NORTH COAST RAILROAD AUTHORITY (NCRA)

BOARD OF DIRECTORS REGULAR MEETING MINUTES

WEDNESDAY, APRIL 12, 2000 AT 10:00 A.M.

HUMBOLDT COUNTY BOARD OF SUPERVISORS CHAMBERS
825 FIFTH STREET, FIRST FLOOR, EUREKA, CALIFORNIA

A. CALL TO ORDER

Chair Jehn called the meeting to order at 10:05 a.m.

B. ROLL CALL

Directors present: Chair Jehn, First Vice Chair David Ripple, Allan Hemphill, Jack McKellar, Daniel

Opalach, Robert E. Simonson, and Max Schlienger.

Directors absent: None.

Also present: Executive Director Max H. Bridges, General Counsel Christopher J. Neary, Property

Manager Cyndee Logan, and Administrative Assistant Pamela Fishtrom.

C. MINUTES

1. Approval of Minutes of the March 15, 2000 Regular Board Meeting

2. Approval of Minutes of the March 24, 2000 Special Board Meeting

Dir. Ripple motioned to approve both sets of Minutes with the following revisions: a

recommendation to insert paragraph breaks into the longer items in both sets of Minutes; and, of

the March 15, 2000 Regular Meeting Minutes, a change under Item E – Public Comments, 5th

Paragraph, to indicate Chair Jehn announced he must leave at 11:45 a.m. instead of 12:45 p.m.

Seconded by Dir. Hemphill. Vote taken; motion carried.

D. AGENDA APPROVAL

Dir. Ripple motioned to approve the Agenda with the following changes; Item F.2. to follow the

Closed Session; and Item F.4. continued to a future meeting. Seconded by Dir. Simonson.

Vote taken; motion carried.

E. PUBLIC COMMENTS

Bill Burton recommended NCRA partner with CalTrans in rebuilding the transportation facility.

Fred Carmichael addressed the need for repair with money available for the Eel River canyon to

facilitate the movement of bulk products. The Southern portion of the Railroad will be funded because

of the need for mass transportation.

John Friedenbach of L & M Renner Petroleum, a major creditor, requested all prior Federal Emergency

Management Agency (FEMA) funds be paid, as was the intended use of those funds, to prior creditors.

Robert and Debra Kamberg, an employee of Northwestern Pacific Railway and wife, expressed dismay

over the lack of regular pay.

David Gavrich, President of Waste Solutions Group that contracts with Humboldt County to transfer

solid waste, stated his willingness to ship by rail when rail is consistently available.

John Mahoney, resident of Miranda in Southern Humboldt County and member of Friends of the Eel

River, spoke because he rafted from Dos Rios to Alderpoint, and he wonders if enough money has been

set aside to stabilize the slides, remove scrap, and stop the sloughing off of dirt which affects fish.

John Franklin from Laytonville recommended spending funds wisely by allowing Rail-Ways to repair

the South End and a portion of the North End, and paying creditors with available public funds because

it is not possible to fix the canyon for $60 to $80 million. He presented to the Board a colander with a

toothpick to symbolize Mr. Chesbro’s efforts to secure $65,000,000 for NWP from the State budget.

Kay Strickland, Citizens for Port Development, spoke in favor of completing repairs from Willits to

Eureka to facilitate the Harbor/Rail relationship, and she congratulated the Board for being considered

in the Governor’s budget.

Dir. Simonson responded to Mr. Franklin’s comments by sharing his experience as a retired employee

of NWP; for forty years the North End was repaired and maintained with only periodic closures with

one exception – the 100-year flood of 1964. Mr. Franklin responded that he is in favor of

segmentation, only deferring the repair of the canyon until the public is made aware of the full cost.

F. CONDUCT OF BUSINESS

1. Further Consideration of Federal Emergency Management Agency Alternate Project

Proposal Continued from NCRA Special Meeting of March 24, 2000

Executive Dir. Bridges reported four alternatives are proposed for the FEMA restoration of the line.

Option 1: The improved project as originally planned that is subject to environmental assessment

where numerous responses have been received . Option 2: The alternate project which takes 90%

of the money identified for the North End and moves it to the South End. Option 3: The improved-

alternate project that segments the line allowing for repair South of Willits and North of South

Fork. Option 4: The revised improved project which allows the entire line to become an improved

project allowing monies to be spent on the South End with no 10% loss, allow work on the North

End after environmental review, spend down some debt, purchase of rolling stock, and secure

future eligibility for FEMA funds.

Mr. Darling reported FEMA and the Office of Emergency Services (OES) are working with NCRA

to devise a project with the most flexibility. He said he plans to bring the line to Class 3 to the base

of Ridge Mountain and Class 2 through the Canyon. The South End is currently a strong Class 1.

Stan Dixon, Humboldt County Supervisor, requested adoption of Option 1.

Carlos Benemann, Mayor of Ferndale, Board Member of the Humboldt County Waste Management

Authority, Member of Humboldt County Association of Governments, encouraged adoption of

Option 1 because transferring funds away from the North End indicated in Options 2, 3, and 4 is

detrimental in the long term.

J Warren Hockaday, Executive Director of The Greater Eureka Chamber of Commerce, read the

attached letter recommending the Board approve no reallocation of funds until receiving written

assurances from FEMA of future eligibility for the North End.

Bonnie Neeley, Humboldt County Supervisor, recommended Option 1; move forward with the

environmental issues, and make repairs to the North End thereby addressing the needs of Humboldt

County’s economics.

Marc Matteoli, Citizens for Port Development, iterated the strong connection between the Port and the Railroad, and indicated his view was reflected in the previous public speakers.

Jimmy Smith, 1st District Commissioner of the Humboldt County Harbor District, reaffirmed the

comments by previous speakers.

John Franklin, recommended not using public money, but have the shippers rebuild the Railroad.

Kay Strickland, Citizens for Port Development, urged support of the original improved project.

Marcus Brown, President of the Northern Counties Logging Interpretive Association, suggested

repair of the line begin at both ends. Repair from Scotia North will build clientele and foster future

development of tourism.

Fred Carmichael, declared the Canyon is repairable by public monies.

Don Dunn, retired Railroad employee and consultant to Rail-Ways, spoke highly of Rail-Ways

employees encouraging the Board to make a decision in their favor.

Lucille Vinyard, Sierra Club, reported her agency supports repair of the Canyon and offered to

write a letter to the Governor stating so.

Dir. Opalach motioned to approve the original improved project. Dir. McKellar seconded. After

discussion by the Board, a roll call vote was taken: Dir. McKellar, aye; Dir. Opalach, aye; Dir.

Ripple, aye; Dir. Hemphill, nay; Dir. Simonson, nay; Dir. Schlienger, nay; Chair Jehn, aye.

Motion passed.

Chair Jehn recessed the meeting for a 10 minute break.

2. Standstill Agreement – Secured Creditor

This item was moved to after Closed Session.

3. Claim by Union Pacific

By recommendation of General Counsel Neary, Dir. McKellar motioned to reject a claim by

Union Pacific. Seconded by Dir. Ripple. Vote taken; motion carried.

4. Consideration of Responses to Audit Report

Item was continued to a future meeting.

5. Adopt Resolution of Intention to Contract with CalPers

Executive Dir. Bridges reported adopting the resolution is a continuation of the effort to contract

with the California Public Employees Retirement System.

Dir. Hemphill motioned to adopt a Resolution of Intention to Contract with CalPers. Seconded

by Dir. Ripple. Vote taken; motion passed unanimously.

G. LIAISON REPORTS

1. Northwestern Pacific Railroad Authority (NWPRA) – Max H. Bridges

Executive Dir. Bridges reported NWPRA issued a Request for Proposals for property management;

had some discussion of station site development; and showed their financial statements reflect

forgiveness of NCRA’s rent payment providing ISTEA funds are dedicated to the South End.

Their next meeting is May 1, 2000.

2. Legislation – Max H. Bridges

Chair Jehn mentioned the allocation from the State budget.

3. Passenger – Robert Jehn

The Passenger Committee has not met.

4. Cities – Jack McKellar

Dir. McKellar reported he has been busy in Humboldt County with issues regarding the Port and

Railroad connection.

5. Sonoma-Marin Area Rail Transit Commission (SMART) – Robert Jehn

Chair Jehn reported SMART is very close to completing a Proposition 116 document to access $28

million relegated for Sonoma County. In addition, the Governor’s budget proposal includes $37

million for this project.

6. Contractor – Rail-Ways, Inc.

Mr. Darling, President, reported the Federal Railroad Administration (FRA) will not inspect the

railroad until a regular source of funding is set aside for maintenance issues. The Board asked Mr.

Bridges and Mr. Darling, and suggested Herzog, follow up with the FRA to clarify requirements of

Emergency Order No. 21.

I. STAFF REPORTS

1. Executive Director – Max H. Bridges

Mr. Bridges provided enlarged pictures from his flight through the Canyon, and maps of the line.

2. Property Manager – Cyndee Logan

Ms. Logan presented a written report to the Board.

J. LEGAL REPORT – General Counsel Christopher J Neary

Meeting with Department of Toxic Substance Control, Department of Fish and Game, and Regional

Water Quality Control Board

Mr. Neary reported meeting in March to discuss NCRA’s progress on compliance with the Consent

Decree. Short supplemental deadlines were established and he is continuing to work with The

McEdwards Group.

K. MATTERS FROM BOARD MEMBERS

None.

L. ANNOUNCEMENT OF NEXT MEETING

Regular Board Meeting – May 17, 2000 10:00 a.m.

Eureka City Council Chambers, 531 K Street, Eureka, Humboldt County, California

M. CLOSED SESSION – Convened at 12:45 p.m.

1. Conference with Real Property Negotiator

Government Code Section 54956.8

Negotiating Parties: Pacific Bell, etc.; NCRA

Under Negotiation: Longitudinal Easement

2. Conference with Legal Counsel – Potential Litigation – Three Cases

Government Code Section 54956.9(a)

3. Conference with Legal Counsel – Pending Litigation

Government Code Section 54956.9

NCRA versus Green

a. Quiet Title Action – Ukiah Depot

b. Quiet Title Action – Canyon Quarries

N. ANNOUNCEMENT OF ACTION TAKEN IN CLOSED SESSION – Reconvened at 1:45 p.m.

1. Conference with Real Property Negotiator

Chair Jehn announced Ms. Logan informed the Board the easement is still under negotiation.

2. Conference with Legal Counsel – Potential Litigation – Three Cases

Chair Jehn announced Mr. Neary informed the Board of three potential cases, one resulting in a

unanimous decision to enter into a Standstill Agreement with Rail-Ways after incorporating

proposed amendments by Mr. Neary.

3. Conference with Legal Counsel – Pending Litigation

Chair Jehn announced information was received from Mr. Neary relative to NCRA versus Green.

O. ADJOURNMENT

Chair Jehn adjourned the meeting at 1:50 p.m.