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CITY OF NEW BRIGHTON <br />COMMUNITY DEVELOPMENT DEPARTMENT <br />MEMORANDUM <br />DATE: August 20, 2010 <br />TO: Dean Lotter, City Manager <br />Schawn Johnson, Assistant to the City Manager <br />FROM: Grant Fernelius, Community Development Director QW <br />SUBJECT: Work Session Update on Railroad Wye Project <br />Introduction <br />Staff had originally planned to discuss the railroad wye at the July 23, 2010 work <br />d not have an <br />Attached or reference urposes is a e to time constraints, we opy of the memo that was distributed for thato discuss the t <br />work session. <br />Update <br />Since mid-July, staff has learned a few things: <br />1) According to the Minnesota Commercial Railroad, the Union Pacific (UP) <br />does not believe that coal train traffic will return for at least another 3 years. <br />Even then it is possible that traffic will be routed elsewhere throughout the UP <br />track network. Staff has contacted the UP and the Canadian National (CN) <br />directly to verify that this is their understanding. At this point, we have not <br />received a response. <br />2) The Canadian Pacific (CP) is still demanding pre -payment of the rail lease, <br />which at this point is estimated to be worth $102,000. In addition, the <br />company wants the City to pay for annual maintenance costs for the first 5 <br />years of the project. This is estimated to cost between $5,000 and $10,000, <br />mostly to cover mandatory FRA inspections. <br />What's at Stake <br />The City must ultimately decide if the wye project is still worthwhile. The additional <br />lease and maintenance costs cannot be paid for out of the State grant funds. Because <br />then the near <br />m, the railroads <br />economics don't work and the City wto be a great ell need toal of use 1pay for these additional say the <br />dd t onal costs <br />con <br />