NORTH COAST RAILROAD AUTHORITY (NCRA)
BOARD
OF DIRECTORS REGULAR MEETING
Wednesday, June 18, 2003 9:30 AM
A.
CALL TO ORDER
Chair Sears called the
meeting to order at 9:40 am.
B.
ROLL CALL
Roll call was conducted
with the following members present: Allan Hemphill, Robert Simonson, Budge
Campbell, Dave Ripple, and Leo Sears. Chairman Sears presiding.
Directors Absent: Woolley
Also present: Executive
Director Douglas M Christy, Executive Assistant Dina Polkinghorne, and Heather
Newell, Administrative Assistant
Director
Woolley joined the meeting at 9:42
C.
CONSENT CALENDAR
Director
Campbell requested that item C.1 “Approval of Minutes dated 05/21/03” - be held for discussion.
Executive Director Christy requested that an item be
added to Conduct of Business (H.5) in regards to an extension of the consent
decree. Legal Counsel Chris Neary
requested that an additional item be added to conduct of Business (H.6) in
regards to a “Consideration of Healdsburg Properties Transfer Request from
SMART.” Director Campbell requested that the Finance Committee Report be moved
to item H.2
Board Action: Upon motion by Director Hemphill, 2nd
by Director Ripple, and carried (6-0); the Agenda was approved as amended.
Adjourn for closed session
at 9:52 am
E.
CLOSED SESSION
1.
Public
Employment:
Title: Executive
Director
2. Public Employment:
Title:
Office Manager
F ANNOUNCEMENT
OUT OF CLOSED SESSION Resume
to open session at 10:45am
1.) By unanimous consent the
board approved hiring Rick Kennedy as Interim Executive Director.
2.) By unanimous consent the
board approved the creation of a new position of Office Manager and promoted
Dina Polkinghorne to this new
position.
3.) By unanimous consent,
the board voted to begin the immediate recruitment of a permanent Executive
Director.
G.
PUBLIC COMMENT
Mike Pechner
1.)
Requested
that the agenda’s be more user-friendly for outside/public interests.
2.)
Requested
that all the support documents to the agenda be made available to the public.
3.)
He
also asked why the Standstill Agreement is going “on and on” with
NWPY.
4.) Thanked Doug Christy for all he’s done for the
NCRA.
James Quinn
1.)
Inquired
as to when will ISTEA be decided.
2.)
Inquired
as to when the last contact with Congressman Mike Thompson was.
3.)
Inquired
as to how the NCRA is planning to use the 9 million in ISTEA funding.
4.)
Inquired
as to when the south end will be operating.
5.)
Inquired
about NCRA’s plan to shorten the paper trail.
6.)
Inquired
about NWPY and exclusivity.
7.)
Inquired
as to when the NCRA sees the south end operating profitably.
8.)
Congratulated
the Interim Executive Director.
9.)
Suggested
that the NCRA is playing a “bureaucratic game” with Caltrans that can’t be won.
10.) Suggested that the NCRA go around Caltrans and
utilize the media and legislatures.
H. CONDUCT OF BUSINESS
1. Election of Officers
Board Action: Upon motion by Director Hemphill, 2nd by
Director Ripple, and carried (6-0) the board reinstated John Woolley as
Chairman of the Board.
Director Woolley thanked the board for appointing
him Chair. Director Hemphill thanked Director Sears for filling in as Chair in
Director Woolley’s absence.
2. Adoption of Preliminary
2003/2004 Budget
Mr. Christy briefly went over the preliminary agency
budget for fiscal year 2003/2004. He explained that the document provided to
the board is a staff worksheet and that the fiscal year is not over yet. To
prepare this document there were two Finance Committee Meetings and multiple
meetings with the Sonoma County Auditors. He then went over three issues facing
the preliminary budget for 03-04 fiscal year.
1.)
Some
of the revenue items belong off the balance sheet and on the general ledger.
2.)
Delinquent
property management – there is $215K still unreceived.
3.)
The
CPUC Crossing Maintenance Funding is at risk.
CPUC Crossing Fund
Mr. Christy explained that this particular revenue
item is actually for last year. The CPUC inspector determined that the
crossings were not maintained. Mr. Christy stated that the inspection was done in 2003 for the year 2002. The CPUC communicated to
him that Caltrans funded the work the NCRA did on maintainance but it is Mr.
Christy’s understanding that’s it’s unrestricted money. Mr. Christy then
explained that in his communications with the CPUC office he stated that the
NCRA has always received this funding in the past under similar conditions and
that nothing has changed. Mr. Darling
of NWPY stated that there is a federal component to these funds. Mr. Christy
reminded the board that the NCRA has $250K in unrestricted cash going into the
next fiscal year – there is a cushion available until this issue is resolved
and he’s confidant it will be resolved in a positive manner.
Chair Woolley asked Mr. Kennedy to stay on top of
this issue and work with Mr. Neary in Doug’s absence to resolve the issue.
Debt Schedule
Mr. Christy went over the Debt Schedule that was
prepared by Sonoma County Auditor’s office. He explained that each of these
items is in the budget – the principle balances out but the interest is listed
as an expense.
As requested and approved as an amendment to the
agenda, Director Campbell addressed the minutes of the June 4th,
2003 Finance Committee Meeting.
Director Campbell pointed out that in addition to
the Agency Budget concept, which really allows the pooling of revenue in one
fund, the one thing that the minutes should reflect is to retain separate cost
centers. We would still have the cost center capabilities so that we know where
the money is spent.
In addition, on the second page of the minutes there
was a budget bullet item for $55K, his recollection was that it should be $50K.
He stated that there was value in putting money in contingency that allowed the
board specific control over the budget in light of the fact that there will be
a transition period between Executive Directors. He then recommended increasing
the contingency to $155K, with no obligations, and that $100K of it be used to
balance the budget with sole control over that money going to the board. Mr.
Roeser of the Sonoma County Auditor’s Office stated that only 15% of the budget
could go into contingency, which would be about $70K. Director Ripple stated
that there would be a retained earnings component categorized as unrestricted
funds. He questioned why we would want to put money into contingency when you
have retained earnings. Director Campbell stated that it gives the board more
control over those funds.
Mr. Roeser of the Sonoma County Auditors office
recommended that the board approve the preliminary budget as presented.
Board Action: Upon motion by Director Hemphill, 2nd by
Director Simonson, and carried (6-0) the board adopted the preliminary budget
as presented, with the addition of a notation under total expenses reflecting
the operating expense deficit to be funded from reserves.
3. Approval of Assignment of Prime
Consultant to HNTB
Mr. Christy stated that the NCRA had approved the
change of the project management role to HNTB. He suggested that the prime role
would move over to HNTB, however, that has to come from the two principles. At
that point, the board would either accept or deny that request. He stated that
Willdan would still be a valuable member of the team.
Members of the public were
invited to speak.
Win Westfall
Yes Mr. Chairman of the board, excuse me, I am Win
Westfall, the principal from Willdan, and this is Bob Stromsted, principle from
HNTB. As Doug stated, we are very committed to the project and certainly to you
our client to see that everything is done in the most appropriate way and with
the changes that are involved with this project, it could very well be and
probably is more reasonable to reassign who the prime is on the contract.
What we would prefer that you do today is express
your sentiment if your in favor of that, so that we can then go to the
attorneys and give the things to the agencies, the oversight agencies, to make
sure that everything is done properly and there is no concerns and that nobody
is going to be caught by doing something that they shouldn’t be doing. Then we
could come back to you in a month and present it to you so that you could
approve a contract, which I think is the timeline that Doug has described.
Bob Stromsted
Bob Stromsted, VP of HNTB and I concur with
everything Win said - we are partners, equal partners, on this project and have
been with it from 2001 - 2002 and we want to continue to do what’s in the best
interest of the agency and stake holders and we do have this as an alternative
before you and we’d like to discuss it with you to make sure all concerns are
addressed and (inaudible ) we are prepared to move forward on that direction
and want to make sure that its appropriate for the board and all interested
agencies.
Mr. Neary stated that the appropriate action would
be nothing further than indicating the boards ascent to this process with the
board coming back for finalization.
Director Campbell asked what the financial impact
would be on the NCRA. Mr. Christy stated that the impact would be under the
line item of reimbursable project management, and staff expense on billable projects.
He explained that in the past the budget was so tight it was only allocated to
the consultants who actually performed some of the assessment work, and there
was no room for staff expense to be put against that project because the budget
just wasn’t sufficient enough for it. He then stated the NCRA may get into
those situations again because when the two roles are split, the project
management and contract management, and because of the prime role, there is
additional expenses the consultants will have to incur that will come back to
the agency or to the billable project that will potentially take away from the
Agency’s reimbursables for there own staff members.
Chair Woolley recommended scheduling a workshop to
sit down with the two consultants.
Board Action: Upon motion by Director Campbell, 2nd by
Director Sears, and carried (6-0) the board directed staff to get a contract or
reassignment letter back from both HNTB and Willdan and to develop a
workshop.
Mr. Westfall wished Mr. Christy well and thanked him
for everything.
4. Project Updates
a) Environmental Consent Decree
Mr. Christy stated that the task order is on budget.
The agencies involved have requested four weeks to look over studies before
they go out for bid to do the clean-up work. Mr. Kennedy will schedule a
meeting after the four weeks and then it will go out for bid. The money has
already been allocated at the state level, only needs a signed budget by the
Governor and he’s confident this item will remain in the budget. It will be
awarded and is contingent upon the budget being passed.
Mr. Neary stated that the NCRA is in the process of
developing a demand for indemnity to Union Pacific for the spill at the Willits
yard approximately 90 days ago. This demand will trigger a review by Union
Pacific and flush out the Union Pacific specifically on the issue of its
contractual indemnity for the Willits yard. It will probably be presented to
Union Pacific before the next NCRA board meeting.
b.) FEMA Alternate Project
Mr. Christy stated that he and project manager,
Jerry Cheek, have created a draft project description and that was sent to OES,
who will then send it to FEMA. FEMA will then issue a programmatic
Environmental Assessment. Once that is completed there will be an official
Alternate Project. Mr. Sabbaghian from OES stated that the funds are suspended
and the process is on hold because FEMA needs an Environmental Assessment (EA)
to release the funding. OES is working with FEMA to get closer on the EA, which
should take about three months. Continuing with typical procedure, he estimates
a seven-month timeframe for starting the project. He added that if there are no
major environmental issues on the southern section there should be no problems.
James Quinn
Asked if Caltrans was involved in this project. Mr.
Christy replied that they provide accounting oversight.
Mike Pechner
Asked a variety of questions
regarding when the money will be available.
Roger Graeber
Commented that the only endangered
species we have are freight trains and passenger rail trains.
Chair Woolley recommended that the board adjourn
into closed session for an hour, reconvene, and then continue with the rest of
the agenda.
K CLOSED
SESSION
Adjourn for closed session
at 12:30pm
1.)
Conference
with Legal Counsel – Anticipated Litigation
Government Code Section 54956.9 (b)
Significant Exposure to Litigation (two cases)
2.)
Conference
with Legal Counsel – Existing Litigation
Government Code Section 54956.9 (a)
Boyle Engineering vs. NCRA, pending in Sonoma County
L ANNOUNCEMENT
OUT OF CLOSED SESSION
Reconvened at 1:50 pm
Director Hemphill left the
meeting at 1:50 pm
1.) By
unanimous vote the Board extended the Stand-Still Agreement with NWPY to
January 1st, 2004.
The Board has been meeting through its ad hoc
operator committee with John Darling and representatives of NWPY for several
months. Certain performance benchmarks
were placed upon the NWPY for continued extension of the Standstill
agreement. The NCRA Board is pleased to
announce that significant progress has been achieved against these benchmarks
paving the way for a successful south end service reopening strategy. Specifically, continued forward progress
with aggregate producers and suppliers as potential shippers and strategic
partners. Second, serious interests
from both investors and the short line railroad industry in working with the
NWPY to both restructure and recapitalize.
2.)
By unanimous vote, the
board approved a settlement with Boyle Engineering for $20,000.
H 5.) Extension of Consent Decree
Board Action: Upon motion by Director Sears, 2nd by
Director Simonson, and carried (5-0), the board agreed, at the request of the
state office of Attorney General, to extend the Consent Decree another two
years to July 14, 2005.
H. 6.) Consideration of Healdsburg Properties
Transfer Request from SMART
Mr. Neary stated that the NWPRA would not transfer
Healdsburg properties without prior consent of NCRA. He recommended that the
mainline and subsidiary track go to SMART so they have a corridor to operate.
Everything else would stay with the NCRA. This would preserve assets until
everything is agreed upon with the dissolution of the NWPRA.
Director Campbell requested that a site plan be
prepared that would depict the multiple parcels that make up the “Healdsburg
Properties”.
Director Sears passed out an opinion document from a
lawyer from the Sonoma County Counsel’s office addressing this issue.
Board Action: Upon motion by Director Ripple, 2nd by
Director Simonson, and carried (4-1, Aye’s - Woolley, Simonson, Ripple,
Campbell. Nay’s - Sears) the board
approved a transfer of the operating track rail facilities through Healdsburg
to SMART.
I COMMITTEE REPORTS
a.)
Finance
Committee Action: Upon motion by Director Campbell,
2nd by Director Simonson, and carried (3-0), the Finance Committee
approved the committee minutes of June 4th, 2003, with the addition
of an additional item in the recommendations to include “Maintain separate cost
centers within the combined Property/Administration “Agency” budget.”
b.)
Property
– No report
c.)
Passenger
– No report
d.)
Operator
– No report
e.)
Executive
– No report
J STAFF REPORT
1.) Mr.
Christy thanked everyone involved with the NCRA for all their support during
his tenure.
2.)
Mr.
Neary acknowledged Mr. Christy and thanked him for all the hard work he’s
provided the NCRA.
The Board of Directors thanked Mr. Christy for his
dedication to the NCRA and presented him with a plaque and a gift.
M MATTERS
FROM THE BOARD
None
N ANNOUNCEMENT
OF NEXT MEETING
Regular
Board Meeting – July 16th, 2003 – 10:00 am
Willits
City Council Chambers, 111 East Commercial Street
Willits,
Mendocino County, CA
O ADJOURN
2:35 PM