1. Call to Order

    The meeting was called to order at 10:05 a.m. by 1st Vice Chairman Dennis Wood.

  2. Roll Call

    Directors present: Dennis Wood, Jack McKeller, Ruth Rockefeller, and Robert Jehn. Also present were Legal Counsel Christopher Neary and Property Manager Cyndee Logan.

    Directors absent: Chairman Allan Hemphill, John Stokes, and David Nelson.

  3. Minutes

    1. The minutes of the April 28, 1999 regular meeting were tabled until the June meeting because not each member had received a copy of the minutes prior to the Board meeting.

  4. Agenda Approval

    Motion by Mr. McKellar, seconded by Ms. Rockefeller to approve the agenda as presented with two additions to be held over to a special teleconference meeting on Friday, May 21, 1999: 1) Proposed amendments to the Herzog and Rail-Ways, Inc. contracts; and 2) issues pertaining to ISTEA funding when presented in a report from Gary Milliman.

    Director David Nelson arrived at 10:10 a.m.

  5. Announcement of Action Taken in Closed Session

    No action was taken.

  6. Consent Agenda
    1. Approval of Expenditures

      Mr. Mustola, Mustola Management presented the Board with a current update of the expenditures. Motion by Mr. Jehn. Seconded by Mr. McKellar to approve the

      expenditures. Vote taken. Motion carried.

      Mr. Mustola requested the audit committee be allowed to approve expenditures for the $3,000 monthly office budget prior to monthly Board meetings. Motion by Mr. Nelson providing the Board receives justification of how the money is spent. Seconded by Mr. McKellar. Vote taken. Motion carried. The matter was added to the agenda as Item 10.

      G. Conduct of Business

    2. Report on Proposed Settlement of Attorney General Action

      Mr. Neary reported: in December, 1998 the Department of Fish and Game, the

      Department of Toxic Substances Control, and the Regional Water Quality Control Board filed suit against the NCRA to obtain an injunction to prohibit future violations of environmental laws and regulations. In February all parties agreed to set aside litigation until July 1, 1999 in order to resolve based on mutual agreement. Mr. Neary presented to the Board a draft of the proposed Consent Decree stipulating judgment which would terminate litigation. He asked each Director to review the document and be prepared to act on this document or one very similar during the June Board Meeting.

    3. Consideration of Resolution Memorializing Action of January 13, 1999 Reprogramming Prop. 116 Funds to the Southern Division

      To satisfy documentary requirements of the California Transportation

      Commission, Mr. Neary prepared a written version of the previously passed

      Resolution to amend the scope of work as stated in the Proposition 116

      application for rehabilitation of funds from the Northern to the Southern division

      of the rail line. Motion by Mr. Nelson. Seconded by Mr. Jehn. Vote taken.

      Motion carried.

    4. Approval of Contract with McEdwards Group for Characterization Study – Island Mountain

      Part of the proposed Consent Decree indicates a site characterization plan for the Island Mountain facility is required by the Department of Toxic Substances Control within 30 days of execution. Due to the short time allowed to conform with the proposed Consent Decree, Mr. Neary contacted McEdwards Group for a proposal. A time and materials proposal not to exceed $4,000 was submitted. NCRA has allotted an estimated $20,000 from the California Transportation Commission AB2782 funds for this expenditure. The study will involve analysis of soil and water samples for contamination. Motion by Mr. Nelson. Seconded by Ms. Rockefeller. Vote taken. Motion carried.

    5. Authorization for Request for Proposals for 1999 Financial Audit

      Mr. Mustola indicated that NCRA is prepared to go ahead with the request for proposals for the Fiscal Year End June 30, 1999. Motion to proceed by Mr. Jehn. Seconded by Mr. McKellar. Vote taken. Motion carried.

    6. Authorization to City of Petaluma to Reconstruct Main Line Bridge

      Thomas S. Hargis, P.E. Director of Engineering, City of Petaluma made a presentation in which he requested to rebuild two bridges at no cost to the NCRA as part of Petaluma’s flood improvement project. The Army Corps of Engineers is the lead agency. A wider, trapezoidal channel has been designed which necessitates replacing two bridges. The Corps is responsible for the designs and construction of the bridges. A current construction schedule is included in the Board packet. The proposal recommends building a new bridge downstream from the Main Line Bridge, construct new approach trackage, and begin on the Drill Line Bridge while minimizing the impact on local railroad customers. The Main Line Bridge switch over can probably be done on a long weekend this summer; the Drill Line Bridge, next summer. There will be a separate request to the Board for the Drill Line Bridge. The City of Petaluma will continue to work with Rail-Ways, Inc. and HDR Engineering during planning and construction. Motion by Mr. Jehn subject to approval by Rail-Ways, Inc. Seconded by Ms. Rockefeller. Vote taken. Motion carried.

      The Board expressed their appreciation to the City of Petaluma, and all cities, for their contribution and efforts regarding the rail line.

    7. Authorization to Execute Watershed Restoration Grant – Bridges Creek (Mile Post 243.28)

      Mr. Neary reports he did not receive the grant from the Fish and Game Department in time to present it to the Board. The grant has been reduced to $100,000 and put over to the June Board Meeting.

      Additionally, Bill Burton has filed a grant proposal for removal of rail cars from the Eel River. The Board thanked Bill Burton for his efforts.

    8. Report on Disbursement of AB2782 Funds to Creditors

Mr. Neary reports Mr. Mustola prepared a report listing creditor claims for submission to the California Transportation Commission (CTC) verified through mailings sent to each creditor. Mr. Mustola reports the CTC approved disbursements based on three categories. Of 300 creditors, half (156) are owed less than $1,000. The first authorization by the CTC allows us $53,000 to satisfy those claims. Each creditor was sent a letter by our auditors verifying our account balance. Once that letter is received by NCRA, a second letter is issued asking each creditor to forgive finance charges and sign a document stating the payment proposed is a full settlement of their claim to NCRA. As these letters are received, checks will be cut to satisfy these claims. NCRA is not paying accounts written off or finance charges. Payments are to begin next week. The second group of creditors (32) are those owed within $1000-$2000. The CTC has requested NCRA offer this group $1000 as a final settlement. A draft letter is being refined to be sent out early next week. There is enough money for 20 respondees. They will be treated on a first come – first serve basis. Those that do not respond, or respond late, will be lumped in with the general creditor pool, NCRA’s third group. The CTC has authorized $494,000 to be divided among the third group that includes FEMA creditors with the exception of Rail-Ways, Inc. in regard to the 1203 event. The third group will be offered partial payments after a schedule has been determined. The partial payment is estimated at $0.10 for each dollar owed. Mr. Wood reiterated that the Board would pursue additional funding to satisfy the rest of the debt.

Mr. McKellar recommended public participation in this portion of the meeting.

Ms. Van Meter, Van Meter Logging, asked the Board to communicate in writing as to the status of the general creditors and expresses concern that the AB2782 money for creditors is not issued quickly.

Mike Renner, L&M Renner, discussed his concern over NCRA’s inability to pay service charges and expressed concern over the status of those creditors in which there are legal proceedings.

Jane Ford, B&B Ford, discussed with Mr. Mustola the procedure for payment of AB2782 funds and expressed concern over distribution of 1203 funds.

10. Approval of Office Budget

Mr. Mustola requests the Board authorize a $3000 office budget so that monthly office expenses are authorized by the audit committee, checks are signed by a Board member, and expenses are paid prior to monthly Board meetings at which time an itemized list of expenses will be presented. A similar procedure is already in place for payroll and taxes. Motion by Mr. Nelson. Seconded by Mr. Jehn. Vote taken. Motion carried.

  1. Public Comments

    Pam Van Meter, Van Meter Logging, regrets having had to draw suit due to the Statute of Limitations.

    Mike Renner, L&M Renner, expresses disappointment in NCRA’s treatment of their establishment and is looking forward to receiving correspondence that lays out the Board’s methodology for securing more funds to pay vendors.

    Bill Burton blamed FEMA for the Railroad’s woes.

    Fred Carmichael recommended a moment of silence to begin each meeting.

  2. Liaison Report
    1. Contractor’s Report

      Glen Babcock, Rail-Ways, Inc. Environmental Director, reports on 1) hazardous

      waste clean-up, 2) FEMA track inspections with Rail-Ways, Inc. Engineer Ron

      Poulsen, and 3) work in the Willits yard to reopen California Western Railroad.

      1) 2400 gallons of drain oil have been removed from six sites. The next phase of

      clean-up will include petroleum products, soil, and batteries. The final phase is

      the long-term goal of employee training.

      2) Mr. Poulsen is currently performing track inspections with FEMA and OES. He has reported that NCRA should receive 50% to 75% of the funds under appeal

      amounting to $2-3 million. FEMA would like to send a geotech back to visit three to five sites.

      3) The FRA will inspect the completed work in the Willits Yard tomorrow. Railroad employees, the California Department of Forestry, and the Willits Fire Department, will conduct a joint training session simulating a hazardous waste spill tomorrow.

    2. CalTrans Liaison Committee – Allan Hemphill

      No report.

    3. Ad Hoc Audit Committee – Dennis Wood, Robert Jehn

      No report.

    4. NWPRA – John Stokes, Allan Hemphill

      No report.

    5. Legislation – David Nelson

Mr. Nelson reported AB74 is in the appropriations committee. Additionally, he sent the Business Plan to each of our legislators. Mr. Wood reports there is a big effort to move on the legislation by Virginia Strom-Martin for $10,000,000. There will be lobbying on NCRA’s behalf with support of AB74 and the Rail Plan.

15. Passenger – Robert Jehn

Mr. Jehn reported on the opening of the Cloverdale Depot last Saturday. A video

of the event and more information is available at He

expressed his appreciation to the City of Cloverdale, Sonoma County, and the cooperation of the FRA in allowing NCRA to move several passenger cars to the site.

16. Cities – Jack McKellar

No report.

17. Executive Director Search – Robert Jehn

Ms. Logan, Lake Management requested a meeting be set for the TAC

Committee because next month is the deadline to adopt the 5-Year Business Plan

as final. Mr. Jehn recommends the meeting wait until after the Sonoma County

Transportation Authority meets on the second Monday of June because it is on

their agenda.

  1. Discussion Items

    19. AB74

    Mr. Nelson reported previously.

    20. Strom-Martin Amendments to State of California Budget

    Mr. Nelson clarified Virginia Strom-Martin’s amendment. She has gotten an

    addition to the California State Budget that provides money through the Fish and

    Game Department for restoration of the Eel River Canyon. The NCRA would

    become partners with those agencies included in the Attorney General Lawsuit to

    restore trackage in areas that have been identified by the Board as stabilization

    sites that will not be funded by FEMA.

  2. Staff Reports

21. Environmental Compliance Issues

Mr. Neary previously reported.

22. Property Management Report

Ms. Logan defers to closed session.

    1. Track Restoration Project – Rail-Ways, Inc.

      No report.

    2. Status of Management Plan

      No report.

    3. FEMA Resolution – Christopher Neary, Dennis Wood, Allan Hemphill

Mr. Neary reported that in meetings with FEMA, NCRA has offered to forego reimbursement for stabilization of five sites to negotiate moving forward with the grant process. Rail-Ways, Inc. has commissioned a geotech analysis of the five sites. In addition, FEMA has committed to respond to NCRA’s 1203 appeals by June 15, 1999. FEMA has also formalized their decision to finalize environmental clearance so that Herzog may begin construction on Monday morning. NCRA and FEMA has agreed to teleconference calls Thursday of each week indicating that FEMA is looking at the NCRA in a new light predominantly based on the completion of audits with no finding of wrong-doing. FEMA’s concern is with the repetitiveness of the damage in the Eel River Canyon. The Strom-Martin legislation, in part, addresses FEMA’s concern.

Mr. Wood reports FEMA funds will be released as soon as NCRA approves environmental clearances with the exception of the Schellville Block that has been deemed an improved project which allows for release of approximately $800,000. NCRA’s position is that the track will be brought up to standards and further damage will be limited and not require special attention. To open the track will cost an estimated $1.3 million dollars.

26. Report on Ukiah Depot Status

Mr. Neary reports the process is moving forward in terms of the Public Utilities Commission matter.

27. Letter to Creditors Outlining Plan

Previously addressed.

M. Other Matters From the Board

Ms. Rockefeller commends Mr. Jehn and the community of Cloverdale for the Depot.

  1. Announcement of Next Meeting

This meeting is to be continued to a conference call on Friday at 2:30 p.m. to discuss the amendment of the Herzog and Rail-Ways, Inc. contracts.

The next regular meeting will be June 16, 1999 in Sonoma County.

O. Closed Session – Adjourned to Closed Session at 12:00 p.m.

    1. Conference with Real Property Negotiators, Cyndee Logan, C.J. Neary

Government Code sec. 54956.8

  1. Negotiating Parties: Pacific Bell, NCRA

Property Interest: 5’ Longitudinal Easement, Rio Dell, Ukiah

Subject: Price, terms, location, relocation

    1. Conference with Legal Counsel – Existing Litigation

Government Code sec. 54956.9(a)

  1. Schafer, et al. v. NCRA, Mendocino County Superior Court,

    Case No. 80240

  2. Van Meter Logging v. NCRA, Humboldt County Superior Court,

    Case No. (Unknown)

  3. Lovio v. NCRA, Sacramento County Superior Court, Limited,

Case No. 99AM00176

    1. Personnel – Review of Executive Director Applications
  1. Adjournment

Meeting adjourned at 12:00 p.m.