NORTH COAST RAILROAD AUTHORITY

FINANCE COMMITTEE MEETING MINUTES

WEDNESDAY, JANUARY 12, 2000 2:00 p.m.

501 ASTI ROAD

CLOVERDALE DEPOT

CLOVERDALE, CALIFORNIA

A. CALL TO ORDER

Chair Robert Jehn called the meeting to order at 2:04 p.m.

B. ROLL CALL

Finance Committee Directors present: Chair Robert Jehn, Robert E. Simonson, and

Daniel Opalach by phone.

Also present: Executive Director Max H. Bridges, General Counsel Christopher J. Neary

by phone, Russ Mustola, CPA.

Additional attendees: Daniel Fuller, Mark Pollock of Rail-Ways, Inc., Jim Lendy of

Senator Chesbro’s office, Gary Boots of Pacific Rail Services, with John Darling,

President of Rail-Ways, Inc. arriving at 2:15 p.m.

C. AGENDA APPROVAL

The Agenda stands approved by Chair Jehn.

D. PUBLIC COMMENTS

None.

E. CONDUCT OF BUSINESS

1. Disbursement of anticipated reimbursement revenues

Executive Director Bridges reported that a Federal Emergency Management

Agency (FEMA) payment for approximately $296,000 was received on Monday,

January 10, 2000 of which Rail-Ways, Inc. performed a large portion of the work

and received a check for $200,000.

In determining a policy for distributing payments a discussion ensued regarding

receipt of past FEMA funds, Rail-Ways, Inc. UCII agreement, FEMA appeals, the

advance of AB2782 monies, and the urgency to submit Proposition 116 billing.

Direction was given to NCRA’s consulting Accountant Russ Mustola to work on

a schedule with John Darling to reach agreement as to money owed Rail-Ways,

Inc., to continue work on a consensus regarding an inventory transfer, and to write

to the Chair regarding his understanding of the offsets levied by the State in

regards to past audit exceptions.

2. Status of FEMA/Office of Emergency Services (OES) Payments

Executive Director Bridges reported that some $184,000 is expected which is the

Small Project Cost Overrun from Disaster 1044. The next monies available will

come from repair of the North End after the environmental work is complete.

Chair Jehn indicated Natural Disaster Assistance Act monies may become

available in lieu of FEMA funds. Mr. Bridges reported the state share of the

supplemental appeal Disaster Survey Reports (DSRs) is expected.

3. Prior Audit Exeptions

Covered under Item 1. In addition, Executive Director Bridges reported he spoke

with the OES regarding Russ Mustola’s assertion that regular time labor should be

reimbursed because, although NCRA is a public agency, our regular time personnel

costs are not budgeted and paid through a tax subsidy. The State indicated the time

frame for raising the issue as an audit exception had expired. General Counsel

Chris Neary reported that during Disaster 1044, the Railroad was shut down and

without revenue, lay-offs were issued and the people who were re-hired were

considered emergency personnel only, therefore, their regular time wages were

eligible. In addition, he discussed applying for a Community Disaster Loan. Mr.

Mustola was given direction to speak to the State regarding this issue.

4. Status of payments to contractors for Disaster 1203.

Covered under Item 1.

5. Revenue available for North End repair project

Executive Director Bridges reported Nancy Ward, OES, indicated that of the $8.5

million dollars available for North End repairs, none is to be spent on South End

DSRs. Mr. Darling indicated he believed based on discussions with FEMA that

the “improved project” status for the Railroad served the entire line as long as all

of the work indicated in each DSR is complete. Mr. Neary said his understanding

is that there is a split between the North and South end in order to allow work to

proceed on the South End while environmental issues are addressed on the North

End. Mr. Darling reported the signals need to be repaired before the South End

can be opened at a cost of approximately $100,000.

6. Intermodal Surface Transportation Enactment Act (ISTEA) funds utilization

Executive Director Bridges reported that the ISTEA project needs project

management, project monitoring, and a competitive bid process. Mr. Neary

recommended that due to NCRA’s limited staff perhaps allowing CalTrans to

administer the contract.

F. ADJOURNMENT

Chair Jehn adjourned the meeting at 3:40 p.m. and the Finance Committee was scheduled

to meet again at the Cloverdale Depot on February 8, 2000 at 2:00 p.m.