187,515 0 187,515 MISC OTHER EXPENSE 8590 BANK CHARGES/CREDIT CD FE 307 0 322 0 0 0 0 MISC OTHER EXPENSE 307 0 322 0 0 0 0 TOTAL OTHER EXPENSE 194,120 182,983 185,377 185,255 187,515 0 187,515 TOTAL EXPENDITURES 1,279,114 1,804,081 1,735,323 1,270,305 1,273,015 0 1,273,015 NET BUDGET BALANCE (Revenues-Expenditures)84,754 672,520 916,246 710,305 173,015 0 173,015 ok ok ok ok Study Session Meeting of December 13, 2010 (Item No. 4) Subject: 2011 Budget Page 5 CITY OF ST LOUIS PARK 2011 Budget Department: Housing Rehab Business Unit: 2700 - 2714 and 2720 - 2733 2007 2008 2009 2010 2011 2011 2011 Actual Amount Actual Amount Actual Amount Adopted Budget Requested Budget New Programs Adopted Budget REVENUES GENERAL PROPERTY TAXES 4016 PENALTIES/INTEREST (129) (347) (2,373)0 4017 PAYMT IN LIEU OF TAXES 0 4018 MARKET VALUE HOMESTEAD 0 GENERAL PROPERTY TAXES (129) (347) (2,373)0 0 0 0 INTERGOVERNMENTAL STATE 4368 GRANTS - STATE 0 4368.421 Operating grants (71,228)0 4369 OTHER STATE REVENUE 0 INTERGOVERNMENTAL 0 (71,228)0 0 0 0 0 CHARGES FOR SERVICES GENERAL GOVERNMENT 4618.519 HIA Prepayments (212,174)10 (38,385)0 4619 ADMINISTRATION FEES (975) (5,525) (1,425)0 0 CHARGES FOR SERVICES (213,149) (5,515) (39,810)0 0 0 0 SPECIAL ASSESSMENTS 5101 COLLECTED BY CITY (35,671) (102,782)0 5102 CURRENT (19,604) (117,365) (208,778)0 OTHER 5200 MISCELLANEOUS (300)0 REVENUE FROM OPERATIONS (268,553) (297,237) (251,261)0 0 0 0 OTHER INCOME MISC OTHER INCOME 8101 INTEREST ON INVESTMENTS (36,766)(6,311) (20,000)0 0 8171 REVENUE BOND FEES (492,123) (492,001) (552,062) (540,000) (600,000)(600,000) 8200 MISC REVENUE (66,818) (63,401)(500,000)(500,000) MISC OTHER INCOME (595,707) (555,402) (558,373) (560,000) (1,100,000)0 (1,100,000) TOTAL OTHER INCOME (595,707) (555,402) (558,373) (560,000) (1,100,000)0 (1,100,000) TOTAL REVENUES (864,260) (852,639) (809,634) (560,000) (1,100,000) 0 (1,100,000) EXPENDITURES PERSONAL SERVICES SALARIES 6011 SALARIES - REGULAR EMPL 162,466 178,151 157,482 158,600 160,300 160,300 PERA 6063 PERA - COORDINATED 10,012 11,579 10,627 11,100 11,620 11,620 FICA 6076 SOCIAL SECURITY 9,914 11,072 9,889 9,800 9,795 9,795 6077 MEDICARE 2,358 2,592 2,321 2,300 2,325 2,325 INSURANCE 6084 LIFE INSURANCE 459 496 458 500 465 465 6085 LONG TERM DISABILITY 369 415 268 500 360 360 6088 EMPLOYERS CONTRIBUTION 16,838 18,574 16,069 16,100 17,410 17,410 OTHER 6102 WORKERS COMPENSATION IN 0 6102.240 League of MN Cities de 980 1,291 1,284 1,300 1,250 1,250 6105 VEHICLE ALLOWANCE 576 576 576 600 580 580 PERSONAL SERVICES 203,972 224,746 198,974 200,800 204,105 0 204,105 SUPPLIES 6211 OFFICE SUPPLIES 396 67 25 0 0 SUPPLIES 396 67 25 0 0 0 0 SERVICES & OTHER CHARGES 6410 GENERAL PROFESSIONAL SE 1,190 1,250 1,250 1,250 1,250 1,250 LEGAL 6550.750 Civil 3,194 4,287 8,026 0 0 6630 OTHER CONTRACTUAL SERVI 345,306 1,267,550 1,235,091 423,000 773,000 773,000 6630.822 Rehab Advisor 9,381 0 6630.826 Program Marketing 2,064 (1,488)0 6630.827 Discount Loans & Rebates 1,000 6,381 0 6630.828 Green Remodeling Visits 3,400 0 POSTAGE 6700 POSTAGE 436 0 0 COMMUNICATIONS 6950 LEGAL NOTICES 629 365 715 0 0 INSURANCE 7106 PUBLIC LIABILITY INSURA 2,693 3,548 4,498 3,500 4,645 4,645 EMPLOYEE DEVELOPMENT 7601 SUBSCRIPTIONS/MEMBERSHI 80 212 0 0 7602 TRAINING 641 753 1,417 0 0 7620 TRAVEL/MEETINGS 44 0 0 7621 MEETING EXPENSE 72 69 70 0 0 7622 MILEAGE-PERSONAL CAR 188 334 326 0 0 SERVICES & OTHER CHARGES 353,993 1,291,081 1,259,898 427,750 778,895 0 778,895 EXPENDITURES 558,361 1,515,894 1,458,897 628,550 983,000 0 983,000 OTHER EXPENSE TRANSFERS OUT 8511 GENERAL 93,797 83,983 86,055 86,255 88,515 88,515 8511.965 P.A. Revenue Bond 99,000 99,000 99,000 99,000 99,000 99,000 8518 TECHNOLOGY REPLACEMENT 1,016 0 TOTAL TRANSFERS OUT 193,813 182,983 185,055 185,255 187,515 0 187,515 MISC OTHER EXPENSE 8590 BANK CHARGES/CREDIT CD FE 307 15 0 MISC OTHER EXPENSE 307 0 15 0 0 0 0 TOTAL OTHER EXPENSE 194,120 182,983 185,070 185,255 187,515 0 187,515 TOTAL EXPENDITURES 752,481 1,698,877 1,643,967 813,805 1,170,515 0 1,170,515 Study Session Meeting of December 13, 2010 (Item No. 4) Subject: 2011 Budget Page 6 CITY OF ST LOUIS PARK 2011 Budget Department: Neighborhood Public Art Business Unit: 2715 2007 2008 2009 2010 2011 2011 2011 Actual Amount Actual Amount Actual Amount Adopted Budget Requested Budget New Programs Adopted Budget REVENUES MISC OTHER INCOME 8130 CONTRIBUTIONS/DONATIONS (17,000)0 MISC OTHER INCOME (17,000)0 0 0 0 0 0 TOTAL OTHER INCOME (17,000)0 0 0 0 0 0 TOTAL REVENUES (17,000) 0 0 0 0 0 0 EXPENDITURES SERVICES & OTHER CHARGES LEGAL 6630 OTHER CONTRACTUAL SERVI 53,917 54,211 34,114 40,000 36,000 36,000 SERVICES & OTHER CHARGES 53,917 54,211 34,114 40,000 36,000 0 36,000 EXPENDITURES 53,917 54,211 34,114 40,000 36,000 0 36,000 TOTAL EXPENDITURES 53,917 54,211 34,114 40,000 36,000 0 36,000 Study Session Meeting of December 13, 2010 (Item No. 4) Subject: 2011 Budget Page 7 CITY OF ST LOUIS PARK 2011 Budget Department: Excess Public Land Business Unit: 2719 2007 2008 2009 2010 2011 2011 2011 Actual Amount Actual Amount Actual Amount Adopted Budget Requested Budget New Programs Adopted Budget REVENUES OTHER INCOME MISC OTHER INCOME 8062 PROCEEDS FROM SALE (278,047) (267,017)0 8065 SALE OF SALVAGE (615) (2,268)0 MISC OTHER INCOME (278,662) (269,285)0 0 0 0 0 TOTAL OTHER INCOME (278,662) (269,285)0 0 0 0 0 TOTAL REVENUES (278,662) (269,285) 0 0 0 0 0 EXPENDITURES SERVICES & OTHER CHARGES LEGAL 6550.750 Civil 1,611 1,097 0 6630 OTHER CONTRACTUAL SERVI 14,383 2,787 3,000 3,000 3,000 COMMUNICATIONS 6950 LEGAL NOTICES 86 0 7050 PRINTING & PUBLISHING 217 0 SERVICES & OTHER CHARGES 16,297 3,884 0 3,000 3,000 0 3,000 CAPITAL OUTLAY 7801 LAND 397,238 0 CAPITAL OUTLAY 397,238 0 0 0 0 0 0 EXPENDITURES 413,535 3,884 0 3,000 3,000 0 3,000 TOTAL EXPENDITURES 413,535 3,884 0 3,000 3,000 0 3,000 Study Session Meeting of December 13, 2010 (Item No. 4) Subject: 2011 Budget Page 8 CITY OF ST LOUIS PARK 2011 Budget Department: Move-Up Program Business Unit: 2717 2007 2008 2009 2010 2011 2011 2011 Actual Amount Actual Amount Actual Amount Adopted Budget Requested Budget New Programs Adopted Budget REVENUES CHARGES FOR SERVICES GENERAL GOVERNMENT 4619 ADMINISTRATION FEES (2,250)0 CHARGES FOR SERVICES 0 0 (2,250)0 0 0 0 REVENUE FROM OPERATIONS 0 0 (2,250)0 0 0 0 TOTAL REVENUES 0 0 (2,250) 0 0 0 0 EXPENDITURES SUPPLIES 6211 OFFICE SUPPLIES 1,700 2,000 0 6212 GENERAL SUPPLIES 300 300 634 0 SUPPLIES 2,000 300 2,634 0 0 0 0 SERVICES & OTHER CHARGES LEGAL 6630 OTHER CONTRACTUAL SERVI 7,600 4,800 7,650 56,500 56,500 56,500 6630.822 Rehab Advisor 24,580 14,910 16,935 0 6630.823 Design Services 11,375 15,675 7,200 0 6630.824 Workshops 0 6630.825 Remodel Tour 8,144 8,356 6,816 0 6630.826 Program Marketing 5,482 1,548 0 POSTAGE 6700 POSTAGE 1,520 0 0 COMMUNICATIONS 7000 ADVERTISING 400 0 0 SERVICES & OTHER CHARGES 57,181 46,809 39,001 56,500 56,500 0 56,500 EXPENDITURES 59,181 47,109 41,635 56,500 56,500 0 56,500 TOTAL EXPENDITURES 59,181 47,109 41,635 56,500 56,500 0 56,500 Study Session Meeting of December 13, 2010 (Item No. 4) Subject: 2011 Budget Page 9 CITY OF ST LOUIS PARK 2011 Budget Department: Transformation Loan Business Unit: 2718 2007 2008 2009 2010 2011 2011 2011 Actual Amount Actual Amount Actual Amount Adopted Budget Requested Budget New Programs Adopted Budget REVENUES CHARGES FOR SERVICES GENERAL GOVERNMENT 4619 ADMINISTRATION FEES (34,438) (9,637) (7,193)0 0 CHARGES FOR SERVICES (34,438) (9,637) (7,193)0 0 0 0 REVENUE FROM OPERATIONS (34,438) (9,637) (7,193)0 0 0 0 TOTAL REVENUES (34,438) (9,637) (7,193) 0 0 0 0 EXPENDITURES SERVICES & OTHER CHARGES LEGAL 6630 OTHER CONTRACTUAL SERVI 15,300 357,000 7,000 7,000 EXPENDITURES 0 0 15,300 357,000 7,000 0 7,000 OTHER EXPENSE MISC OTHER EXPENSE 8590 BANK CHARGES/CREDIT CD FE 307 0 MISC OTHER EXPENSE 0 0 307 0 0 0 0 TOTAL OTHER EXPENSE 0 0 307 0 0 0 0 TOTAL EXPENDITURES 0 0 15,607 357,000 7,000 0 7,000 Study Session Meeting of December 13, 2010 (Item No. 4) Subject: 2011 Budget Page 10 CITY OF ST LOUIS PARK 2011 Budget Department: Development - EDA Business Unit: 4891, 4893, 4713, 4717, 4720 - 4722 2007 2008 2009 2010 2011 2011 2011 Actual Amount Actual Amount Actual Amount Adopted Budget Requested Budget New Programs Adopted Budget REVENUES GENERAL PROPERTY TAXES 4011 CURRENT AD VALOREM (302,127)0 4016 PENALTIES/INTEREST (270)(386)(281)0 GENERAL PROPERTY TAXES (270) (302,513)(281)0 0 0 0 INTERGOVERNMENTAL STATE 4368 GRANTS - STATE 00 4368.421 Operating grants (183,715) (79,851)0 4370 MARKET VALUE HOMESTEAD (24,727)0 OTHER 4402 HENNEPIN COUNTY (91,850)(355,000)(355,000) INTERGOVERNMENTAL (24,727) (275,565) (79,851)0 (355,000)0 (355,000) CHARGES FOR SERVICES GENERAL GOVERNMENT 4610 APPLICATION FEE (6,000) (4,000) (2,000)(4,000)(4,000) CHARGES FOR SERVICES (6,000) (4,000) (2,000)0 (4,000)0 (4,000) SPECIAL ASSESSMENTS 5101 COLLECTED BY CITY (51,588) (5,034)0 5102 CURRENT (81,569) (67,769) (63,351)(50,000)(50,000) 5103 DELINQUENT (7,039) (1,098)0 OTHER 5200 MISCELLANEOUS 0 5300 RENT REVENUE (150,000)(150,000) 5300.533 Parking ramp (150,000) (150,000) (150,000) (150,000)0 5300.534 Parking lot (10,344) (10,473) (12,021) (11,892) (11,892)(11,892) REVENUE FROM OPERATIONS (331,537) (816,452) (307,504) (161,892) (570,892)0 (570,892) OTHER INCOME MISC OTHER INCOME 8062 PROCEEDS FROM SALE (1,853,992)(1)0 8070 OTHER RECOVERIES (156,000) (156,000)0 8101 INTEREST ON INVESTMENTS (1,452,446) (748,540) (440,488) (800,000) (390,000)(390,000) 8102 OTHER INTEREST (137,169) (132,598) (123,277)(50,000)(50,000) 8130 CONTRIBUTIONS/DONATIONS 0 8174 NSF FEES (25)0 8200 MISC REVENUE (1,001)0 MISC OTHER INCOME (1,589,615) (2,892,156) (719,766) (800,000) (440,000)0 (440,000) TOTAL OTHER INCOME (1,589,615) (2,892,156) (719,766) (800,000) (440,000)0 (440,000) TOTAL REVENUES (1,921,152) (3,708,608) (1,027,270) (961,892) (1,010,892) 0 (1,010,892) EXPENDITURES PERSONAL SERVICES SALARIES 6011 SALARIES - REGULAR EMPL 358,744 (1,142,592) 381,444 367,400 369,100 369,100 6012 OVERTIME 203 0 6013 SALARIES - TEMPORARY EM 230 0 6014 SALARIES - COUNCIL & CO 30,100 30,100 30,100 PERA 6063 PERA - COORDINATED 21,085 25,449 24,516 26,500 27,495 27,495 FICA 6076 SOCIAL SECURITY 19,621 23,800 23,810 23,810 6077 MEDICARE 5,117 5,922 5,508 5,800 5,790 5,790 INSURANCE 6084 LIFE INSURANCE 829 949 888 1,000 875 875 6085 LONG TERM DISABILITY 682 671 756 1,000 690 690 6088 EMPLOYERS CONTRIBUTION 31,455 38,790 34,428 36,700 39,415 39,415 OTHER 6102 WORKERS COMPENSATION IN 0 6102.240 League of MN Cities de 2,099 2,781 3,072 3,000 2,935 2,935 6105 VEHICLE ALLOWANCE 2,556 2,556 2,295 2,600 1,620 1,620 6108 PAID TIME OFF 2,700 2,300 0 PERSONAL SERVICES 442,621 (1,065,474) 455,607 500,200 501,830 0 501,830 SUPPLIES 6211 OFFICE SUPPLIES 179 92 198 1,000 400 400 6212 GENERAL SUPPLIES 1,912 100 500 500 NON-CAPITAL EQUIPMENT 6301 OFFICE EQUIPMENT 500 500 500 SUPPLIES 179 92 2,110 2,600 1,400 0 1,400 SERVICES & OTHER CHARGES 6410 GENERAL PROFESSIONAL SE 7,228 8,855 1,474 6,120 13,250 13,250 6520 AUDITING AND ACCOUNTING 5,500 5,500 8,160 8,160 LEGAL 6550.750 Civil 3,690 5,691 9,624 20,000 10,000 10,000 6550.752 Legislative/Lobbying 12,000 15,000 15,000 6630 OTHER CONTRACTUAL SERVI 34,823 175,952 347,634 10,000 73,953 73,953 6630.773 SSD Site Maintenance 553 0 6630.798 Project Reimbursement 0 6630.832 EDA Financial Analysis 675 4,328 12,069 0 POSTAGE 6700 POSTAGE 6,000 500 500 500 6720 DELIVERY 150 150 150 COMMUNICATIONS 6831 TELEPHONE 998 1,697 1,600 1,800 1,800 6831.800 Cellular 700 0 6950 LEGAL NOTICES 200 500 400 400 7000 ADVERTISING 545 495 2,000 3,000 3,000 7050 PRINTING & PUBLISHING 19,593 0 INSURANCE 7102 BLDG & CONTENTS INSURAN 775 775 7106 PUBLIC LIABILITY INSURA 5,161 3,521 3,359 4,000 3,130 3,130 7109 NOTARY/SURETY BONDS 58 50 47 100 45 45 ECONOMIC DEVELOPMENT Study Session Meeting of December 13, 2010 (Item No. 4) Subject: 2011 Budget Page 11 CITY OF ST LOUIS PARK 2011 Budget Department: Development - EDA Business Unit: 4891, 4893, 4713, 4717, 4720 - 4722 2007 2008 2009 2010 2011 2011 2011 Actual Amount Actual Amount Actual Amount Adopted Budget Requested Budget New Programs Adopted Budget 7451 PLANNING 158,393 102,833 20,186 100,000 100,000 100,000 7452 ECONOMIC (12,306)5,000 5,000 5,000 7453 FINANCIAL 5,518 1 10,000 10,000 10,000 7454 SURVEYING 10,000 5,000 5,000 7455 APPRAISALS 1,500 15,000 10,000 10,000 7457 ENVIRONMENT ANALYSIS 2,000 2,212 15,000 40,000 40,000 7459 OTHER TECHNICAL SERVICE 5,000 5,000 5,000 RENTALS 7504 RENTAL OTHER 25,000 25,000 25,000 25,000 25,000 25,000 EMPLOYEE DEVELOPMENT 7601 SUBSCRIPTIONS/MEMBERSHI 4,011 2,335 6,080 2,700 6,000 6,000 7601.904 Rotary 600 0 7602 TRAINING 1,281 2,388 2,601 2,400 2,500 2,500 7603 SEMINARS/CONFERENCES/PR 90 260 4,500 4,500 4,500 7620 TRAVEL/MEETINGS 120 1,000 1,000 1,000 7621 MEETING EXPENSE 9,752 259 227 1,000 1,000 1,000 7622 MILEAGE-PERSONAL CAR 49 364 141 2,000 1,000 1,000 TAXES 7682 PAYMENT IN LIEU OF TAXE 3,103 3,142 0 SERVICES & OTHER CHARGES 269,471 338,382 442,954 262,923 346,163 0 346,163 CAPITAL OUTLAY 7908 SOIL REMEDIATION 275,565 44,056 0 0 CAPITAL OUTLAY 0 275,565 44,056 0 0 0 0 EXPENDITURES 712,271 (451,435) 944,727 765,723 849,393 0 849,393 OTHER EXPENSE TRANSFERS OUT 8518 TECHNOLOGY REPLACEMENT 1,016 0 TOTAL TRANSFERS OUT 1,016 0 0 0 0 0 0 MISC OTHER EXPENSE 8580 MISC EXPENSE 150 0 8590 BANK CHARGES/CREDIT CD FE 5,247 0 MISC OTHER EXPENSE 0 0 5,397 0 0 0 0 TOTAL OTHER EXPENSE 1,016 0 5,397 0 0 0 0 TOTAL EXPENDITURES 713,287 (451,435) 950,124 765,723 849,393 0 849,393 NET BUDGET BALANCE (Revenues-Expenditures)(1,207,865) (4,160,043) (77,146) (196,169) (161,499)0 (161,499) ok ok ok ok Study Session Meeting of December 13, 2010 (Item No. 4) Subject: 2011 Budget Page 12 Meeting Date: December 13, 2010 Agenda Item #: 5 Regular Meeting Public Hearing Action Item Consent Item Resolution Ordinance Presentation Other: EDA Meeting Action Item Resolution Other: Study Session Discussion Item Written Report Other: TITLE: Communications/Meeting Check-In (Verbal). RECOMMENDED ACTION: Not Applicable. POLICY CONSIDERATION: Not Applicable. BACKGROUND: At every Study Session, verbal communications will take place between staff and Council for the purpose of information sharing. FINANCIAL OR BUDGET CONSIDERATION: Not Applicable. VISION CONSIDERATION: Not Applicable. Attachments: None Prepared and Approved by: Tom Harmening, City Manager Meeting Date: December 13, 2010 Agenda Item #: 6 Regular Meeting Public Hearing Action Item Consent Item Resolution Ordinance Presentation Other: EDA Meeting Action Item Resolution Other: Public Hearing Study Session Discussion Item Written Report Other: TITLE: Business Terms for Development Contract with Hardcoat Inc. (7317 West Lake St.). RECOMMENDED ACTION: The purpose of this report is to provide a preview of the proposed business terms that will serve as the basis for a Development Contract with Hardcoat Inc related to its purchase and renovation of the former Flame Metals property (7317 West Lake St.). If EDA members have any questions or comments please contact staff. The proposed contract is scheduled for formal consideration December 20th; the same night the creation of the Hardcoat TIF District will be considered. POLICY CONSIDERATION: Does the EDA/City Council support the business terms proposed for inclusion within a Development Contract with Hardcoat Inc to facilitate the purchase and renovation of the former Flame Metals property? BACKGROUND: The EDA reviewed Hardcoat Inc’s (located at 7300 W. Lake Street) request for Construction Assistance Program (CAP) assistance at the November 8th Study Session. It wishes to acquire the former Flame Metals property located across the street to the south at 7317 W. Lake Street. The company plans to renovate the building and site, and relocate its operations there. The industrial building is approximately 33,600 square feet and was constructed in 1963. It was in very poor condition with numerous building code deficiencies. Following Flame Metals’ departure in 2009, the building’s interior has been emptied, thoroughly cleaned, repainted, and many (but not all) code deficiencies have been addressed. Nearly all the building’s operating systems have been removed. Hardcoat’s plans include a complete renovation of both the interior and exterior of the building as well as the construction of a small addition. Renovation will include a new roof, new exterior facelift, new windows and dock doors, new offices and interior spaces, new electrical and plumbing systems, new energy efficient HVAC equipment, new parking lot and landscaping, rain gardens and site amenities, as well as the construction of a 1,500 SF addition for office/conference space on the north side of the building. Once the renovation is complete, Hardcoat will initially occupy approximately 25,000 square feet of the building. The balance will be leased to a complementary business and provide Hardcoat with future expansion capacity. In order to pursue the above project Hardcoat applied for up to $420,000 in financial assistance through the Construction Assistance Program (CAP). Hardcoat’s application was reviewed at the November 8th Study Session where it was favorably received. Mr. Michael Kelner, owner of Hardcoat Inc., was also asked to hold a neighborhood meeting to share Hardcoat’s relocation plans, discuss the proposed building improvements, and answer questions. On November 30th, Mr. Kelner held a neighborhood open house at the former Flame Metals building (7317 W Lake Street). The meeting was attended by approximately 20 local residents Study Session Meeting of December 13, 2010 (Item No.6) Page 2 Subject: Business Terms of Development Contract with Hardcoat Inc. including Councilmember Santa. Hardcoat’s renovation plans were well received. Residents were glad to hear the building was going to be reoccupied and that a local company was expanding into it. They also expressed their appreciation for the City’s active involvement in the project and for the opportunity learn more about it through the Open House. The proposed project qualifies as an Economic Development TIF District. Establishing a TIF district in conjunction with the project will allow the EDA to reimburse a portion of the CAP funding provided to Hardcoat. A public hearing date for the establishment of the TIF district has been set for December 20, 2010. Request for Financial Assistance Hardcoat has negotiated a Purchase Agreement with A & D Holdings LLC, (the current owner of the Development property) for $1,050,000. The purchase price is $134,700 less than the property’s current assessed value. The total cost to renovate the building and grounds is estimated at $1.4 million. Of this amount, Hardcoat has applied for up to $420,000 in Construction Assistance: which equals approximately 33% of total renovation costs. This is the maximum percentage for which businesses may apply under the CAP. This amount could be reduced based upon more refinements to Hardcoat’s cost estimates and whatever cost savings the company receives through Xcel Energy’s Energy Design Assistance program to which it recently applied. When one adds the cost of the property ($1,050,000), the hard costs related to the building renovation ($1,400,000), the cost of new equipment ($500,000), as well as soft costs and permits estimated at ($136,500), the entire project will total nearly $3.1 million. Hardcoat plans to finance approximately 85% of its total project costs between a bank loan and the SBA. One note would be for the building and a second note would be for the equipment. Since the $420,000 in CAP funds would be a forgivable loan from the EDA and subordinate to the bank and SBA notes, it qualifies as Hardcoat’s equity contribution for the building loan. Proposed Funding Sources The source of the CAP funds is tax increment generated by nine of the City’s TIF districts. These funds would be disbursed from the Development Fund. Given the size of Hardcoat’s CAP request, an Economic Development TIF District will be created to partially reimburse a portion of the CAP funding provided to Hardcoat. Such a TIF district is estimated to generate approximately $190,000 over the 9- year life of the district. Structure of CAP Funds CAP funds will be provided to Hardcoat upon prove-up that the property was purchased and the proposed construction costs were incurred. In order to remain in compliance with State Statutes, the CAP funds will technically be applied to Hardcoat’s property acquisition costs as these are considered “qualified costs” under the rules for Economic Development TIF Districts. The funding will be structured as a forgivable loan through a mortgage. Provided the building is held and properly maintained by Hardcoat for 5 years after project completion, the entirety of the loan would be forgiven. If the property is sold within 5 years of project completion, the entirety of the loan must be repaid in full along with 6% accrued interest from the date funding was provided. Study Session Meeting of December 13, 2010 (Item No.6) Page 3 Subject: Business Terms of Development Contract with Hardcoat Inc. Project Schedule Hardcoat Inc. expects to close on the property within the next couple months. It plans to commence interior building renovations immediately thereafter in the first quarter of 2011. Exterior renovations and construction will begin in the spring and should be completed prior to summer’s end. Current/Proposed Market Value The subject property’s 2010 assessed value is $1,184,700. The 2010 taxes payable for this property total $37,542. Upon renovation the property would have an estimated market value of approximately $2,625,000; an increase of $1,440,300. Total taxes payable would be approximately $87,520; an increase of $49,978. Job Creation Hardcoat currently has 14 employees and all will be retained in the relocation to the new building. As a result of its expanded operations and the new business it anticipates generating, Hardcoat believes an additional 6 to 25 employees could potentially be hired in the next 5 years. Additional labor would be involved with the building renovation and construction of the small addition. Other jobs would also be created when a tenant leases the balance of the building. Development Contract A summary list of specific business terms consistent with previous redevelopment projects is attached for review. The intent is to use these terms as the basis for a Development Contract with Hardcoat Inc. The proposed terms are subject to further negotiation and refinement with Hardcoat. FINANCIAL OR BUDGET CONSIDERATION: To stimulate private construction activity within the city it is proposed that the EDA consider providing Hardcoat up to $420,000 through the Construction Assistance Program to purchase and renovate the former Flame Metals property. Such funds would be provided on a reimbursement basis and as a forgivable loan from tax increment generated by the City’s various TIF districts. It is also proposed that the EDA create an Economic Development TIF District in conjunction with this project so as to allow the EDA to reimburse itself approximately $190,000 of the above assistance over the 9-year life of the district. VISION CONSIDERATION: The proposed Construction Assistance Program Policy is consistent with elements of Vision St. Louis Park as it facilitates and promotes environmental stewardship and green development. Attachment: Business Terms of the Development Contract with Hardcoat Inc. Prepared by: Greg Hunt, Economic Development Coordinator Reviewed by: Kevin Locke, Community Development Director Approved by: Tom Harmening, EDA Executive Director and City Manager Study Session Meeting of December 13, 2010 (Item No.6) Page 4 Subject: Business Terms of Development Contract with Hardcoat Inc. Business Terms of Development Contract Between the St. Louis Park EDA and Hardcoat Inc. The following are proposed Business Terms between the St. Louis Park Economic Development EDA (“EDA”) and M & L Properties, LLC (otherwise known as Hardcoat Inc or “Developer”), which, upon mutual agreement, will be incorporated into a Development Contract (“Development Contract”) for the purchase and renovation of 7301 and 7317 West Lake St. (the former Flame Metals property). 1. All parties agree that the Developer will be solely responsible for the acquisition of the subject two parcels that constitute the Development Property and that the City/EDA has no obligation to acquire the Development Property. 2. The Developer acknowledges that the EDA makes no representations or warranties as to the condition of the soils on the Development Property or the fitness of the Development Property for construction of the Minimum Improvements or any other purpose for which the Developer may make use of such property, and that the assistance provided to the Developer under this Agreement neither implies any responsibility by the EDA or the City for any contamination of the Development Property nor imposes any obligation on such parties to participate in any cleanup of the Development Property. 3. Developer further agrees that it will indemnify, defend, and hold harmless the EDA, the City, and their governing body members, officers, and employees, from any claims or actions arising out of the presence, if any, of hazardous wastes or pollutants existing on or in the Development Property (including without limitation any asbestos in any existing building). 4. The EDA has no obligation to pay relocation benefits with regard to any Parcel. 5. The EDA has determined that, in order to make the proposed project financially feasible and to expedite such development and stimulate the retention and creation of jobs, including construction jobs pursuant to the Job Creation Act, it is necessary to provide the Developer with a CAP Loan for a portion of the acquisition costs of the Development Property (the “Acquisition Costs”), subject to the following terms: (a) Terms. To assist the Developer with payment of the Acquisition Costs incurred by Developer, the EDA will provide the Developer with the CAP Loan in the principal amount of the lesser of $420,000 or 33% of the Construction Costs. The EDA shall loan 33% of the CAP Loan funds to Developer within 30 days of Developer having: (i) submitted and obtained Authority approval of financing in accordance and (ii) delivered to the EDA written evidence satisfactory to the EDA that Developer has incurred and paid the Construction Costs for which reimbursement is sought, which evidence must include copies of the paid invoices or other comparable evidence for the Construction Costs. Such invoices or other evidence shall be submitted to the EDA for payment on a monthly basis following commencement of construction of the Minimum Study Session Meeting of December 13, 2010 (Item No.6) Page 5 Subject: Business Terms of Development Contract with Hardcoat Inc. Improvements. Developer may submit invoices on a more frequent basis if the invoice or invoices submitted total more than $50,000. All invoices must be submitted no later than December 1, 2011. (b) Construction of the Minimum Improvements must commence prior to July 1, 2011, and no extensions of the commencement date will be considered. If the construction has not commenced by such date, the EDA has no further obligations under this agreement. (e) The Developer understands and acknowledges that the CAP Loan must be fully repaid, along with accrued interest at the rate of 6.0%, if the Developer fails to maintain the Minimum Improvements in good repair and condition, if a Transfer of the Development Property occurs at any time before the Termination Date, or if the EDA exercises its right to terminate this Agreement as a remedy for any Event of Default. Acquisition Costs exceeding the principal amount of the CAP Loan are the sole responsibility of Developer. 6. The EDA has determined that the total assistance loaned to the Developer is the lesser of $420,000 or 33% of the Construction Costs. This amount represents the total to be invested by the EDA. (a) The EDA will treat the above assistance as an interfund loan. The total principal amount of the Interfund Loan shall be the lesser of $420,000 or 33% of the Construction Costs. The EDA will pledge Available Tax Increment from the TIF District to payment of the Interfund Loan. The Developer has no rights or interest in any Tax Increment. 7. The parties agree and understand that the financial assistance described in this Agreement does not constitute a business subsidy within the meaning of the Business Subsidy Act. The Developer releases and waives any claim against the EDA arising from application of the Business Subsidy Act to this Agreement, including without limitation any claim that the Authority failed to comply with the Business Subsidy Act with respect to this Agreement. 8. The parties agree and understand that this Agreement is subject to the job retainment and creation objectives of the Job Creation Act. Accordingly, through the use of the CAP loan and other financing, the Developer will create and/or retain jobs in the construction industry and, once the Minimum Improvements are completed, will retain his current 14 full-time equivalent employees in the City of St. Louis Park and, as Developer’s business expands, create new job opportunities, presently projected to be at least six new full-time equivalent jobs (annualized 2,080 hours per job). 9. The Developer must submit to the City a written report regarding job and wage goals and results by no later than February 1 of each year, commencing February 1, 2012 and continuing until the date the job goals are met; or (ii) if the goals are not met, the date the CAP Loan is repaid. Study Session Meeting of December 13, 2010 (Item No.6) Page 6 Subject: Business Terms of Development Contract with Hardcoat Inc. 10. The Developer agrees that it will construct or cause construction of the Minimum Improvements on the Development Property in accordance with the approved Construction Plans and that it will, during any period while the Developer retains ownership of any portion of the Minimum Improvements, operate and maintain, preserve and keep the Minimum Improvements or cause the Minimum Improvements to be maintained, preserved and kept in good repair and condition. 11. Before commencing construction of the Minimum Improvements, the Developer shall submit to the EDA Construction Plans for the Minimum Improvements acceptable to the EDA. The Construction Plans shall provide for the construction of the Minimum Improvements and shall be in conformity with this Agreement, the Redevelopment Plan and all applicable State and local laws and regulations. 12. If the Developer desires to make any material change (meaning changes that increase or decrease construction costs by $100,000 or more) in the Construction Plans after their approval by the EDA, the Developer shall submit the proposed change to the EDA for its approval. The EDA’s approval of any such change in the Construction Plans will not be unreasonably withheld. 13. Subject to Unavoidable Delays, the Developer shall commence construction of the Minimum Improvements by July 1, 2011. Subject to Unavoidable Delays, the Developer shall complete the construction of the Minimum Improvements by December 1, 2011. All work with respect to the Minimum Improvements to be constructed by the Developer shall be in conformity with the Construction Plans as submitted by the Developer and approved by the EDA. 14. Within 30 days after completion of the Minimum Improvements the EDA Representative shall deliver to the Developer a Certificate of Completion. a) If the EDA Representative shall refuse or fail to provide the Certificate, the EDA Representative shall, within thirty (30) days after written request by the Developer, provide the Developer with a written statement, indicating in what respects the Developer has failed to complete the Minimum Improvements in accordance with the provisions of the Agreement, or is otherwise in default, and what measures or acts it will be necessary, in the opinion of the EDA, for the Developer to take or perform in order for the EDA to issue the Certificate of Completion. Issuance of the Certificate of Completion shall not be unreasonably withheld. 15. The Developer shall, with the EDA execute an Assessment Agreement specifying an assessor’s minimum Market Value for the Development Property and Minimum Improvements constructed thereon. The amount of the minimum Market Value shall be $2,425,000 as of January 2, 2012, and each January 2 thereafter. 16. The EDA agrees to subordinate its rights under the Agreement to the Holder of any Mortgage securing construction or permanent financing, in accordance with the terms of a mutually- approved subordination agreement. Study Session Meeting of December 13, 2010 (Item No.6) Page 7 Subject: Business Terms of Development Contract with Hardcoat Inc. 17. Developer agrees not to transfer the Redevelopment Agreement or the Redevelopment Property (except to an affiliate) prior to receiving a Certificate of Completion without the prior written consent of the EDA, except for construction mortgage financing and/or permanent financing. The EDA's consent shall not be unreasonably withheld, conditioned or delayed. The EDA agrees to provide its consent or refusal to consent to Developer in writing within 10 days after a request for such consent from Developer. 18. Developer agrees that the EDA and the City (the “Indemnified Parties”) shall not be liable for and agrees to indemnify and hold harmless the Indemnified Parties against any loss or damage to property or any injury to or death of any person occurring at or about or resulting from any defect in the Development Property or the Minimum Improvements. Developer agrees to protect and defend the Indemnified Parties and further agrees to hold the Parties harmless from any claim, demand, suit, action, or other proceeding whatsoever by the acquisition, construction, installation, ownership, maintenance, and operation of the Development Property. 19. Developer agrees until the Maturity Date that it shall not discriminate upon the basis of race, color, creed, sex or national origin in the sale, lease, or rental or in the use or occupancy of the Development Property or any improvements erected or to be erected thereon. 20. The Developer agrees that no portion of the Redevelopment Property will be used for a sexually-oriented business, a pawnshop, a check-cashing business, payday loan agency, a tattoo business; or a gun business. Meeting Date: December 13, 2010 Agenda Item #: 7 Regular Meeting Public Hearing Action Item Consent Item Resolution Ordinance Presentation Other: EDA Meeting Action Item Resolution Other: Study Session Discussion Item Written Report Other: Special Meeting TITLE: Governmental Accounting Standards Board (GASB) Statement 54 Implementation. RECOMMENDED ACTION: No action required at this time. This report is being provided for information purposes Please inform staff of any questions or concerns that you might have. Specific action regarding this matter will be brought to the Council’s December 20 meeting. POLICY CONSIDERATION: Does the City Council wish to proceed with early implementation of GASB 54 for fiscal year end 2010? BACKGROUND: During the 2011 budget process, staff briefly explained the requirements of GASB 54 and its effects on the presentation of fund balance. Staff explained that it allows the City to use different methods to show anticipated spending of its financial resources. This helps demonstrate financial planning for accumulated resources and subsequently how they may or will be spent. GASB Statement 54 is required to be implemented for year end 2011, and staff is recommending early implementation. This allows the City to experience the benefits of the Statement, as well as provides time for staff to work through any necessary changes before required implementation. New Fund Balance Classifications GASB 54 separates fund balance into five new categories. Under the old standards, there were three categories: Reserved, Designated, and Undesignated. The new categories are more descriptive, and focus on how the City plans to use its resources. A brief description of each of the new categories is listed below along with examples of each. Nonspendable fund balance- amounts that are not in a spendable form or are required to be maintained intact. An example of nonspendable fund balance is inventory. Inventory cannot be spent without being converted to cash first. Restricted fund balance- amounts subject to externally enforceable legal restrictions. An example of restricted fund balance is grant proceeds required to be spent for a specific purpose. The Cable TV capital grant received from Time Warner is an example of a restricted grant. Committed fund balance- amounts that can be used only for the specific purposes determined by a formal action of the government’s highest level of decision-making authority (City Council). Commitments may be changed or lifted only by the government taking the same formal action that imposed the constraint originally. An example of committed fund balance would be the City Council committing cable franchise fees for cable TV programming. Assigned fund balance- amounts a government intends to use for a specific purpose; intent can be expressed by the government body or by an official or body to which the governing body Study Session Meeting of December 13, 2010 (Item No. 7) Page 2 Subject: Governmental Accounting Standards Board (GASB) Statement 54 Implementation delegates the authority (City Manager and/or Controller). An example of assigned fund balance would be the City’s portion of a construction project where other funding was received with the requirement of a match. Unassigned fund balance- residual amounts that are available for any purpose in the general fund. This category can only be found in the general fund given that the City must identify the specific intended use or limitations of the dollars in the other funds that we have. Committed, assigned, and unassigned fund balance combine to make unrestricted fund balance. Changes Due to GASB 54 Compliance with GASB does not change how the City of St. Louis Park conducts business. All of the changes will be from a presentation standpoint in the City’s Comprehensive Annual Financial Report (CAFR) and the Fund Balance Policies. Other than the new classifications being presented in the CAFR, there are several other changes of note. One change will be related to the City’s Police and Fire Pension Fund. This fund is currently classified as a Special Revenue Fund. Under GASB 54, this fund no longer meets the definition of a Special Revenue fund, as there are no specific on-going revenue sources. Based on the City’s Capital Improvement Plan and Long Range Financial Management Plan, the majority of the expenditures in the Police and Fire Pension Fund will be capital related. This allows the City to reclassify the fund to a Capital Projects Fund. This does not change how the City uses the Fund; it only changes what section of the CAFR it is presented in. The second change is related to fund balance commitments. To meet the Special Revenue Fund definition, a fund must have “specific revenue sources that are restricted or committed to expenditure for specified purposes”. This requires the Council to adopt a resolution “committing” specific revenues to each of the special revenue funds prior to the end of the year. This resolution will be presented to Council on December 20th. Attachment #1 gives the anticipated fund balance classifications for each Governmental Fund. The Special Revenue Funds are highlighted, and the commitments that will be included in the resolution are italicized. This document will change as we go through the audit process and determine other revenues that fall under a specific category. The commitments made by the Council cannot change without Council taking similar action to remove them. The final change of note is related to the City’s Fund Balance Policies originally adopted on October 27, 2008. The Fund Balance Policies need to be revised to authorize the City Manager and/or Controller to assign fund balance to reflect the City’s intended use of funds. This does not change the authority to actually spend resources, but to assign resources for a presentation standpoint only. The Fund Balance Policies also need to include how the City intends to use its resources when multiple categories of fund balance are available. The revised Fund Balance Policies are included as attachment #2. There have been several minor changes made to reflect the new terminology used in GASB 54 and to reflect how funds are currently being used. Again, the revised policy does not change how the City conducts business or the General Fund reserve. Changes to the policies have been highlighted in the attachment. FINANCIAL OR BUDGET CONSIDERATION None other than those identified in this report Study Session Meeting of December 13, 2010 (Item No. 7) Page 3 Subject: Governmental Accounting Standards Board (GASB) Statement 54 Implementation VISION CONSIDERATION: Not applicable Attachments: 1- Fund Balance Classifications 2- Fund Balance Policy Prepared by: Steven Heintz, Finance Supervisor Reviewed by: Brian A. Swanson, Controller Approved by: Tom Harmening, City Manager FundCategoryCommitted/Assigned For:General FundE-911 MoneyRestrictedInventoryNonspendablePrepaidsNonspendableDWI Enforcement- from Crime FundAssignedDWI EnforcementSPECIAL REVENUE FUNDSPark & RecInventory NonspendableSummer Playground Progaram RestrictedProperty TaxesCommittedRecreation ProgramsCharges for ServicesCommittedRecreation ProgramsRemainder Assigned Recreation ProgramsHousing RehabLoans Rec-noncurrent NonspendableRevenues from Rev Bond FeesCommittedPreventing deterioration of mult-unit housingRemainder Assigned Preventing deterioration of mult-unit housingCable TVFranchise FeesCommittedCable TV ProgrammingTime Warner Capital Grant Restricted CapitalRemainder Assigned Cable TV ProgrammingCommunity DevelopmentCDBG Funds RestrictedRemainder Assigned Community DevelopmentSpecial Service DistrictsSpecial Assessments Assigned/Restricted Special Service Dist OperationsRemainder Assigned Special Service Dist OperationsCity of St. Louis ParkGASB 54 ImplementaionFund Balance ClassificationsFYE 2010Study Session Meeting of December 13, 2010 (Item No. 7) Subject: Governmental Accounting Standards Board (GASB) Statement 54 Implementation Page 4 CAPITAL PROJECTS FUNDSPolice & Fire PensionsRefund of overpayment for P&F Pension RestrictedPermanent Improvement RevolvingSpecial AssessmentsAssigned/Restricted Capital Improvements benefiting individual property ownersRemainderAssignedCapital Improvements benefiting individual property ownersStreets Captial ProjectsMSA RestrictedRemainderAssignedStreet ConstructionDevelopment EDAParking Lot RentAssignedRedevelopment EffortsRemainderAssignedRedevelopment EffortsRedevelopment DistrictTax IncrementsRestrictedHRA LevyRestrictedRemainderAssignedTax Increment FinancingFire Station BondsBondsRestrictedConstruction of two new fire stationsRemainderAssignedConstruction of two new fire stationsPark Improvement FundProperty TaxesAssignedSchool Dist ContributionsRestrictedPark Dedication FeesRestrictedRemainderAssignedDevelopment of ParksPavement Management FundProperty TaxesAssignedStreet RehabilitationFranchise FeesAssignedStreet RehabilitationRemainderAssignedStreet RehabilitationDEBT SERVICE FUNDSRestricted Study Session Meeting of December 13, 2010 (Item No. 7) Subject: Governmental Accounting Standards Board (GASB) Statement 54 Implementation Page 5 St. Louis Park Fund Balance Policy 1 City of St. Louis Park Fund/Cash Balance Policies December 20, 2010 The purpose of the fund balance policies is to establish appropriate fund balance levels for each fund that is primarily supported by property tax revenues or user fees. These policies will ensure that adequate resources are available to meet cash flow needs for carrying out the regular operations of the City, as well as to meet the fund balance requirements identified in the City’s Long Range financial Management Plan. The funds that will be addressed in this policy are: General Fund, Parks & Recreation, Park Improvement, Pavement Management, and Enterprise Funds. The City Council authorizes the Controller and/or City Manager to assign fund balance that reflects the City’s intended use of those funds. When both restricted and unrestricted resources are available for use, it is the City’s policy to first use restricted resources, and then use unrestricted resources as they are needed. When unrestricted resources are available for use, it is the City’s policy to use resources in the following order; 1) committed 2) assigned 3) unassigned. These fund balance classifications apply only to Governmental Funds, not Enterprise Funds. I. General Fund The General Fund is established to account for all revenues and expenditures which are not required to be accounted for in other funds. Revenue sources include property taxes, license and permit fees, fines and forfeits, service charges, intergovernmental revenues, investment interest earnings, and transfers. The General Fund’s resources finance a wide range of functions including the operations of general government, public safety, and public works. The City will strive to maintain an unassigned fund balance in the General Fund in the range of 35-50% of the subsequent year’s budgeted expenditures. Since a significant source of revenue in the General Fund comes from property taxes, maintaining a fund balance that is equal to at least five months of operating expenditures ensures that sufficient resources are available to fund basic City functions between property tax settlements. This range is in conformance with guidance from the Office of the State Auditor (OSA). Amounts that exceed 40% may be transferred out to other funds. An assignment or restriction of fund balance may be used to offset revenues earned in one year where substantial services are required to be performed in the next fiscal period II. Parks & Recreation The Parks and Recreation Fund is a Special Revenue Fund that provides for both passive and active recreational activities throughout the community. It receives the majority of its funding from property taxes and user fees which finance specific activities. These activities are separated into several divisions: Organized Recreation, Park Maintenance, Study Session Meeting of December 13, 2010 (Item No. 7) Subject: Governmental Accounting Standards Board (GASB) Statement 54 Implementation Page 6 St. Louis Park Fund Balance Policy 2 Environment, Westwood Nature Center, Recreation Center and Vehicle Maintenance. Fees for programs within these divisions are reviewed each year to determine the appropriate amount of revenue to offset the costs and yet keep the program affordable for participants. In some cases, the fee charged is either more market driven or may be based on ability or willingness to pay, which will set the fees above or below the direct costs of running an individual program. The City will strive to maintain a fund balance in the Parks and Recreation Fund in the range of 10-25% of the subsequent year’s budgeted expenditures. This lower percentage is deemed adequate since many of the program revenues are received earlier in the year than property tax settlements. Amounts that exceed 15% may be transferred out to other funds. III. Park Improvement Fund The Park Improvement Fund pays for land, buildings, and infrastructure for the parks within the city. Property taxes and park dedication fees make up the majority of the revenues for this fund. The City will strive to maintain a fund balance in the Park Improvement Fund in an amount sufficient to support the ongoing capital expenditures planned in the CIP and in congruence with the Long Range Financial Management Plan. IV. Pavement Management Fund The Pavement Management Fund is used to account for the financing of street rehabilitation projects. Revenue sources are provided mainly through franchise fees and property taxes. Street projects are programmed into the City’s Capital Improvement Plan and are generally planned years in advance. The City will strive to maintain the fund balance in the Pavement Management Fund in an amount sufficient to support the ongoing capital expenditures planned in the CIP and in congruence with the Long Range Financial Management Plan. V. Enterprise Funds These funds were established to account for the operation of Water, Sewer, Solid Waste, and Storm Water operations which are designed to be self-supporting from user charges. a. Water Utility This fund is used to account for the provision of water services to the customers of the City related to administration, operations, maintenance, billing and collection. This fund is financed predominantly through user charges. Study Session Meeting of December 13, 2010 (Item No. 7) Subject: Governmental Accounting Standards Board (GASB) Statement 54 Implementation Page 7 St. Louis Park Fund Balance Policy 3 The City will strive to maintain a cash balance in the Water Utility Fund in the range of 35-50% of the subsequent year’s budgeted expenditures. Since a significant source of revenue in the Water Utility Fund comes from user charges, maintaining a cash balance that is equal to at least 35-50% of the subsequent year’s expenditures ensures that sufficient resources are available to fund basic City functions between receipts of user charges. In addition, due to the mature water infrastructure within the City, a higher percentage of fund balance is prudent to address any potential issues. b. Sewer Utility This fund is used to account for the provisions of sewer services to the customers of the City. All activities necessary to provide this utility to the customers are administration, operations, maintenance, billing and collection. This fund is financed predominantly through user charges. The City will strive to maintain a cash balance in the Sewer Utility Fund in the range of 35-50% of the subsequent year’s budgeted expenditures. Since a significant source of revenue in the Sewer Utility Fund comes from user charges, maintaining a cash balance that is equal to at least 35-50% of the subsequent year’s expenditures ensures that sufficient resources are available to fund basic City functions between receipts of user charges. In addition, due to the age of sewer infrastructure within the City, a higher percentage of fund balance is prudent to address any potential issues. c. Solid Waste Utility This fund is used to account for the provisions of solid waste services to the customers of the City related to collection, disposal and recycling of solid waste. This fund is financed predominantly through user charges and investment income. The City will strive to maintain a cash balance in the Solid Waste Utility Fund in the range of 25-40% of the subsequent year’s budgeted expenditures. Due to less volatility, a lesser cash balance percentage is justifiable. This will ensure that sufficient resources are available to fund basic Solid Waste activities. d. Storm Water Utility This fund is used to account for the provision of storm water to the customers of the City related to administration, operations, maintenance, billing and collection. This fund is financed predominantly through user charges and investment income. The City will strive to maintain a cash balance in the Storm Water Utility Fund in the range of 25-40% of the subsequent year’s budgeted expenditures. Due to less volatility, a lesser cash balance percentage is justifiable. This will ensure that sufficient resources are available to fund basic Storm Water activities. Study Session Meeting of December 13, 2010 (Item No. 7) Subject: Governmental Accounting Standards Board (GASB) Statement 54 Implementation Page 8 Meeting Date: December 13, 2010 Agenda Item #: 8 Regular Meeting Public Hearing Action Item Consent Item Resolution Ordinance Presentation Other: EDA Meeting Action Item Resolution Other: Study Session Discussion Item Written Report Other: Special Meeting TITLE: Selection of City Auditor. RECOMMENDED ACTION: No action required at this time. This report is being provided for informational purposes. Please let staff know of any questions or concerns you might have. POLICY CONSIDERATION: Does the City Council wish to proceed with a contract for auditing services with HLB Tautges Redpath, LTD? BACKGROUND: The audit firm the City has used over the last six years is Abdo, Eick and Meyers. During this time this firm has provide very good service to the City. However, given the amount of time the City has used this firm without receiving competitive proposals, the City Council directed staff on October 25 to request proposals for auditing services for fiscal year end 2010 with three option years. In early November, staff sent out a Request for Proposals (RFP) for auditing services. We received seven proposals, all from very reputable CPA firms. All seven of the proposals met the minimum requirements, and were considered. Staff reviewed all of the proposals and scored them based on criteria given in the RFP. The criteria included: experience and quality of staff, overall firm qualifications, audit approach, audit schedule, additional services, and cost. After all of the proposals were reviewed, the top three firms were invited to give a brief presentation and answer questions posed by staff. City staff interviewed all three firms on Thursday, December 2nd. The interviews were scored based on criteria including: communication, experience with cities of similar size and complexity, work relationships, and overall quality of the presentation. Several reference calls were made to other cities with experience in working with the various firms. After consideration of the proposals, interviews, and reference calls, staff came to the conclusion that HLB Tautges Redpath, LTD would provide the best overall service for the City. Below are the CPA firms that were interviewed, along with their corresponding fees for the 2010 year-end audit and total fees for 2010-2013 audits. Firm Fees for 2010 Audit Cumulative 2010-2013 Audits MMKR $43,200 $175,450 HLB Tautges Redpath $45,000 $195,300 Abdo, Eick & Meyers $46,906 $190,318 All three of these proposals are a decrease from the 2009 audit fees of $51,000 and provide the same services as the 2009 audit. Study Session Meeting of December 13, 2010 (Item No. 8) Page 2 Subject: Selection of City Auditor Background on HLB Tautges Redpath, LTD HLB Tautges Redpath, LTD is a local CPA firm located in White Bear Lake, MN. They are a member of HLB International, a worldwide organization of professional accounting firms. This gives them access to the resources of accounting firms throughout the world. Several members of their staff have 20-30+ years of governmental experience. Many members of their staff are member of the Minnesota Government Finance Officers Association, and they routinely host seminars and workshops for clients regarding important changes in accounting standards. They have a reputation for providing a quality audit, and pride themselves on being “thinkers, not robots”. Several members of HLB Tautges Redpath, LTD that would be working on the St. Louis Park audit will be at the Special Study Session on December 20th. They will provide a brief presentation on their firm and answer any questions that the Council may have for them. FINANCIAL OR BUDGET CONSIDERATION The expense for the 2011 audit is included in the budget. VISION CONSIDERATION: Not applicable Attachments: None Prepared by: Steven Heintz, Finance Supervisor Reviewed by: Brian A. Swanson, Controller Approved by: Tom Harmening, City Manager