Wednesday, October 15th, 2003   10:00 AM

 Fortuna City Council Chambers



A.                 CALL TO ORDER

Chair John Woolley called the meeting to order at 10:05 am


B.                 ROLL CALL

Roll was called with the following members present; Burton, Hemphill, Ripple, Sears, Simonson, and Chair Woolley. Members absent; Campbell. Also present were executive director Mitch Stogner, legal counsel Christopher Neary, and recording secretary Dina Polkinghorne.


C.                 CONSENT CALENDAR

1.              Approval of Minutes - 06/04/2003 Finance Committee Meeting

2.              Approval of Minutes – 07/23/2003 Executive Committee Meeting

3.              Acceptance of Financial Reports


ACTION: Upon motion by Director Sears, 2nd by Director Ripple, and carried (6-0) the Consent Calendar was approved as presented.


D.                AGENDA APPROVAL


E.            PUBLIC COMMENT


Kaye Strickland: Commended Director Sears for all his efforts in Humboldt County on behalf of the NCRA and his support of balanced transportation in the region. She stated that she recently attended a Humboldt County Board of Supervisors meeting in which Assemblywoman Patty Berg attended. Berg reported at that meeting that she asked to be on the Assembly Transportation Committee and that transportation and the railroad are high on her agenda. Ms. Strickland also stated that she had heard that the new Governor (Schwarzenegger) has put highway, infrastructure, and railroads high on his list of priorities.


Fred Carmichael:  Reiterated what Ms Strickland said regarding the new Governor.


F.             NWPRA REPORT (Director Hemphill)


Director Hemphill briefly went over the history of the NWPRA and stated that it was set up as a temporary agency with a mandate to dissolve in 2003 with railroad properties and operating rights south of Healdsburg being transferred to SMART. He further stated that the NCRA is one of three agencies which make up the NWPRA and that dissolution negotiations are now underway between the three parties with Chris Neary representing the NCRA.   Director Hemphill further stated that part of the negotiations include the forgiveness of the NCRA debt on the “Haystack Landing” loan, forgiveness of various current obligations of the NCRA, and significant expansion of the NCRA’s ability to run excursion trains south of Healdsburg. They in turn are asking the NCRA for transfer of the Healdsburg Depot site to SMART. Director Hemphill also reported that at the staff level the negotiations came to an impasse so he and Director Ripple met with Sonoma County Supervisor, Tim Smith (Chair of the SMART board of Directors) in which the position of the NCRA was reiterated. Director Hemphill felt it was a positive meeting and is confident in the outcome of the negotiations for the NCRA. The next NWPRA dissolution meeting is scheduled for October 20th, 2003.



1.            Award of Single Year Audit Services

Executive Director Mitch Stogner stated that the NCRA received three bids for auditing services and based on a point system, he recommends awarding audit services to the accounting firm of Aycock and Edgmon.


ACTION - Upon motion by Director Simonson, 2nd by Director Ripple, and carried (6-0) the board awarded the Single Year Audit duties to the accounting firm of Aycock and Edgmon.


2.                  Adoption of Final Budget for fiscal year 2003-2004

Mr. Stogner stated that Director Simonson led a budget workshop on October 8th, 2003 and it was attended by staff, Theda Hawkinson and Stephanie Coleman of Caltrans District 1 office, and Eric Roeser of the Sonoma County Auditor’s Office. He further stated that it was a very helpful session in which the proposed budget was defined and recommended that the board approve this document as the final NCRA budget for the fiscal year 2003-2004. Director Simonson stated that the contributions of Caltrans District 1 staff and Sonoma County staff were very helpful. Chair Woolley thanked staff for all the work that went into creating this budget.


ACTION Upon motion by Director Simonson, 2nd by Director Sears, and carried (6-0) the board adopted the Final Budget for the fiscal year 2003-2004 as presented.


3.                  Approval of Reassignment of Prime Consultant

Mitch Stogner updated the board on the reassignment of the prime consultant. He stated that he had received a revised amendment of the Willdan contract from Mort August of Willdan in which the prime consultant is named as HNTB. Legal counsel Chris Neary stated that in the revised version under sub section I, 21A, the words “active negligence” were replaced with “passive negligence”. He recommended that the board change the language back  to read “active negligence”. Mort August of Willdan stated that HNTB legal counsel created the document and that it was his opinion that this change was not monumental and that the word “active” could be put back without raising a concern by the parties involved.


Director Sears stated that he was disappointed with the consultants for taking 5-6 months to accomplish this change in the prime role. He also stated that he felt the change in the language from “active” to “passive” created by HNTB at the last moment in the revised document was inappropriate.


Director Ripple stated that he agreed with Director Sears but suggested that the board defer to Mr. Neary’s recommendation. Mr. Neary stated that the change is a minor one but one that needs to be acknowledged and addressed. He said it’s a technical issue that he will resolve with HNTB Counsel.


Director Burton asked for someone to go over the history of this issue since he had been off the board for several months, which Mr. Neary did. He then inquired as to which firm hired  the previous NCRA Executive Director, Max Bridges, upon his departure from the NCRA.. Mr. Neary responded that Mr. Bridges went to work for Willdan.


ACTION Upon motion by Director Hemphill, 2nd by Director Simonson, and carried (6-0) the board approved the Reassignment of the Prime Role document with the following changes; remove the word “passive” and replace with the word “active”.





4.                  State/Local Agency Contribution Agreement


Mr. Stogner stated that in July of 2002 Caltrans did some storm damage repair work on highway 162 in Mendocino County that required the removal of a section of NCRA track. They have since informed the NCRA that they will advance approximately $75,350 to the NCRA to repair the track damage. He also stated that this is unencumbered money, but it is understood that when the NCRA schedules the repair work it  cannot apply for state reimbursement.


Director Ripple inquired whether or not the NCRA could apply federal dollars to pay for the damage. Mr. Stogner stated that it was his understanding that this agreement only applies to state monies and that yes the NCRA could apply federal monies to the project.


Theda Hawkinson of Caltrans District 1 office stated that the intent of the state entering into this agreement with the NCRA was that the NCRA should be paid for damage caused by Caltrans since it is the goal of the NCRA to repair the entire line. She further stated that at this time NCRA can use those funds through the Cooperative Agreement as they wish with the expectation that NCRA will fix that part of the track with their own funds, assuming these state funds are not used to make track repairs.


ACTION – Upon motion by Director Ripple, 2nd by Director Sears, and carried (6-0) the board approved the Contribution Agreement between the NCRA and the State of California as submitted. 




1.                   Finance Committee Report

No report 


2.                  Property Committee Report  

Director Simonson reported that there is a property committee meeting scheduled for next month on the 19th of November. Director Sears requested that the date be changed to which Director Simonson stated that he will look into it with staff.


3.                  Passenger Committee Report

Director Hemphill reported that the Orient Express has defaulted on their agreement to follow through with their purchase of passenger cars and that legal counsel is looking into an appropriate course of action. He also reported that he has worked with staff to hire someone to secure the cars in the Willits yard, which has in fact taken place and the cars are well secured. There has also been further damage on the daylight cars and that is being taken care of as well.


4.                  NWPRA Ad Hoc Committee Report

No Report


5.                  Operator Ad Hoc Committee

Director Ripple reported that there is a meeting scheduled for October 30th, 2003 with the Ad Hoc Operator Committee and John Darling of Northwestern Pacific to discuss budgetary issues and the NWPY business plan.


By consensus of the board, the agenda was changed to move item I, “Closed Session” and J, “Announcement Out Of Closed Session” to the end of the agenda.





1.) Executive Director Mitch Stogner


1.a) FEMA/OES Alternate Project Update

Mitch Stogner stated that the FEMA OES Grant is under internal review with FEMA, OES, and Caltrans staff for a few more days and that there will be a 14-day public review period immediately following the internal review. Assuming that there are no environmental consequences brought up in either review, and FEMA/OES does not anticipate that there will be, then they will obligate the funds after getting approval from FEMA DC.  NCRA will then do a detailed scope of work and seek categorical exclusions under NEPA to acquire equipment and begin track rehabilitation. By the end of November Mr. Stogner stated that the NCRA should receive between 7.5 and 8 million dollars to do the work between Lombard and Willits.


1.b) CTC Presentation

Mr. Stogner went over a presentation on the opening strategy plan for the south end of the line that he anticipated presenting to the CTC in December. Originally that meeting was scheduled for October 30th, but had since been postponed by the CTC due to the heavy agenda before the commission. After reviewing the presentation Chair Woolley directed Mr. Stogner to make sure that all parties involved knew that this was a draft presentation, to which Mr. Stogner assured him that that this would be made clear. Chair Woolley also stated that with the postponement of the meeting more time would be provided to fine tune the presentation and the business plan.


Because the NCRA will have an operational track for the first time in several years, Director Hemphill stated that he felt it was of the utmost importance that NCRA launch some sort of publicity campaign to ensure that the public is aware of this. He also stated that this will also make prospective shippers and receivers aware of the transportation opportunity available to them on the rail.


Theda Hawkinson of Caltrans inquired if the business plan laid out in the presentation had a baseline starting with the feasibility study done last year and if so, to make sure that the public is aware of that. Chair Woolley stated that the feasibility study was done on the whole line and Mr. Neary added that the log and sand opportunities listed in the presentation came up after the feasibility study was done. Ms. Hawkinson recommended that those points be mentioned in the presentation. She also suggested that any figures, for example an increase in carloads, that differ from the feasibility study be mentioned in the methodology used.


Director Hemphill suggested that input from the private operator in partnership with the Operator Committee, be included in the annual budgetary process of the NCRA. in putting together any long range plans. Chair Woolley and Theda Hawkinson were in agreement.  


Chair Woolley complimented Mr. Stogner for putting together this presentation without the benefit of extensive railroad operations experience and additionally stated that he hoped the board felt as satisfied as he did in the ongoing efforts of the Operator Committee in working on these issues.


2.) Legal Counsel Chris Neary


No Report   



L.1. Removal From Table - Discussion Regarding the Formulation of NCRA Executive Committee - Robert Simonson


Director Simonson stated that there are many ways that an Executive Committee could be of great assistance to the Executive Director and that his desire to have an Executive Committee does not in any way reflect a lack of faith in the new Executive Director.  Mr. Neary stated that with three members this would be a standing committee, and would require that meetings be posted.


Director Sears stated that he did not see a reason for having an Executive Committee. Director Simonson stated that he thought there were several reasons to have an Executive Committee, one of which would be to handle matters if and when the Executive Director goes on vacation. In addition, an Executive Committee could be beneficial to the new Executive Director as a resource for advice on particular issues.


Director Sears felt that the Executive Director could reach out for assistance at any time to the board without having an Executive Committee. Director Hemphill stated that perhaps an Executive Committee could assume some of the responsibilities of the other committees so that the members aren’t spread too thin. Director Burton stated that he would be more comfortable if the Executive Director brought any issues that he needed advice on before the full board.


Chair Woolley stated that with the FEMA Alternative Project on the horizon the Executive Director will be busier than ever and the Executive Committee could be a valuable resource to him. In addition he felt that in compliance with the Brown Act, an Executive Committee could act in an advisory role and meet via telephone. Mr. Stogner felt that an Executive Committee would be a helpful tool to give guidance if that is the will of the board. Director Sears stated the he is opposed to the idea, but that if it were to be created it should be comprised of the top three officers.


ACTION Upon motion by Director Simonson, 2nd by Director Hemphill, and carried (4-2) the board directed staff to define the duties and geographical membership of an Executive Committee.


Ayes - Simonson, Hemphill, Ripple, and Woolley

            Nays – Sears and Burton


                L.2) Headwaters Grant – Leo Sears

Director Sears informed the board that on behalf of the NCRA he recently applied for a Headwaters Fund Grant in the amount of $40,000 specifically for legal assistance in getting T-21 funds released. He then stated that he met with local community organizations to seek matching funds support including the Trade Council and the Labor Council. In addition, he stated that he is on the agenda of the next Harbor Commission meeting.


There was a discussion regarding the release of the TCRP funds in which Mr. Stogner explained that these funds are locked into the state constitution and specifically list the NCRA along with other recipients. To continue to freeze the funds, the legislature would have to annually suspend them with a two-thirds majority vote and the Governor would have to declare a fiscal emergency.


Chair Woolley added that he and Mr. Stogner recently met with Senator Wes Chesbro who is still very supportive of the railroad and the NCRA.


                                                                                                                Adjourned to closed session at 11:46 am

                                                                                                Reconvened at 1:25

I.                CLOSED SESSION

1.            Conference with Legal Counsel – Potential Litigation

                 Pursuant to Government Code Section 54596.9 (two cases)



                The board provided legal counsel with direction and received information.



 Regular Board Meeting – November 19th, 2003 – 10:00 am

 Ukiah Valley Conference Center, Chenin Blanc Room

 200 South School Street

 Ukiah, Mendocino County, CA 



N.             ADJOURNMENT

1:26 pm