NEVADA COMMISSION for the RECONSTRUCTION of the V&T RAILWAY

Monday, March 3, 2008 - 3:00 p.m.

Carson City Community Center – SIERRA ROOM

851 East William Street

Corner of South Roop Street and William (Highway 50)

Carson City, Nevada 89701

MEETING MINUTES

DATE: 03-12-2008

Time: 5:00 p.m.

Submitted by Brenda Frank

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The following minutes are a summarized explanation of the topics discussed. A taped

recording of these proceedings will be kept for review. A printed copy is kept along

with a copy on CD in Microsoft Word. A copy has been e-mailed to the Project Coordinator & Counsel. ****************************************************************************************************

3:00 p.m. CALL TO ORDER

Vice- Chairman Flanagan called the meeting of the Commission for the Reconstruction of the V&T Railway to order at 3:00 p.m. He asked Kevin to call the roll.

1. ROLL CALL

PRESENT: ABSENT:

Vice-Chairman Flanagan Chairman Hadfield

Commissioner Tyson Commissioner Baushke

Commissioner Millard Commissioner Weber

Commissioner Allen

Commissioner McPherson (late)

Commissioner Teixeira

ALSO PRESENT:

Kevin Ray, Project Coordinator

Michael Rowe, Counsel

Ken Dorr, Manhard Consulting

It was noted there was a quorum.

2. APPROVAL OF THE AGENDA

This is the tentative schedule for the meeting. The Commission reserves the right to take items in a different order to accomplish business in the most efficient manner.

Vice-Chairman Flanagan called for any changes to the agenda. Commissioner Tyson asked to withdraw Item 14, (Discussion and possible action to donate railroad ties to Gold Hill Historical Society) from the agenda, as it was irrelevant at this time. This was seconded by Commissioner Allen. Question was called on Commissioner Tyson’s motion and it carried. Kevin noted the list of bills titled Consent Agenda was not a part of the Consent Agenda. Counsel Rowe noted it would be a part of Item 7, Action to ratify the Payment of Bills Submitted.

3. ACTION TO APPROVE THE MINUTES OF February 4, 2008

Vice-Chairman Flanagan called for any corrections or changes to the minutes of the February 4, 2008 meeting. None were stated and Commissioner Allen made the motion to approve the minutes as presented. Commissioner Tyson seconded the motion. The question was called and the motion carried and was so ordered.

4. PUBLIC COMMENT ON NON-AGENDIZED ITEMS: Discussion may be limited to three minutes per person at the discretion of the Chairman. No action may be taken on a matter raised under this portion of the agenda until the matter itself has been specifically included on an agenda as an item upon which action may be taken.

Public comment was called for by the Vice Chairman.

Jim Clark, a new member of the Foundation, came forward and introduced himself.

He had moved back to the area and lives at 55 B Street in Virginia City. Jim used to work at the Railroad Museum. He said he had owned three railroads and was involved in all phases of a railroad and he also was into motion pictures. He said he was confused on some of the purchases made by the Commission. Since he has joined the Northern Nevada Railroad Foundation he will be around to be a part of this project. He commended the Commission on the work that has been accomplished.

Kevin noted that Commissioner McPherson was present.

5. COMMISSIONERS CONSENT AGENDA: All matters listed under the Consent Agenda are considered routine and may be acted upon by the Commission with one action and without an extensive hearing. Any member of the Commission or any citizen may request that an item be taken from the Consent Agenda, discussed and acted upon separately during this meeting.

There were no items under the consent agenda and required no motion.

**END OF CONSENT AGENDA**

6. treasurer report – ron allen Commissioner Allen gave his report for the date ending January 31, 2008. The cash on hand as of January 31 was $9,746,572.72. There has been some sizable expenditures since then that are not reflected in this report. The report shows the Convention & Visitors Bureau year to date actual monies of $82,700. That is in error, that is actually the interest on the money that is bonded and that was not supposed to be a part of the Commission’s revenue stream and it has been removed. Ken Dorr asked if he could have a copy of his report. Commissioner Millard asked if there was any projected income and Ron noted there was the Storey County sales tax on a regular basis. Commissioner Millard asked why they couldn’t count the interest from the Convention & Visitors Bureau and Ron said it was not part of the original agreement.

7. ACTION TO RATIFY THE PAYMENT OF BILLS SUBMITTED Action to ratify the payments of bills submitted was called for. The bills submitted totaled to $304,589.94. Commissioner Millard made the motion to ratify the payment of the bills submitted. Commissioner Teixeira seconded the motion. The question was called and the motion carried and was so ordered.

6. DISCUSSION AND POSSIBLE ACTION ON PROPOSAL FOR AUDIT SERVICES FOR FISCAL YEAR 2007/2008 BY KAFOURY ARMSTRONG Counsel Rowe noted this item would be handled by himself and Kevin. Mike said they were to have a proposal but it hadn’t come in time for the meeting but they did have an amount and the Commission needs to approve an auditor for the year of 07-08 per the statute. He had an e-mail from Kriston Burgess and Kafoury Armstrong’s proposed fee was not to exceed $24,600. That amount includes having the single audit done which is an additional function and if they do not have to provide the single audit the fee would be $19,600. They will be getting the agreement later. Commissioner Allen asked if it would be the same agreement as last year with the figures changed. Mike said he assumed so. Commissioner Teixeira made the motion to award the audit services to Kafoury Armstrong for fiscal year 2007/2008 not to exceed $24,600 and contingent on a letter and contract to be received by Mike Rowe. Commissioner Allen seconded the motion. Vice-Chairman Flanagan called the question and the motion carried and was so ordered.

7. DISCUSSION AND POSSIBLE ACTION ON PHASE 2-4 ENGINEERING WORK – Ken Dorr Ken Dorr of Manhard Consulting reported that Granite Construction had been unable to work the last couple of months on Phase 2A-2B due to weather but are now starting again as long as the weather holds. With the weather delay they are now looking at completion date sometime in August. Phase 2C, which takes then from top of Mound House and across Highway 50. Ken passed around a 123 page design plans and right of way documents. He discussed these. To be able to advertise they need to have the drawings completed and reviewed, utility certifications, right of ways, certifications with NDOT and environmental certifications. After all of this is completed they will be looking at 30-45 days to go through the process of final approvals. They are looking at June before they can go to bid. Ken discussed the utility relocations that have to be done in the different counties. On the design process, they will take the comments from NDOT and other agencies and go from there. Ken discussed the three submittals they have had to make to Lyon County. One to the Lyon County Utilities for them to review, one to Lyon County Road Department for revising some of the storm sewers and roads and one to Lyon County on part of the original environmental assessment in 2003 where there is a statement that says the Commission will work with the owners of the Brandenburg parcel to get rid of the tire pile there left from the old Lyon County dump. They have talked with NDEP and they are receptive to an on site disposal of those tires. They will be making submittals to them this week. Ken discussed the three proposed design options for the bridge crossing at Highway 50 referring to the proposed designs in the Commissioner’s packets. Since this would be the east gateway to Carson City they would like something nice. Design 1 is a very minimal design without any architectural enhancements to the bridge. The only thing done is to add chain link fencing for safety purposes. Ken said that may not cut it as far as getting approvals. The cost of Design 1 is $10,000. Design 2 is a more realistic treatment. A couple of features with this option is the use of simulated stone on the concrete and a safety railing fence which is identical to the fence used at the Overman Pit. The bridge will be kept in its current condition. The cost of this option is $50,000. Design 3 is the fancier option. The bridge is painted, the abutment and fencing is the same as Option 2. There is landscaping and architectural columns as enhancements. There is a “Welcome to Carson City” sign and lighting. The cost for Design 3, excluding landscaping and irrigation, is $150,000. These designs have been taken to RTC because they have a Federal Enhancement Grant for three Carson City portal signs. They asked if some of the funds in that grant could be used for the bridge aesthetics. This will be discussed with RTC. Each of the designs was discussed. Ken asked the Commission if they had any preference on the color of the bridge. Commissioner Tyson asked Ken why option 3 was $100,000 more that option 2. Ken reviewed Option 2 & 3 saying three has same as two but also has lighting and the Carson City sign. Commissioner Allen said he would like to see the color of bridge remain railroad coloring. Also Commissioner Allen asked if there was a pedestrian walkway on the bridge that would require lighting up there. Lighting, colors and cost was discussed. Some of the cost would be picked up by Carson as it will be their gateway. Ken asked if they could come up with a motion for the color of the bridge. Commissioner Tyson made the motion that the bridge color be traditional Railroad Silver/Gray. Commissioner Allen seconded the motion. The motion carried. Ken said they were essentially done with the detailed design on Phase 2C. They are finishing the specifications now and will be starting on the preliminary design on the next phase which will take them down and through Brunswick Canyon and to the depot site. Ken asked for any questions and Commissioner Millard said he thought they would be making a mistake if they don’t make good looking entrance to Carson City.

8. DISCUSSION AND POSSIBLE ACTION ON rIGHT oF wAY AcqUISITIONS and attorney's monthly report - MICHAEL ROWE Commission Counsel Mike Rowe said their major items this month was finishing up the Phase 2C acquisitions. At the last meeting there were five properties left and now they are down to two. He made an agreement with the Eitel owners last week and will be finalizing that parcel in a week or so. They have reached an administrative settlement with the Brandenburg’s and that will be done in the near future. They are waiting to hear back from the Brandenburg’s. The Aiken deed has been recorded. Three of the five from last month’s report are completed or being completed. The two remaining properties, they have had preliminary discussions with Serpa and hopefully it will be done by the April meeting. They are working on the bridge area and look to have both of these last two in the works by next meeting. Ken has gotten the additional right of way granted from BLM. Mike continued to discuss further these five properties. Mike said they were in good shape and he anticipated they would be able to certify that they have acquired the right of way and go through that process before bid time. Mike said they were looking at some $2.3 million in acquisition costs. Mike then asked for any questions from the Commission.

9. Discussion and possible action on a proposal from Carson City to provide an additional $10 million in funding for the project - Marv Teixeira Commissioner Teixeira discussed his proposal for acquiring the additional $10 million needed by the Commission to complete or at least get the project to the proposed depot site. Carson City has given $21 million out of the $37 million raised toward the construction of this project. Commissioner Teixeira said the additional money would be raised through another 1/8^th of a cent sales tax and he would place the item on the ballet to go before the people asking the city to fund the Commission the additional $10 million. In return he asked that Carson City receive 5% of the Railroad’s ridership sales for the next 99 years. Commissioner Teixeira said his proposal to the Commission was: if Carson City would fund and bond the additional $10 million would the Commission agree to give back to Carson City 5% of the gross ridership fees for the next 99 years. If they agree he would put an advisory question on the ballet for the general election in November to be voted on by the people. Commissioner Teixeira fielded questions and explained in detail to the Commission and he said Sierra Railroad was in agreement. Commissioner Millard made the motion that the Commission agree to accept the terms to bring $10 million and in return give 5% of the gross ridership fees to the City of Carson for the next 99 years. Commissioner Teixeira seconded the motion. Discussion was called for. Counsel said if the board approves and Marv was successful on the advisory question, there would be an inter-local agreement between the Carson City supervisors and the Commission stating the terms binding for anyone operating the train. Vice Chairman called the question and the motion carried and was so ordered.

12. DISCUSSION AND POSSIBLE ACTION to aCquire 1-6 flat cars – ron allen Commissioner Allen said they had a chance to purchase 1 to 6 40’ flat cars. They are in good condition, they could be use the flat cars maintenance and for movies when the railroad is complete. The cars are free we just need to pay to move them from San Francisco. Commissioner Allen said he thought they could get two flat cars on one truck so it would be a shipping cost about $1800-$1900. Discussion was held on how else they could be transported. Commissioner Teixeira asked if there were any pictures to look at and does Sierra already have cars as these. Ron said he couldn’t say what Sierra has and he didn’t have pictures of them and discussed how the Commission could benefit from these cars. Commissioner Teixeira asked if they continued this item would the cars still be there. Ron agreed. Commissioner Tyson said he felt they needed to acquire equipment so the Commission would still be able to operate a railroad if something happened to their operator. This was discussed. Commissioner Millard suggested they limit themselves to four cars. Commissioner Millard then made the motion to continue Item 12 until the April meeting. Commissioner McPherson seconded the motion. Chairman called the question and the motion carried and was so ordered.

13. DISCUSSION AND POSSIBLE ACTION on Review of Storage Agreement with Feather River Rail Society (FRRS) regarding compliance with the terms of the agreement by FRRS in the storage of the Commission's rail cars - Ron Allen Commissioner Allen said the cars they were storing at the Feather River Rail Society under a Storage Agreement were not being stored properly. He felt Feather River Rail Society was not complying with the Agreement in storing the cars. The cars are sitting on Union Pacific track and are not being kept inside the yard as per the agreement. Mike referred to a memorandum in the Commissioners packet that confirmed the contract did say the cars were to be kept inside the yard and gave options to be taken. Commissioner Teixeira asked what kind of direction Ron was looking for. Ron said the Commission has been paying rent and the cars haven’t been kept as they should. He felt the Commission should be reimbursed for rent paid when the agreement wasn’t being lived up to by Feather River. Commissioner Millard asked what if Feather River doesn’t agree, then what. There was a discussion as to the ‘what ifs’. Janice Ayres asked if there could be public comment. The Commission agreed and opened it up to public comment. Jim Clark, Northern Nevada Railroad Foundation, asked if these cars were in good shape and are they worth saving. Commissioner Tyson answered Mr. Clark and said the cars were in excellent shape and they can be restored. Commissioner Millard made the motion to direct Counsel to write a letter to FRRS and advise them they are not in compliance with the agreement and see if they could bring it into compliance. Commissioner Tyson seconded the motion. Vice Chairman called the question and the motion carried.

14. DISCUSSION AND POSSIBLE ACTION to donate railroad ties to gold hill historic society - john tyson This item was withdrawn from the agenda.

15. DISCUSSION AND POSSIBLE ACTION to reactivate the commission’s operating committee - john tyson Commissioner Tyson asked that the Operation Committee be reinstated so discussions could be held on what they could and could not do. They could discuss items like the cars, how to handle to utilization of them and the costs it would entail. Commissioner Tyson suggested John Flanagan, Ron Allen, Dwight Millard and himself be on the Committee. Commissioner Teixeira asked why they discontinued the committee. Marv said he would like to have it tabled for 30 days for all nine members to vote on the reactivation. After discussion, Commissioner Tyson made the motion that they reactivate the Operating Committee to come up with alternative ideas for the acquisition, restoration and operation of freight equipment and to offer suggestions for operations that can best serve the project efficiently and cost effeteness so they can discuss things that there is no leeway to discuss at Commission, they could brainstorm with other people, do cost analysis for car restoration and bridge design recommendations. Commissioner McPherson seconded the motion. Discussion was called for and Janice Ayres asked if the Operating Committee meetings were going to be open to the public and was it going to be posted. In response to Janice’s question, Counsel stated that the Operating Committee, as a committee taking input from the public and providing advice and recommendations to the Commission, is required to post agendas and conduct open meetings in compliance with the Open Meeting Law, Chapter 241 of NRS. The Vice-Chairman then called the question, There were 4 yeses, 1 abstained and 1 no vote. The motion carried.

16. V&T Historic Railroad Society Report – Ron Allen Commissioner Allen had nothing to report.

17. VIRGINIA AND TRUCKEE RAILROAD REPORT – TOM GRAY Tom Gray of the Virginia and Truckee Railroad, said in their old contract with the Commission they had agreed to pay 6% of their revenue back to the Commission to pay back their loan to the State of Nevada. Tom said this was their 33^rd year coming up and they are getting ready for bigger and heavier trains. NCOT has booked the Pow Wow group (the largest International Trade Tourist show in the United States) to come to Virginia City June 5-6. In April the PreFam tour will be here and Tom will showcase the Railroad by taking them on the new track.

18. Northern nevada railway foundation report – janice ayres Janice Ayres of the Northern Nevada Railway Foundation reported on the Railroad Reflection. She did a TV show last week regarding the hope of getting the $10 million. Steve Saylor said they have been getting international exposure on the Project. He has a meting with Brian Krolicki next week on funding. They are doing some presentations and have secured funds from Greater Nevada Credit.

19. Project coordinator REPORT - kevin ray Project Coordinator Kevin Ray has done presentations to Carson City Lodging Association. He attended the branding workshop. Each month he gives his update presentation to Carson City Convention and Visitors Bureau.

20. Commission chairman report - Robert hadfield There was nothing to report as Chairman Hadfield was absent.

21. COMMISSIONER COMMENTS

Commissioner Teixeira had nothing to add.

Commissioner Millard questioned, there is $9 million in the bank, who is doing the projections of where those funds go. Dwight asked if there could be a one page scenario presented at the next meeting.

Commissioner Allen had nothing to add.

Commissioner Tyson had nothing to add.

Commissioner McPherson discussed his difficulty in with the Lyon County Board regarding his suggestion of a 1/8% tax and asked for advice on how else he could approach his Board.

Vice-Chairman Flanagan had nothing to add.

22. ACTION ON THE NEXT COMMISSION MEETING The next meeting for the Commission for the Reconstruction of the V&T Railway was set for April 7, 2008 at 3:00 p.m. Location would be the same.

23. ADJOURNMENT Vice-Chairman Flanagan adjourned the meeting at 5:05 p.m.