Minutes - South Dakota Department of Transportation

SOUTH DAKOTA STATE RAIL PLAN REGIONAL STAKEHOLDER MEETING MINUTES SOUTH DAKOTA DOT BUILDING 1306 W. 31st Street, Yankton, SD Monday, November 18, 2013 5:00pm-7:00pm Attendees: Alex Huff – Retired DSRC; Dick Rysavy – City of Dante; Tub Harrington – Chairman NPRA; Gary Brown – NPRA; Garry Moore – NPRA/Yankton County Commission; John Hauck – Bon Homme Commission; Jim Klimisch; Dan Matcha; Brad Moser – City of Yankton; Jerry Oster – WNAX Radio; Al Sinclair – Yankton County; David Leonard – KYNT Radio Staff Present: Bruce Lindholm – South Dakota DOT; Misty Siedschlaw – South Dakota DOT; Erika Witzke– Cambridge Systematics; Andreas Aeppli – Cambridge Systematics; Carey Bretsch – Civil Design Inc; Chris Brozik – Civil Design Inc Stakeholder Discussion: Andreas Aeppli started the meeting with a presentation on the South Dakota State Rail Plan regarding its purpose, plan, and process. Information that has been gathered thus far was also discussed during the presentation including existing infrastructure and how commodities are transported through, into, or out of the state. Andreas continued by discussing projections to the year 2040 to show trends for freight to help plan for the future. Andreas then asked stakeholders in the room to each fill out a questionnaire to get input, and a group discussion was held to talk about issues and where areas of improvement need to be made. Garry Moore opened up discussion with economic development concerns. He said the local economy around the Yankton area is hurting. Small elevators that need 5-10 rail cars are not getting them to have grains shipped. They have to ship by truck. He said you now need to have a large facility that can handle a large unit train in order to get service from BNSF. Garry went on to say that they cannot get service to the small communities via rail and without service to these small communities, economic growth is not possible. He went on to say that lumber or paper used to be delivered by rail all the time, but now you can’t get it by rail. Dan Matcha said a lot of the smaller communities would get their own locomotive and own cars, and they would switch them in and that is how they were able to get them shipped. Garry said that today you cannot do this. Garry believes that the state should retain ownership of state owned rail lines. Alex Huff said there is a new player in the grain business, a company called Interstate Commodities. They are getting aggressive by purchasing multiple elevators in the area. They are significant players in the Mitchell to Rapid City (MRC) and Platte lines. Alex went on to mention that multiple carrier access has about $1 of savings per bushel. Alex agrees with Garry that the state should retain ownership, but

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only as long as the state is putting pressure on railroad operators. Alex said that multiple carrier access should not be given to an individual, but should be in the hands of the state. Alex brought up the issue with the line west of Pierre and what will happen to this line in the future. Canadian Pacific (CP) currently owns the line, but there are many areas with bad soil conditions. They constantly have to tamp areas after trains pass along the line. Alex said there are also many bridges that are in poor condition because they were existing structures from another location that were shipped to the site and installed and many are over 100 years old. Alex said it would be a bad idea to lose the last piece of rail connecting the eastern part of the state to the western part of the state. Another option would be to relay track on the state owned rail banked line from Kadoka to Rapid City but this would also be a very expensive investment. Alex said there are tough decisions that need to be made with South Dakota rail infrastructure moving forward. Tub Harrington mentioned that there was no representation for their area of the state on the State Rail Plan Advisory Committee. Tub thought they should have a representative from the area attending these meetings. Bruce Lindholm said if anyone would like to be a representative for the community to attend the committee meetings they would add them to the committee mailing list. A couple in the group thought Garry Moore would be a good candidate for attending these meetings. Erika Witzke said the next advisory committee meeting will be held February 12, 2014 in Rapid City. Garry said another improvement that is required throughout the state that isn’t getting addressed is railroad crossings. Many are in very poor condition and are not getting repaired. Garry said there has been a case where a farmer had a tire blowout driving over a railroad crossing and then the BNSF fixed the crossing. It shouldn’t come to this before crossings are repaired. They need to be more proactive to avoid incidents like these. Garry went on to discuss one of the state policy questions: “Should the state support investment in public and private rail systems?” Garry said the state has already supported public and private rail systems, and they need to stay involved. That is what the trust fund is set up for. Bruce said most state loans go to private industries. Currently, the rail fund assets are approximately $40 million. Alex asked Bruce if any loan has not been fulfilled. Bruce said they haven’t had any issues with anyone not paying loans or not getting money on loans, except for one instance where they borrowed money to an elevator that burned down. On this particular loan, the entire principal balance was received but none of the interest. This loan was particularly small as well in relation to other loans given out. Alex agreed with Garry that using the rail trust fund has not been a loss to the state. John Hauck asked about the Bakken Oil in North Dakota and was wondering where the oil is going and why South Dakota’s rail infrastructure isn’t being utilized. Andreas said a small portion in southeastern South Dakota is being used for the Bakken Oil, the BNSF line through Garretson. However, most the oil is being shipped all over the country. John added that he didn’t see why the line running north from Sioux City through Mitchell up to Aberdeen and north into North Dakota couldn’t be utilized for the Bakken Oil. Alex said that if more unit trains are going through Sioux City in the future, improvements will need to be made to the track. He said that currently they need to lubricate the track on a stretch of curve every

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time prior to a train passing. However, Alex believes that the state is in better condition than many other states. Carey Bretsch asked the group how many businesses in the community are having trouble getting cars. Garry said that three farm equipment dealerships could be getting equipment by rail. There are multiple grain elevators, one example being Chancellor, which are hauling by truck currently and could be shipping by rail. Gehl Manufacturing is another example along with many other businesses. Dan said that many of these businesses don’t have spurs right now to get rail cars. Carey said these businesses need sidings before they would be able to receive cars, because cars cannot be sitting on the mainline. Carey asked if this was the main problem for not having railcars delivered. Dan said that this is some of the problem. Garry said they would need about 20-30 cars. Garry also mentioned that if cars are being stored, the state should be receiving a switching fee. Bruce said the state receives one-third of the fee for storing cars. Misty said it is an annual payment and is $0.032/foot of car stored. John said that preparing a state rail plan is a great idea and is glad the state is working on completing one. Overall, the general consensus in the room was that the state needs to stay involved in rail and should not get out of the business. They do a lot of good for rail and the community feels it would be a bad idea to sell the current state owned lines. They feel that it is a good use of state funds and the rail trust fund is working and is a benefit to the state.