NORTH COAST RAILROAD AUTHORITY (NCRA)

BOARD OF DIRECTORS

REGULAR MEETING

MINUTES

AUGUST 13, 2002 AT 10:00 AM

BOARD OF SUPERVISORS CHAMBERS

HUMBOLDT COUNTY COURTHOUSE

825 5^TH STREET, EUREKA, CALIFORNIA, USA

A. CALL TO ORDER�� Time: 10:03 am by Chair, David Ripple

B. ROLL CALL

Present:��

Chair, David Ripple

Vice Chair, Allan Hemphill

Second Vice Chair, Leo Sears

Director, Daniel Opalach

Director, Budge Campbell

Director Bob Simonson

Director Bruce Burton

�� Also Present:

�� Legal Counsel, Chris Neary

�� Executive Director, Max Bridges

�� Assistant Executive Director, Doug Christy

�� Administrative Assistant, Andrea Darlington

C. AGENDA APPROVAL

The Agenda was approved with the additions of the Approval of the July Minutes, and the Humboldt County Board of Supervisors Resolution.

APPROVAL OF JULY MINUTES�

Minutes of July 17, 2002 Regular Board Meeting were approved.

COUNTY OF HUMBOLDT RESOLUTION

Supervisor Bonnie Neely read a letter requesting $500,000.00� for funding from the TCRP Funds for preventative storm maintenance of the railroad on the Eel River. It was recommended to initiate a preventative maintenance plan to prepare for El Nino, and requested that the preventative maintenance plan be presented to the CTC.��

Dir. Sears: moved to direct Staff to prepare an emergency maintenance plan, and pursue funds from CTC.� Vice Chair Hemphill seconded the motion.� ��

Motion carried unanimously.

D. PUBLIC COMMENT

Bill Burton: Ready to do the work

Peter Galvan:� Environmental concern of the railroad�s cavalier disposal issues. This effort would be environmentally sound.

Kaye Strickland:� Supports Humboldt County Board of Supervisors on their resolution.

Patty Clarey.� Where is the dirt from the culverts going to go?�� Dirt is contaminated along the tracks.� Does not want contaminated dirt going into the river.

Marcus Brown: Keep the culverts clean and the debris out.

�

STANDSTILL AGREEMENT

Dir. Sears moved to discuss the Standstill Agreement in closed session Vice Chair, Hemphill seconded the motion.� Motion carried unanimously.

E. CONDUCT OF BUSINESS

1. Status Report on Eel River RR

Dir. Sears read a letter from Mr. Niemeyer extending his proposal for 30-days and asked that the Board accept the email and reaffirm Dir. Sears and Dir. Simonson for any comments with Mr. Niemeyer.

Ronald Kuns, Attorney for Eel River Railroad read a letter from Ted Niemeyer summarizing his proposal.

Darby Kernan (Senator Chesbro's office):� Provided information from the Legislative Counsel�s Office on the NCRA�s authority to sell the railroad and what happens to the TCR funds; the 60 Million that the railroad has already received from the State?�

��

Oral Opinion: Does the NCRA have the authority to sell the railroad?� NCRA's statute is vague.� In the statute establishing the NCRA, you can acquire (purchase) property to benefit the RR, sell off parcels of the RR for the RR.�� The NCRA does not have the authority to sell the railroad.� Legislation would have to provide authority to sell.��

Written Opinion�� Could the TCR funds that have not yet been spent, be transferred over to a private entity that purchases the railroad? Legislative Counsel states, No.� you cannot.� The funds are very specific in statute and state that they are for the NCRA and any change to that would have to be done before the legislation.� With regard to the TCR funds that have already been spent for the railroad, the State would have the option upon the sale of the RR to collect those funds upon the purchase or to take it as a credit.� That would be the State�s option on how to deal with those funds. Because the CTC is really the only overseeing agency in the statute, it would be CTC and Cal-Trans that would have the overriding authority on how that would really work out.

2.�� ACCEPTANCE OF PASSENGER CAR BIDS

Max Bridges, Executive Director, presented a car bid summary and recommended that the Board accept that summary.� The Grand Canyon RR (Bid for Car #4011) is working on a revised bid because of the condition of the car after they had viewed it, but it is agreed not to sell for less than $30,000.00.

Bill Burton - Asked the Board to reconsider and accept his offer of $2,600.00 for Car #156.

Executive Director, Max Bridges, recommended that Mr. Burton�s offer not be accepted because it was too low.

Vice Chair Hemphill moved to accept Staff�s recommendation. Dir Opalach seconded.� Motion carried unanimously.

3.�� NCRA�S STRATEGIC UPDATE PRESENTATION

A. NCRA�s Recommended Strategy � Presentation by: Doug Christy

B. Capital Assessment Report - Presentation by: Dave Anderson

C. Consent Decree Assessment Report - Presentation by Mort August

D. The Long Term Financial Feasibility of the Northwestern Pacific Railroad Report - Presentation by Dominic Spaethling

E. Public Input

Peter Galvan - Opposes the NCRA running the railroad. �Environmental consequences would be severe.�

Pete Oringer - Discussed the "potential" of the railroad, and suggested that it be incorporated into the report/presentation to CTC.

Patty Clarey -. Additional funding needs to be defined. Contaminated soil estimate is inadequate.

Kaye Strickland:� Study and estimate of cost to abandon railroad would be significant.� The railroad was once profitable.

Fred Carmichael:� Humboldt County needs the railroad. We must consider the future.

Marcus Brown:� Need to build positive alliances with environmentalist.� Trains are a positive way to emphasis what we are trying to do in this community.

John Williams:� Good package of reports.� You should take them to the CTC and ask for the money.

F.�� CLOSED SESSION/LUNCH �� Adjourned to Closed Session: 1:10 pm

1. Conference with Legal Counsel � Anticipated Litigation Government Code � 54956.9, one case

General Counsel received direction from the Board of Directors.

2. Conference with Legal Counsel � Existing Litigation Government Code Section 54956.9(a) Harden Cook et al vs. NCRA; Alameda Superior Court Case #020762

There was nothing new to report.

3. Conference with Legal Counsel � Pending Litigation Mass Electric, � Anticipated Litigation Government Code � 54956.9

General Counsel received direction from the Board of Directors.

4. Conference with Real Property Negotiator - Mr. Bridges Government Code � 54956.8

Real Property Negotiator received direction from Legal Counsel.

G.�� ANNOUNCEMENT OF ACTION TAKEN IN CLOSED SESSION

Reconvened in Open Session : 2:42 pm

Announcement made by Legal Counsel that the Board approved, with a 5-2 vote, the NWPY Standstill Agreement with one minor change.�

H.�� CONDUCT OF BUSINESS

1. Adoption of Strategy

Staff recommended that the Board approve the Strategic Plan and that they be allowed to present the plan to the CTC.

Executive Director, Max Bridges, recommended that an Ad-Hoc Funding Committee be formed to work with the consultants.� An Ad-Hoc Funding Committee was formed with, Dir Sears, Chair Ripple, and Vice Chair Hemphill.� Staff and consultants will advise Committee of meeting schedule.

Dir.� Campbell moved to accept consultant reports and strategic plan and present strategy to CTC. Simonson 2^nd.� Vote taken, Motion carried unanimously.

I. MATTERS FROM BOARD MEMBERS

J.�� ANNOUNCEMENT OF NEXT MEETING

Regular Board of Directors Meeting

Wednesday, September 18, 2002 at 10:00 a.m.

Healdsburg City Council Chambers

Healdsburg City Hall

401 Grove Street,

Healdsburg, Sonoma County, California USA