Thursday, April 5, 2012

Railroad Relocation Project Internal Audit

If you haven't heard about the Railroad Relocation Project Internal Audit conducted by the City Council's Internal Audit team, then here is a link to the report. The report was completed in March, 2012 by the city's Lead Internal Auditor.

Here are the salient points in the audit:
  • In 2000, the city hired a consultant to perform a feasibility study related to the completion of the Phillips to the Falls project. The consultant was paid $127,310 in 2001-2002.
  • The same consultant was hired again in 2003 to perform work on the railroad relocation project. The consulting firm was paid $127,737 in the years 2003-2004 for design work on Phase 1 of the project related to an underpass at Pasley Park and adding siding tracks at Benson Road.
  • The funds to pay for the consultant services above came out of the second penny sales tax fund.
  • In 2006, the city received a congressional earmark of $40 million dollars for the relocation project. A railroad relocation fund was established to track project expenditures. This is how it works: Congress appropriates the funds; the Federal Highway Administration (FHWA) awards the funds; the South Dakota Department of Transportation (SDDOT) oversees the funds and verifies compliance with federal regulations; the City of Sioux Falls is the user of the funds.
  • An environmental assessment must be completed in order to use the federal funds. Herein lies the problem about accesssing the federal funds.
  • From 2006 through 2008 the city paid $592,023 out of the railroad relocation project fund for property appraisal fees, legal services, and title searches.
  • The Environmental Assessment essentially stopped in 2008.
  • A Financial Review of the Railroad Relocation Project was conducted by the SDDOT Audits office in 2009. Eight audit issues were outlined in the report along with corrective actions.  See page 4 of the report.
  • In 2009, the fund was in the red by $200,000 due to questions by the SDDOT regarding which expenses were eligible for reimbursement for the project.
  • On February 11, 2011, the SDDOT reimbursed the city $124,000, leaving a deficit of $74,994 in the railroad relocation fund to date.
  • The City Finance office is showing $36,538,098 in anticipated federal revenue in the railroad relocation fund.
The city administration said the environmental study would be completed in June 2011 and the draft environmental assessment would be completed in October 2011. Those dates have come and gone and neither has happened yet.

  • A comprehensive management plan  by SDDOT, the city, FHWA and the consultant was to be completed by March 2011.  Is it done yet?
  • A deficit in the Railroad Relocation Project Fund.
  • No draft environmental assessment report to date. The City can't access those federal funds until the ES is completed.
  • Public outcry regarding the Canton siding alternative option.
  • Public outcry regrading the main switching line near Brandon.
  • BSNF says it won't contribute any money to the project saying it is a "city project."

There must be a reason why this project has not moved forward. No cooperation from the railroad who doesn't see this as their project. Land use issues relating to the relocation of those rail lines haven't been resolved since the beginning of the project back in 2006. Is this a project that is meeting it's demise because there were no palatable options back then and there still aren't any now?


  1. The only guaranteed way to resolve this issue is to work on it and according to the audit and your post here this has NOT been a priority for the city since 2009. If there is no solution then that's the answer but the current administration has squandered two years and now the money is going to go away and they're going to blame BNSF for that. Ridiculous mismanagement of federal dollars that Thune and Johnson got our state. The Mayor and city staff who are in charge of planning need to be held accountable for missing the opportunity and/or not focusing on this issue until it's too late. Ignoring issues doesn't make them go away.

    In other news we did approve spending $150,000,000 of taxpayer dollars while we sat on $35,000,000 in federal funds. Nice job team...nice job. Spend money we don't have and ignore money we do have.

  2. Where does it state the money is going away?

  3. Here is a question, If 2 members of the council have a meeting does the information in this meeting have to be released in order to follow the open meetings law? Why are we not privy to the information that was in this meeting with BNSF?

  4. City leaders (including Mike Huether and Sue Aguilar) flew to Minneapolis to advocate for the "Y Bridge Alternative"....

    There is something VERY "wrong" with this picture!!

    The "Y Bridge Alternative" is a second bridge (to the north of the existing bridge)over the river at Falls Park. Sioux Falls taxpayers have invested millions of dollars in rehabilitating this area. It is not only our city's namesake, but is a draw for both tourists and local residents.

    Of equal importance is the resistance that was demonstrated recently by Sioux Falls citizens to a new rail siding in SE Sioux Falls, and the unhappiness of our neighbor, Brandon, over the location of a new switchyard.

    The "Y Bridge Alternative" has now been deemed unacceptable by Burlington Northern for engineering reasons. Also, I think that the SE rail siding option is off the table because of the issue of multiple at-grade crossings.

    I have followed this project for the past ten years, and I believe that the City's focus is now being "quietly" shifted to the "Near Downtown Alternative".

    The "Near Downtown Alternative" would switch the engine on the Madison Sub on the new siding track (that was constructed as part of Phase I of the Railroad Relocation Project), then push the train to the south of the current rail yard site, ultimately pulling it out to the new switchyard NE of SF.

    The dual tracks that cross Cliff Avenue near Drake Springs would be used in this alternative. This brings us to what I believe would be an insurmountable obstacle to this plan. IT WOULD BLOCK A MAJOR NORTH/SOUTH ROUTE THROUGH OUR CITY FOR EXTENDED PERIODS OF TIME. Benesch,(the consultant on this project) suggested that electronic signs would be used to route the Cliff Avenue traffic through surrounding neighborhoods. Director of Public Works, Mark Cotter, said that building a bridge (similar to the new 57th and 69th overpasses) over the dual tracks is not feasible because the Cliff Avenue bridge has many years of life left in it.

    This entire idea of relocating the switchyard has really come down to a question of what are Sioux Falls citizens willing to sacrifice in order to free up a few acres of downtown land for commercial and residential development.

    Are we willing to sacrifice Falls Park.........

    Are we willing to sacrifice a residential area in SE SF........and, east-west traffic flow through the city...........

    Are we willing to sacrifice a major north/south route........and impact surrounding areas with dramatically increased traffic.....

    That leaves us with the only viable option which is the NO BUILD OPTION.

    The railroad has been a part of downtown Sioux Falls for over a hundred has not prevented economic development from happening in the past, nor will its presence prevent downtown progress in the future!!!!

  5. Why are options "quietly" being discussed and why all the secrecy? And why would anyone wonder about open meeting violations by this mayor and city council? Already been found guilty so who knows how many times they have done it. Trust factor with this council and mayor is zero.