NORTH COAST RAILROAD AUTHORITY (NCRA)

NORTH COAST RAILROAD AUTHORITY (NCRA)

BOARD OF DIRECTORS REGULAR MEETING

Wednesday, March 16, 2005 10:00 AM

Healdsburg City Council Chambers � 401 Grove St., Healdsburg, Sonoma County

�DRAFT MINUTES

A.�� CALL TO ORDER

Chair Woolley called the meeting to order at 10:12 am. He announced that Director Ollivier was delayed on his way to the meeting due to car troubles.

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B.�� ROLL CALL

The roll was called with the following members present: Directors Ellinger, LaVallee, Ripple, and Chair Woolley. Absent: Director Hemphill, Director Ollivier, and Director Simsonson.� Also present were Executive Director Mitch Stogner, General Counsel Chris Neary, Recording Secretary Dina Polkinghorne and Administrative Assistant Heather Newell.

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C.�� AGENDA APPROVAL

�� The Agenda stood as approved

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�� Director Hemphill arrived at 10:14 am

D.�� CONSENT CALENDAR

�� 1.�� Approval of Minutes � February 2005

2. Approval of Financial Statements � February 2005

Item 1 pulled for discussion. Director Ellinger stated that the minutes from the February meeting incorrectly listed Director Ripple as present and Director Simonson as absent. It should have been the other way around.

ACTION: Upon motion by Director LaVallee, 2^nd by Director Ellinger, and carried (6-0) the board approved the Consent Calendar with the following changes: Correct the February minutes to reflect the absence of Director Ripple and the presence of Director Simonson.

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E.�� PUBLIC COMMENT

Ruth Rockefeller � Ms Rockefeller stated that she recently called legislators in regards to the NWP and that it will take the efforts of a dedicated Board of Directors, staff, and the public to move things forward. She stated that two different local support groups have been formed to organize trips to legislative hearings and that other communities could do the same. She also stated that in the 1990�s the State tried to present a case where the public did not care about the railroad. Each community along the right of way formed groups and persuaded the State otherwise. She reported that the two current active groups have created a �need to know� goal so that no legislative hearing regarding the NCRA go unattended by private citizens.

John Clifton � Mr. Clifton provided a written statement and read those statements aloud regarding the recent availability of Port facilities in Vallejo at the South End of the UP tracks at a General Mills plant. He stated that the property is on the market and would make available freight and ferry service from San Francisco to the Wine County and the Skunk Train. He referenced a CLEAN CITIES PROGRAM OF THE REDWOOD EMPIRE and that the installation of additional rail services would be in keeping with the program�s goals. He also stated that the additional tracks that would be needed could be funded by an FRA 25 year loan at 5% interest.

James Quinn � Mr. Quinn stated that out of the $60 million obligated to the railroad in July of 2000, most of it has been spent on bureaucratic purposes and if the economy gets any worse the NCRA risks having the� balance deobligated. He then reported that he recently called Diane Eidam, the new Executive Director of the CTC and that in his view she did not seem to be a friend of the railroad.� He urged the Board to come up with a new strategy for obtaining the remainder of the obligated TCRP funds.

Mike Pechner � Mr. Pechner urged the board to come up with a new strategy for dealing with the CTC.

Mr. Pechner also voiced concern over the recording of minutes in terms of public comment. He referenced his comments regarding Farley Station from a previous meeting He stated that he has given his comments to Mr. Stogner and Mr. Neary 3 or 4 times and they are not appearing in the minutes. In regards to the Farley Station he stated that public property has been destroyed (track removal) and urged the NCRA to contact the County Sherriff and then the District Attorney. He stated that he has asked the Board of Directors to take action on this before and felt that the written submitted comments should be added as an addendum to the minutes.

Don Edmisten � In regards to the Chesbro Bill (SB 792) Mr. Edmisten volunteered to testify on behalf of the business community. He further stated that having no running railroad has hurt many businesses and that he believed the Cal Northern would look forward to having the railroad running soon.

Mr. Stogner thanked Ms. Rockefeller for her comments. In regards to Mr. Pechner�s comments he stated that the Farley Station issue is not a priority at this time.

Mr. Neary stated that the minutes are required to identify the commenter and the substance. Written statements form speakers are only useful to staff and the comments are not appended to the minutes. He further stated that it�s a matter of policy � if the board wishes to add the comments as an addendum they can, but the default position is not to.

Director Ripple suggested that the Farley Station issue be agendized to discuss.

Chair Woolley also suggested that the Farley Station issue be agendized. He further stated that he appreciates all the public support from local community groups in the Northern areas and encourages the same in the southern locations as well. In regards to the comments in the minutes from the public Chair Woolley suggested that the number one role of minutes is to accurately reflect the action taken and that the comments are tracked as far as how the Board heard them. It may not always be accurate.

Director Hemphill stated in regards to Mr. Quinn�s comments, that it�s important to note that the NCRA has been working with Congressman Thompson to have the NCRA designated as the lead agency in the ISTEA funds.

Chair Woolley thanked everyone for their comments.

F.�� PRESENTATIONS

1.�� HNTB � Dave Anderson

Bridge Inspection Report

Mr. Anderson stated that the focus up to this time has been on the bridge inspection component of the project. Some of the steps are out of the NCRA�s control regarding the environmental clearance and permitting. The next step in the process, as outlined by Mr. Anderson, is to do the actual construction and that involves drawing up the bid packet and dealing with permitting. Task Order #8 has been initiated to move forward with this step. This has to be done before the FEMA monies expire in September so things are moving forward in a pro-active manner.

The next Task Order will be created for the procurement of rail cars, signals and equipment. The list will have to be finalized soon and more information is needed regarding the rail cars. He reported that he is meeting with Mr. Stogner this week to begin strategizing the procurement.

Mr Stogner stated that the procurement schedule indicates completion of the purchases by the end of July.

Mr. Anderson stated that five different agencies require permits; United States Coast Guard, the California Regional Water Quality Control Board, the US Army Corps of Engineers, the Department of Fish and Game, and the San Francisco Bay Conservation and Development Commission.

Director Ripple stated that there were probably additional permits required from the Army Corps and defined further permitting requirements that the NCRA can anticipate.

Mr. Anderson stated he is working with Marty McClelland of Oscar Larson on the permitting and after he and Mitch get together to discuss procurement, the first priority will be permitting.�

Chair Woolley asked if there were any comments from the public.

Jim Quinn asked if the FEMA funds would go away if not allocated by September.

Mr. Stogner confirmed that the deadline is September, but that if necessary the NCRA could request an extension and most likely it would be granted. He stated that it is his goal to try and avoid asking for an extension.�

Mike Pechner asked about the type of railcars the NCRA planned to purchase.

Mr. Stogner said that it has not yet been determined.

John Clifton asked the board about the insurance requirements of running passenger cars in the future and urged the board to research this because the requirements are extensive.

Don Edmisten requested a quick description of the bridge inspection results.

Dave Anderson stated that the bridges are in very good shape both structurally and mechanically and that most of the repair work will be damage repair to the fendering system and routine maintenance.

G.�� CONDUCT OF BUSINESS

1.�� Adoption of Administrative Code (Policies and Procedures Manual)

Chair Woolley stated that some of the members have not had enough time to review the code and that he is relying on staff to make recommendations to move forward on adoption so that a workshop could be scheduled.

Mr. Neary stated that he has received comments from two directors asking for more time. He further stated that the document was presented to Caltrans 6 weeks ago and no comments have been received. In terms of time limitations he stated that the accounting portion would have to be adopted and in place for 1 quarter before Caltrans can come back and audit the NCRA against the manual.

Stephanie Coleman of Caltrans District 1 stated that the Administrative Code was received in their office but they were not asked to provide comments. She further stated that it�s NCRA�s prerogative when Caltrans comes back and audits the agency.

Director Hemphill asked whether Caltrans should review it since they are the CTC �gatekeeper�.

Mr. Stogner agreed and he stated that he would formally make that request.

ACTION: Upon motion by Director Ripple, 2^nd by Director LaVallee, and carried (6-0)the board moved to put the item back on the agenda in April.

H.�� STAFF REPORTS

1. Executive Director Mitch Stogner

a.) NCRA Administrative Funding � SB 792

Mr. Stogner reported that the first hearing regarding the bill is scheduled in April and it will be chaired by Sen. Torlakson.� Sen. Chesbro is the Chairman of the Senate Budget Committee and he is very much aware of what the NCRA�s request is and he has agreed to author the bill. One of the state TCRP projects (32.8) was a $5.5 million set aside to repay the Q fund loan � a $12 million dollar Federal loan to acquire the right of way South of Willits. Congressman Thompson has a provision in the Highway Bill, that passed the House last Thursday, that forgives the Q Fund Loan. We are asking that the $5.5 million set aside to repay that loan be reallocated to cover our administrative and maintenance of way needs and to cover the completion of the ECD. Those are the two things that are addressed in the Chesbro Bill. We have every reason to believe that the Federal Highway Bill will be passed into law and therefore Sen. Chesbro�s Bill would come into play. There is a lot of pressure building to get the TEA 21 adopted and things are moving quickly. Many State projects are held up in that bill and pressure is building to pass it before the start of the spring construction season.

b.) �Q-Fund Loan Forgiveness and ISTEA Funding � HR 3

Mr. Stogner reported that he�s confident that the Federal Highway bill will pass and that there is pressure to get the TEA 21 moving forward. The ISTEA funds, $8.6 million, are already obligated to the NCRA and are sitting at Federal Highways. The monies are for North End Construction and Congressman Thompson�s bill makes NCRA the lead agency on this. He further stated that the NCRA would have to develop a DBE Program and find local match. Director Ellinger has volunteered to assist with this.

Loretta Ellard of MCOG asked if SB 792 is an urgency bill.

Mr. Stogner stated that it�s too risky because a 2/3 majority would be needed to get it passed.

James Quinn asked for clarification on the Q-Fund loan.

Mr. Stogner provided clarification � there is only one $5.5 million allocation.

James Quinn asked how the matching funds requirement would be met.

Director Ripple explained that there is an allocation in the TCRP that may be available.

Chair Woolley stated that the funding strategy is a benchmark approach and these items are the steps that have to be taken to reach those benchmarks.

c.) �Right-of-Way Issues on the North End

Mr. Stogner reminded the Board that he met with the City Manager and Public Works Director for Arcata regarding Rails with Trails and a Rail to Trails and that Mr. Neary will be working with the City on a licensure agreement. There is also interest in Railbanking the AMRR, but abandonment issues are still undetermined and you cannot Rail bank without abandonment. He further stated that he would be working with Caltrans on getting clarity whether the AMRR is officially abandoned.

Chair Woolley stated that in terms of resources, the City of Arcata�s interests should take priority over the Railbanking issues.

Mr. Neary stated that he would be providing the board with a licensure agreement, perhaps as early as April.

2. Legal Counsel Chris Neary ��

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Mr. Neary reported that the environmental clean-up on the southern section of the line has been completed and that triggers a Union Pacific clean up of four NCRA sites. Mr. Neary was recently informed that the UP has hired a contractor to start the clean up. He also reported that NWPY has reached a settlement with Mass Electric.

I.�� COMMITTEE REPORTS

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1. Operator Committee � Dave Ripple

Director Ripple reported that the Committee met yesterday and will be reporting to the board in closed session.

The board convened into Closed Session at 11:35 am

J.�� CLOSED SESSION

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1. CONFERENCE WITH LEGAL COUNSEL

Existing Litigation pursuant to Gov. Code Section 54956.9 (a) (3 cases)

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a) Michael H. Meyer vs. NCRA, Surface Transportation Board Docket # 34337

b) Jerico Products Inc. vs. Smart, U.S. District Court number 05-000210

c) NCRA vs. Jerico Products Inc. et al.

2. CONFERENCE WITH LEGAL COUNSEL

Initiation of Litigation pursuant to Gov. Code Section 54956.9(c) (1 case)

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3. CONFERENCE WITH LEGAL COUNSEL

�Potential Exposure to Litigation pursuant to Gov. Code Section 54956.9 (b) (1 case)

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�� Director Ripple left at 12:45 pm.

The board reconvened into Open Session at 1:40 pm

K. �� ANNOUNCEMENT OUT OF CLOSED SESSION

Mr. Neary reported that Director Ripple recused himself on Item�s J.1 b and c.

J.1 a�� The board received information and gave direction.

J.1 b�� The board received information and gave direction.

J.1 c�� The board received information and gave direction.

J.2�� The board authorized it�s counsel initiate an action against the Coast Guard to enforce Freedom of��

�� Information Act requests made from various times dated back to 2002.��

J.3�� The Board voted to extend the Standstill Agreement until April 30, 2005 pending negotiable conditions between now and March 30, 2005.

L.�� MATTERS FROM THE BOARD

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The board discussed moving the date of the April meeting to Thursday April 28.

ACTION: Upon motion by Director LaVallee, 2^nd by Director Ellinger, and carried (5-0), the board changed the date of the next board meeting to April 28^th.

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M.�� ANNOUNCEMENT OF NEXT MEETING

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Chair Woolley announced that the next meeting will be on Thursday, April 28, 2005 in Ukiah. Location to be determined.

N.�� ADJOURNMENT

�� Chair Woolley adjourned the meeting at 1:45