NORTH COAST RAILROAD AUTHORITY (NCRA)

BOARD OF DIRECTORS REGULAR MEETING

Wednesday, January 11, 2006 ~10:00 am

Eureka City Council Chambers ~ 531 “K” Street, Room 208

Humboldt County

Draft Minutes

Subject to approval by the NCRA Board of Directors

A. CALL TO ORDER

Chairman Hemphill called the meeting to order at 10:10 am. He thanked Humboldt County Supervisor and NCRA Director John Woolley for the time he spent serving as Chairman of the Board. Chairman Hemphill also introduced Sonoma County Supervisor Paul Kelley and Mendocino County Supervisor Hal Wagenet and expressed how important it is to have a member of the Board of Supervisors serving on the NCRA in each of the North Coast Counties represented by the NCRA.

B. ROLL CALL

Directors Present: Chairman Hemphill, Directors Ollivier, Wagenet, Simonson, LaVallee, Kelley, Woolley

Directors Absent: None

Also Present: Executive Director Mitch Stogner, Legal Counsel Christopher Neary and Recording Secretary Heather Newell.

C. AGENDA APPROVAL

The following items were added to the Agenda:

Closed Session – K.3 anticipated litigation (1 case)

H – Ronnie Pellegrini – Trade Mission

Motion to add items by Director LaVallee, seconded by Director Wagenet (7-0).

D. MATTERS FROM THE BOARD

E. CONSENT CALENDAR

Director Kelley requested that the minutes from the November meeting be changed to reflect a correction to the spelling of his last name.

Motion to approve Consent Calendar made by Director Ollivier seconded by Director Kelley carried unanimously (7-0).

1. Approval of Financial Statements – November 2005

2. Approval of Minutes – December 2005

3. Renewal of Contract with CF Solutions for Consulting Services needed to secure TCRP Funding

F. PUBLIC COMMENT

Aaron Antrim - Humboldt State University student, Arcata resident and Greenwheels member. Mr. Antrim said that Greenwheels support alternatives to single occupant vehicles. Greenwheels supports a Eureka to Arcata walk/bike rail trail. He said his organization also supports rail service and would like to see both the short-term and the long-term transportation needs of the North Coast addressed. Mr. Antrim said he would like to see realistic discussions on the possibility of rails to trails, given what he called the railroad’s uncertain future.

Chairman Hemphill stated that NCRA has a good record of cooperating with groups who seek alternate uses of the right-of-way as long as such use does not interfere with the intended use of the right-of-way. He noted the City of Healdsburg has a “Rails with Trails” project that is compatible with future rail use.

Director Woolley also stressed his support for “Rails with Trails” projects that ensures future rail operations.

Kate Strickland – Chair of Citizens for Port Development, a rail support group. She also said she supports rails with trails. She said that she will include Mr. Antrim in any meetings or discussions CPD sponsers in the future. Ms. Strickland also welcomed Chairman Hemphill back to the Board as Chairman, and offered her support.

Chris Rawl – President Greenwheels and Humboldt State University student and Arcata resident. He thanked the Board for giving him the opportunity to address them. He restated that Greenwheel is pro-rail but questioned whether rail would be operational in the near-term. He said his group supports rail banking until the ROW can be refurbished through the Eel River Canyon. He said that Greenwheels believes that multi-use trails and tourist trains are the only options at present and that trails are the most viable use of the ROW at this time. He said he thinks that a bike/hike trail between Eureka and Arcata would be the best use. He said bicyclists and walkers have to use the freeway now and it is unsafe.

Chairman Hemphill said that the NCRA Board welcomes these suggestions but reminded those in attendance that it is the job of the NCRA to maintain and preserve the right-of-way for future rail operations.

Moss Bittner – Member RAPIT. Mr. Bittner updated the Board on the recent RAPIT meeting and gave a summary of actions taken. He also commented on the previous speaker’s thoughts and ideas and stated that he supports cycling. He said that he and said he would like to work with the members of Greenwheels and see what options might be compatible with future train service. Mr. Bittner then summarized RAPIT’s recommendations which included a request that the Harbor District appoint an advisory committee to assist with the Redwood Dock Modernization and Feasibility project. He said the Harbor District hopes to receive grant money for this project He also said RAPIT recommended that the Harbor District have a representative attend all state maritime meetings and conferences and he said that he hopes that NCRA will be a presence at these meetings also. He said that it would be good to seek an appointment with the Governor through Sunny McPeak to obtain money for the railroad. He also said other RAPIT recommendations included a request that the Harbor District explore a relationship with the Port of Stockton and that NCRA and the Harbor District provide input to HCAOG with the update of the Regional Transportation Plan. Mr. Bittner said that he will be going to the Urban Freight Conference in Long Beach and that he would update the NCRA when he returns.

Sarah Star – Resident of Arcata – Ms. Star said she would like to see a train from Arcata south to Eureka and stressed the importance of a light rail commuter train along with a hike/bike trail from Arcata to Eureka. She pointed out that it is extremely dangerous to ride a bike on the freeway between these two towns.

Tanya Marssay – Eureka resident. Ms Marssay is concerned that the Balloon track has been sold. She said she is concerned that the wetlands will be destroyed, harming the nesting ground for many birds. She said green space such as the balloon track needed to be preserved.

Director Lavallee said that the issue of sale of the balloon track will be before the City Council in February and wii require a change in zoning.

Jerry Tomsack – Vice president of the Timber Heritage Association said that his group supports rails with trails as long as the trails are compatible with future rail use. He also said that a tourist train around Humboldt Bay would greatly benefit the community.

Shanna Minors – Arcata resident. Ms Minors said she rides her bicycle from Arcata to Eureka for work. She said she understands that most people do not want to ride along the freeway. She said she supports a hike/bike trail from Arcata to Eureka.

Spencer Clifton – Director for the Humboldt County Association of Governments. Mr. Clifton updated the Board on the actions of HCAOG, Redwood Community Action Agency, Cities of Eureka, Arcata and Humboldt County, and Caltrans concerning trail development. He said he believes that a multi use trail in the right-of-way would not preclude the reestablishment of rail service. He said HCAOG applied for a technical assistance grant, and that in the Spring there will be more opportunities for public and agency involvement in identifying the challenges and opportunities that go along with having rails with trails in that corridor.

G. PRESENTATIONS

1. Marcus Brown – Discussion of Potential North End Excursion Service

Marcus Brown – President Timber Heritage Association, proposed a tourist train around the Bay. He said that he visited the East Coast this fall and spoke at the Tourist Railroad Association Convention while there. Mr. Brown said he supports the concept of “Rails with Trails” and that his experience on the East Coast reaffirmed his support for this approach.

He said he believes that there is a synergy between having a tourist train and a trail around the bay, and that he would like to see everyone work together to make “Rails with Trails” possible.

Mr. Brown also reported that the City of Arcata was prepared to restore the rail it had previously removed. He also said that there was a rock quarry adjacent to the Carlotta Branch that had commercial potential and that $200,000 in ISTEA funds is available to repair the tracks around the Bay.

Chairman Hemphill thanked Mr. Brown for his presentation and suggested that his group respond to the RFP NCRA would release shortly.

Dave Meserve – Arcata City Council. Councilman Meserve said that it is the City of Arcata’s intention to fix the rail. He said he supports an independent North End rail project, as a separate utility so that time and energy can be spent opening up the tracks around the bay. He said that he would like to see the railroad be the link between Eureka and Arcata and that the tourist train. He said that he supports “Rails with Trails” and that he would like to work with Greenwheels and any other group that is interested in this issue.

Chris Neary, NCRA Legal Council, said the he though it would be possible to propose rail around the Bay as an independent project and encouraged the Timber Heritage Association to respond to the RFP.

Director Wagenet added his support for an independent North End rail project around the Bay.

Director Woolley added his support and asked staff to review the Business Plan submitted by the Timber Heritage Association.

Chairman Hemphill said that we need to get creative and work out ways to help move the project forward, and Director Kelley suggested that the Timber Heritage Association propose its plan through the RFP process for formal review by Staff and the Board of Directors.

Director Kelley pointed out that this is a presentation, not an action item. He suggests bringing this back for further discussion.

2. Ronnie Pellegrini – China Trade Mission

Mrs. Pellegrini presented the Board with a powerpoint presentation on her recent trip to China at the invitation of Governor Schwarzenegger and his trade delegation. She said that it was her goal, on behalf of the Humboldt Port Authority, to interact with the Governor, his staff and cabinet to bring awareness of the benefits of Humboldt Bay to the State of California, specifically with respect to port and highway congestion and the role Humboldt Bay could play in relieving that congestion. She thanked Moss Bittner for his preliminary discussions and stated that his work was helpful in laying the groundwork for the trip. She said that they developed very important business relationships while in China and that the Port of Humboldt was the only port represented on this important trade mission.

She stressed how beneficial this trip was because it familiarized the Governor and his staff with the importance of a rail-port connection at Humboldt Bay.

Chairman Hemphill thanked Commissioner Pellegrini for her presentation.

Director Ollivier also thanked Commissioner Pellegrini and said that he could not think of another person more appropriate for the trip to China. He also said that the jobs that this effort will create are extremely important.

Director Woolley also thanked Commissioner Pellegrini and the Harbor District. He said that the long term success of the NCRA is directly linked to the Port of Humboldt and that the economy of Humboldt County will be the beneficiary of a successful rail-port connection.

Director Kelley also expressed his appreciation to Mrs. Pellegrini and the Harbor District. He said that he is convinced that the economic vitality of the North Coast is directly linked to the Harbor District’s efforts, and that he looks forward to combining efforts in the establishment of a rail-port connection on the North Coast.

H. CONDUCT OF BUSINESS

1. Consideration and Approval of Issuance of Request For Proposals for an Operator of Rail Freight and Excursion Service on the North Western Pacific Rail Line.

Mr. Stogner opened the discussion by saying that the Request for Proposals (RFP) for NCRA operator, lays out the history of the NWP line, the history of NCRA’s management of the line, the assets that are owned by NCRA for use by any potential operator, and some of the state and federal funds that can be accessed for Capital repairs. He said that the RFP provides maximum flexibility for a proposer that wants to operate the entire line or some segment of the line.

Chairman Hemphill said that this is an extremely important step for NCRA. He also said that there is a renewed interest in goods movement, rock extraction and the movement of municipal solid waste by rail He thanked Staff for the time and energy invested in creating the Request for Proposals.

Legal Counsel, Christopher Neary gave a brief overview including the history of the line and the events leading to the issuance of the RFP.

Mr. Neary informed the public in attendance that the pre-proposal conference will be in Healdsburg at 10:00 a.m. on February 15. He said that NCRA staff will answer questions and explain the proposal process. NCRA will then give 45 days from that date for proposal submission. He then explained the RFP submission process in its entirety.

Mr. Neary said the Selection Criteria had not yet been fully developed, at which time Director Simonson distributed a proposed ranking for recommendation and discussion.

A discussion then ensued between legal counsel and members of the Board of Directors regarding recommendations for technical changes to the RFP prior to release on January 17.

After a lengthy exchange between Board Directors and legal counsel, Chairman Hemphill made the motion that staff incorporate the suggested changes to the RFP and that upon approval by the Operator Committee, the RFP be released to the public. Chairman Hemphill’s motion was seconded by Director Wagenet and approved unanimously (7-0).

The Board convened to break at 12:50.

The Board reconvened into open session at 1:00.

2. Request for Disaster Assistance Funding in State Declared Counties.

Mitch Stogner, Executive Director, said that the State has declared Marin, Sonoma, Mendocino and Humboldt Counties disaster areas and NCRA needs to make a damage assessment within the respective counties and report to OES representatives in each of the three counties. He said the goal is to receive disaster assistance funding from OES and FEMA to repair damage to railroad facilities as a result of the New Year’s floods.

Director Kelley said that the Governor is expected to make the formal request to the Federal Government by January 10. He said that FEMA required that the damage assessments be put together and have justification included in the assessments. Director Kelley said that Congressman Thompson’s office reported to the County of Sonoma that they would seek a federal disaster decleration for the New Year’s storm damage.

Director Woolley thanked staff for attentiveness to the problem in Redwood Valley at Baker Creek. He said that that was type of emergency is what makes maintenance funding so important. Director Woolley also thanked OES for rising to the occasion and participating with NCRA as an active partner.

There was no action taken on this item.

3. Lease of Maintenance Equipment to Skunk Train.

Executive Director Mitch Stogner told the Board that the Sierra Northern “Skunk Train” also suffered storm damage along it’s line between Willits and Fort Bragg.. NCRA has offered the use of it’s recently acquired heavy equipment to address these storm damage issues.

Chairman Hemphill said that this is a good way to help a partner. HE explained that the details have not been worked out but that he supported the recommendation that NCRA help if possible.

Director Kelley motioned for NCRA staff to discuss the issue with the Skunk Train and come up with an agreement for Board consideration at a future meeting Seconded by Director Wagenet and carried unanimously (7-0).

4. Approval Letter from NCRA Board Chair to the HCAOG Requesting Assistance in Developing a Plan to Manage the Annie & Mary Rail Corridor from Arcata to Korbel.

Director Woolley introduced Jen Rice from the Community Action Agency who has lead the effort to establish a public trail along the Annie and Mary corridor. Director Woolley made the motion to write a letter to Spencer Clifton of HCAOG requesting assistance in the formulation of a plan to convert the Annie & Mary corridor into a public trail. Chairman Hemphill seconded the motion, approved unanimously (7-0). Jen Rice thanked the Board and said that she will assist with efforts to look for resources and solutions to manage and maintain that public right-of-way.

Jennifer Kalt – McKinleyville resident said she appreciates the Annie and Mary trail and was very supportive of efforts to maintain its status as a trail open to the public.

I. COMMITTEE REPORTS

Chairman Hemphill said that the Operator Committee developed the RFP and forwarded to the full Board for consideration.

Mitch Stogner said that Directors Woolley, LaVallee and Ollivier were all present at the Joint Harbor Committee meeting. He said the Joint Committee met with Dave Hull and Ken Davlin to talk about efforts to secure state support for a port-rail connection to Humboldt Bay. He said the committee concluded that NCRA needs to work cooperatively with the Port and let the Secretary of Business Transportation and Housing know that we are working together, and to the extent that Caltrans and the state help the NCRA they are helping the Port effort and the Business, Transportation and Housing with the Goods Movement program. Mr. Stogner said that the Joint Committee is working with Senator Chesbro to secure a meeting with Secretary McPeak.

J. STAFF REPORTS

1. Executive Director Mitch Stogner

a) 2006 Progress Report - Mr. Stogner said that all of the items in his report have been discussed.

Chairman Hemphill said that NCRA is working on remedies to solve the problem of the “raid” of the Q-Fund money, following the veto of SB 792 (Chesbro).

2. Legal Counsel Chris Neary said next month NCRA is meeting in Ukiah, which would be a good time to look at the proposed MOU with the City of Ukiah in regards to the development of the Ukiah Depot property. Mr. Neary also referenced a letter from the City of Willits regarding the City’s desire to acquire railroad property for additional parking. Mr. Neary suggested a property meeting before the regular board meeting to go over these issues. Mr. Neary said that Director Wagenet had a conflict relative to the City of Willits issue and Chairman Hemphill asked that Director Wagenet recuse himself with respect to property committee and Board consideration of this issue. .

The Board Convened into Closed Session at 1:20

K. CLOSED SESSION

1. Conference with Real Property Negotiators

Agency Negotiators: Rob Kranz (who will not be present), Mitch Stogner, Christopher Neary;

Government Code Section 54956.8 (1 case)

Under Negotiation: (1) Assignment of an existing industrial at-grade crossing from Louisiana Pacific to Tyris Corporation; its contractor and Shamrock Materials; (2) Possible resumption of negotiations for three permanent crossing agreements between MP 83.48 and 83.75 near Cloverdale, California; (i) an at -grade crossing for vehicular traffic; (ii) a public under- crossing; and (iii) utility crossings for water, sewer and electrical lines.

Negotiating Parties: Tyris Corporation and NCRA.

2. Conference with Legal Counsel---Existing Litigation

Government Code Section 54956.9 (a) (4 cases)

a). Michael Meyers vs. NCRA, pending before the Surface Transportation Board, Financial Docket # 34337; and related case: Meyers vs. Surface Transportation Board, U.S. Court of Appeals, Ninth Circuit, Case # 05-75440;

b). NCRA vs U. S. Coast Guard, US District Court, Northern District Case # 05-2739;

c) NCRA vs. Jerico Products, Sonoma County Superior Court Case # SCV235961; and related case: Jerico Products vs. SMART, US District Court Case # 05-00210;

d) Hight vs. NCRA, Mendocino Superior Court Case # CV 80240

3. Conference with Legal Counsel-Anticipated Litigation:

(1) Significant Exposure to litigation

Government Code Section 54956.9(b) (3 cases)

(2) Significant Exposure to litigation

Government Code Section 54956.9(c)

Initiation of Litigation (Two potential cases)

The Board reconvened into Open Session at 2:40.

L. ANNOUNCEMENT OUT OF CLOSED SESSION

Legal Counsel reported that the Board met with Real Estate Negotiator regarding Tyris Corporation and approved the concept of entering into a license agreement and authorization to reopen negotiations with Tyris. The Board met with Legal Counsel and received information and gave direction. The Board gave unanimous approval to seek Legislative Counsel’s opinion as to the status of the $5.5 million in TCRP funds which are in controversy, and gave authorization to send a letter to the CTC requesting that they refrain from taking any action until the Legislative Counsel’s opinion has been received.

M. ANNOUNCEMENT OF NEXT MEETING

February 8, 2006

Ukiah City Council Chambers

Mendocino County

N. ADJOURNMENT

Chairman Hemphill adjourned the meeting at 2:45 to the next regularly scheduled meeting of February 8, 2006 in Ukiah.