WEDNESDAY, JULY 19, 2000 AT 10:00 A.M.





A.                 CALL TO ORDER

            Chair Jehn called the meeting to order at 10:00 a.m.


B.                 ROLL CALL

            Directors present:  Chair Robert Jehn, David Ripple, Allan Hemphill, Daniel Opalach, Jack McKellar,

            Robert E. Simonson, and Max Schlienger.  Executive Director Max H. Bridges was absent; he was       

            attending the California Transportation Commission Meeting.

            Also present:  General Counsel Christopher J. Neary, Property Manager Cyndee Logan, Consulting

            Accountant Russ Mustola, and Administrative Assistant Pamela Fishtrom.


C.                 MINUTES

            Approval of Minutes of the June 21, 2000 Regular Board Meeting


            Dir. Ripple moved approval of the Minutes as written; seconded by Dir. Hemphill.  Vote taken;

            motion carried.


D.                AGENDA APPROVAL

            Dir. Simonson moved approval of the Agenda with the following additions:
            Item F.14 Federal Emergency Management Agency (FEMA)/Office of Emergency Services (OES)    
            Programmic Agreement
            Closed Session Items M.3:  Conference with Real Property Negotiator – Fiber Optics
                                                         a.  Pacific Bell

                                                                            b.  Qwest Communications

            and, the order in which each item was to be heard arranged as follows:

            Items 2,5, and 9 to become Items 1,2, and 3, respectively

            Item 13 to become Item 4

            Reverse Items 10 and 11; seconded by Dir. McKellar.  Vote taken; motion carried.           


E.                 PUBLIC COMMENTS

            Hannah Burkhardt, Mendocino County Railway Society, read a letter written by her husband in which

            he recommends payment for the Board Members by the county from which they are selected.


             Jay Mosley, Boyle Engineering, introduced himself.


             Chair Jehn read a letter written by Kaye Strickland, Chair of Citizens for Port Development, in which

             she announces the formation of the sub-committee, “Friends of Northcoast Railroad,” to enlist

             renewed support for the Railroad.  In addition, she urged NCRA to request a bridge loan from

             Humboldt County Headwater funds.


            1.   Approve Project Manager Job Description and Authorize Hiring Recruiting Firm

      Dir. Opalach requested from Executive Director Bridges an outline of the separation of duties

      between the Project Manager and the Engineering firm.  Dir. Hemphill said historically CalTrans

      has criticized NCRA for hiring consultants without oversight by accountable employees.  Dir.

      Opalach also recommended inclusion of the physical requirement within the job description.


                  Dir. Hemphill moved approval to hire L.B. Hayhurst and Associates to recruit a Project

                  Manager;  seconded by Dir. Ripple.  Vote taken; motion passed unanimously. 


            2.   Authorize Issuance of Request for Proposals for Engineering Services

    Chair Jehn described development of the Capital Project Program as a plan to rehabilitate the

    Railroad irrespective of the funding sources.  Dir. Hemphill reminded there may be some overlap

    with Boyle Engineering’s contract.  Dir. Opalach recommended the Proposal contain consistent   

    language with regard to the scope of repair to Class 1, 2 and/or 3.  Dir. Opalach also recommended

    the Board be included in the interview process.  Chair Jehn formed an ad-hoc committee of Dir.

    Opalach and Dir. Hemphill to assist interviewing respondents and making recommendations.


                  Dir. Opalach moved approval to authorize the issuance of a request for proposals for a

                  consultant to develop the Capital Project providing the language in the scope is made     

                  consistent with the summary and adding the selection process to include review by a Board

                  sub-committee;  seconded by Dir. Simonson.  Vote taken;  motion passed unanimously.         


            3.   Action to Adopt Budget for Fiscal Year 2000-2001

      Chair Jehn reported two changes from the previous version include revenue from the Transit

      Congestion Relief Plan (TCRP) and an expenditure item, “Q-Fund Retirement.”  Dir. Hemphill

      praised the budget as a conservative document sensitive to the priorities of a public agency.


      Dir. Opalach moved to adopt the Budget for fiscal year 2000-01; seconded by Dir. Simonson. 

      Vote taken; motion passed unanimously.


4.   California Western Railroad (CWR) Presentation

      John Mayfield, Skunk Railroad, indicated the relationship between CWR and NCRA is in jeopardy.   

      Tom Honer, CWR President, explained that under the Trackage Rights Agreement, NCRA is 

      responsible for track repairs performed by Rail-Ways in the Willits Yard.  CWR was billed

      however and their lawyer, Mr. Cheever of Diepenbrock Law Firm, requested NCRA indemnify     

      CWR from the subsequent lawsuit brought by Rail-Ways. 


5.   Authorize Signatores to the Bank of Willits Property Account


      Dir. Simonson moved to authorize all Board Members and the Executive Director as signers    

      on the account; seconded by Dir. Ripple.  Vote taken; motion passed unanimously.


6.   Action to Approve Bylaws

      General Counsel Neary recommended adding a sentence to the Public Character section that deals 

      with a method of memorializing Closed Session Minutes.  Chair Jehn suggested the Executive  

      Director, who is also the Board Secretary, continue to be responsible for taking the Closed Session



      Dir. McKellar moved approval of the Bylaws with the language suggested by Legal Counsel; 

      seconded by Dir. Ripple.  Vote taken; motion passed unanimously.


            7.   Adopt Executive Director Performance Evaluation Procedure

                  Chair Jehn reported having encouraged Mr. Bridges to submit to an annual performance evaluation. 

                  Because his one-year anniversary of employment with NCRA is July 26, 2000, he is asking the

                  Board to adopt the form and procedure presented, to be filled out by the Chair, and adopted at the

                  August Board Meeting.


                  Dir. Hemphill moved approval of the form and procedure presented; seconded by Dir. Ripple.  

                  Vote taken; motion passed unanimously.


             8.   Property Management Issues Considered       

a.      Lease Format 

                         Dir. Ripple reported on Page 11 it is written $2 million, yet numerically $1 million. 


                         Dir. Hemphill moved to approve the lease format with the error corrected; seconded by  

                         Dir. Ripple.  Vote taken.  Dir. Schlienger abstained; motion carried.


                   b.   Fee Structure

                         Dir. Schlienger was concerned over the cost of overhead crossings.  John Darling, President of

                         Rail-Ways, Inc., requested collaboration with his company before approving leases. 


                         Chair Jehn recommended dealing with Property Management issues by creating a

                         committee including Dir. Ripple, Dir. Schlienger, Executive Director Bridges, Property

                         Manager Logan, and Rail-Ways President Darling. 


                   c.    Residents on Railroad Property

                   d.    Lease, Kenneth A Quigley

                   e.    Lease Procedure


                          Chair Jehn recommended Items F.6.c-e be sent to the newly formed committee.


             9.   Authorize Signatores to CalTrans Fund Transfer Agreements


       Dir. Ripple moved to approve either the Executive Director or the Chair execute CalTrans    

       Fund Transfer Agreements; seconded by Dir. McKellar.  Vote taken; motion carried.


            10.  Approve Contract with Mustola Management to Provide Accounting Services

                   Dir. Opalach recommended adding the word “assist” in the beginning language of Attachment A  

                   so it does not appear that Mr. Mustola is entirely responsible for revisions to the business plan.


                   Dir. Hemphill moved to approve the contract with the revision as stated above; seconded by     

                   Dir. Schlienger.  Vote taken; motion passed unanimously.


            11. Consider Rail-Ways, Inc. Request for Extension of Start-up Date to Trigger Commencement

                  Date of Permanent Operation Agreement

                  General Counsel Neary reported NCRA’s agreement with Rail-Ways, Inc. begins when freight rail 

                  operations commence prior to December 1, 1998, after the FRA Emergency Order lifts.  The date

                  was extended through today; however, with Rail-Ways concurrence, Mr. Neary recommended

                   extending the date to August 16, 2000.  Mr. Neary reported meeting with Rail- Ways, Inc. to 

                   discuss procedure for review of their financial business plan, and how to incorporate into the

                    Agreement concerns of the California Transportation Commission (CTC), CalTrans, and OES

                    regarding the relationship between Northwestern California Railway Engineering, Corp.

                    (NorCare) and Rail-Ways, Inc.  Mr. Neary suggested both organizations file conflict of interest

                    statements, and the Agreement contain anti-collusion language.  In addition, add a clause to  

                    allow NCRA to reject NorCare as a sole source provider, and clarify how contractors access the

                    facilities for construction.


        Dir. Simonson moved approval to extend the start-up date of the Operation Agreement to

                    August 16, 2000; seconded by Dir. Ripple.  Vote taken; motion passed unanimously.


             12.  Consider Approach to Southern Division Repairs to Class I Status by Amending Southern

                    Remediation Agreement or Issuing New Request for Proposals

                    Chair Jehn reported NCRA may need to issue a Request for Proposals to continue Southern

                    Division repairs because Rail-Ways, Inc. may not be able to perform under the suggested

                    amendments to the Agreement.


             13.   Claims Recommended for Denial

                     a.   Bushnell Enterprises ($212,195.05)

                     b.   Bushnell Enterprises ($8,408.89)

                     General Counsel Neary recommended denial of both claims based on discrepancies within the

                     claims.  However, Mr. Jackson, Attorney for Bushnell Enterprises, responded to his request for

                     clarification.  Therefore, he recommended putting the matter over to the August Meeting.


                         Dir. Schlienger moved approval to continue both claims to the August Meeting; seconded by

                   Dir. Ripple.  Vote taken; motion passed unanimously.


             14.  FEMA/OES Programmic Agreement

                    General Counsel Neary reported distributing to the Board a proposed agreement between NCRA,

                    the State Historical Society, FEMA, and perhaps the product of negotiations with the Round 

                    Valley Indian Tribe.  Tomorrow NCRA meets with FEMA/OES to discuss the agreement and

                    NCRA’s response to the Environmental Assessment comments.  FEMA, as lead agency, can delay

                    the reopening of the North End.  Mr. Neary requested authority to discuss the Revised Improved

                    Project concept with FEMA. 


                   Dir. Hemphill moved to allow General Counsel Neary to explore the Revised Improved  

                   Project option at tomorrow’s meeting with FEMA/OES; seconded by Dir. Simonson.  Vote

                   taken;  motion approved unanimously.


G.                LIAISON REPORTS

            1.   Northwestern Pacific Railroad Authority (NWPRA) – Max H. Bridges

       Dir. Hemphill reported NWPRA is exploring the fundamental duties and potential redundancies in 

                  the myriad of governmental agencies responsible for the Northwestern Pacific Railroad (NWP). 

                  General Counsel Neary reported the Coast Guard requires NCRA to repair the Haystack Landing 



            2.   Legislation – Max H. Bridges

       Chair Jehn reported the Governor approved AB 2928, the Traffic Congestion Relief Program

                  (TCRP).  A summary is available on NCRA’s web site in the Powerpoint presentation.  AB 1093,

                  proposed legislation providing a mechanism to fund short line railroads, may be amended to

                  include only NCRA.  Also, Executive Director Bridges is at the CTC meeting explaining the top

                  priority is accessing the $10 million slated for debt reduction.


            3.   Passenger – Chair Jehn

       No report.


 4.   Cities – Dir. McKellar

       No report.


 5.   Sonoma-Marin Area Rail Transit Commission (SMART) – Chair Jehn

       Chair Jehn reported SMART meets August 9, 2000 2:00 pm at the Petaluma Community Center.    

       SMART was appropriated $37 million from the Governor’s budget.  Additionally, $28 million will   

       be available from Proposition 116 funds.


            6.   Mendocino Council of Governments Technical Advisory Committee (MCOG-TAC) -                 

       Property Manager Logan

       Property Manager Logan reported MCOG-TAC discussed crossing repair as opposed to losing the

       10% set-aside for rail out of state transportation funds, however, Loretta Ellard, MCOG, reported

       TAC has not made a decision on the use of funds.   


 7.   Web Site – Chair Jehn

                  Chair Jehn reported visitation to the site this month will be near 4,000 hits; 127 people subscribe.

                  Also, the web site is very helpful in terms of disseminating knowledge to the public.


            8.   Contractor – Rail-Ways, Inc. / Northwestern Pacific RailWays

                  John Darling, President of Rail-Ways, Inc., praised the Board for succeeding in securing funding

                  from the State.  He described his position with regard to CWR and expressed the desire for an

                  amicable resolution.  Also, he said he understands NCRA’s need to explore options with regard to

                  the Southern Division repairs.  Finally, he reported lighting has been restored in the Willits Yard.



            In Executive Director Bridges’ absence, Administrative Assistant Fishtrom reported Bruce Evans,

            Northwestern Pacific Railroad Historical Society, advises that the Society will be looking into a

            stewardship program for the passenger cars.  Consulting Accountant Mustola presented audited

            financial statements for fiscal years ending 1996, 1997, 1998, and a draft of 1999 which needs to be  

            accepted before July 31, 2000 so as not to be considered late by CalTrans.  Mr. Mustola also presented  

            draft financial statements for June 30, 2000.  


I.         PROPERTY MANAGER – Cyndee Logan

            Property Manager Logan expressed satisfaction with the Board’s creation of a sub-committee to work on 

            property management issues.


J.         LEGAL REPORT – General Counsel Christopher J. Neary

            General Counsel Neary reported NCRA is required to update its Conflict of Interest Code.



            Dir. Opalach reported Rick Knapp, District 1 CalTrans Director, asked him to serve on the District

            External Advisory Liaison committee.  The first meeting is August 2, 2000.  Dir. Opalach will report     

            the committees actions at NCRA’s regular Board meetings.  In addition, he has a July 25, 2000 meeting

            with Marcus Brown to discuss a steam tourist train around Humboldt Bay.  Finally, in light of the  

            Board’s decision to allow Mr. Neary to explore with FEMA the “Revised Improved Project,” he

            recommended addressing the Board’s concerns by making adjustments to the established project. 

            Chair Jehn indicated the intention is to explore all options, with the possibility of removing FEMA as

            the lead agency.


            Dir. McKellar will also attend the meeting with Marcus Brown.  Dir. McKellar supports the develop-  

            ment of the proposed railroad museum, and indicated donations of used rail equipment is appreciated.


            Dir. Schlienger cautioned adequate financial reporting is absolutely necessary to administer public           



            Chair Jehn reported Jake MacKenzie, Vice-Mayor of Rohnert Park, replaces Dir. McKellar as the

            Cities Representative. 



             Regular Board Meeting – August 16, 2000 10:00 a.m.

             Eureka City Council Chambers, 531 K Street, Eureka, Humboldt County, California


M.       CLOSED SESSION – Convened at 12:40 p.m.

            1.   Conference with Real Property Negotiator – Max H. Bridges, Cyndee Logan

                  Government Code Section 54956.8

                  Sale of Ukiah Depot

            2.   Conference with Legal Counsel – Existing Litigation
                  Government Code Section 54956.9(a)
                  a.    NCRA v. Green
                  b.    East Bay Machine v. NCRA
                  c.    Rail-Ways, Inc. v. NCRA, CWR (Including Consideration of Rail-Wyas, Inc. Claim)
                  d.    Claim of Richard Reid
                  Government Code Section 54956.9(b)
                  e.    Claim of James Bruggere
                  f.    Green v. NCRA
            3.   Conference with Real Property Negotiator – Fiber Optics
                  Government Code Section 54956.8
                  a.  Pacific Bell

                        b.  Qwest Communications



              1.   Conference with Real Property Negotiator – Max H. Bridges, Cyndee Logan

                 Government Code Section 54956.8

                 Sale of Ukiah Depot

                       General Counsel Neary announced the Board provided direction to Property Manager Logan.

            2.   Conference with Legal Counsel – Existing Litigation
                  Government Code Section 54956.9(a)
                  a.    NCRA v. Green
                         General Counsel Neary announced the Board authorized the issuance of a 90-day notice to
                         terminate the Quarry Agreement.
                  b.    East Bay Machine v. NCRA

                              General Counsel Neary announced the Board accepted the claim for $15,300.00.

                  c.    Rail-Ways, Inc. v. NCRA, CWR (Including Consideration of Rail-Ways, Inc. Claim)
                         General Counsel Neary announced the Board rejects the claim by Rail-Ways, Inc. and
                         indemnifies CWR against the Rail-Ways, Inc. claim.  In addition, a joint press release will be
                         issued by CWR and NCRA.
                  d.    Claim of Richard Reid
                         General Counsel Neary announced the Board denied the claim.
                  Government Code Section 54956.9(b)
                  e.    Claim of James Bruggere
                         General Counsel Neary announced the Board accepted the claim.
                  f.     Green v. NCRA
                         General Counsel Neary announced the matter was dropped.


           Chair Jehn adjourned the meeting at 1:50 p.m.