1. Call to Order

    Chairman Allan Hemphill called the meeting to order at 10:00 a.m..

  2. Roll Call

    Directors present: Chairman Allan Hemphill, Jack McKellar, Ruth Rockefeller, John Stokes, Robert Jehn, and David Nelson. Also present were Legal Counsel Christopher Neary, Property Manager Cyndee Logan, and newly appointed Executive Director Max Bridges.

    Director absent: Dennis Wood.

  3. Minutes
    1. Approval of Minutes of the June 16, 1999 Regular Meeting. Motion by Ms. Rockefeller. Seconded by Mr. Stokes. Vote taken. Motion carried.
    2. Approval of Minutes of the June 23, 1999 Special Meeting. Motion by Ms. Rockefeller. Seconded by Mr. Nelson. Vote taken. Motion carried.

Chairman Hemphill welcomed newly appointed Executive Director Max Bridges.

  1. Agenda Approval

    Ms. Rockefeller recommended under Item H.6 the Board consider alternatives to the Cloverdale Depot.

    Mr. Jehn recommended inclusion of an Item 19 under Liaison Reports concerning Sonoma County.

    Mr. Neary reports an error in the Agenda. The next meeting will be in Humboldt County.

    Motion to approve the agenda subject to the changes above by Mr. Jehn. Seconded by Mr. Nelson. Vote taken. Motion carried.

  2. Announcement of Action Taken in Closed Session

    Mr. Neary reported the Board of Directors authorized its Real estate Negotiators to negotiate with Pacific Bell concerning a real property interest. The Board authorized settlement of Schafer, et al. v. NCRA, Mendocino Superior Court, Case No. 549568.

  3. Introduction of New NCRA Executive Director – Max Bridges

    Previously introduced.

  4. Consent Agenda
    1. Authorization to Close Six Rivers Accounts

      Motion by Ms. Rockefeller. Seconded by Mr. Hemphill. Vote taken. Motion carried.

    2. Approval of Vendor Warrants

Tabled until Russ Mustola, consulting accountant, arrived.

  1. Conduct of Business
    1. Consideration of Executive Director Contract

      Mr. Neary reported a draft employment agreement is enclosed in the Board packet. Mr. Jehn moved approval. Seconded by Mr. McKellar. Vote taken. Motion carried.

    2. Designation of Principal NCRA Office
  1. Furnishing and Equipping Office
  2. Consideration of Lease with Sonoma County

Mr. Bridges expressed his desire to work from the Cloverdale Depot. After extensive discussion by the Board, Mr. Jehn motioned to maintain a presence in each of the three counties. Max Bridges, Executive Director will lease the Cloverdale Depot in Sonoma County. An office will be leased in the Willits Depot in Mendocino County. The principal business office will remain in Eureka, Humboldt County, staffed by one full-time employee. Seconded by Mr. Nelson. Vote taken. Chairman Allan Hemphill, Ms. Rockefeller, Mr. Jehn, and Mr. Nelson vote affirmative. Mr. Stokes and Mr. McKellar vote against. Motion carried.

    1. Consideration of Agreement with PERS re Actuarial Valuation

      Mr. Neary reported an actuarial valuation for the Public Employees Retirement System needs to be performed at a cost of $700. Motion by Mr. McKellar. Seconded by Ms. Rockefeller. Vote taken. Motion carried.

    2. Consideration of Longitudinal Easement with Pacific Bell

      Deferred to Closed Session.

    3. Authorization for MTA to submit Use Permit Application to the City of Ukiah for Transit Facility in Expectation of Eventual Acquisition of Ukiah Depot Property

      Mr. Neary recommended the Board approve authorization for MTA to submit a Use Permit Application to the City of Ukiah. This action will formalize MTA’s ability to utilize the property while NCRA holds the property off the market until issues are resolved with MTA. Rail-Ways has requested permission to use the Depot as a temporary administrative office until such time as the property is sold. Motion by Mr. Nelson. Seconded by Mr. McKellar. Vote taken. Motion approved.

    4. Ratification of Sale of Scrap by Rail-Ways

      Mr. Neary reported Rail-Ways has requested the authority to remove and sell scrap along the rail line. Ron Poulsen, Chief Engineer for Rail-Ways reported the removal of scrap would conform to the Consent Decree clean-up. The type of scrap to be removed includes old wrecked, burned vehicles, scrap rail, scrap track materials, and discarded Maintenance of Way equipment missing engines and transmissions. The scrap is in the way of work crews and considered a safety hazard. Chairman Hemphill remarked, seeking assurance from Mr. Poulsen, that the scrap includes only small items as identified by Mr. Poulsen and not, for instance, half mile stretches of siding or usable rail cars. Mr. Jehn recommended Rail-Ways document each scrap sale. Mr. Poulsen will document old maintenance of way equipment and vehicles. The smaller items will be identified by a sales receipt. Motion by Mr. Stokes subject to adequate documentation as described by Mr. Poulsen. Seconded by Ms. Rockefeller. Vote taken. Motion carried.

    5. Authorization to Approve Assignment of Rail-Ways Agreement to Nor-Care

Mr. Neary reported Rail-Ways requested the interim arrangement, as relates to maintenance and construction, be assigned to Nor-Care consistent with Rail-Ways original proposal. Motion by Ms. Rockefeller. Seconded by Mr. Jehn. Vote taken. Motion carried.

    1. Consideration of Passenger Agreement Amendment

Mr. Neary reported an amendment presented by the California Redwood Coast Company (CRC) consists of three changes: 1) an extension of the original agreement for 10 years, 2) change of terminology and structure under Paragraph 4 from 20% to 10% and measuring the gross proceeds on net passenger fares, and 3) a proposal to rehabilitate some of NCRA’s cars and utilize equipment acquired from third party sources. Chairman Hemphill recalled the Board previously approved a 10 year extension of the original agreement in February, 1999. In addition, he asks Mr. Neary to clarify these changes with CRC so that the Board can respond and take specific action by the next Board meeting. The item was tabled until the next Board meeting.

  1. Public Comments

    Gary Milliman, California Western Railroad presented the Board with a master plan report for the Willits Depot.

    Bernard Kamoroff, near-Willits resident, recommended NCRA address Rail-Ways priorities because he read in the Willits paper that Rail-Ways hired Pinkerton Agents to patrol the track, however, he observed a 6-man crew working near Alderpoint which looked, to him, like a hopeless project in terms of the size of the commitment towards the restoration of service. Chairman Hemphill responded Rail-Ways hiring of security personnel is their business, unless it is inconsistent with the law or NCRA policy. In addition, railroad security enhances public safety and protects public assets. Further, no public funds are expended for security. The rehabilitation is minor pending the release of FEMA funding.

    Bill Burton reported the Humboldt County Board of Supervisors has $22 million to spend on county government. He recommends NCRA offer a stewardship for a portion of this funding. Chairman Hemphill recommends Mr. Burton brief Max Bridges, NCRA Executive Director on this issue. Mr. Burton also commends Rail-Ways on their efforts at rehabilitation without revenue.

  2. Liaison Report
    1. Technical Advisory Committee Report

      Mr. Jehn reported the committee met this morning at 8:30 am. A final recommended version will be presented at the next meeting.

    2. NWPRA Report – John Stokes/Allan Hemphill

      Mr. Stokes reported the meeting is presently scheduled on August 2, 1999. Because Chairman Hemphill presence is requested at the next meeting, Mr. Stokes recommended he have the NWPRA meeting changed to August 9, 1999.

    3. Legislation – David Nelson

      Mr. Nelson reported Assemblywoman Strom-Martin’s bill AB 74 has been merged with another bill requiring CalTrans to merge passenger and freight operations when creating the State rail plan. The bill will make shortline and freight railroads eligible for federal money. It is in the Senate Appropriations Committee and looks as if it may pass in August and hopefully be signed by the Governor. In addition, Mr. Nelson received some encouragement from Assemblywoman Strom-Martin’s office concerning NCRA’s eligibility for SB45 STIP funding. Mr. Nelson recommended Mr. Bridges look for an administrative solution. Chairman Hemphill reported Mr. Wolf of the CTC recommends NCRA receive some County of Government’s commitment that they will fill in the Q-Fund in case of NCRA default.

    4. Passenger – No report

      No report.

    5. Cities – Jack McKellar

      No report.

    6. Contractor’s Report – Rail-Ways, Inc.

      Ron Poulsen, Rail-Ways Chief Engineer, reported: 1) FEMA granted a re-obligation of approximately $3 million plus a categorical exclusion of Schellville and Burdell Blocks from environmental review. Rail-Ways began work on track restoration, however, a week after the exclusions were granted Rail-Ways received notice that the "Clapper Rail" bird, an endangered species, may inhabit a two mile stretch between mile post 32.5-34.5. Although FEMA indicated no work may be completed at that site until the end of August, Rail-Ways is working towards an agreement that allows work crews to continue through the area without returning. Rail-Ways also provided to FEMA and other environmental agencies a video tape of those sites considered environmental sensitive to expedite clearances. 2) FRA ties are unloaded up to Geyserville. The tie gang has installed ties to mile post 61, Windsor. The surfacing gang is through Novato. Mr. Poulsen estimates that the line will re-open through Petaluma around August 13, 1999 pending FRA inspection and approval; through Willits by October 8, 1999. The goal is to restore track to FRA class 1 standards only. FRA inspection of June 21, 1999 unofficially approved track for service Lombard through Schellville.

    7. Sonoma-Marin Area Rail Transit Commission

Mr. Jehn reported the Commission is a JPA; 5 members each from Sonoma and Marin Counties. Their purpose is to access $528 million in Prop. 116 funds to provide a plan for commute rail from Cloverdale to Larkspur. Their next meeting will address the use of light rail equipment. Mr. Jehn recommended NCRA maintain a presence at each Commission Board meeting.

  1. Discussion Items
    1. AB 74 – David Nelson

      Mr. Nelson reported previously.

    2. Strom-Martin Amendments to State of California Budget – John Stokes, Allan Hemphill

      Mr. Stokes reported the amendments are "down the tubes."

      L. Staff Reports

    3. Status of FEMA Issues

Mr. Neary reported NCRA has on-going discussions each week with FEMA/OES. Chairman Hemphill added NCRA has advocacy at the FEMA National and Regional level.

    1. Property Management Report – Cyndee Logan

      Ms. Logan reported Rail-Ways security helps NCRA with Real Encroachments.

      25. Track Restoration Project – Rail-Ways, Inc.

      Mr. Poulsen, previously reported.

    2. FEMA Resolution – Christopher Neary, Dennis Wood, Allan Hemphill

      Mr. Neary previously reported.

    3. Financial Report (Year End) – Russ Mustola

Chairman Hemphill deferred until the arrival of Mr. Mustola.



  1. Legal
    1. Environmental Compliance

      Mr. Neary reported NCRA finalized the consent decree with the Department of Toxic Substance Control, Department of Fish & Game, and the Regional Water Quality Board. NCRA will provide Mr. Bridges with a checklist of requirements. Mr. Bridges will be responsible for development of time lines and a method for reporting on progress to the various agencies. A characterization study is underway for the Island Mountain Quarry. Rail-Ways has performed many of the requirements towards compliance.

    2. Report on Ukiah Depot Status

      Mr. Neary reported NCRA required MTA to update its project description and it has been submitted by counsel retained to prosecute NCRA’s PUC application.

    3. Report on Passenger Agreement Amendment

      Previously reported.

      30. Report on Van Meter Logging v. NCRA

      Mr. Neary reported NCRA has filed a cross-complaint in Humboldt County to cover environmental expenses in connection with alleged contamination at Island Mountain if identified by the characterization study.

    4. Union Pacific Termination of CMA; General Indemnity

Mr. Neary reported Union Pacific terminated the cooperative marketing agreement with NCRA restricting use of railcars. In addition, UP is terminating NCRA’s general indemnity because freight service has been suspended in excess of six months. Furthermore, UP has begun environmental work on a parcel which houses a radio tower and equipment used by NCRA. NCRA has received cooperation from UP in allowing time to find a new home for the tower.

UP is also allowing car hire to run although NWP is under embargo.

  1. Other Matters from Board Members
    1. Contract Administration
  1. Herzog Contract

Mr. Neary reported Rail-Ways presented a report of which Ron Poulsen covered the highlights. Boyle Engineering submits weekly progress reports. Herzog had some trouble during start up. They lost some employees to other projects and some equipment had to be replaced.

Items G.4 and L.26 below were tabled until the arrival of Russ Mustola:

G. 4. Approval of Vendor Warrants

Mr. Mustola reported on current expenditures as noticed in the financial supplement to the Board packet. He recommended using $300,000 of AB2782 funds to pay contractors as a feeder to begin the process of project reimbursement under the Proposition 116 program. Motion by Mr. Nelson to approve vendor warrants under the assumption NCRA will withhold on a couple of the invoices pending further analysis. Seconded by Ms. Rockefeller. Vote taken. Motion carried.

L. 26. Financial Report (Year End) – Russ Mustola

Mr. Mustola reported that he used the most current figures available in the preliminary financials for year end June 1999, however, the analysis is incomplete in that not all the accruals have offset revenue and reimbursement as relates to direct cost for track rehabilitation. In addition, he reported that he anticipates that all the statements, audit work, and single year audits will be finished by the September Board meeting.

  1. Announcement of Next Meeting
    1. The next regular meeting will be held August 18, 1999, 10:00 a.m. in Humboldt County
  1. Closed Session
    1. Conference with Real Property Negotiators, Cyndee Logan – Christopher Neary

Government Code sec. 54956.8

  1. Negotiating Parties: Pacific Bell, NCRA

Property Interest: 5’ Longitudinal Easement, Rio Dell, Ukiah

Subject: Price, terms, location, relocation

  1. Adjournment

The meeting was adjourned at 12:09 p.m.