Public Information Meeting Summary Meeting Dates and Locations: February 21-22, 2012, San Luis and City of Yuma Public Feedback: 1.Is there an interest in short line rail for export/import? Majority of said “Yes”. Only one “No” vote. 2.Is there an unmet need for short line rail for export/import? Majority of attendees said yes. Only one responded “not at this time” 3.Do you have an interest for rail connection to the seaports in Mexico? Majority of attendees said “yes”. One said depends upon the route.

Public Information Meeting Summary Cont. 4. If a rail line is developed to connect Yuma to Mexico: a. What portion of Yuma County should it pass through? – Do the pink line with distribution centers at… POE – Follow Area Service Highway – South of the farmland along ASH – Through POE 2 and along (parallel to Ash Hwy) – It should travel parallel to the border then join the main line via a route across BMG Range east of Gila Mountains. The Wellton area would serve well for economic activity for trans load and other operations

Public Information Meeting Summary Cont. b. What areas of the County are areas to avoid? – Agricultural land, populated areas, new Walmart along Ave 8E area, MCAS weapons range – Do not bisect east-west c. Or should it not be built? – Only if logistics can be built near port of entry so some economic benefit to Yuma County – Majority of attendees said “yes” 5.What concerns do you have about a rail connection through Yuma County? – Transport of Hazmat through Yuma County. Loss of viable agricultural land. – Disruption to community, lack of economic benefit to Yuma 6.Would you utilize rail if it were readily available – Divided reaction. Two participants indicated “Yes” and two indicated “No”

Summary POE II Trade Meeting on March 20, 2012 Discussion Items: 1.Reviewed the Purpose and Need of the project 2.Reviewed the types of rail service to be considered a. Intermodal facility Container –on-Flatcar (COFC)/ Trailer-on-Flatcar (TOFC) b. Unit train facility attached to a consolidation center c. Carload facility – Industrial park – Bulk trans load/team tracks – Warehousing 3.Reviewed long term freight rail opportunities if a deep sea port at Punta Colonet is constructed 4. Solicited input on a crossing location 5. ed out a questionnaire Currently waiting for responses

Technical Memorandum No. 1 – Yuma County Economic and Freight Profile Summary This technical memorandum considers: – the types of industries that are located in Yuma County and their likely usage of rail – the current status of rail service in Yuma County – The nature of Yuma County’s trading relationships, particularly with Mexico – Provides a freight profile of Yuma County’s neighboring regions of Imperial County, CA and Sonora, Mexico – Rail’s role in the U.S. transportation system, and how this might impact options to improve rail service in Yuma County.

Technical Memorandum No. 1 – Yuma County Economic and Freight Profile Summary Economic Profile: Agriculture (2007 – US Census Bureau) Agriculture is an important component of Yuma County’s economy – Yuma County Represents 20.4% of Arizona farm payroll Yuma County's inbound shipments currently devoted to agriculture and fertilizer Yuma County’s outbound shipments are currently devoted to grain Produce accounts for 70% of the value of Yuma County’s agricultural production. – Rail service would need to be fast enough to bring products to market before spoiling Pct of Land Pct of Workforce Value Per Acre Total Farm Payroll Yuma County6%8.8%$4,558$77,446,000 Arizona36%1.1%$124$380,491,000 United States41%1.9%$323$21,877,661,000

Technical Memorandum No. 1 – Yuma County Economic and Freight Profile Economic Profile - Related to agriculture: Yuma County’s largest manufacturing industry is perishable food manufacturing. In the other US locations, rail is used for shipping frozen and non-frozen fruits and vegetables. For non-frozen perishable foods, rail service would need to be fast enough to bring products to market before spoiling. IndustryEmployment Perishable prepared food manufacturing Yarn texturizing, throwing, and twisting mills All other basic organic chemical manufacturing AC, refrigeration, and forced air heating Corrugated and solid fiber box manufacturing All other plastics product manufacturing Fabricated metal product manufacturing Nonmetallic mineral product manufacturing123 Wood product manufacturing118

Technical Memorandum No. 1 – Yuma County Economic and Freight Profile Summary Economic Development Greater Yuma Economic Development Corporation (GYEDC) leads this effort. Target industries include: Food processing Military and Defense Testing Industrial Manufacturing Logistical and Distribution Renewable Energy Twin Plant/Maquila Operations 41.7% business leads were in Manufacturing (2011 GYEDC Annual Report) 10% of business leads were in Distribution (2011 GYEDC Annual Report)

Technical Memorandum No. 1 – Yuma County Economic and Freight Profile Summary Food Processing Products in the US Shipped by Rail in 2010 Source: US Surface Transportation Board (STB) 2020 Public Carload Waybill Sample 20.2 Million tons of products derived from Grains (Soybean Cake, Flour, Grits, Meal) 1.5 Million tons of frozen vegetables 1 Million tons of non-frozen juice, vegetables and fruits Rail could play a role in the Yuma Region for shipping these types of products

Technical Memorandum No. 1 – Yuma County Economic and Freight Profile Military and Defense Products in the US Shipped by Rail in 2010 Source: US Surface Transportation Board (STB) 2020 Public Carload Waybill Sample 8,024 rail carloads Large rail volumes of military hardware often relate to deployments It is unlikely that Yuma County will generate large volumes of rail freight Smaller rail volumes in military testing operations could generate small rail shipments The extents of rail supporting these small volumes would depend upon the type of operation

Technical Memorandum No. 1 – Yuma County Economic and Freight Profile Industrial Manufacturing Shipped by Rail in the US in 2010 Source: US Surface Transportation Board (STB) 2020 Public Carload Waybill Sample 43.7 Million tons of Pulp, paper or allied products The top categories include: – 17.9 Million tons of Fiberboard, Paperboard and Pulp board – 9.7 Million tons of Pulp 39.1 Million tons of Transportation Equipment. The top categories include: – 16.4 Million tons of Assembled Motor Vehicles – 8.3 Million tons of Assembled Trucks Rail could play a role in supporting economic development initiatives in the Yuma Region The extent of rail relevancy will depend upon the nature of the manufacturing

Technical Memorandum No. 1 – Yuma County Economic and Freight Profile Logistics and Distribution Rail could play a role in supporting economic development initiatives in Yuma County The extent of rail relevancy will depend upon the nature of the products to be distributed Rail is often used to for building supply hubs Retail distribution hubs are frequently coupled with rail intermodal service – Volumes generated would need to be substantial for containerized intermodal service to be viable

Technical Memorandum No. 1 – Yuma County Economic and Freight Profile Summary Imperial County, California and Mexico Imperial County’s economy is similar to Yuma County’s in terms of its reliance on agriculture Imperial County’s manufacturing sector has been more resilient than that of Yuma County San Luis Rio Colorado (SLRC) has a lower population (178,380 people in 2010) than Mexicali (936,826 people in 2010) Agriculture is a major source of employment in both SLRC and Mexicali By tonnage, Yuma County’s most significant trading partners are the Los Angeles and Phoenix metropolitan areas, as well as other parts of Arizona.

Technical Memorandum No. 1 – Yuma County Economic and Freight Profile Yuma County Freight Flows Source: FHWA Freight Analysis Framework – 3 (FAF3) FAF3 has 3 zones in Arizona (e.g., Phoenix, Tucson and the remainder of the State) Yuma County is a part of the remainder of the State FAF zone FAF3 estimates international trade flows with 8 foreign trade zones Commodities are categorized in 43 groups Commodities in Yuma County are disaggregated from the remainder of the State information The disaggregated model serves as the input to the Arizona Statewide Transportation model

Technical Memorandum No. 1 – Yuma County Economic and Freight Profile Summary Yuma County Truck Flows Source: FHWA Freight Analysis Framework – 3 (FAF3) In 2012, 83% of total truck tonnage were accounted for in the following areas. – 32% Remainder of Arizona – 31% Los Angeles – 20% Phoenix The highest tonnage products shipped into and out of Yuma County are building materials and agricultural food products Other high volume markets include Las Vegas, San Diego, and Tucson

Technical Memorandum No. 1 – Yuma County Economic and Freight Profile Summary Cross Border Trends/Flows Source: FHWA Freight Analysis Framework – 3 (FAF3) San Luis is the 5 th busiest border crossing along among primary points of entry along Arizona and California 73% of the products imported through San Luis are agricultural products Over half of the shipments that cross at San Luis originate or terminate in Phoenix or Tucson. Trade with Mexico are a small portion of Yuma County’s inbound and outbound freight flow as a % of total truck tonnage Item Exports to Mexico from Yuma County0.33%0.61% Imports from Mexico to Yuma County0.51%0.72%

Technical Memorandum No. 1 – Yuma County Economic and Freight Profile Summary Cross Border Trends/Flows Factors that could impact cross-border trade include: – Development of the Port of Punta Colonet – Improvements to the Port of Guaymas – The Western CANAMEX Passage – Maquiladora plants to manufacturing in China

Technical Memorandum No. 1 – Yuma County Economic and Freight Profile Role of Freight Rail Rail is a mode of transportation used for transporting commodities long distances The economics of rail over trucking improve with distance The economics of rail improve with the ability to ship entire trainloads from one origin to one destination New rail lines address specific transportation needs accessing a particular shipper or set of shippers. Distance RangeAll ModesRailTruckOther% Rail Less than 50 miles13,897,488505,00811,497,2651,895,2154% miles2,510,268197,4901,918,711394,0678% miles3,170,630687,2851,940,368542,97722% miles2,119,980671,1761,046,340402,46432% miles1,237,915523,644462,975251,29642% miles1,031,758574,882262,550194,32656% More than 1,000 miles1,086,505531,139374,975180,39149%

Technical Memorandum No. 1 – Yuma County Economic and Freight Profile Summary Role of Freight Rail In Yuma County Gravel, Waste/Scrap, and Agricultural Products may have the highest number of tons that could potentially be diverted from truck to rail Rail improvements targeted at these products could warrant additional consideration The need for improved rail access appears to be a major issue for Yuma County – GYEDC notes that the region is frequently at a disadvantage bidding on economic development projects due to a lack of land and facilities with rail access – There are no truck/rail multimodal facilities in the region, including no publicly available trans load facilities

Next Steps Involve developing specific project alternatives that will consider: 1.the location or potential location of impacted industries 2.the type of rail service to be provided 3.the feasibility of connecting to existing rail infrastructure Rail improvements that benefit the transportation of produce Rail improvements that benefit the transportation of other agricultural products Rail improvements that benefit the transportation of food products Rail improvements that will benefit future economic development initiatives, particularly in food manufacturing and industrial manufacturing Rail improvements that improve transportation to/from Phoenix Rail improvements that benefit the transportation of construction materials, such as gravel, non-metallic minerals, etc.

Study Process Universe of Potential Options to Improve Rail in Yuma County Alternative 1Alternative 2 Alternative 3 Preferred Alternative How to Implement Preferred Alternative You are here Alternative X

Schedule DeliverableDate Final Tech Memo #1 Economic and Freight Profile to YMPOJune 1 Public Meeting #2Mid June Draft Tech Memo #2 Evaluation of Rail Alternatives to YMPOJune 29 TAC Meeting #3Mid July Final Tech Memo #2 to YMPOAugust 1 Public Meeting #3TBD Draft Tech Memo #3 Implementation of Preferred Alternative AND Draft Tech Memo #4 Economic Impact to YMPO August 31 TAC Meeting #4Mid September Public Meeting #4TBD Final Tech Memo #3 AND Final Tech Memo #4 to YMPOSeptember 28 Draft Final Report to YMPOOctober 15 TAC Meeting #5Early November Public Meeting #5TBD Final Report to YMPONovember 18 Contract EndsNovember 18

Questions and Open Discussion