# Presentation: 253740

## Financing Freight Infrastructure

***presented to*****Talking Freight Seminar**
***presented by*****Iris N. Ortiz****Cambridge Systematics, Inc.**
**September 20, 2006**

**Financing Freight Infrastructure**

**A Guidebook to Federal Funding****and Financing Tools for Freight Projects**

## Agenda

**About the Guidebook**
**Case Studies**

## Freight Financing Issues

**Public investment on private infrastructure**
**Public-private partnerships**
**Regional/multijurisdictional scope of issues**
**Some require unique blending of funding sources****and financing techniques**

## Objective and Structure

**Objective – Develop a guide that will provide information and descriptions of available Federal funding sources ****and financing tools to support freight investments**
**Guidebook structure**
**Funding and financing tools**
**Case studies**
**Phases II and III – Freight financing course development and delivery**

## Federal Funding and Financing Tools

**Funding (partial list)**
**Traditional – NHS, STP**
**Mode Specific/Special Grants – CMAQ, Bridge, ****Rail-Highway Crossing, Harbor Maintenance, ****Airport Improvement Program**
**Discretionary and HPP**
**Financing Tools – TIFIA, SIBs, RRIF, GARVEE, PAB**

## Non-Federal Funding Methods and Financing Tools

**Funding sources**
**User fees/tolls**
**Dedicated taxes**
**Special taxing and assessment districts**
**Equity and in-kind contributions**
**Financing tools**
**Public debt**
**Tax-exempt/private activity bonds**
**Institutional arrangements**
**Joint development**
**Public-private partnerships**
**Tax-exempt corporations/63-20 corporations**

## Case Studies

**Case Studies**

**Guidebook includes about 50 case studies**
**Types of projects**
**Highway**
**Rail**
**Airport expansion**
**Port**
**Intermodal/storage facilities**

## Case Studies

**Dixie Siding (Indianapolis, IN) ****– ****$1.5 million**
**Southern Tier Extension Railroad Restoration (Hornell, NY to Corry, PA) ****– ****$38 million**
**ReTRAC (Reno, NV) ****– ****$280 million**
**Sheffield Flyover/Argentine Connection ****(Kansas City, MO-KS) ****– ****$60 million to $74 million**

## Dixie Siding

**One-mile long rail siding constructed south of the West Avenue highway-rail crossing to store empty coal trains **
**Completed in 2003**

**Source:  Indianapolis MPO.**

## Dixie SidingFunding

**Dixie Siding****Funding**

**Funding partners – Indiana Railroad Company, Indiana DOT, Indianapolis MPO, FHWA**
**Funding/financing mechanisms**
**Indiana Railroad Company – $815,000**
**INDOT Industrial Rail Service Fund grant – $200,000**
**CMAQ – $480,000**

## Reno Transportation Rail Access Corridor (ReTRAC) 

**Project description – 33-foot deep trench to separate auto traffic from rail in downtown Reno; 11 bridges to provide crossings over the trench**
**Project cost – $280 million**
**Project sponsors/partners**
**City of Reno**
**Union Pacific**
**FHWA**

**Source:  City of Reno**

## ReTRACFunding

## ReTRACSources to Repay Debt

**ReTRAC****Sources to Repay Debt**

**1/8% Sales Tax and ****1% Hotel Tax, 46%**
**$50.5 Million **

**Air Rights, 5%**
**$5 Million**

**Lease Income, 32%**
**$34 Million**

**Assessment District, 17%**
**$18 Million**

## Sheffield Flyover and Argentine Connection

**Location – Kansas City, Kansas-Missouri**
**Project type – Rail crossing separation**
**Project cost**
**Sheffield Flyover – $74 million**
**Argentine Connection – $59.8 million**

## Sheffield Flyover

**Completed in 2000**
**Sheffield Junction was the third busiest rail crossing in the country**
**Travel time savings of 25 minutes (trains)**
**Financing strategy**
**Creation of nonprofit transportation corporation**
**Issue bonds; tax-exempt status from property tax**
**Railroads (BNSF, UP, and Kansas City Southern) pay back debt**

## Argentine Connection

**Completed in 2004**
**Santa Fe Junction located at state border**
**Increased rail capacity**
**Financing strategy**
**Missouri created another transportation corporation to issue bonds ($46.3 million)**
**Unified Government of Kansas City/Wyandotte County issued bonds to fund the Kansas portion of the project ($13.5 million)**
**Kansas City Railway Terminal responsible for debt service payments**

## Lessons Learned

**Funding follow benefits**
**Agreements are reached only after major obstacles are addressed**
**Cash contributions not the only “revenue source”**

## Next Steps

**Guidebook – Fall 2006**
**Develop a freight financing course – Winter 2006/07**
**Course delivery – TBD**

## Contact Information

**Iris N. Ortiz**
**100 CambridgePark Drive Suite 400****Cambridge, MA 02141**
**Phone: 617-354-0167**
**E-mail: iortiz@camsys.com**