NORTH COAST RAILROAD AUTHORITY

SPECIAL MEETING MINUTES

FRIDAY, NOVEMBER 12, 1999 AT 10:00 A.M.

BY TELECONFERENCE FROM THE

LAW OFFICE OF CHRISTOPHER J. NEARY

110 SOUTH MAIN STREET SUITE C

WILLITS, CALIFORNIA

  1. CALL TO ORDER

    Chairman Robert Jehn called the meeting to order at 10:09 am

  2. ROLL CALL

    Directors present: Chairman Robert Jehn, Ruth Rockefeller, David Ripple, David Nelson, and via telephone, Allan Hemphill and Jack McKellar. Directors absent: Daniel Opalach. Also present: Executive Director Max Bridges, Legal Counsel Christopher Neary, and Property Manager Cyndee Logan.

  3. AGENDA APPROVAL

    Motion by Mr. Nelson, second by Mr. Ripple to add an emergency item to closed session regarding potential litigation with OES appeal and to consider the fiber optic item (E1) first on the agenda. Motion carried unanimously.

  4. PUBLIC COMMENTS

    There were no public comments.

  5. CONDUCT OF BUSINESS
    1. Amended Rail-Ways, Inc. long-term Lease and Operating Agreement

      Legal Counsel Mr. Neary described the amendments, the reasons for them, and their need for approval prior to the NWPRA meeting Monday November 15, 1999. Rail-Ways agreed to a 6 months notice prior to their termination under the agreement.

      Motion by Mr. Ripple, second by Mr. Nelson the Amendment to the lease and operating agreement was unanimously approved with the one change indicated above.

    2. Russ Mustola’s Financial Supplement to October, 1999 Board Packet

      Executive Director Bridges presented his recommendations for the various issues raised by Mr. Mustola and pointed out that there are still items that need to be addressed. Motion by Mrs. Rockefeller second by Mr. Ripple the staff recommendation was approved unanimously.

    3. Fiber optic considerations

Executive Director Bridges gave a brief report followed by a presentation from R. W. Luehs, Kathy Lesbille, and Paul Mendez from Pacific Bell who presented their offer in the form of a letter of intent. Information was also provided via telephone from Pete Caldwell of Williams Communications regarding similar proposals from his company. Mr. Caldwell stated that Sprint is no longer interested in utilizing the railroad right of way. Mr. Hemphill expressed concern with condition precedent number 3, Mr. Bridges questioned the two 10 year renewal options, and Mr. Caldwell asked for 60 days instead of 45 in conditions precedent number 2. The offer is for 55 cents per foot, per year with a 3.5% COLA every 5 years with the understanding that the portion south of Cloverdale will be increased to match any additional price agreed upon with NWPRA.

At this point the Board convened in closed session to conference with Real Property Negotiators Max Bridges and Cyndee Logan pursuant to Government Code Section 54956.8.

Upon conclusion of the closed session Chairman Jehn announced that the Board had taken the following actions and directed staff to negotiate final agreements as soon as possible:

    1. Accepted the Pacific Bell proposal for the entire length, approximately 140 miles, including the Annie and Mary portion subject to elimination of Condition Precedent 3, changing Conditions Precedent 2 to 60 days, and limiting the term to 25 years. It is further understood that any "deal" negotiated with NWPRA that includes a higher payment will be matched for that portion South of Cloverdale.
    2. Accepted the Williams Communications proposal with the same conditions as number 1 above and an additional condition that it be subject to resolution of the relationship between Williams and Union Pacific.

Pacific Bell clarified that the use of "ownership" in Conditions Precedent 1 to mean "control".

    1. Appointment of NCRA Board member to the NWPRA Board.

Chairman Jehn reported that Director David Ripple has been appointed to represent the NCRA on the NWPRA Board.

  1. CLOSED SESSION
    1. Conference with Real Property Negotiator – Max Bridges

      Government Code Section 54956.8

      Negotiating Parties: Mendocino Transit Authority, NCRA

      Subject: Price, terms

      Property Interest: Ukiah Depot

      Report from closed session:

      Accepted the Option Agreement and Purchase Agreement from MTA for sale of the Ukiah Depot property with the understanding that the access roadway would be dedicated for public use and that the contract would not require NCRA to incur litigation expenses relating to tenants until the option is exercised.

    2. Conference with General Counsel – Christopher Neary

      Government Code Section 54956.9(b)(2)

      Significant Exposure to Litigation: Pacific Rail Services

      Report from closed session:

      Continued action on this item until the December meeting.

    3. OES Appeal

Directed staff to contact OES regarding options for settlement.

  1. ADJOURNMENT

Meeting was adjourned by Chairman Jehn at 11:45 am.