HomeMy WebLinkAbout14297RESOLUTION NO. 14297
AN RESOLUTION MAKING RAIL SERVICE BY THE BNSF
RAILWAY COMPANY
AND THE UNION PACIFIC RAILROAD
AVAILABLE TO THE ST. CHARLES INDUSTRIAL PARK
AND TRANSFERRING FIVE HUNDRED THOUSAND
DOLLARS ($500,000.00) FROM THE 1992-2021 SALES
AND USE TAX CAPITAL IMPROVEMENT PROJECTS
FUND FOR SUCH PURPOSE AND GRANTING A
VARIANCE FROM THE CRITERIA AND STANDARDS
ESTABLISHED BY SECTION 14-4-85.3 OF THE PUEBLO
MUNICIPAL CODE
BE IT RESOLVED BY THE CITY COUNCIL OF PUEBLO, that:
SECTION 1.
The City Council finds and determines that the expenditure of Five Hundred
Thousand Dollars ($500,000.00) from the 1992-2021 Sales and Use Tax Capital
Improvement Projects Fund for the purpose of making rail service by the BNSF Railway
Company (“BNSF”) and the Union Pacific Railroad (“UP”) available to the St. Charles
Industrial Park, is for a public purpose and in furtherance of a municipal function and will
create employment opportunities justifying the expenditure of public funds.
SECTION 2.
Funds in the aggregate amount of $500,000.00 are hereby authorized to be
transferred, expended and made available out of the 1992-2021 Sales and Use Tax
Capital Improvement Projects Fund for the payment to, or for the benefit of, the Colorado
and Wyoming Railway (“C&W”) in exchange for the relinquishment of its exclusive
trackage rights to provide switching rail service to the St. Charles Industrial Park.
SECTION 3.
The City Council further finds that the payment hereby authorized seemingly fails
to meet the criteria and standards established by Section 14-4-85 of the Pueblo Municipal
Code (“PMC”) because it will not immediately lead to the creation of primary jobs.
However, the City Council further finds and concludes that PMC Sec. 14-4-85.3(c) of the
Criteria Ordinance provides that the City Council “may grant a variance” from the
requirement that new jobs be immediately created “if the City Council determines in its
sole discretion” that the variance will create employment opportunities justifying the
expenditure of public funds.
SECTION 4.
The City Council further finds and concludes that good cause exists to grant a
variance from the criteria and standards established by Section 14-4-85 of the Pueblo
Municipal Code because the relinquishment of C&W’s trackage rights will allow BNSF
and UP to provide rail service to the St. Charles Industrial Park and will lead to the creation
of primary jobs in the future.
SECTION 5.
The officers and staff of the City are authorized and directed to perform any and
all acts consistent with this Resolution which are necessary or desirable to implement the
transactions described herein.
SECTION 6.
This Resolution shall become effective immediately upon passage and approval.
INTRODUCED October 15, 2019
BY: Robert Schilling
MEMBER OF CITY COUNCIL
APPROVED:
PRESIDENT OF CITY COUNCIL
ATTESTED BY:
CITY CLERK
City Clerk’s Office Item # Q-1
Background Paper for Proposed
Resolution
COUNCIL MEETING DATE: October 15, 2019
TO: President Dennis E. Flores and Members of City Council
CC: Mayor Nicholas A. Gradisar
VIA: Brenda Armijo, Acting City Clerk
FROM: Daniel C. Kogovsek, City Attorney
SUBJECT: A RESOLUTION MAKING RAIL SERVICE BY THE BNSF RAILWAY COMPANY
AND THE UNION PACIFIC RAILROAD AVAILABLE TO THE ST. CHARLES
INDUSTRIAL PARK AND TRANSFERRING FIVE HUNDRED THOUSAND
DOLLARS ($500,000.00) FROM THE 1992-2021 SALES AND USE TAX
CAPITAL IMPROVEMENT PROJECTS FUND FOR SUCH PURPOSE AND
GRANTING A VARIANCE FROM THE CRITERIA AND STANDARDS
ESTABLISHED BY SECTION 14-4-85.3 OF THE PUEBLO MUNICIPAL CODE
SUMMARY:
Attached is a Resolution which authorizes the payment of $500,000.00 from the City’s half-cent
economic development fund for the purpose of making rail service by the BNSF Railway Company
(“BNSF”) and the Union Pacific Railroad (“UP”) available to the St. Charles Industrial Park.
PREVIOUS COUNCIL ACTION:
Not applicable to this Resolution.
BACKGROUND:
The St. Charles Industrial Park has been identified by the Pueblo Economic Development
Corporation (“PEDCO”) as the preferred site for future job-creating development of large and
heavy industries in the Pueblo region. One of the advantages of the Saint Charles Industrial Park
is its proximity to rail lines owned by BNSF and UP.
BNSF and UP have been unable to provide switching rail services to the east of their main rail
lines in the vicinity of the St. Charles Industrial Park due to an April 11, 1973 trackage rights
agreement between BNSF and the Colorado and Wyoming Railway (“C&W”). Essentially, the
1973 agreement gave BNSF trackage rights for the Comanche power plant and gave C&W
trackage rights for all areas east of the main rail lines (including the St. Charles Industrial Park).
While UP is not a party to the 1973 Agreement, it has been limited in its ability to provide rail
service due to the restrictions placed on BNSF by the 1973 agreement. BNSF and UP have
shared track agreements in place which allow BNSF and UP to each use the 2 parallel tracks that
run through the middle of the St. Charles Industrial Park.
C&W, despite having the exclusive right to do so, is unable (for a variety of financial and logistical
reasons) to provide switching rail service to the St. Charles Industrial Park. C&W has taken the
position that it is unwilling to relinquish its exclusive trackage rights without receiving
compensation for same.
FINANCIAL IMPLICATIONS:
The City will pay C&W $500,000.00 from the 1992-2021 Sales and Use Tax Capital Improvement
Projects Fund for the relinquishment of its exclusive trackage rights to provide switching rail
service to the St. Charles Industrial Park. This will enable BNSF and UP to provide such service
to the industrial park.
PMC Sec. 14-4-85.3(b) of the Criteria Ordinance requires that economic incentive payments be
made to an employer who creates new primary jobs. Under the proposed Resolution, $500,000.00
will be paid to C&W for the relinquishment of its exclusive trackage rights to provide switching rail
service to the St. Charles Industrial Park. C&W will not create new primary jobs, but the
relinquishment of C&W’s trackage rights will allow BNSF and UP to provide dual rail service to
the St. Charles Industrial Park and will lead to the creation of primary jobs in the future.
PMC Sec. 14-4-85.3(c) of the Criteria Ordinance provides that the City Council “may grant a
variance” from the requirement that new jobs be immediately created “if the City Council
determines in its sole discretion” that the variance will create employment opportunities justifying
the expenditure of public funds.
City staff is recommending that City Council grant the variance because it will lead to the creation
of primary jobs in the future as the St. Charles Industrial Park develops in the years ahead.
BOARD/COMMISSION RECOMMENDATION:
Not applicable to this Resolution.
STAKEHOLDER PROCESS:
Not applicable to this Resolution.
ALTERNATIVES:
If this Resolution is not approved, the City will forego opportunities for future economic
development in the St. Charles Industrial Park.
RECOMMENDATION:
PEDCO recommends approval of this Resolution.
Attachments:
Proposed Resolution