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Project Information: What is the Project Name? Port of Longview - Industrial Rail Corridor Expansion (IRCE) Who is the Project Sponsor? Port of Longview Was an INFRA application for this project submitted previously? (If Yes, please include Yes, FASTLANE FY17, INFRA FY18 title). Port of Longview Industrial Rail Corridor Expansion (ICRE) Project Project Costs: INFRA Request Amount $48.8M Estimated federal funding (excl. INFRA) $0 Estimated non-federal funding $31.9M Future Eligible Project Cost (Sum of previous three rows) $80.7M Previously incurred project costs (if applicable) $ 2.2M (2017-2019) Total Project Cost (Sum of ‘previous incurred’ and ‘future eligible’) $82.9M Are matching funds restricted to a specific project component? If so, which one? No Project Eligibility: Approximately how much of the estimated future eligible project costs will be spent $0 on components of the project currently located on National Highway Freight Network (NHFN)? Approximately how much of the estimated future eligible project costs will be $0 spent on components of the project currently located on the National Highway System (NHS)? Approximately how much of the estimated future eligible project costs will be $0 spent on components constituting railway-highway grade crossing or grade separation projects? Approximately how much of the estimated future eligible project costs will be $80.7 million spent on components constituting intermodal or freight rail projects, or freight projects within the boundaries of a public or private freight rail, water (including ports), or intermodal facility? Project Location: Small or large project? Small State(s) in which project is located? Washington Urbanized Area in which project. is located, if Longview (UA#51283) applicable Population of Urbanized Area 63,952 (2010 Census) Is the project currently programmed in the • TIP. No, Only Roadway Projects are listed • STIP. Project to be added Spring 2019 • MPO Long Range Transportation Plan. 2045 Regional Transportation Plan • State Long Range Transportation Plan. No projects are not listed in this Plan • State Freight Plan? Yes

Table of Contents

Application at a Glance ...... 1 Executive Summary ...... 2 I. Project Description ...... 4 I.1 Project Size and Elements ...... 5 I.2 History and Context ...... 5 I.3 National and regional Significance ...... 6 I.4 Transportation Challenges Addressed ...... 7 II. Project Location ...... 9 III. Project Parties ...... 11 IV. Grant Funds and Sources/Uses of Project Funds ...... 12 IV.1 Previously Incurred Costs ...... 12 IV.2 Future Eligible Costs ...... 12 IV.3 Description of Sources and Uses of Funds ...... 13 IV.4 Summary of Industrial Rail Corridor Expansion Enhancements ...... 13 V. Merit Criteria...... 14 V.1 Criterion #1: Support for national or regional economic Vitality ...... 14 V.2 Criterion #2: Leveraging of federal funding ...... 17 V.3 Criterion #3: Potential for Innovation ...... 19 V.4 Criterion #4: Performance and Accountability ...... 20 VI. Project Readiness ...... 20 VI.1 Technical Feasibility ...... 20 VI.2 Project Schedule ...... 21 VI.3 Required Approvals ...... 22 VI.3.1 Environmental Permits and Review ...... 22 VI.4 Assessment of Project Risk and Mitigation Strategies ...... 24 VII. Conclusion ...... 25 VIII. Appendices ...... 26

List of Appendices Appendix A: Benefit Cost Analysis Executive Summary Narrative- Submitted in Application Appendix B: Benefit Cost Analysis Excel Spreadsheets- Submitted in Application Appendix C: INFRA Criterion Summary- Detailing Project Attributes Appendix D: National Highway System – Longview, WA Appendix E: Schematic of Rail Layout Appendix F: Detailed Project Schedule Appendix G: Detailed Project Budget Appendix H: 30% Design Plan Set- posted on website due to document size Appendix I: Required Reviews and Permits Appendix J: Description of the Port Terminals serviced by the IRCE and Highlights of Market Demand- Appendix K: Port of Longview’s 44 Trading Partners

Project website: http://www.portoflongview.com/165/INFRA-Grant

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List of Exhibits

Exhibit ES-1: IRCE Site Plan ...... 2 Exhibit I-1: Total Tonnage ...... 4 Exhibit I-2: Section Drawing of IRCE over Log Pond ...... 5 Exhibit I-3: Port of Longview Aerial View ...... 6 Exhibit I-4: Columbia River ...... 7 Exhibit I-5: Port of Longview Industrial Corridor Expansion Project (IRCE) ...... 7 Exhibit I-6: SR 432/433 Intersection ...... 8 Exhibit I-7: Internal Port Rail lines serving Berths and Terminals ...... 9 Exhibit II-1: Location of Port of Longview ...... 9 Exhibit IV-1 Project Funding ...... 12 Exhibit IV-2: Total Budget Including Previously Incurred Expenses ...... 12 Exhibit IV-3: Sources and Uses of Project Funds ...... 13 Exhibit IV-4: Project Enhancements ...... 13 Exhibit V-1: Project Metrics for an additional 375,000 MT in 2025 ...... 14 Exhibit V-2: Wind Blade Unloading at Berth 6 ...... 15 Exhibit V-3: Wind Blade on Train ...... 15 Exhibit V-4: Current IRC into Port ...... 16 Exhibit V-5: BCA Summary ...... 17 Exhibit V-6: Federal Investment that will be leveraged by this Project ...... 18 Exhibit VI-1 Project Scope of Work ...... 21 Exhibit VI-2: Phase I IRCE Project Schedule ...... 21 Exhibit VI-3: Required Reviews and Permits ...... 23 Exhibit VI-4: Examples of Letters Supporting the Project ...... 24 Exhibit VI-5 Project Risk Matrix...... 25

APPLICATION AT A GLANCE

Proposed Title: Port of Longview Industrial Rail Corridor Expansion (IRCE) Project

Project Summary: This project is Phase I of the Port’s $100 million IRC Expansion Project. The project will expand rail capacity of the port’s current IRC to serve the bulk and breakbulk cargo facilities at the Bridgeview Terminal and Berths 4, 6 and 7 (five of the Port’s eight berths). Specifically, it will bring uninterrupted unit train service to future development at Berth 4. Geospatial Information: N 46.0625 W 122.5726 County Demographics1: Population in Cowlitz Co. (2018): 103,590 Median Household Income: (2017) $49,804 Personal Per Capita Income: $25,878 Persons in Poverty 16.4% Congressional District: Washington 03 Economically Distressed: Cowlitz County has been designated by Washington State as an economically distressed county due to a higher unemployment rate than the state average. Project Classification: Urban

Total Phase I Project Cost: $80,700,000 Funding Request: $48,800,000 Non-Federal Match: $31,900,000

Benefit: Cost Ratio: 6:1 at 7%, Contact: Kara Metzger, Contracts / Purchasing Manager 10 port way, Longview, WA 98632 360-703-0254 [email protected] Project Documentation: http://www.portoflongview.com/165/INFRA-Grant

1 https://www.census.gov/quickfacts/fact/table/cowlitzcountywashington/PST045217

EXECUTIVE SUMMARY

The Port of Longview (Port) is seeking $48.8 million in a rural small project INFRA grant to complete the $80.7 million Phase I of the Port’s Industrial Rail Corridor Expansion (IRCE). It is the Port’s intent to build out the full $100 million IRCE project in three phases as funds become available. The Phase I Project is cost- effective with a benefit cost ratio of 6:1 at a 7 percent discount rate. An effective rail network through Longview is important to helping Washington state’s economy remain vital. The full buildout of this Project will more than double the capacity of the local rail network within the Port area by adding a total of 76,000 linear feet of track which includes an additional running-track and a 42,500-foot staging yard. The expanded rail gateway at the Port of Longview will enable the Port to improve safety, decrease congestion, improve mobility, while protecting the environment by improving system reliability of the freight movements by rail. Phase I will utilize the current two track industrial rail corridor and develop the new rail track bed for the full build, utility improvements, and place 33,700 feet of track (one lead track and two support tracks).

Exhibit ES-1: IRCE Site Plan

The IRCE project improves freight movement by providing the last mile connection between the BNSF Railway and Union Pacific Railroad to the Port’s marine terminals and industrial park complex. Adding a running track and storage capacity will allow for the efficient movement of 100-120-car unit trains between the Class I mainline tracks and the port facilities. The Port constructed the original Industrial Rail Corridor (IRC) in the early 2000s to provide more efficient access to existing import/export facilities. The IRC was developed to stimulate economic growth within Washington’s Cowlitz County, the Pacific Northwest (PNW) and the country, by improving freight mobility, reducing congestion, and enhancing safety. The IRC development achieved its goal by attracting the first new gain terminal in 25-years. Additionally, the success of the IRC project continues to grow the demand for rail infrastructure at the Port. The IRCE will allow the Port to provide current customers with their rail needs, as well as attract new unit train delivery for future customers. Supports for National and Regional Vitality: The project supports Economic Vitality by improving the efficiency of delivering freight safely from across the nation, cutting the costs of doing business and attracting

new freight customers and creating family wage jobs. This Project will reduce truck traffic on the National Highway System (NHS) by transporting freight to and from the Port’s docks by rail. Using rail as the primary mode of transportation for the cargo will meet National Goals by improving safety, improving highway infrastructure condition, reducing congestion, improving system reliability, strengthening connections to trade markets and reducing emissions. A map of the National Highway System in Longview is in Appendix F. Keeping the cargo off the roads and highways reduces congestion, improves safety and improves the overall well-being of the region. The project will yield regional and national benefits because of these improvements made in moving cargo through the Port to both domestic and world markets. The Federal investment in the IRCE will help bring our citizens back to work and revitalize Longview’s economy. Leveraging of Federal Funding: This Project will be the catalyst to attract new private investment onto port property. The port terminals are ripe for private economic development but need the public rail infrastructure to make investments in the Terminals fruitful. Bridgeview and Berth 4 are prime opportunities for private investment. A lease was signed in October 2017 for Bridgeview and the Port has many customers looking at Berth 4 in anticipation of the completion of the IRCE. The Port and its partners have identified all non-Federal funding sources for this Project and are pursuing these sources, with the ability to provide a 40 percent match, which is a large commitment for this small, rural community. However, this public investment cannot be completed without Federal assistance through an INFRA grant. It’s appropriate for Federal partnership with the local community because the benefits accrue far beyond the Port. Potential for Innovation: The IRCE has been designed to utilize cutting edge construction techniques for the 2000 ft. of track bed, which is through open water and a small portion of uplands. Due the large sized fill material, innovative ways of placing this material will be developed, with the potential of utilizing conveyors to bring material in from the pond shoreline or developing a north and south jetty in the pond to establish construction roadways to then backfill the center of the jetties with sand or rock material. Secondly, the design considers all current rail safety technology to ensure the completed Project can be operated as safely as possible. Performance and Accountability: Full Life Cycle Costs: The Port’s union maintains the Port’s rail network. Future life-cycle expenditures will follow their internal Asset Management Maintenance schedule. This includes monthly inspections by Port labor and ongoing rail maintenance and improvements to Federal Rail Association standards. Performance / Accountability Construction Date Commitment: The Port proposes the following Performance /Accountability goal. The Port will commit to starting the construction of the Project by March 30,2023 and completing the Project by March 30,2025. Applicant and Project Eligibility The lead applicant for this grant is the Port of Longview, a unit of state government. Each element of the Project is eligible per Section C.3.a of the Notice of Funding Opportunity as freight network improvements that will significantly improve freight movement on the National Highway Freight Network.

I. PROJECT DESCRIPTION

The Port of Longview is expanding its existing Industrial Rail Corridor (IRC) to accommodate current customer growth and attract new development for the benefit of our local, regional and national economies. Initially constructed in the mid-2000s, the IRC was aimed at connecting the Port directly to the mainline railroad to create operational efficiencies for the benefit of our customers, to minimize use of local short lines through populated areas and to spur new development. The IRC expansion (IRCE) is designed to continue the original goal. Directly connected. The IRCE allows rail in and out of the Port to avoid waits at local switch yards, provides prestaging and storage for railcars, and allows predictability when doing business within the marine terminals. Phase I will continue the use of the existing IRC, while adding an additional through track and two sidings on the new track bed. Phase I will provide immediate benefits to the Port and its customers. Moving away from at-grade crossings. Prior to the IRC, rail into the Port moved along a short line known as the “Reynolds Lead”, which extends from the mainline through the heavily populated industrial area of Longview and for several miles past the Port. By moving Port rail volumes off this lead and onto the IRC, the Port eliminated impeding at least four at-grade crossings, which were often blocked simultaneously. The IRCE will allow the Port to grow its rail capacity while continuing to keep additional rail traffic from utilizing the “Reynolds Lead”. Spurring new development. The IRC, coupled with available land and the deepening of the Columbia River federal navigation channel, has spurred nearly $300 million in new development at the Port. The need for the IRCE Project is a direct result of these investments. The Port has attained its original IRC goals and seeks to maximize on current momentum by developing the IRCE. Over the last decade, the Port has seen unprecedented growth in tonnage moved across the docks and seeks to remain competitive as a premiere West Coast cargo handling facility. The Port of Longview is ranked 44th in Total Tonnage of US Water Ports up from 75th in 2007.

Exhibit I-1: Total Tonnage Port of Longview Total Tonnage

Percent Change Percent 2017 2016 2007 2016-2017 Change 2007- 2017 US Rank Million US Rank Million Tons US Rank Million Tons Tons 44th 13.6 44th 13.1 75th 5.1 +3.3% +165.1% Source: BTS https://www.bts.gov/content/tonnage-top-50-us-water-ports-ranked-total-tons As the Port redevelops into a 21st Century Port, the ability to move cargo from origin to destination is strained by inadequate capacity on our National Highway System and local roads.

To mitigate for this system failure, the Port has invested in rail capacity from their docks to the National Rail System that runs along the I-5 Corridor. This investment has allowed the Port, and highways to work more efficiently. Today, the Port is faced with the challenge of expanding their terminals to meet current demands to move more cargo more efficiently to both domestic and international markets. To achieve this, the Port must expand its rail capacity to increase its last mile capacity between the Port docks and the Class I mainline rail system. The IRCE will keep trucks off the roads, improving highway safety for citizens, reduction transportation costs for our customers and thereby generating economic vitality for our region and nation.

I.1 PROJECT SIZE AND ELEMENTS The full build out of the IRCE will relocate the IRC north, to accommodate three new running tracks and five new support (arrival and departure) tracks each able to hold a full 8,500’ train waiting for processing or dispatch (see Exhibit I-2). The full buildout will add a total of 14.44 linear feet, or 14.4 miles, of track to the Port’s current 14 miles of rail infrastructure, more than doubling the Port’s current rail network. This additional rail will accommodate growing demands for current, and future businesses, and be a catalyst for new economic growth. Phase I includes continuing use of the two 7500’ IRC with the addition of one new running track and two support tracks to allow for simultaneous arrival and departure of three 8,500’ unit trains as shown in Exhibit I-2 as Lead 3, Sidings #A and B. This first Phase will build a 193 feet wide track bed, fencing, add the utility improvements such as air, lights, and stormwater treatment system and place 33,373 linear feet of track (6.4 miles). Phase I has independent utility and will bring immediate rail benefits to the Port.

Exhibit I-2: Section Drawing of IRCE over Log Pond

I.2 HISTORY AND CONTEXT The original Industrial Rail Corridor was a $21 million rail infrastructure project designed to improve the connection between the Burlington Northern Santa Fe and Union Pacific main-line rail and the Port’s marine terminal and industrial park complex.

The project’s overall purpose was to: • Stimulate economic growth by improve rail service to attract new development and spur growth of existing customers • Reduce freight rail congestion • Expand capacity along Longview’s SR 432 Corridor • Increase mainline rail capacity • Improve traffic flow by avoiding at grade crossings The IRC, which came online in 2005, included construction of an overpass, 1.8 miles of rail and an additional 1.5 miles of siding to serve growing imports and exports out of the Port of Longview. Completion of the IRC, coupled with the deepening of the Columbia River Federal Navigation Channel from 40’ to 43’ in 2010, spurred such significant growth that the Port must expand the existing IRC to meet existing customer needs and position for future growth. In 2015, the Port began planning for expansion of the corridor. Starting with planning and preliminary engineering, the Port worked several years to refine the rail concepts to the current design. In 2018, development of environmental documentation for permits began, as well as negotiations to purchase right of way. The Port’s development schedule is outlined in stages, with the first major milestone of Phase I scheduled as bid opening in late 2021 and overall completion of the project in 2024. The Project is a culmination of more than ten years of collaborative efforts, public involvement, and partnerships related to port development. This is one of the Port’s first, and highest, priority investment projects ready to move forward. This investment leverages Exhibit I-3: Port of Longview Aerial View municipal, county, state and federal funding spent on complementary projects to benefit the community and the entire region. The IRCE is included in local, regional and state transportation plans. The Project improvements are identified as an economic development priority in the 2016 Port of Longview’s Strategic Business Plan, the 2011 Port of Longview Strategic Plan and 2010 Port of Longview Master Plan and as a WSDOT Tier 1 Freight Project in the 2017 Washington State Freight Systems Plan2.

I.3 NATIONAL AND REGIONAL SIGNIFICANCE The Port’s rail infrastructure is currently 14 miles long. This expansion Project will add 6.4 additional rail

2 http://www.wsdot.wa.gov/Freight/systemplan.htm

miles to the Port’s rail infrastructure, a 45% increase. The Columbia River is a leading gateway for international trade, rated as a M-1 Marine Highway by the State of Washington. Exhibit I-4: Columbia River #1 U.S. wheat exports #2 U.S. corn and soy exports #1 West Coast wood exports #1 West Coast bulk exports #1 West Coast auto exports

I.4 TRANSPORTATION CHALLENGES ADDRESSED The completion of the Project will address the current challenges of Road Congestion, Freight Mobility, Safety concerns and the Negative Impacts that congestion and the use of commercial trucks has on the environment. On average, the Port’s current rail network handles 14,000 cars per year (trains are either broken up into strings or come in manifest service, where a train holds a mixed type of cars and cargoes). The EGT facility (see Figure 1) brings in approximately 600-unit trains (110-120 cars/ 72,000 cars) per year. These unit trains enter the IRC and then are directed to the EGT owned facility track system that can handle up to six-unit trains (four full, two empty). With improved capacity and efficiency for unloading at EGT and at other Port terminals, the A&D tracks will add the ability to hold up to six-unit trains entering or departing from the Port’s industrial area. Currently, an EGT train can be positioned, unloaded and dispatched in six to eight hours. With the improved access created by this project, this cycle-time could be reduced to four hours, a significant operational improvement over today's experience.

Exhibit I-5: Port of Longview Industrial Corridor Expansion Project (IRCE) The IRCE Project results in a much higher degree of resiliency, operational efficiency, and capacity to the Port and connected rail network. This rail network will be available for a variety of cargos such as agriculture, energy, break-bulk (including high and wide cargos), and cargo that the Port would like to keep off the local, regional, and national road networks.

This project will provide direct rail access, unit train capability and storage to Berths 1 & 2 (the Bridgeview Terminal). The Bridgeview terminal is a “direct hit” facility, where rail cars are unloaded direct to ship. The additional IRCE sidings / staging will provide rail storage capacity to allow more cargo to be on terminal readily available for efficient loading and unloading. It will provide unit train delivery to a redeveloped Berth 4, and additional tracks for railcar staging and train storage while the trains are awaiting loading / unloading operations to start. This project will also establish the connections required for future track and staging areas needed for expansion to Barlow Point. Congestion and Freight Mobility will be Improved: New businesses, agricultural producers, manufacturers, and suppliers are attracted to the Port of Longview because of the recent investments made to bring new shipping capacity to the Port’s marine terminals. The federal investment to deepen the Columbia River, and improve navigation and safety at the Columbia River Exhibit I-6: SR 432/433 Intersection Jetty, has been a major driver in the Port’s investment decisions. However, the lack of efficient / cost effective transportation options to reach the revitalized waterfront facilities is a key barrier towards attaining the full benefits of the federal investments on the River. The completion of this Project will solve the “lack of last-mile” rail capacity in the Longview area which currently impedes the ability to efficiently ship and receive goods by rail. Using rail to move cargo into their Columbia River terminals and facilities will ensure the Port remains competitive in the global market. Safety will be improved: The Port is located at the Southeast corner of SR 433 and SR 432 (Industrial Way). Congestion is an immediate and future problem. Port customers commented that traffic congestion at the Port’s “front door” due to vehicle traffic on the main routes of SR 432 and SR 422 contribute to increased safety concerns and increased transportation costs. Businesses, customers, resident and tourists cannot rely on the system to be reliable and/or safe. This project will make sure that trains stay in a dedicated corridor versus moving through the multitude of Longview’s at-grade crossings that border the Port area. Negative Environmental Impacts will be reduced: The current congestion around the Port facilities forces trucks and motorist to sit idle, increasing emissions and wear and tear on vehicles. Truck traffic is expected to grow through 20353. Combined with anticipated increases in vehicular traffic, the SR 432/SR 433 (both designated as NHS Intermodal Connectors) will be at a level of service F. The delays at this vital intersection will translate into increase emissions, safety concerns and a loss of economic productivity for the region. On average, 30% of the daily traffic on SR 433 is truck traffic. Using conservative scenarios, by the year 2035, the annual loss of economic productivity for truck freight is estimated at $1.1 million (2013 dollars). The IRCE project will divert freight from trucks to rail, easing congestion, bottlenecks, wear and tear, and lowering emissions.

3 http://industrialoregonway.org/wp-content/uploads/2016/09/FINAL_PurposeNeed_updated-2016-09-13.pdf

Improve System Linkage This Project has spurred additional and planning efforts to enhance the Port’s internal rail network to meet ensure efficient rail delivery in coordination with the IRCE project. Current customers are reviewing their operational needs and have indicated that they would like to utilize unit trains directly to and from the terminals. The IRCE’s configuration, along with internal track improvements, will meet this new operational requirement. The Project will provide adequate storage and siding tracks outside of the Port’s internal system that will allow for storage of a full 8,500’ train that is waiting to enter a terminal or be dispatched to the mainline.

Exhibit I-7: Internal Port Rail lines serving Berths and Terminals Phase I of the IRCE will not replace the existing IRC as access to the Port Terminals but will provided additional rail capacity to enter or depart from the Port’s many terminals as well as provide a storage area to hold full unit trains. The map in Exhibit I-7 shows in the top right corner the IRCE entering the Port’s rail network. The rest of the map shows the Port’s internal rail lines when fully built out that serve the Port’s berths and terminals.

II. PROJECT LOCATION

Exhibit II-1: Location of Port of Longview The Port of Longview is the first-full service operating port with eight terminals on the deep-draft Columbia River in Washington State. Located just 66 miles from the Pacific Ocean, with direct connections to interstate and mainline rail networks, the Port is a premier cargo handling facility in the Pacific Northwest.

RIVER Port of Longview is the first operating port on the federally maintained, 43” deep-draft Columbia River shipping channel in Southwest Washington State, USA. Located just 66 river miles from the Pacific Ocean, vessels can sail from the Port into the Pacific on just one tide - saving both time and money. Top Trading Partners + Sailing Times

Australia 27 days Indonesia 26 days Brazil 34 days Japan 19 days Chile 22 days Korea 19 days China 23 days Mexico 5 days Europe 35 days Panama 16 days India 37 days RAIL The existing IRC connects the Port directly with BNSF and UP mainline rail. These rail lines connect the Port to customers across the Nation via the Great Northern Corridor (GNC). The Great Northern Corridor Coalition (GNCC) works to promote regional cooperation, planning and shared project implementation to improve freight movement from Chicago through the member states of Wisconsin, Minnesota, North Dakota, Montana, and Idaho, to ports in Washington, and Oregon. The GNC system of highways, rail lines, and ports is vital in moving American products to global markets, and in bringing commodities to our communities. The Coalition is working to, (1) improve the corridor to promote

economic growth for neighboring communities, states and the nation; and (2) accommodate the demand for safe, efficient, and environmentally sound transportation services. The GNCC is working to identify opportunities to improve the technology, operations and infrastructure along the corridor. ROAD The Port is on the southwest border of Cowlitz County, along the Columbia River, located approximately 120 miles south of the metropolitan area of Seattle, WA and 40 miles north of the metropolitan area of Portland, OR. The Port is strategically located close to major trucking transportation routes being only 3 miles from Interstate 5 (I-5) north-south corridor, 45 miles north from the east-west Interstate 84 (I-84) in Oregon, and approximately 120 miles southwest from east-west Interstate I-90 (I-90) in Washington

III. PROJECT PARTIES

PROJECT SPONSOR The Port of Longview is the project sponsor and grant recipient. By law, port powers are singularly focused on economic and community development. Port related activities employ 10% of the workforce in Cowlitz County, and supports another 9,100 jobs with shippers and related businesses. The Port of Longview, like all ports in Washington, has the ability and authority to fund their operations and programs through a combination of earned revenues and property taxes. In that sense, the Port is a publicly owned business enterprise making market-based investments to support the local economy and to create jobs. Port customers and their consultants have provided engineering expertise to the design of the rail plans and operations plan. RAILWAY SUPPORT BNSF and UPRR have played a pivotal role in the planning and design of the proposed rail layout. Both railroad companies have brought significant staff expertise, time and effort toward executing the many steps required to properly plan and appropriately design this project.

LOCAL PARTNERS The collaborative inter-jurisdictional approach used to develop this project concept, and implement the earlier phase, is a core strength of the Project. The City of Longview, City of Kelso and Cowlitz County are critical to the success of this Project, and the collaborative effort will continue to serve as a distinguishing feature of the project. This community is focused on its goals of job creation, community revitalization, and improved transportation systems for people and freight. The Port and its Partners are working together toward these interdependent goals. The Port works closely with Longview, Kelso and Cowlitz County in their planning efforts to ensure that Port projects are in alignment with local and regional economic development efforts. Longview is the largest city in Cowlitz County, and serves as the regional hub. Regional coordination is essential, and will remain a core feature of economic development, environmental planning, restoration,

transportation system funding and improvement in the region. The Port is committed to proactively include public and private sector stakeholder participation in the project. STATE PARTNER The Port works closely with Washington State Department of Transportation (WSDOT) on transportation. This Project has been approved by the state as a Tier 1 multimodal freight project to be included in the state’s 2017-2019 prioritized list of projects.

IV. GRANT FUNDS AND SOURCES/USES OF PROJECT FUNDS

The INFRA program priorities the leveraging of Federal dollars with non-Federal match, this Project has a local match of 40 percent which is a challenge for a Port of its size. INFRA also priorities construction over planning. This Project requests Federal dollars only to support the construction of this Project. INFRA 2019 funding is critical to the completion of this project. Cost analysis completed by the Port’s engineering consultant shows that the cost to complete this phase of the project is $80.7 million. A non-federal match of $31.9 million has been committed by the Port. The INFRA FY2019 request is for a federal investment of $48.8 million to complete the project’s construction. Exhibit IV-1 Project Funding Project Funding in Millions % INFRA Request $48.8 60% Local Match $31.9 40% $80.7 100%

IV.1 PREVIOUSLY INCURRED COSTS The Port has spent $1.5 million as of 12/31/18 for the planning and preliminary engineering of this Project. It is anticipated that 2019 expenses will be approximately $0.7 million.

Exhibit IV-2: Total Budget Including Previously Incurred Expenses

Port of Longview Industrial Rail Corridor Phase 1, Project Cost by Year Year: 2017 2018 2019 2020 2021 2022 2023 2024 2018-2024 Prev. Design/ NEPA/ Total before Incurred NEPA/ Permitting/ ROW Pre- Prev. Incurred Project Cost Design Design Permitting ROW Permitting Construction Construction Construction Costs No Discount Rate $ 903,831 $563,958 $730,280 $12,906,503 $1,613,313 $1,613,313 $33,072,913 $31,459,600 $81,959,880

IV.2 FUTURE ELIGIBLE COSTS A reliable and reasonable cost estimate of future eligible costs has been prepared by the Port’s consulting engineers during preliminary engineering nearing the 60 percent level. The February 2019 estimate including ROW is $80.7 million to be spent from 2020-2024.

IV.3 DESCRIPTION OF THE SOURCES and USE OF INFRA FUNDS INFRA funds will be used for the construction of the site and for the rail track.

Exhibit IV-3: Sources and Uses of Project Funds

Local Matching Total Project Item Descriptions INFRA Funds Funds Funds INFRA % Total % IRC Expansion Project Phase I ROW $5.0 $5.0 0% 6.2% Mobilization $6.4 $6.4 0% 7.9% Site Preparation $0.6 $0.6 0% 0.7% Site Work $39.9 $39.9 82% 49.4% Storm Drainage $1.2 $1.2 0% 1.5% Utilities $1.0 $1.0 0% 1.2% Track Work $8.9 $8.9 18% 11.0% WA Sales Tax $5.0 $5.0 0% 6.2% Contingency $12.7 $12.7 0% 15.7%0 0% Total Phase I Cost $48.8 $31.9 $80.7 100% 100.0% INFRA Funds $48.8

Port of Longview Contribution $31.9 Grand Total 60% 40% $80.7

One hundred percent of INFRA 2019 grant funds will be spent on construction of rail improvements. All remaining costs of the Project including engineering, environmental and right of way transactions will be paid for by the Port with non-federal matching funds.

Phase I is financially feasible. The full and detailed budget is in Appendix C. The Port of Longview Board of Commissioners have included this project in their 2019 and five-year budgets to provide the $31.9 million in matching funds to complete the Project. The Project budget includes 10 percent Design contingency and a 10 percent Construction contingency for a Total contingency of $12.7 million which is an industry standard for 60 percent design. Further, the Port is committed to life-cycle costs of the Project as described in Section V.4.1. Future operating budgets will represent the operating and maintenance responsibilities of this Project.

IV.4 SUMMARY OF INDUSTRIAL RAIL CORRIDOR EXPANSION ENHANCEMENTS Exhibit IV-4: Project Enhancements Infrastructure Type Current Condition Future Condition with IRCE Phase I: Additional Lead + 2 A&D Tracks Track 2 Leads Future Phase: Additional 2 Leads + 3 A&D Tracks

V. MERIT CRITERIA

This Project aligns well with the merit criteria identified in the INFRA program. Each criteria is discussed below, including a detailed discussion of the results of the Benefit-Cost Analysis, under Criterion #1 (Section V.1.1).

V.1 Criterion #1: Support for national or regional economic Vitality This Project support national and regional economic vitality as export products that move through the Port come from over 40 states. This Project reduces congestion, improve freight and people mobility, improves safety on the roadways, and reduces negative impacts on the environment. Exhibit V-1 displays the No-Build Scenario versus Build Scenario for the Project and identifies the changes this Project will have on the system.

Exhibit V-1: Project Metrics for an additional 375,000 MT in 2025 Objective / Metric base upon No Build Build Change 375,000 MT of cargo 2025 2025

Achieve a significant reduction in traffic fatalities and serious injuries-The reduction of freight tonnage on the roads is projected to reduce potential accidents and fatalities on the local roads and highways Truck Miles 12,758,102 0- (12,758,102) Traffic server injurie accidents 0.52 -0 (0.52) Fatalities 0.15 0 (0.15) Improving interactions between Road users, reducing the likelihood of derailments, high consequent events. Trucks 15,310 0 (15,310) Railcars 0 3,594 +3,594 Eliminating bottlenecks in the Freight supply Chain # Truck 15,310 -0- (15,310) VMT on Road 319 million VMT -0- (319 million VMT)

Ensure or restore good condition of infrastructure that supports Commerce and Economic Growth

Lane Miles 20.6 20.6 0 From Port to I-5 Sustain or Advance National or Regional Economic Development in areas of need including projects that provide or improve connections to the Nation’s Transportation Network to support movement of Freight and People.

Annual Rail Carloads 14,000 17,594 +3,594

This project will relieve local and regional traffic congestion at a Port with national significance because of its unique location on the Columbia River. It will increase the volume of freight that can be handled at Berths 1,2,4,6, and 7 and the associated terminals. By improving the first/last-mile connectivity to growing international markets, the local, regional and national economies will benefit.

These improvements will improve system reliability for current Exhibit V-2: Wind Blade Unloading at Berth 6 customers and future tenants on the redeveloped, but underutilized, berths. The IRCE will provide additional tracks for railcar staging and storing while awaiting loading / unloading operations to commence. Relocation of the IRCE will allow Pacific Fiber Products, Inc., a neighboring private company, the ability to utilize the current IRC as a direct access to their facility. This will reduce Port congestion and enhance Pacific Fibers business opportunities. Enhance efficiency for freight movement across the nation- The completion of Phase I of the rail expansion creates increased regional access to rail and reduces dependence on trucks. This Project is consistent with National goals to improve freight mobility, system efficiency, and cost-effective operations. The mode conversion from road to rail for the transportation of heavy products will reduce highway maintenance and preservation costs. Exhibit V-3: Wind Blade on Train The expansion of the IRC will increase vital connections from rural SW Washington to inland locations throughout the US. The Project will create additional access to rail for bulk and break-bulk commodities that need to be transported by sea- going vessels. The most efficient way to move heavy cargoes to inland and international points is to go directly between ship and rail and eliminate the need for a truck movement on local roads. The additional running tracks created in the full build out will more than double the capacity and flexibility for train movements along the IRC. Promotes current and future economic development- This Project will prepare the Port’s rail system to be extended to serve the 282-acre undeveloped port lands at Barlow Point. The development of this new Barlow Point facility, located north of the current port, will greatly increase freight volumes through the community. The use of rail transportation will reduce the potential congestion caused if trucks were used to move the freight. State of good repair - Diverting freight traffic from trucks to rail will reduce the wear and tear on local roads/ Highways and City streets. As congestion increases at the intersections entering the Port, vehicular movement is restricted and “stop and starts” are necessary. This adds additional pressures on local roads and highways. Improve highway safety - Shipping cargo by rail to and from the inland destinations will improve the safety of the entire transportation corridor on which the cargo is moved. The Project increases safety by diverting truck cargo to rail for two additional Port berths. This phase will provide unit train storage capacity to the Bridgeview Terminal and new unit train delivery to Berth 4. The A&D tracks will allow over-length cars that handle wind turbine components to be assembled into strings of cars ready for dispatch to the Class I mainline railroads for delivery to their destination.

Additionally, with Phase I completion, the dangerous SR 432/SR 433 Exhibit V-4: Current IRC into intersection at the Port’s entrance can be re-constructed to eliminate the at- Port grade crossing without interference from train traffic. Keeping cargo off city and regional roads will reduce roadway congestion for everyone moving into, out of, or through, the area. It will reduce the wear and tear on our state and national highways, and our local roads. Significantly, the Project will alleviate the congestion that creates challenges for nearby residents to access city services and transportation. Reducing truck traffic near the Port will improve safety and allow pedestrians and bicyclists to move through the area safely. The reduction of truck traffic on the highways between the Port and cargo destinations will also reduce emissions. Provides congestion relief and system reliability- The mode conversion will result in increased productivity and efficiency because of time and cost savings resulting from reduced congestion along SR 432 and 433. This intersection is adjacent to the Port and one of Longview’s busiest intersections. Reducing truck traffic from this intersection will provide congestion relief to commuters and other users of the SR432 Bridge which spans the Columbia River between Oregon and Washington.

The Benefit-Cost Analysis The Benefit Cost Analysis shows that Phase I of IRCE Project will provide cost-effective benefits to the region. These monetized benefits are substantial at a 7% discount rate of 6:1. In $2017, the BCR is 18:1. Economic Competitiveness: Moving cargo by rail versus truck is estimated to save shipper $1.2 billion in operating costs over the 20-year period post- construction. Safety: Over the 20-year analysis 319 million miles will be removed from the roadways, this Project saves 3.8 lives and 13.6 server injuries totaling over $38 million in savings. Mobility: Using Travel Time Value as a measure of reduced congestion by delivering cargo by rail, a net of $178 million in Travel Time is saved including 6 million truck driver hours on the road. State of Good Repair of the Roadways: It is estimated that 319 million miles will be removed from the regional and highways, saving the local and state governments over $38 million in road maintenance and preservation costs. Emission Savings: Using rail versus truck to transport the cargo will save 38 million gallons of fuel equaling 342,000 MT of CO2. Total benefits to the environment are estimated to $9 million in reduced negative effects on the environment.

Exhibit V-5: BCA Summary

Benefit Cost Analysis of Port of Longview Industrial Rail Corridor Phase 1 Project Benefit and Cost Analysis Summary (20-year analysis) using 25% of Port's Projected increased volume Zero Discount Category Metric Rate* Discount Rate @7% Project Benefits Improved Economic Competition Savings to Shipper by using Rail vs. Truck $ 1,202,195,938 $ 393,472,294 Improved Mobility Truck Time Savings Offset by Rail Engineer Time Increase $ 178,039,281 $ 58,271,303 Improved Safety 3.8 lives saved by reducing VMT on Roads $ 38,403,355 $ 12,569,212 Improved State of Good Repair on Roads Reduction of 0.3 billion VMT off road network $ 38,274,306 $ 12,526,975 Emission Savings 343,750 MT of CO2 Saved $ 2,801,349 $ 1,068,637 Total Societal Benefits $ 1,459,714,229 $ 477,908,422 Life-Cycle Costs $ (15,133,128) $ (5,341,419) Residual Value of Capital Improvements in Year 20 $ 55,443,761 $ 9,547,166 Total Benefits $ 1,500,024,862 $ 482,114,169 Project Cost Prior Incurred Cost of Design $ (903,831) $ (903,831) Cost Industrial Rail Corridor Expansion $ (81,959,880) $ (73,454,533) Total Cost $ (82,863,711) $ (74,358,364) Net Present Value $ 1,417,161,151 $ 407,755,806 Benefit-Cost Ratio Calculated Benefit Cost Ratio 18.1 6.48 Benefit-Cost Ratio (rounded) 18:1 6:1 * These values are expressed in year 2017 dollar amounts. The BCA estimates that over the 20-year post construction period, 9.4 million metric tons of cargo will move to the terminal for export on rail from destinations over 1000 miles east of the port. Using characteristics of a potential customer as the basis for the BCA provides an estimates of net present value (NPV) and benefit cost ratio. At a discount rate of 7 percent, the PV of costs in 2017 dollars is $ 73 million and the PV of social benefits is $482 million before Life-cycle costs and residual. This analysis yields a NPV of $408 million with a benefit-cost ratio of 6:1 over the 20-year period of analysis. The greatest share of discounted benefits is in the Economic Competitiveness category from operating savings of $393 million, followed by reduced travel delay benefits of $58 million and improved safety and state of good repair each with $12 million savings. The Project is appropriately capitalized up front and uses asset management approaches that optimize its long-term cost structure. Additionally, a sustainable source of revenue is available for long-term operation and maintenance of the Project.

V.2 CRITERION #2: LEVERAGING OF FEDERAL FUNDING

Port of Longview’s Activities to Maximize the Non-Federal Share of the Project Funding The Port traditionally has applied for both Federal and non-Federal funds to support infrastructure improvements that have public benefits beyond the Port district. The Port plans to continue to seek other local and state funding opportunities when available. As an independent special district in Washington State, local resources are limited for a project of this nature. Federal support is necessary to gain the highway safety, congestion reduction, reduced maintenance, and economic development benefits that will accrue outside the Port district from this project.

Evaluations of Private Funding Options The Port has evaluated the potential for private investment in this Project and determined that private funding options are limited. The Port has a policy not to sell port assets because the Port Commission believes it is in the public’s best interest to keep these assets public. Accordingly, the Port has made a conscious decision to retain control of the rail connections to Port docks and industrial properties. This allows the Port to control how the public’s assets in Berths and Terminals are used in the future instead of having a private party price the Port out of rail options. Selling this asset to a private party would not be in the best interest of the Port, the region or the community. The Port is pursuing private investment for rail infrastructure that has specific tenant related needs in Phase II or III of this Project. An example of a tenant related need is the future rail loop shown on Exhibit I-7. The Port is evaluating options for the customers to share in the cost of the rail improvements required for their leased terminal and specific commodity needs through a direct investment in the capital asset and/or future infrastructure fees. Use of Federal credit instruments- The Port is still investigating the use of Railroad Rehabilitation Improvement Financing (RRIF) for this project. Based upon the initial research, the time and fees of the program may delay the Project’s completion schedule and add unnecessary cost to the project. If this is true, then this will delay the creation of jobs and economic development in the local community and region. Leveraging other Federal investments-The Federal Government recently invested $200 million in the Columbia River Deepening Project (increasing the depth to 43’). Additionally, the Federal Government is investing to protect navigation, improve safety and install navigation infrastructure to improve the movement of ships through the Columbia River Jetty Rehabilitation project. The IRCE Project is, indeed, the type of project envisioned when these investment decisions were made. The project will capitalize on those federal investments by efficiently moving import/export goods from the Port to the Class I mainline rail system.

Exhibit V-6: Federal Investment that will be leveraged by this Project

Federal Investment to Date Federal Deepening of the Columbia $200 Million River Planning for SR432/ 433 Improvements $35 Million ARRA High Speed Passenger Rail $800 Million Improvements Total Funds Expended to Date $1.035 Billion The Port was one of five non-Federal sponsors for the Columbia River Deepening and continues to be a non-federal sponsor for development of a 20-year dredge material management plan. The Port has also assisted in negotiating and providing funding for the installation of stern buoys to ensure safe passage of vessels in the river. The Port not only benefits from the use of the Channel, but is heavily invested in its operations, maintenance, and environmental health Leverages private investments -- Additionally, the IRCE leverages millions of dollars of investment made by the BNSF in capacity improvements along their I-5 and Great Northern Corridors. Fiscal Constraints Affecting the Port’s ability to Use Non-Federal Contributions The Port is an independent quasi-public entity within the State of Washington. Washington State does not

financially support ports; therefore, there are very limited resources for funding regional transportation projects of any kind. The Port is authorized to levy 45 cents per $1,000 of assessed value of real property within the Port District, which is used for Port operations and capital projects. The Port will have limited bonding capability available for this Project in 2019/2020 (as has been indicated in the funding sources Exhibit IV-1). The Port is not authorized to collect any other tax revenues. Ports are largely restricted to Port generated cash flows to fund major projects. For projects of this nature, it is necessary to receive assistance.

Non-Federal Share of the Port of Longview’s Transportation Program As indicated above the Port is an independent special purpose district in Washington State. The Port’s transportation infrastructure is self-funded with the assistance of grants received from outside agencies. The Port is eligible for Federal formula funds through the State of Washington; however, these funds must be allocated by the State to a specific project. The Port does not get any direct pass through Title 23 funding. Therefore, funds from a grant such as INFRA will not be replacing or substituting State, local or private funds. The Federal aid will help fund the project and allow for its timely completion. If full funding came solely from internal or local funding sources, the project will not be completed in a timely manner.

V.3 CRITERION #3: POTENTIAL FOR INNOVATION A range of innovative features are being considered to enhance this project. The Port and its partners are exploring intelligent transportation systems, such as dynamic message signs and adaptive traffic signals, for the road intersections entering the Port to improve traffic movements. The design team is investigating efficient technologies, materials, and techniques for the modernization of the rail, embankment, and future maintenance. The project will emphasize the importance of building resilient infrastructure to improve rail and roadway networks in the region. These improved networks will enhance mobility for regional and international trade. Construction Design Work The Port’s project will fill approximately 2000-linear ft and 194’ in width of water and uplands. The project will incorporate innovative construction design to ensure limited settlement along the corridor, and reduction of environmental impacts. The design includes submerging a geo-technical type fabric, which will be weighted, within the open log pond. The fabric would be installed with a work barge just ahead of the filling activity. This method is twofold, one to reduce turbidity within the pond, and two to ensure that the fill material does not settle into the soft soils lining the pond bottom. The first gradient of rock material will also need to be placed just ahead of the larger gradient rock material to ensure that embankment blow out does not occur. Due the large sized fill material, innovate ways of placing this material will be developed, with the potential of utilizing conveyors to bring material in from the pond shoreline, or developing a north and south jetty in the pond to establish construction roadways to then backfill the center of the jetties with sand or rock material. Environmental Review and Permitting The Port, in preparation of new development and expansion of the industrial rail corridor, began two innovative environmental mitigation projects beginning in 2012. The first in Washington State, the Port developed, in coordination with state and federal agencies, an advanced aquatic habitat mitigation methodology that would allow for future aquatic credit of the removal of a 1920’s dilapidated dock structure

in the Columbia River. This methodology allows the state and federal agencies a common aquatic mitigation currency that can be utilized for future in-water Port projects. The basis of this model is the Habitat Equivalency Analysis or HEA, that allows accumulation of credit over a 30-year period. The filling of the log pond for the IRCE will be the first time the Port will use some of the HEA credits on a project. The second mitigation project is an advanced wetland mitigation site developed again in coordination with state and federal agencies, as well as a local land trust. The Port’s advance wetland mitigation site is the second one developed of this kind in the state. The wetland mitigation site, for Port use only, consists of Port and land trust owned property, and is approximately 307 contiguous acres within the Columbia River. To mitigate filling of low-quality wetlands for the IRCE development, the Port will utilize wetland mitigation credits from this bank. Additionally, the Port is proposing a low impact development design strategy for stormwater treatment along the entire length of the rail corridor. This LID treatment will include an infiltration swale system with treatment media. Safety and Technology Safety is a high priority in the project’s design. During the Planning phase, the Port looked for all opportunities to prepare the Project for future technological enhancements in the areas of safety, operations and maintenance. Since this Project is a hardened rail corridor, the option of conflict detection and mitigation technologies for freight and non-freight is not applicable. The Class I mainline engines will be delivering directly to the Port terminals, these engines are already enabled with Positive Train Control technology. With that in mind, the Port will evaluate any cost-effective technologies that can work with technology on these engines to ensure safe delivery and departure of the trains within the IRCE. Additionally, for Class I rail worker safety, the IRCE designs includes inspection roadways between all tracks, and improved roadways on both the north and south side of the rail corridor for safe inspections and crew changes.

V.4 CRITERION #4: PERFORMANCE AND ACCOUNTABILITY Full Life Cycle Costs The Port currently maintains, with Port union trades labor, approximately 14 miles of Port owned rail infrastructure. The Port understands the cost of rail maintenance and has addressed these costs within its financial policies and Asset Management Plan. This policy allows the Port the ability to negotiate a per car rail fee to help offset the costs of additional rail maintenance that support additional business. Performance / Accountability Construction Date Commitment The Port is would like to propose the following Performance /Accountability goal. The Port will commit to starting the construction of the Project by March 30,2023 and completing the Project by March 30,2025.

VI. PROJECT READINESS

VI.1 Technical Feasibility Phase I, will build the embankment and foundation for the full build out, add 1 running track and create a 3- track wide support yard.

Detailed Statement of Work This Project is ready to move forward. The rail improvements are technically feasible and ready to move into final design and permitting. Final design of the Project will be prepared by the Port in collaboration with BNSF Railway and UPRR. The design team foresees no complicating or project ending factors. The project will meet all local requirements for approvals and permits. State and federal requirements will be met late no later than Fall 2021. Accordingly, USDOT could obligate funding well in advance of September 30, 2022 deadline for obligation. Project risks have been identified and mitigation strategies incorporated (see below). The Project schedule illustrates that contract bid documents will be finalized and the Project ready for bid in 2021. It is anticipated the long lead time items will be ordered in 2022 to ensure timely delivery.

Exhibit VI-1 Project Scope of Work

Planning and Engineering Bid Letting & Construction- Bid February 2021- ♦ Procurement of Consulting Engineering Services -completed Construction January 2023 – December 2024 ♦ Task 1: Surveying & Mapping-completed ♦ Final PS&E Review ♦ Task 2: Utility Coordination- in-process ♦ Advertisement and Bid Letting ♦ Task 3: 30% Plans and Estimate Update-completed ♦ Procurement of Contractor ♦ Task 4: 60% PS&E- in progress, completion Summer 2019 ♦ Notice to Proceed ♦ Task 5: 90% PS&E – Fall 2019 ♦ Shop Drawings and Submittal Reviews ♦ Task 6: Final PS&E – December 2019 ♦ Fabrication of Structural Supports ♦ Task 7: Local Agency Permits- to be submitted Fall 2019 ♦ Mobilization, Demolition and Disposal ♦ Task 8: Public Involvement- on-going ♦ Temporary Traffic Control ♦ Task 9: Project Management-on-going ♦ Utility Demarcation ♦ Task 10: Quality Management- on-going ♦ Structure Construction ♦ Task 11: Project Team Meetings- on-going ♦ Site Visits and Inspection ♦ Right of Way Purchase – March 2022 ♦ Record (“As Constructed”) Drawings Tasks 1 through 6 will be completed in the order shown, while Tasks 7 ♦ Meetings through 11 will be ongoing throughout the course of the engineering. Project Close out- March 2025 ♦ Final Administrative Activities will be completed.

VI.2 PROJECT SCHEDULE Exhibit VI-2: Phase I IRCE Project Schedule 2017 2018 2019 2020 2021 2022 2023 2024 2025 Industrial Rail Corridor Expansion Project 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 NEPA/SEPA Permitting INFRA Funding Award Obligation of Federal Funds Property Acquistion Engineering Bid Process Procurement Construction Contract Close out Schedule Description Preliminary engineering has been completed to the 30+ percent stage and environmental documentation for the IRCE Project have already begun. With this INFRA grant award, the funding package will be complete,

and construction can begin in 2023. The Project can be constructed in 24 months. The schedule includes a contingency to ensure that the Project is completed by December 2024 and open for full operation January 1, 2025. Detailed Project Budget As a public port authority, this INFRA project will meet all county, state and federal requirements. It will be managed utilizing public procurement standards that comply with Federal and State of Washington law. Accordingly, any risks will be mitigated prior to and during construction. The project budget has been developed internally with the assistance of consultants with extensive port engineering experience. The estimates are conservative and includes a $12.7 million contingency. The Port understands its obligations to cover future Life-cycle costs related IRCE construction. The Port’s Planning and Finance Departments have the capacity to manage a federal grant of the size requested with rigid internal processes and controls. The Port complies with audit requirements performed under pursuant to the Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards found in 2 CRF part 200, as well as other applicable federal regulations and requirements. INFRA Project audit requirements will be the responsibility of the Port as the Grantee. This INFRA request does not include administrative cost allowances; those costs will be borne by the Port. A Detailed Budget can be found in Appendix G.

VI.3 REQUIRED APPROVALS VI.3.1 ENVIRONMENTAL PERMITS AND REVIEW a. NEPA The Port began the Project’s National Environmental Policy Act (NEPA) and State Environmental Policy Act (SEPA) documentation in 2018. The NEPA will be conducted by the US Army Corps of Engineers, Portland Oregon District (Corps) for the full length of the project area. However, the NEPA agency may change depending on the Port’s receipt of a federal grant award. The Port has been coordinating with the Corps since 2017 regarding the Project. Permit packages are estimated to be submitted to state, local, and federal agencies in September 2019. The Port received, from the Corps, an Approved Jurisdictional Determination (AJD - June 2018) for the proposed impact to Waters of the United States. The Port is working on a mitigation strategy to provide the Corps in March 2019 prior to submittal of the full application. The Port anticipates final NEPA approval, and permit issuance, in second quarter 2021. The SEPA process will initiate at the time of permit submittal. It is anticipated that the SEPA process will be concluded by November 2019. The Port determined that a joint NEPA/SEPA process would not provide an efficient permitting path, and therefore these reviews will be conducted separately. b. Agency Reviews The IRCE Project as currently designed would trigger the need to obtain a variety of federal, state, and local permits. The log pond and associated wetlands have been determined to be jurisdictional waters of the United States under Section 404 of the Clean Water Act (CWA), but the log pond is not classified as a navigable water of the United States under the Rivers and Harbors Act (Section 10). The log pond is not regulated under the Cowlitz County or City of Longview Shoreline Master Programs, and the log pond is not considered a shoreline or water of the state under the Washington Shoreline Management Act; although, due to the

issuance of a U.S. Army Corps of Engineers Section 404 permit, the Washington Department of Ecology will regulate the log pond along with jurisdictional wetlands under CWA Section 401. The Project Area includes land within the City of Longview jurisdiction, as well as a corridor in Cowlitz County jurisdiction. For a full detailed list of permits and actions, please see Appendix I. It is expected that all required reviews and permits will be in hand by end of second quarter 2021. This will ensure that the Project can be obligated well within the deadline requirement under small project INFRA FY19 of September 30, 2022.

Exhibit VI-3: Required Reviews and Permits Permit or Approval Agency

Individual Section 404 Permit USACE ESA Compliance NMFS and USFWS Section 106 Compliance Department of Archaeology and Historic Preservation Floodplain Permit City of Longview/Cowlitz County Section 401 Water Quality Certification (WQC) Ecology Construction Stormwater General Permit Ecology SEPA Compliance Port of Longview Notification of Demolition (requires asbestos report) SWCAA Development Permit Package (master permit, Cowlitz County/City of Longview planning clearance, demolition, grading) Critical Areas Permit Cowlitz County/ City of Longview Stormwater Permit City of Longview c. Environmental Studies The following Environmental Studies will be completed by the Port to support the NEPA and SEPA process. ♦ Wetland Determination- complete ♦ Wetland Mitigation Plan- in process ♦ Floodplain Analysis- in process ♦ Habitat Assessment- in process ♦ Contamination Investigation- in process ♦ Cultural Resources Technical Report- in process ♦ State Environmental Policy Act Checklist and Analysis-in process ♦ National Environmental Policy Act Documentation- in process d. Discussions with USDOT The Port has had on-going discussions with MARAD on port development projects. MARAD has been very helpful to the Port in providing support for this project, and other initiatives to modernize terminals to meet future cargo demands. They have also provided guidance on the Port’s efforts to expand marine facilities onto the Port’s Barlow Point property.

e. Public Engagement The Port is actively engaged in keeping their citizens and stakeholders informed of Port activities and future developments. During the 2016 Strategic Business Plan development, the Port held four public workshops and a Community Open House which showcased and discussed future capital projects. Additionally, through the budget process, the Port holds open workshops where it discusses short term and long-term capital investments. The Port has also had meetings with the local planning and engineering departments, elected officials, and state and federal permit and transportation authority’s regarding this Project. The Project is also within the Port’s Comprehensive Scheme of Harbor Improvements, which requires public participation. Further, during the NEPA and SEPA review process, the public will have the ability to provide public comment on the Project. VI.3.2 State and Local Approvals No legislative approvals are necessary for the project. The required permits are listed above in Section VI.3.1.b: Agency Reviews and in Appendix I. VI.3.3 Federal Transportation Requirements Affecting State and Local Planning This Project has been approved by the state as a Tier 1 multimodal freight project to be included into the state’s 2017-2019 prioritized list of projects. Traditionally, port projects in Washington State have not been included in either local Regional Transportation Improvement Projects (RTIP) or the State Transportation Improvement Project (STIP) list. This is changing as all parties implement the FAST Act. The Port’s project will be included as an amendment to the RTIP and the STIP in 2019 and is discussed in the local transportation and comprehensive plans. VI.3.4 Letters of Support Exhibit VI-04: Examples of Letters Supporting the Project ♦ Cowlitz County ♦ City of Kelso ♦ Pacific Northwest Waterways Association ♦ Columbia River Steamship Operators ♦ Washington State Representative Herrera-Beutler ♦ U.S. State Senator Maria Cantwell ♦ U.S. State Senator Patty Murray Letters of support for the project may be found at the project’s site on the Port’s webpage: http://www.portoflongview.com/165/INFRA-Grant

VI.4 ASSESSMENT OF PROJECT RISK AND MITIGATION STRATEGIES The Port routinely conducts community and stakeholder outreach as part of their planning processes to ensure it addresses concerns residents or stakeholders have on a plan or project. Feedback on this project has been favorable. This is indicative of Port’s history of honoring commitments made through their planning process, keeping interested parties informed, and diligently implementing the Port’s Master and Strategic Plans. This history, and public engagement, demonstrates that the project risks are relatively low. Mitigation strategies have been identified for each potential risk areas.

Exhibit VI-5 Project Risk Matrix Potential Risk Area Risk Type Current Status/ Proposed Mitigation Risk Level Technical Feasibility Feasibility Preliminary design developed with input from Low customers and the railroads Design Standards Feasibility Preliminary design developed with input from Low Conformance customers and the railroads Partner Approvals Schedule Preliminary design developed with input from Low customer and railroads Local Jurisdiction Schedule Past history of multi-agency cooperation and Low Approvals collaboration is anticipated to continue. Environmental Approvals Cost, schedule Multiple permits are required for this project. The Low/Medium Port anticipates that all permits will be processed and received in a timely manner Public and Stakeholder Cost, schedule Extensive public involvement effort was done as part Low/Medium Support of the port’s planning and budgeting processes. Level of public interest is high, in particular from nearby residential neighborhoods as well as labor. Construction Cost, schedule Currently entering into final design phase for the rail Low improvements. To mitigate potential risks, conservative prices and quantities were used. In addition, Project Budget contains $3 million in contingency funds

VII. CONCLUSION

The Industrial Rail Corridor Expansion Project critical to the economic wellbeing of the local, regional and national economies. It provides added rail capacity to support the redevelopment of old terminals into modern 21st Century terminals that can handle the current and future port cargo mix. This Project reflects the intent of the INFRA grant program, meeting the National Goals and the Program Objectives and Merit Criteria. As displayed in Appendix C, this Project meets all six National Goals: Safety, Infrastructure Condition, Congestion Relief, System Reliability, Freight Movement and Economic Vitality, Environmental Sustainability and Reduction of Project Delivery Delays. It meets all four INFRA program objectives. This Project will improve the movement of freight across the country by providing a “last mile” rail connection to a key gateway Port on the Columbia River. It is a great example of local and regional collaboration that reaches across political jurisdictions; addresses environmental sustainability, enhances economic growth of the community by expanding international trade. The Port has worked at every step to find solutions to the current challenges on the ground and create solutions that will make Longview and Cowlitz County more viable and livable for future generations.

VI. APPENDICES

Port of Longview Industrial Rail Corridor Expansion Project webpage: http://www.portoflongview.com/165/INFRA-Grant

Appendix A: Benefit Cost Analysis Executive Summary Narrative- Submitted in Application

Appendix B: Benefit Cost Analysis Excel Spreadsheets- Submitted in Application

Appendix C: INFRA Criterion Summary- Large/ Small Matrix Detailing Project Attributes

Appendix D: National Highway System – Longview, WA

Appendix E: Schematic of Rail Layout

Appendix F: Detailed Project Schedule

Appendix G: Detailed Project Budget

Appendix H: 30% Design Set

Appendix I: Required Reviews and Permits

Appendix J: Description of the Port Terminals serviced by the IRCE and Highlights of Market Demand-

Appendix K: Port of Longview’s 44 Trading Partners

The following Documentation can be found on the project webpage.

• Letters of Support • Market Analysis

Appendix C: INFRA Criterion Summary

The Port of Longview recognizes that this form was intended to confirm Large Project Eligibility, but we believe that this summary is helpful to demonstrate the attributes of our small rural project as well.

Project Summary 1. Does the project generate national or regional Yes. It diverts thousands of truck miles from economic, mobility, safety benefits? federal, state and local highways to rail; provides congestion relief, improves safety and brings new economic opportunities to SW Washington by adding new rail capacity to the Port of Longview. 2. Is the project cost effective? The BCA results show the Project to be cost- effective 7% Discount = $408 million NPV; 6:1 B/C Exhibit V-5 3. Does the project contribute to one or more of the Goals listed under 23 U.S.C. 150 (and shown below)?

National Goals-It is in the interest of the United States to focus the Federal-aid highway program on the following national goals: (l) Safety-To achieve a significant reduction in Safety – The Project will reduce 319 M miles of truck traffic fatalities and serious injuries on all public traffic from federal, state and local roads/highways, roads accidents will be reduced. (2) Infrastructure condition-To maintain the Infrastructure condition – Reducing319 M VMT of highway infrastructure asset system in a state of truck miles traveled on federal, state and local roads good repair. and highways reduces wear and tear, and maintenance costs. Thus, improving the state of good repair. Appendix A-1 and A-2 and Section V: Merit Criteria. (3) Congestion reduction-To achieve a Congestion relief – Congestion is cited by current, significant reduction in congestion on the National and potential, Port tenants as a major concern – both Highway System. for costs, and safety of their employees. Moving freight by rail versus truck will eliminate 178 M hours of Time Value Saved as the major contributor to congestion in and around the Port and the industrial area of Longview. Appendix A-1 and A-2 and Section V: Merit Criteria.

(4) System reliability-To improve the Removing 319 M VTM of Trucks from the road will efficiency of the surface transportation system. improve the efficiency of the NHS as well as non- NHS roads. Appendix A-1 and A-2 and Section V: Merit Criteria. (5) Freight movement and economic vitality-To Freight movement and economic vitality – the improve the national freight network, strengthen the project will bring added rail system capacity to Berths ability of rural communities to access national and 1& 2, 4, 6 and 7 at the Port of Longview. All of these international trade markets, and support regional berths have capability to handle Panamax sized economic development. vessels. Bringing “last mile” connectivity from the BNSF and UP mainline railroads will (1) improve efficiencies for moving cargo from across the nation, (2) add jobs and economic investment to rural SW Washington; (3) leverage federal investments to improve shipping in the Columbia River; (4) increase shipper’s ability to compete for international business from SW Washington- Section VI (6) Environmental sustainability-To enhance the Environmental sustainability – the Port of performance of the transportation system while Longview is pioneering protection of the Columbia protecting and enhancing the natural environment. River with its reconstruction of Berth 4 pier and terminal. The project will lower emissions and fuel consumption nationwide by enabling a modal shift in freight movements from truck to rail. - Section VI (7) Reduced project delivery delays- To Reduced project delivery delays – the Port is reduce project costs, promote jobs and the partnered with WSDOT, and all other local economy, and expedite the movement of people permitting agencies to efficiently proceed with and goods by accelerating project completion permitting. The Port has a long-standing through eliminating delays in the project relationship, and history, with working with the development and delivery process, including state permitting agencies to ensure all their reducing regulatory burdens and improving information needs are met so that permitting does agencies' work practices not delay implementation. The funding of this grant will enable the Project to quickly move to construction without delay, therefore reducing project costs, promoting local and regional jobs, reducing local and regional congestion, reducing the environmental effects of freight movement through the region and national surface transportation system. -Section V.3

4. Is the project based on the results of preliminary Yes. See Section IV A – Project Readiness engineering?

5a. With respect to non-Federal financial Yes, The Port of Longview will provide $31.9 commitments, does the project have one or more million towards the project. These funds are stable and dependable funding or financing budgeted, and available for use. The Port is sources to construct, maintain, and operate the prepared, and has planned for, future maintenance project? and operating costs. -Exhibit IV-3. 5b. Are contingency amounts available to Yes. The budget includes $12.7 million cover unanticipated cost increases? construction contingency, or 10%, contingency in design budget and construction budget 6. Is it the case that the project cannot be easily The project requires federal assistance. The Port and efficiently completed without other Federal is limited in its ability to raise funding through funding or financial assistance available to the revenues or taxes. This project requires project sponsor? assistance in order to implement. Section IV and Section V.2.c 7. Is the project reasonably expected to begin Yes. See Section V1.2, Exhibit VI-2. construction not later than 18 months after the date Engineering, design and permitting will be of obligation of funds for the project? completed by late Q1 2021 in advance of Sept 2022 obligation of funds. Construction will be initiated immediately and completed by late 2024.

Appendix D: National Highway System, Longview WA

Appendix E: Schematic of Rail Layout

Appendix F: Detailed Schedule

Appendix G: Detailed Budget

Appendix H: 30% Design Documents – posted on Project website at: http://www.portoflongview.com/165/INFRA-Grant

Appendix I: Required Reviews and Permits Permit or Agency Trigger Notes Approval

Individual Section USACE Discharge of fill material to A JARPA, Figure Set, and 404 Permit waters of the U.S. under 404(b)(1) Alternatives Analysis CWA Section 404 will be prepared and submitted to USACE for issuance of the Individual Permit. A Section 10 permit is not required.

ESA Compliance NMFS and Associated with approvals of The project is not expected to USFWS activity that may affect affect ESA listed species. A No species listed under ESA Effects Letter will be prepared and Section 7 submitted with the JARPA. Section 106 Department of Associated with proposals A Section 106 compliance Compliance Archaeology and that may affect archeological memorandum will be prepared Historic or cultural resources or and submitted with the JARPA. Preservation historical properties

Floodplain Permit City of Coordination required Floodplain analysis model Longview/Cowlitz because of potential effects approved by City of Longview County to floodplain

Section 401 Water Ecology Necessary for federal A WQC will be issued by Ecology Quality approvals for discharge of fill for the Individual Permit. Certification material to waters of the U.S. (WQC)

Construction Ecology Necessary for construction A Notice of Intent will be Stormwater activities disturbing an area submitted to Ecology through the General Permit equal or greater than 1 acre WQWebPortal; a Stormwater Pollution Prevention Plan will be prepared by the contractor and submitted prior to construction. SEPA Compliance Port of Longview Necessary for work with A SEPA checklist and figure set environmental impacts will be prepared and submitted to requiring state agency the Port of Longview. The Port review, pursuant to WAC will prepare and publish the SEPA 197-11 determination.

Permit or Agency Trigger Notes Approval

Notification of SWCAA Necessary to notify agency An application will be prepared Demolition for demolition of Tennant and submitted to the SWCAA. (requires asbestos Way Landfill Structures report) Development Cowlitz County Necessary for cut, fill, An application and figure set will Permit Package demolition, and development be prepared and submitted to (master permit, within Cowlitz County Cowlitz County along with planning jurisdiction. Structures in approved SWCAA application. clearance, County to be demolished are demolition, a warehouse and sheds grading) associated with Tennant Way Facility. Critical Areas Cowlitz County Necessary for work occurring A critical areas permit application, Permit within any designated critical critical areas report, and figures areas in Cowlitz County will be prepared and submitted to jurisdiction. Critical areas in Cowlitz County for concurrent County may include review. Wetlands B, C, and D.2 Building Permit City of Longview Necessary for development A building permit application will within City of Longview be prepared and submitted to the jurisdiction City of Longview. Stormwater City of Longview Necessary for excavation or An excavation permit will be Permit grading of any area greater prepared and submitted to the than or equal to 5,000 square City of Longview for concurrent feet review. Critical Areas City of Longview Necessary for work within A critical areas permit, critical Permit critical areas (e.g. wetlands, areas report, and figure set will be flood hazard areas) within submitted to the City of Longview City of Longview jurisdiction for concurrent review.

Notes: 1. The Log Pond is mapped by FEMA as Special Flood Hazard Zone A, but does not have a mapped base flood elevation. Additional information on this requirement will be developed. 2. Online mapping sources are inconclusive as to whether the Cowlitz County portion of the Project Area contains Special Hazard Flood Areas. Additional coordination with the County will be necessary. ESA: Endangered Species Act FEMA: Federal Emergency Management Agency JARPA: Joint Aquatic Resources Permit Application NMFS: National Marine Fisheries Service SEPA: State Environmental Policy Act SWCAA: Southwest Clean Air Agency

USFWS: United States Fish and Wildlife Service WQC: Water Quality Certification

In addition to permits described above, coordination will be required for demolition and construction work adjacent to the Cowlitz County Tennant Way Facility (i.e., landfill). Although this facility has completed a post- closure facility use assessment,4 the facility is governed by an environmental covenant and post-closure permit requirements. Any impacts to monitoring wells and leachate collection pipes as a result of the IRC Expansion Project must be coordinated with Cowlitz County Environmental Health Unit and Ecology. Specific approvals or permits are yet to be determined.

4 Maul Foster Alongi, 2017. Post-Closure Facility Use Assessment, Cowlitz County Tennant Way Facility. Prepared for Cowlitz County Department of Public Works. Project No. 9041.04.20. May 12, 2017

Appendix J: Terminals served by the IRCE

Port of Longview Terminals along the Columbia River Port of Longview Bridgeview Terminal

Bridgeview Terminal (Berths 1&2) The Port of Longview entered into a lease agreement to operate this 20.5-acre terminal, which includes Berths 1 and 2, rail tracks, storage and existing structures. The Port’s criteria for evaluating the “best” possible use of a site includes, cargo throughput, job growth, new customers, new cargo and overall revenue to the Port. Using these criteria, the proposed five- year lease, with options to renew, offers the Port the best possible use of the site. The Port selected this operator because of their ability to increase the throughput of Berths 1 and 2 and drive increased demand for use of available backland facilities. The berths have handled a variety of bulk commodities over the years, including fertilizers, potash, soda, ash and grains. Berth 4 Berth 4 was once operated by Continental Grain Company until it was shuttered in the 1980s. Attempts to restart the terminal date back to the 1990s, but the Port abandoned those plans when the EGT grain terminal was developed downriver on the new Berth 9 site. The Port has taken proactive measures to redevelop the Berth 4 site. In the last five years, the Port pioneered a new model for riparian habitat mitigation with State and Federal permitting agencies in order to remove the dilapidated pier. The construction of an environmentally friendly layberth pier structure is complete, and the environmental and engineering studies to remove the upland Silo Complex are underway. Demotion of the Silo complex could begin as soon as 2021. The Port is actively marketing this terminal to foster private investment in developing a bulk export operation. The IRCE will bring the necessary first/last mile rail capacity required to handle unit trains and bulk commodity efficiently and cost-effectively. The IRCE will also keep the cargo off local roads. Combined, the projects will improve the local quality of life and bring new economic activity to the community and region. Berths 6: Breakbulk Cargo Terminal Berth 6 is operated by the Port of Longview and can handle “Panamax” sized vessels with 40’ draft. Berths 6 and 7 have a continuous length of 1,500’. The Berth is currently serviced by trucks and three, on dock, rail spurs on the inland side of Transit Shed 6. This shed can provide 100,000 sq. ft. of covered storage. The berth also has 35 acres of paved, uncovered storage capacity, with Port of Longview Berth 6 Terminal 10 acres lighted.

Berth 7: Bulk, Breakbulk, Container Handling Terminal Berth 7, operated by the Port of Longview, can also handle “Panamax” sized vessels with a draft up to 40’. The Berth has two heavy-lift cranes with bucket and container lift capabilities, bulk loader, clam shell buckets, portable hopper conveyor system with capacity for 500 metric tons/hour. The berth is served by hopper to rail and hopper to truck capability. The berth also includes additional covered and uncovered storage (35 acres paved). Immediately adjacent to the to the site is a Ro-Ro berth EGT Grain Terminal The Port’s Export Grain Terminal (EGT), is the first modern facility grain facility constructed in the last 25 years. It is also the largest facility in the Pacific Northwest. EGT exports primarily wheat and soybean and makes up 75% of Longview’s export volumes. EGT can handle “Panamax” sized vessels. The Terminal is 1,000’ long, with a trestle width of 30’. Grain is delivered via rail and barge. The development of the current IRC was the catalyst for EGT in selecting the Port. The IRCE will continue to help facilitate unit train movement into EGT and provide more flexibility and efficiency of movement of trains. Port of Longview EGT Terminal Future Barlow Point Development The Port of Longview seized the opportunity for future growth by purchasing Barlow Point in 2010. The 283-acre greenfield acquisition is a critical supplement to the Port's 479 acres of industrial property, that significantly expands the Port’s growth potential. The site, located at river mile 64 on the Columbia River, is 4 miles downriver from the Port’s existing industrial site, and sits directly on a naturally deep portion of the Columbia River shipping channel. The property is within the Longview City limits and, like other Port properties, zoned for manufacturing and industrial use. The Port of Longview Future Barlow Point Development site, when developed, will include 4,000 linear feet of deep- draft Columbia River access. Cargo Markets Demand Upgraded Infrastructure - Sufficient cargo and rail volume growth has been identified to justify the project. The Port of Longview is positioned favorably to grow as a major import and export gateway for bulk and break-bulk commodities. Commodity forecasts show that emerging markets in Asia, the Middle East, Latin America and Africa will continue to drive demand for food and agriculture products, and construction and industrial related commodities.

The Port’s 2014 market analysis showed that regional ports moved a total of 63.8 million tons of non- containerized cargo in 2013. This equates to 6.3% of the US total non-containerized tonnage. Volume growth has averaged 2.8% per annum and is expected to continue at that rate into the future. The region; however, handles 14.5% of the total US volume (excluding energy). The region has historically, and continues to be, heavily reliant on fulfilling demand from North and Southeast Asia to drive export volumes. The Port anticipates building on this strength to accommodate the region’s traditional wood products, grain, oil seed and animal feed markets. The Port’s Commodity Analysis identified potential new demands for fertilizers, inorganic chemicals, wood pellets, and project cargos Project cargo (machinery, equipment, etc.) is also continuing to grow. These large and heavy unitized commodities (capital equipment) produced both in the US, and elsewhere, are transported by ocean- going vessels between origin and destination countries. The United States is endowed with the ability to produce these products efficiently and effectively. The Port of Longview can serve the growing need to ship these products by strategically investing in infrastructure to move these goods The IRCE Project allows the Port of Longview to grow, to accommodate expanding international demand for US products, and to increase jobs and economic activity. It is precisely what was envisioned when the federal government invested $200 million to deepen the Columbia River, and opted to invest in new navigation and safety systems at the Columbia River jetty.

Appendix K: 44 Port of Longview Trading Partners over last 5 years

Argentina Ireland Qatar Australia Italy Saudi Arabia Bangladesh Japan Singapore Belgium Korea South Africa Brazil Kuwait Sri Lanka Canada Luxembourg Taiwan Chile Malaysia Thailand China Mozambique Turkey Colombia Netherlands United Arab Emirates

El Salvador New Zealand United Kingdom Finland Norway Guatemala Venezuela Germany Oman Vietnam India Panama Indonesia Peru Yemen Iran Philippines