This document, the South Dakota Rail Plan 1997, is South Dakota's official rail planning document.

This plan is a component of the Statewide Intermodal Long Range Plan adopted by the South Dakota Department of Transportation in 1994. The goals of the rail plan are:

• to inform the public and transportation officials of the transportation planning process and the importance of the rail plan component to an integrated intermodal transportation plan,
• to establish the goals and objectives to be achieved by the rail planning process,
• to inform the public and transportation officials of the current rail system characteristics,
• to examine the future of rail transportation in South Dakota.

Rail Planning Process

As part of the rail planning process, the Office of Planning and Programs of the Division of Planning & Engineering performs the following tasks:

• Conducts research on basic railroad problems,
• Works with the Office of Air, Rail, and Transit of the Division of Fiscal and Public Assistance in development of solutions,
• Maintains the State/Federal relationship on programs relating to rail transportation, and
• Assists SDDOT and any other public or private agency in coordinating railroad services with those of other transportation modes.

Rail planning in South Dakota has long recognized the importance of public involvement. The Department will continue to keep the public informed and actively solicit their input. Rail planning grew out of public awareness of the rail crisis facing the State and the public's desire to solve the resulting transportation problems. Direct public involvement in the rail planning process is generated through news releases, Department mailings, meetings, and seminars. SDDOT personnel also interact directly with shipper groups and the rail carriers to solicit their input into the planning process.

Shipper surveys are conducted on rail lines selected for intensive study for financial assistance. These surveys provide information on the shipper's usage of rail transportation, future needs for rail service, and other related information. For additional information and points of view, SDDOT coordinates its rail activities with the surrounding states.

Public meetings on the rail plan and planned railroad improvement projects are held in conjunction with the public meetings on the Statewide Transportation Improvement Program held annually at various sites across the State. The meetings afford the public to review the plans and proposed projects for all modes of transportation, including rail. Public involvement is essential in ascertaining the needs and concerns of local rail users and will continue to be a major component of the transportation planning process in South Dakota.

Intermodalism

South Dakota has a long history of intermodalism. In South Dakota, the major intermodal transfer is grain from trucks to rail cars at elevators and unit train loading facilities. Following the late 1970s and early 1980s when many rail lines were abandoned and some elevators lost rail service, the Department identified the Preferential Truck Network, long before the passage of ISTEA. The network consisted of state highways which linked elevators which had lost rail service to elevators and unit train loading facilities which maintained a rail connection. Improvements such as widening of lanes and shoulders, and improving turning radii at intersections were made on the network to accommodate twin 42 foot trailers.

To assist the development of unit train facilities, elevators capable of loading 25 rail cars or more, the Department developed a program in the 1980s to provide state highway funds to improve local roads that connected unit train loading facilities to state highways. The local roads were improved to handle the increased truck traffic generated by the unit train loading facility.

The Department also assists unit train loading facilities by providing loans and grants to railroads and elevators to add or improve track siding to develop or improve unit train loading facilities. The Department is committed to the development or improvement of at least one unit train facility every five years.

Rail Service and Planning Goals

The rail service and planning goals of the South Dakota Department of Transportation are to:

• Coordinate the efforts of rail users, railroad companies, local governments, and the SDDOT in solving rail transportation problems in South Dakota.
• Encourage the continuation of privately owned and operated essential rail service in South Dakota through the use of available public and private funds, where the public interest justifies such assistance.
• Facilitate the consolidation of rail services in South Dakota when opportunities exist for improving the efficiency of rail operations.
• Increase public awareness of rail service issues as they affect South Dakota and to promote public involvement in the rail planning process.

Rail Service and Planning Objectives

South Dakota's objectives in rail service and planning are to:

• Foster safe, efficient, and economical transportation services for the movement of freight in South Dakota.
• Integrate South Dakota's rail transportation system with other modes, with surrounding states, and with the national rail transportation system.
• Provide and maintain essential rail services and facilities in South Dakota which serve the public interest but which cannot otherwise be profitably continued by private carriers.
• Provide a point of coordination for rail users, railroad carriers, and governments (local, state, and federal) in maintaining essential rail transportation accessibility within South Dakota.

Rail Service and Planning Actions

Workable actions are essential to the rail planning process. The following actions have been developed to implement the goals and objectives:

• Identify the essential rail system needed to serve South Dakota's current and future agricultural, natural resource, industrial, and energy-related activities.
• Retain a viable core rail system comprising of essential rail lines which serve the primary traffic-producing areas in South Dakota and which provide accessibility to state and national markets.
• Eliminate non-profitable rail lines which are non-essential and whose services could be more efficiently provided by an alternative rail line or transportation mode.
• Invest Railroad Trust Fund dollars and assist in securing federal funds for the permanent improvement and rehabilitation of essential rail lines.
• Assist in establishing regional railroad authorities and providing loans to develop or improve rail facilities, including unit train loading facilities.

Planning Process for Local Rail Freight Assistance Program

Historically, federal funding has been an important part of the maintenance and rehabilitation of rail lines in South Dakota. Since 1979, South Dakota has received over $20 million in federal grants under the Local Rail Assistance Program and the Local Rail Freight Assistance Program. However, since 1988, the availability of federal assistance for railroad rehabilitation has become increasingly problematic with the uncertainties of the federal budget process. Authorization for the LRFA program expired in 1995. It is not known if the program will be reauthorized in the future. South Dakota does not have the resources to replace the loss of federal funds to rehabilitate rail freight lines. The shortline operations which relied on federal funds for maintenance and rehabilitation have limited ability to provide the capital needed for rail improvements.

Significant Events Since the 1992 Rail Plan

1. Abandonment of the rail line from Watertown to Sioux Valley Junction. On February 18, 1993, the Interstate Commerce Commission (ICC) approved the Dakota, Minnesota and Eastern Railroad (DM&E) request to abandon the rail line from Watertown to Sioux Valley Junction. This 44 mile long rail line segment was embargoed in 1989. The DM&E traffic, consisting mainly of cement to Watertown, was diverted onto the Huron to Watertown line.
2. Abandonment of the rail line from Aberdeen to Hecla. On September 4, 1993, the ICC approved the DM&E request to abandon the segment of rail line from Aberdeen to Hecla. This segment was embargoed in 1989. The segment of rail line from Hecla to Oaks, ND is being operated by the Red River Valley and Western Railroad.
3. Huron to Yale rail line rehabilitation project. On July 30, 1994, the DM&E Railroad completed the rail rehabilitation project on the Huron to Yale rail line. Funding for the $391,500 project came from a Local Rail Freight Assistance (LRFA) grant in the amount of$256,333. The DM&E Railroad provided matching funds of $135,167. The project consisted of tie replacement and adding ballast on the 12.8 mile section of track.
4. Sisseton to Milbank rail line rehabilitation project. The rehabilitation of the 37 mile track from Sisseton to Milbank was completed on October 14, 1995. The rail rehabilitation project consisted of tie replacement and adding of ballast. Funding for the $391,747 project consisted of $274,223 from a LRFA grant and $117,524 in matching funds from the Sisseton-Milbank Railroad.
5. 1993 Flood repair projects. Heavy rains in the spring of 1993 caused wide-spread flooding in eastern South Dakota. The flooding caused extensive damage to rail lines and caused a temporary disruption in some rail service. In response to the disaster, the Federal Railroad Administration provided a $1,422,951 grant to South Dakota for necessary repairs to the flood-damaged track. The following shows the amount of federal funds received by the railroads:

Sisseton-Milbank Railroad	$ 49,794
D&I Railroad	$ 223,257
CP Rail	$ 141,000
DM&E Railroad	$ 1,008,900
Total	$ 1,422,951

6. 6. Colony Line rehabilitation project. On June 9, 1995, the Chicago & North Western Railroad (C&NW) completed the track rehabilitation on 60 miles of the rail line from Hermosa, south to the Nebraska State Line. The project consisted of replacing 26,000 cross ties and adding ballast. Funding for the $1.4 million project consisted of a LRFA grant for $1 million and the C&NW Railroad providing $428,572 in matching funds.
7. Sale of the Colony Line. In the spring of 1996, the Union Pacific Railroad (UP) sold its Colony Rail Line to the DM&E Railroad. The Colony Line runs from Colony, WY south through Rapid City to Dakota Junction, NE, a distance of 174.7 miles. The UP had obtained the line as a result of its merger with the C&NW in 1995. The DM&E began operating the line on May 4, 1996.
8. Light-weight rail replacement project on the D&I Railroad Line. In April 1995, the Department of Transportation received a LRFA grant in the amount of $554,927 to be used to replace 8 miles of light-weight rail near Chatsworth, IA and Hawarden, IA. This line is owned by the State of South Dakota and operated by the D&I Railroad which is providing $344,385.61 in matching funds. The rail replacement project is scheduled for completion in the summer of 1996.
9. Core line rehabilitation and rail replacement project. On August 7, 1991, the Burlington Northern Railroad (BN) and the State of South Dakota agreed to extend the operating agreement for the 368 mile state-owned core system to June 30, 2020. In the amendment, The State of South Dakota agreed to commit $8 million in lease payments over eight years from the BN to assist in the following projects:
1. The rebuilding of the North Yard in Mitchell at a cost of $1,037,000. This project is complete.
2. The relay of light rail between Mitchell and Canton at a cost of $4,556,000. This project is fifty percent complete.
3. The relay of light rail between Mitchell and Sioux City at a cost of $4,707,000. Work has started on this segment.
4. The purchase and rehabilitation of 22 miles of track between Ortonville, MN and Appleton, MN at a cost of $2.4 million. This project is complete.
10. Unit Train Loading Facility Improvement at Midland. In October 1994, the Dakota, Minnesota, and Eastern Railroad completed construction of the industrial siding serving Dakota, Mill and Grain in Midland, SD. Completion of the project allows the elevator to load 25 car unit grain trains. Financing of the project consisted of a five year $164,000 loan from the State Railroad Trust Fund to the Haakon County Regional Railroad Authority, an additional $27,728 from the railroad authority, and $22,000 from the DM&E. As a result of the project, carloadings at the elevator in 1995 was 160 % higher than in 1993.
11. Northern Hills Regional Railroad Authority. In December 1994, the Northern Hills Regional Railroad Authority was incorporated to develop passenger rail service between Deadwood and Rapid City.
12. Sale of Core Line to BNSF in November 2005.