MEETING NOTES FROM THE NEVADA COMMISSION FOR THE RECONSTRUCTION OF THE VIRGINIA AND TRUCKEE RAILWAY

WARNING: These unofficial minutes most certainly contain implicit or explicit editorializing! Read at your own risk! When you see “IMHO” (in my humble opinion) you know it probably won't be humble.

JULY 7, 2008 meeting – I did it again, don't get used to it. Because so many interesting things were said I have transcribed what was said in many cases. This report will probably run on to ten pages by the time I'm done. I won't always do this, I promise. For now, enjoy the detail.

WARNING: These are not official meeting minutes! These are prepared by Jim Lohse of Reno Railfans and the Virginia Truckee Railroad Historical Society

List of agenda items discussed in this report:

4 PUBLIC COMMENT

6 TREASURERS REPORT

7 RATIFYING BILLS SUBMITTED FOR PAYMENT

8 PHASE 2-4 ENGINEERING REPORT

9 RIGHT OF WAY ACQUISITIONS AND ATTORNEY'S REPORT

10 DISCUSSION OF ANOTHER ECONOMIC IMPACT SURVEY – RIMS II REPORT

11 STATUS OF PASSENGER CARS AT PORTOLA (FRRS) AND STORAGE AGREEMENT

12 VIRGINIA AND TRUCKEE RAILROAD REPORT (TOM GRAY)

13 NORTHERN NEVADA RAILWAY FOUNDATION REPORT (JANICE AYRES)

14 PROJECT COORDINATOR REPORT

15 COMMISSION CHAIR REPOR

16 COMMISSIONER'S COMMENTS

17 ACTION ON THE NEXT MEETING

18 ADJOURNMENT

Meeting Highlights:

-- A new map was handed out showing the entire route

-- The Commission voted to get rid of the five decaying passenger cars stored at Portola

-- Better financial information was available but not discussed at length

-- More people came to make public comments

-- Mayor Marv proved to be surprisingly thin-skinned, Chairman Hadfield too

-- John Tyson (absent), in a letter read by Chairman Hadfield, floated an idea to run the #8 with the Grays parlor car to raise funds, this part of his letter was not discussed

-- Bonnie Weber continued to make the excellent point that without proper info she could no longer vote on ratifying bills

Meeting Summary:

This was a pretty good meeting, except that the Commission Chair Hadfield and especially Mayor Marv continued to be surprisingly thin-skinned about public comments. It's like their defending their child who can do no wrong, instead of answering questions about a public project. Read on...

And now the gruesome details!

4 PUBLIC COMMENT ON NON-AGENDIZED ITEMS

Member of the public Mary spoke first. Mary was confused thinking the Virginia Truckee Railroad Historical Society meeting in June in Virginia City was a Commission meeting, instead it was a VTRRHS meeting with Kevin Ray from the Commission, but hey, it's hard to keep everyone straight.

She was echoing the comments from a guy, Mr. Malloy, who wrote a letter to the editor of the Nevada Appeal suggesting that the project run the tracks to Mound House, put up a temporary station and start running. She thought people might ride the train up the hill to save on gas, and wondered how to get that on the agenda. Chair Hadfield said it's not time to have that discussion until the section of track from Frehner Pit to Highway 50 goes out to bid. (IMHO editor's note, this was a non-answer, because once that section goes out to bid it's too late to plan a station, the track will already run past there.)

Dave Campbell of Carson City, leader of the No on the V&T tax group came to the meeting to “do some due diligence like any good investor would do.” Dave continued saying he “would like to see the business plan for the V&T.” Chair Hadfield responded, “that's why we selected an independent operator (ed. Note -- currently Sierra Railroad, not yet under contract). The Commission's job is to build a railroad, not operate the railroad.” Hadfield explained that it's too early to enter final negotiation with an operator until “we're further down the lane, so to speak.” Campbell responded, “so the business plan does not exist,” and tried to continue his question. He was interrupted by Mayor Marv Teixeira who said, “Dave you and I worked through this but I'll do it for you one more time.” Campbell, “How can I examine that?” Marv: “Well, I'll tell you what it is. How is that” Campbell, “No, I want to examine it, because...” Marv, interrupting again, getting frustrated, said, “well, I'll just give you a little thumbnail. Is that all right?” Campbell, “No, the essence of examining a business plan is to look at each number.”

(as background, three railroads submitted business plans in 2006, the V&T, the American Heritage / Durango and Silverton, and the Sierra Railroad. These plans exist in the Commission records but the Commission won't let anyone look at any part of the plan supposedly because they contain proprietary business information. I have now made a public records request to see the parts of the plan that can be released. Back to the Campbell – Teixeira fight.)

Marv, getting snide, stated, “OK, that will come from the OP-ER-AT-OR.” Marv began to read from some document stating various statistics such as P&L, project ridership, number of trains and more. Campbell stopped Mayor Marv and asked, “where'd that number come from? Pick any of those numbers and tell me where they come from.” Chairman Hadfield answered slowly, “they come from Sieeeerrrrraaaaa Raillllrrrrroad.” (ed note I rarely see politician be so disrespectful when discussing a document they won't let the public see). After some back and forth, Mayor Marv said, “Wait, wait Dave, you want to know about this please schedule an appointment and I'll be glad to give it to you.” Campbell, “I requested that of you twice by email and you did not choose to answer.”

Still with Campbell, Hadfield sternly interrupted, “I will not allow public comment at this meeting to turn into a debate.”

(background, the sales tax increase proposed in Carson City will back $10 million in bonds, the proceeds of those bonds goes to the Commission to work on Phase 3, the Carson River Canyon. The deal is that the Commission will give Carson City 5% of gross revenues from the railroad for 99 years.)

Campbell then asked, “who will be giving this 5% to Carson City?” Marv again with the slow voice like speaking to a child, “the OP-ER-AT-OR.” Campbell, “so we're gonna vote, without a business plan, without examining the business plan, and trust that the operator will have a good business plan. So what is revenue?” Dave then asked specific questions about whether dinner train revenue would be part of the 5% formula. Dave went on and Hadfield interrupted, “Again, I'm going to terminate this discussion, excuse me just a minute, if you wish to have a private discussion with me afterwards, that's fine,” Hadfield gave Campbell one more question.

Campbell asked, “If a big checkbook came in here today and wanted to write a check, what would it cost today to complete the whole project.” Mayor Marv answered, “Ballpark? Oh, another 15 to 18 million.” Campbell said “thank you,” started to walk away and Mayor Marv said, “maybe twenty ... maybe twenty-two.” Campbell, taking his seat, said, “maybe 35.”

Chairman Hadfield was already having a bad day. He started to say, “Some of you with public comment may have an opinion about the proposed tax in Carson City...” Mayor Marv interrupted him to say, “but that issue is mine.” Hadfield started to say, “and I think the...” Mayor Marv interrupted Hadfield again to tell Dave Campbell, “you want to take me on Dave, anytime anyplace, but not the Commission.” Campbell retorted, “well I'm sorry you see it as a personal challenge, but the Commission is the one who will do the contract with these guys, and the Commission will not (let the public) examine the business plan, certainly you're going to examine the business plan, and it (the tax) IS Commission business.” Marv again said, “and we've got one.” (business plan, see next speaker for more about this business plan.)

After Campbell left the podium, while Mayor Marv was trying to say that it's not appropriate to comment on the V&T Tax at Commission meetings, (your pesky editorializing writer) Jim Lohse stood at the podium. Chair Hadfield went on the chastise Campbell, “I hope that you understand the people who sit on this Commission have a great deal of experience ... have a lot of experience in different ways and things, all right? And we decided that the best thing we could do is have an expert that knows how to operate railroads be the operator (Ed note- despite John Tyson and Ron Allens plan to have the Commission run the railroad) and not a government entity. So any discussion of the figures from Sierra Railroad can be taken up with Sierra Railroad.”

Now that pain in the ass Jim Lohse began to speak and identified himself as being from Washoe County, and said there had been enough debate, that he just wanted to make some comments about his opinion and didn't expect any answers. (I) Lohse started to speak and immediately at that point Chairman Hadfield interrupted and said, “I have a question. Did you say you live in Washoe County?” Lohse replied, “yeah, I've always said that.” Hadfield, “I just was wondering.” Lohse replied, “the bad county that's only given $300,000 or $30,000 or something like that.”

Lohse asked “does my three minutes start now?” He went on to express agreement with the first speaker Mary, saying that he wished there was some way they could get up and running at Mound House. Lohse stated he understood that's not politically what they wanted to do, but he felt getting something up and running would garner a lot of public support.

Lohse went on, “following Dave Campbell's comments I would say there is, that the plans that are submitted from the three railroad companies, the Virginia and Truckee, the American Heritage and the Sierra Railroad, I've been requesting those documents and I've been told that they're not available because they contain proprietary financial information. If there's, like under the Public Records Act if there's some way you could release part of those documents that doesn't comprise the companies, or compromise the companies, that would be great ... moving on... “ At this point Chairman Hadfield interrupted again to say, “I would suggest, as I just did to the other gentleman, if you have questions of any of those railroad companies, contact them directly. And get us out of the middle.” (Ed note -- ?!?!?!! Get them out of the middle? Huh?)

Lohse responded, “Well, because you're a government agency it's much easier to go to a government agency and request documents, and you're here in Nevada and they're in California, so anyway, maybe I could just get to my comments, I don't want to take a lot of time here.” Lohse went on to suggest that like other government agencies there is a background information packet given to the Commissioners and that it would be nice it it was available. Kevin Ray pointed out that it was on the podium in front of Lohse. Lohse went on to say that it would be nice if like other agencies that package was available online ahead of the meeting.

Lohse continued, “I'm not going to say who, you know, part of my problem is that you look at claims that have been made in the past and they don't pan out, and I'm not going to bring up who, it wasn't Mayor Marv but somebody at a 2005 Carson City Supervisors meeting, at least according to the minutes, that's all I know, somebody here today said that 'almost all the financing is in place.' If you understand why people are skeptical, you have to look at the history of comments that are made along those lines, and it doesn't prove out to be the truth, so forgive the public if they get a little angry with you, or skeptical, there's a, like any good rumor there's always a kernel of truth.”

Lohse continued, “moving on, I hope we get better financial information here today, I think I've got a minute left, I hope we get better financial information here today, I think the public pressure on you to provide that can only be good and I support the public coming in here.” Lohse then asked whether the current sales tax was paying off the bond, and before (I) he could be more specific to ask whether general fund was going to make up any shortfall, Chairman Hadfield interrupted to say, “the answer to that is yes.”

Lohse then said, “I only have one more thing.” (Ed note -- You may remember from the last episode that Ron Allen used his position as Commissioner during a time when Lohse couldn't respond (commissioner's comments at the end of the meeting) to criticize Lohse for his choice when naming his new group, the Virginia Truckee Railroad Historical Society. This name is approved by the Nevada Secretary of State but Ron Allen doesn't like it.)

(You can view the previous episode summary at http://www.renorailfans.com/v-n-t-meetings-minutes/2008-06-June-virginia-truckee-reconstruction.html or here's the excerpt describing Allen's comments:

Commissioner Ron Allen used his position as a Commissioner during a segment of the meeting where the public cannot comment to bring up a complaint held by his Nevada non-profit corporation, the Virginia and Truckee Historic Railroad Society. He said that Jim Lohse had created a group with a similar name as a play on his group's name. Out of order, Mr. Lohse commented from the audience, “that's not true!” Commissioner Allen continued to explain that he didn't think the railroad space was big enough for two groups with similar names. Lohse, again totally out of order, commented, “I have no chance to respond!” Ron Allen went on bringing his (IMHO one-sided) private dispute up as commission business, and Lohse, again totally out of order, shouted at Chairman Hadfield, “Is this on the agenda?” State Commissioner Ron Allen finished bringing his private business up while sitting as a Commissioner, and finished his complaint.)

Back to the July meeting, Lohse continued, “The only other issue I'm going to bring up just to close is the issue that Ron Allen brought up at the end of the last meeting, I would suggest as Mayor Marv has done as Carson City meetings that if you as a private citizen have a comment to make you can step down and get behind the microphone too. I don't see that whether there's a name conflict between our two groups that it's Commission business, but you chose to bring it up during Commissioner's Comments and made it Commission business by that. So I don't want any resolution on it, as I told Ron Allen he should contact the Secretary of State. Just to give you the other side of the story, I registered my name as a name reservation with the Secretary of State, and when I spoke to Ron about that he actually said that he didn't believe that government was capable of doing a good job of checking those names, which is funny from a guy on a government panel. So, I still would like you to pursue the option of checking with the Secretary of State. I don't see that there's a conflict, if there's any confusion it's that people think I'm with the Virginia and Truckee Railroad. So thanks, have a great day!”

At this point Chairman Hadfield asked if there was anyone else who wanted to make a public comment, and seeing none he closed the public comment period.

5 CONSENT CALENDAR

There were no items on the consent calendar

6 TREASURERS REPORT

Treasurer Ron Allen gave his report as follows: “OK, now this is through May 31 of 2008, the cash balance as of that date was $5,806,062.56, we expected revenues from June of 2008 through June of 2010 to be somewhere right around $900,000, now that's not including reimbursements from federal grants and those types of things. That's just other revenues. The federal grant process for phase 2-c construction which is not yet consigned is $3,849,626, and the EDA grant that we're expecting reimbursements from for the tunnel is $750,000, so as of May 31 the total expected expenditures with all of the contracts in place and assuming the one for the new 2-c is signed will have been $14,452,457,55. So that's my report as of May 31 of 2008.”

Washoe County Commissioner Bonnie Weber said, “Mr. Chairman” and she was recognized: Weber said “I appreciate having the report but again this is the second time I've requested it, it has to be in writing. We have to have copies of this in writing. These are too many numbers. Every organization, every meeting that I go to, we always have a written report, and to make our organization look like it should and for the benefit of the public, we need to have these things in writing and it has to be ongoing.” ... “We as a board have accountability and we have a responsibility of letting everyone know where these monies are and it needs to be publicized, and it needs to be available to us in our board packet” ... “and I'm not going to vote on this next time if I don't have it in writing.”

“Mr. Chairman I would think that the rest of the board members should comment on this, if they don't agree with this or if they do agree with this, I think there should be some communication on this.”

Commisioner Larry McPherson of Lyon County said, “Mr. Chairman I think it's a good idea.”

Chair Hadfield said, “I think the Commission is on record supporting that Bonnie.”

Chair Hadfield said something to Ron Allen to the effect that he did have the report.

Ron Allen, “I just didn't have it in time to get it into the packets. I will try to get it done sooner next time.”

Bonnie Weber spent a little time allowing Ron Allen to save face, Ron interrupted to say, “Bonnie the information was not available in time to get it into the packet.”

Dwight Millard asked why the outgoing was over $14 million and the incoming was only $11 million and asked what the difference was.

“The differences are reimbursements ... that's where the difference occurs.”

Mayor Marv moved to accept the Treasurer's Report and it was voted in.

Bonnie Weber spoke up and asked that expected reimbursements be included in the report. “We as Commissioners on this project really need to know when the monies are expected or anticipated.” ... “I really would like to know and I assume that would be included.”

7 RATIFYING BILLS SUBMITTED FOR PAYMENT

Kevin Ray gave some explanation of the accounting process.

Commissioner Weber spoke up again to ask, “I am very confused, I have no idea from having a verbal report of what our balance is and how much money we have, and I feel it's so important. I don't mean to give Ron a hard time, can he tell us with this being paid how much money will be left in the account?”

Ron Allen said, “at this moment no, there's no way I can.” Weber: “Approximately?”

Allen gave an answer and then said “but that's not going to be an accurate amount.”

Kevin Ray spoke up and discussing grant reimbursements and said we'll always be about thirty days out knowing dollar for dollar what's there.”

Weber expressed a concern that she didn't want to be in a position of paying bills when there's not enough money to pay them.

Kevin Ray pointed out that every one of these bills is part of the annual budget.

Ron Allen said before the bills are paid he knows they have money in the account to pay them.

Ken Dorr said that at the completion of the next phase of construction we'd have $700,000 in the bank.

The rest was pretty cut and dried with one notable exception. I have to look into this but I thought it was previously agreed that the Commission was no longer going to fund the fundraisers, the Northern Nevada Railway Foundation.

Now, at this point of the meeting I was looking at the information packet and I noticed in the bills to be paid was $30,000 going to the Northern Nevada Railway Foundation, who are a fundraising group that is supposed to raise money for the Commission. I didn't understand why the Commission would be paying the foundation, and not the other way around, so I got up to ask that question.

Chairman Hadfield said that's an annual payment to the Foundation. So IMHO Editor's note and all that, I still don't understand why this happens, except that the Foundation needs money to run the Railway Reflections events. At the same time I don't think there's an expectation that they're going to make money at this in the first year. With all due respect to the NNRF, I've only seen government agencies fund private non-profits when they are performing a community service like homeless shelters, medical care, soup kitchens, etc. I think this is a bit unusual. Just IMHO. If it were appropriate to fund the NNRF it should come from the cities who stand to benefit, Carson City and Virginia City.

The bills were ratified unanimously. Next.

8 PHASE 2-4 ENGINEERING REPORT

Portals for tunnel 2 are basically done, granite construction has moved their equipment off the project. The remaining work is inside the tunnel, putting up wire mesh and shooting shotcrete inside the tunnel. H&H has run track down to Scales extending the Overman pit track from before, ballast is laid but alignment work and tamping is yet to be done (surface and lining operations).

Another section of track has been built above Frehner pit (Road and Highway builders), as soon as tunnel is complete the track will be laid through the tunnel and then another mile or so up the grade to connect with the track at Scales. After that the new track will be ballasted, surfaced and lined.

Hadfield asked whether the roadbed was still accessible to the public on the Carson City side (ed note -- it hasn't been for months now) and Ken Dorr answered no. Hadfield then asked that if the public wanted to go up and see the project, was the only part open now the roadbed between the Virginia City side of Tunnel 2 and Scales, Ken Dorr didn't say yes, he noted that Granite still has a gate there until the Commission accepts their work. (Ed Note -- Hadfield seemed to think the public could access that part of the roadbed but it's all off limits to the public unless they are escorted on the property, and then you're supposed to wear a hard hat and safety vest if you're on the project during working hours.)

Hadfield to Dorr, “Is it fair to say that (on phase 2-c, the part from Frehner pit to Highway 50 and beyond) we're just waiting for some technical things from the state and then we'll be ready to go out to bid on that?”

Ken Dorr stated that “I'll talk about the next construction phase in just a minute.” Ken noted that Mayor Marv had a question. Marv said something about a “that's exactly where I'm going.” Marv is very hard to hear, in Seinfled-speak he's a “low-talker,” so I couldn't hear exactly on my tape but I think he was talking about a settlement. What settlement, I don't know. Marv said more loudly something about a “substantial cost saving.”

Dorr said “we're done with the engineering on the next phase of the project” to go across highway 50 over the bridge, and then past Pick and Pull and put a siding in there. Dorr then noted the next three-quarter miles of the project and leave flexibility for the board to decide how to handle that.

One thing worth noting is that Dorr brought up the fact that NDOT (Nevada Department of Transportation) was working with the Commission on getting federal grant money reimbursement for a future phase of the project. “Once that's done there's a couple other things NDOT is reviewing, they're reviewing the right-of-way certification, the utility certification, the design certification and addressing any comments that the department's had previously on the design.”

“We're basically all there, that's what it amounts to.” Dorr noted in a joking manner that sometimes he wakes up at 2 in the morning and wants to make changes but “it's time to shoot the damn engineer and build the next phase.”

“Cost estimates for the next phase are the base bid, I think we have an estimate of $7.8 million, with the added (last three quarter mile) it'd be $8.6 million. I did not deflate those values but...” Dorr noted that he was considering prices from the first phases of the project in coming up with this bid and then noted a “better environment” presumably meaning construction costs going down because of the housing bust and slower economic environment. “Hopefully we'll get a nice surprise on the prices.

Mayor Marv asked “OK, how many miles is on 3C?” (ed note Marv either meant Phase 3 or Phase 2C, there is no 3C)

Dorr answered “The next subsequent phase? It's right at five miles to take us to the tunnel.” (ed note this was confusing too, I assume Dorr was lumping phase 2B and 2C together.)

Mayor Marv then asked, “and you figure it will come in somewhere around $8 (million)?”

Dorr began to answer that to get to Bertinoli's Pit (ed note at the west end of the Carson River Canyon) it would take $8-10 million dollars.

(ed note I think this is what I heard to make me think they were getting to Bertinoli's pit with current funding.)

Marv clarified that he meant “just the phase that we're going to put out to bid,” (ed note -- which is Phase 2-C from Frehner Pit to the Lyon/Carson county line.)

At this point my tape is messed up for about a minute. Once the tape gets better, Marv asked if another $10 million would get the project to the west end of the Carson River canyon, which is Phase 3. Then all that would be left is getting back to Highway 50 to the depot/terminal, building a terminal.

(Ed note- in these discussions the Commission often forgets to mention the cost of buying out the Gray's, the possible cost of extending the Virginia City track past the current depot through a re-opened tunnel past the church and putting the end of the line at the freight depot across from the Ramada. Also, the commission seems to think the Gray's track must be rebuilt even though it's FRA certified and trains run there now. The Gray's track is in far better shape than the original V&T in 1950, but it's “not up to the commission's standards.”)

Continuing, Commissioner Millard asked “do we already have the rail for 2C?” Dorr said yes. Millard made the point that the bid could come in lower since the price of steel won't be a factor. Dorr answered, “that's a good point you brought up, Dwight. The price of that rail has gone up about 25% since we bought it, so, it was about $2.3 million counting all the hardware, and that was enough rail to get us all the way from Phase 1 down to the end of this phase we're currently bidding.”

Mayor Marv took this chance to put it in the record that until now the phases of the project have come in under the engineer's estimate. Ken Dorr at first replied “more or less” and later when asked again by Mayor Marv he said “that's correct.” Marv noted that Ken Dorr does a lot of work for free.

Mayor Teixeira basically then held a one-minute love-fest saying how dedicated Mr. Dorr is and noted that the project was more than a job for Mr. Dorr, it's a passion. Lovefest over. Marv finished, “so for the new people that just decided that we're not doing quite what we should they oughtta understand there's an awful lot of time and commitment.” After Hadfield and Marv thanked everyone involved Marv went on to state that part of the hard work is dealing with “the Feds,” noting the minutae of detail required to get money from all the United States taxpayers. “But this is not easy and fighting through the bureaucratic red tape is not only expensive but it's time consuming. It does, some of the stuff we've had to go through has just been mind-boggling.” To Mr. Dorr, “But you stayed to course, I've been in many meetings with you Ken, you held your professionalism when I was ready to go totally ape-shit. You're a professional but I know just how much this means to you.”

Millard said, “having said all that, and I concur Mr. Mayor, you say all the nice things” then turning to Dorr, “and then I'm going to shoot you, what's the date that we have to shoot you to make sure we get the best opportunity for the October award?”

Ken Dorr explained agreed that there was a 95% chance that the new contract would be ready within a week and the “award” would be had by October. Dorr noted that the Attorney General's office had to review the contract and noted a couple needed changes.

(ed note so far this meeting we're heard Marv say that dealing with the Feds is expensive. Now we hear that the attorney general must review all contracts. No wonder government work is so much more expensive that work done by private corporations.)

At this point I got up and asked a question about my confusion over how Mayor Marv referred to Phase 3C and it was cleared up for me that it would take another $10 million to get to Bertinoli's Pit.

9 RIGHT OF WAY ACQUISITIONS AND ATTORNEY'S REPORT

8:20 on tape II, this was pretty brief, attorney Rowe said there is no report on right-of-way acquisitions. Rowe noted that NDOT people had been in his office going over previous acquisitions.

(Ed note -- It was interesting to see Mike Rowe describe the process that once the Commission acquires land NDOT goes over the acquisition with a fine toothed comb and then reports back to the FHWA that indeed the land was bought. This must be the strings attached to federal dollars that Mayor Marv referred to. It's funny how negative an impact federal funding has on the project, not only does it make Mayor Marv go “totally ape-shit” but when people ask why private dollars can't be invested in this project the Commission's answer is that once federal money is involved no private investment is allowed. IMHO this answer is a bit questionable, what ever happened to the public-private partnership concept?)

Row went on to note that he was involved in several meetings about a stewardship agreement and the Southwest Gas utility re-location. I guess he earned his $6000 this month. Rowe noted that there was nothing going on with phase 3 at this point.

Mayor Marv said that what happens in November with the Carson City sales tax vote will predicate what happens to phase 3, if there's no revenue stream they won't be able to go anywhere. (Ed note IHMO this is the downside of the Commission going after another $10 million from Carson City, it seems that all their other significant fundraising efforts have stopped.)

10 DISCUSSION OF ANOTHER ECONOMIC IMPACT SURVEY – RIMS II REPORT

Somewhere out there is a 300-page document that was originally done in the early 1990's. One of my criticisms of the Commission is that I have been asking for months to see this document but my request has gone unanswered. While in a conversation with Project Attorney Mike Rowe months ago he said, “these documents are not secret” my repeated requests to see them have gone unanswered.

The original feasibility study included the RIMS II analysis of the economic impact. The study estimates projected ridership, jobs created, additional business added to the local economy and more.

RIMS II stands for Regional Input-Output Modeling System (RIMS II), there's a website explaining it at http://www.bea.gov/bea/regional/rims/.

The original study was updated once in 2000 by Stone Consulting, and I have only seen about fifteen pages of this update. The original doc said many things including a discussion that people expect a western historic train to look like something they're seen in the movies, since no one was there to see the actual trains. The original study made it pretty clear that clerestory windows and other features seen in movies from Union Pacific to Wild Wild West will be needed to perfect the attraction.

Note the next agenda item where the commission decided to jettison the cars they bought from the closed Hunter's Point railroad museum and moved to Portola. Those cars didn't fit the bill, so getting rid of them is consistent with the original study.

Once the new RIMS II study is approved it should take 45-60 days to complete the updated analysis. Stone Consulting will send someone out from Pennsylvania to study current conditions and issue an updated report. This apparently was spurred by Stephen Lincoln, Chairman Hadfield commented that everyone has questions about the claims of economic impact and he thinks it's a good idea to update the study.

The Carson City Convention and Visitors Bureau will be paying for this update. Commissioner Millard and Mayor Marv both sit on the CCCVB. The contract will be between Stone engineering and the Commission. This is contingent on the CCCVB approving the expenditure at their next meeting.

“This will bring us up to date on the true economic impact of this historic railroad based on today's conditions.”

This is a statistical study that makes assumptions of how every government and tourist dollar spent is multiplied through the local economy. For example, during construction the workers brought in from Southern California stay in local motels. This additional business wouldn't be at the motel if not for the V&T project, therefore it is argued that even the construction phase has a beneficial effect. Currently the Commission claims that 885 local jobs are created by the construction and I have trouble believing that. The fact is that a worker coming in from Southern CA is probably spending as little as possible in Nevada and taking the bulk of the money home for his family in CA. Some of the money probably also goes to Mexico to support family there, IMHO.

Also IMHO this new study will be beneficial in terms of having current numbers to sell the project to the voters. At the same time more skeptical people say you can make statistics say anything you want them to. This is not true, but is a commonly held belief.

What is missing from the argument is this proposition: if government spending has a multiplier effect, then shouldn't the government just take everyone's money for their own good? Just kidding... NEXT!

Oh, yeah, at the end the Chair asked for public comment and Mary Bangert from Carson City got up to ask how much the ride was going to cost. She was told around $40 per person and she balked, commenting that families won't ride at that rate. I did the same thing months ago and had the same reaction.

11 STATUS OF PASSENGER CARS AT PORTOLA (FRRS) AND STORAGE AGREEMENT

Chair Hadfield kicked this one off: “Now we'll take up item number 11 and before I comment I want to say that this has been before this commission any number of times. It's not my intention to take a great deal of public comment, everybody's position is fairly well known on this.”

The upshot is a good move, IMHO, the Commission voted 6-2 to jettison the passenger cars they have been storing at Portola, CA under an agreement with the Feather River Railroad Society.

This came in two parts. For the boring part I will just waste this sentence: the Commission agreed to pay the back rent for storing the cars at the Feather River Railroad Society's property at Portola, CA.

Then Commissioner Millard made a motion to get rid of the cars. There's a good Nevada Appeal article on this here: http://www.nevadaappeal.com/article/20080709/NEWS/821590344

These cars cost about $25000 as far as I know, and another $25000 was paid for moving them to Portola and storage.

Commissioner John Tyson was absent doing something for his employer, Channel 8 News. Tyson is looking for any reason to run his group's #8 locomotive on the new tracks (the #8 is currently stored at the Gray's Virginia and Truckee Railroad in Virginia City.) In his absence Chairman Hadfield read a letter from John, parts of it read like this:

TYSON's LETTER: “My proposal is to refurbish two of the cars and keep one for parts. The cars would be moved to the Shaw property (owned by the Commission) in Carson City where they would be worked on by volunteers. To finance the transportation and refurbishing of these cars I am volunteering the services of the Feather River Shortline Engine #8 (not the FRRS, John's group is the the Feather River shortline) and Tom Gray's parlor car to run on special occasion on the new track to raise money for the cars and bring awareness to the entire project. The crew would be volunteers so no money would be made by anyone except that which is necessary to buy fuel and service for the engine. Under this proposal there would be no cost to the Commission. The moneys raised would be through special wine and dinner train fundraisers.”

“I profoundly believe as I have from the beginning that this railroad Commission has to have it's own trainset regardless of who or when an operator takes over operations of the railroad.”

“It is important because it is simply good business to have a backup plan in the event we find ourselves with a 50 million dollar railroad with nothing to run.”

“Even if an operator is selected (Hadfield noted that an operator HAS been selected, “that was already done”) and brings their own equipment (Hadfield: “that was requested of the Operator”) the Harriman cars will always be available for movie work, special excursions, or if things go really well we could sold at a premium and the money would go to the Commission's coffers. Having our own equipment puts the Commission in a much better position when it comes to negotiating a contract with a prospective operator.”

END OF TYSONS LETTER AS READ BY CHAIRMAN HADFIELD

Chairman Hadfield clarified, “again we have selected an operator through a public bidding process and that's Sierra Railroad.”

All I am going to say IMHO at this point if that's all it takes to run a railroad then let's do it -- not! I think this is just another thinly-veiled plan by John Tyson et al to push any private operator aside and let him and Ron Allen run the operation, which is their dream. Once there are running their #8 on the Commission's tracks, they could argue there's no need for an outside operator. I'm going to be blunt, Tyson and especially Ron Allen will say whatever it takes to put their personal stamp on this public project.

Still IMHO, of course a professional operator will bring not just operations expertise but also business and marketing backgrounds. The Sierra does make sense from this standpoint that they are already in the business of attracting many riders to their existing properties and keeping them happy. I like the Grays but Sierra does have an edge on them in this respect.

Now the fun starts. Ron Allen said they should deal with the storage issue first before they get into the rest of the issue. After discussion a motion was made to pay the FRRS through the end of September. Millard seems at this point to bring up Tyson's proposal by leading a discussion of why to pay through September when it's only the start of July. Others said nothing would happen that fast with the cars anyway, so just pay through September.

When Millard was pressed on this point, he said: “If you bomb them you will (be done with them before September). If you junk them you can” not have to pay beyond July.

Once that was disposed of by deciding to pay FRRS the money (over) due them through June of 2008, Commissioner Millard surprised the audience with a motion to get rid of the cars by donating them to John Tyson's Feather River Shortline group (again not the FRRS). Millard, “I move that the Commission donate those cars to John Tyson and any company he'd like.”

Mayor Marv objected saying that would be a huge conflict of interest and “we are not going to give them to a Commissioner.” He then said, “I think we oughtta dump the things too. I don't know who you give them to and I don't know who the hell will take them ... I know that Commissioner Tyson is really set his mind that we should run a train ... that is the last thing this Commission needs to do is run a train. We'd screw it up profoundly.”

Ron Allen interrupted to say, “I believe those cars are of value to the Commission in more ways than one” as Tyson's letter claims. “The other thing is that I did get a quote for a complete restoration analysis of the cars, a feasibility study.” Allen argued that this study would only cost $26,000. He later argued that this would be a deal because the Nevada State Railroad Museum paid $50,000 for the #22 McKeen car feasibility study. (IMHO, here, buy my Chevy Beretta for $40,000 because a Corvette costs $80,000.)

“Also it would tell us how much each car would cost to be refurbished.” ... “We've gone through all the heartache” of getting this far along and he argued that the study would be worthwhile. He said, “If it then comes back that all five cars are unusable” then they could decide to get rid of them.

(IMHO, HUGE editor's note, this is an admission that they never knew what the cars were good for in the first place. Pretty sad. Also sad is that in an old Nevada Appeal article http://www.nevadaappeal.com/article/20060307/NEWS/103070056 Ron Allen said back then it would cost $10,000 per car to renovate, and more recently numbers like $250,000 per car have been thrown around.)

Chairman Hadfield reiterated that the Commission's job is to build, not run a railroad. In a last ditch effort to save his cars, Ron Allen said, “The cars are historic. We are not rebuilding the V&T, we are reconstructing a tourist railroad. We are not going to have any original V&T equipment.” (Ed note I'm not touching that one with a ten foot pole.) Allen then said, “to put the cart before the horse and get rid of them without even knowing for sure how they could fit into the program here is not in my estimation the right thing to do.”

(Ed note – again we get a statement that the Commission never knew what they were going to do with these cars in the first place, pretty sad. Would you buy one model railroad car because it only cost a buck, and then rebuild it and build an entire railroad around it? Probably not.)

(My last editorial note of the night, if you look back a few months Ron Allen was trying to get the Commission to buy some flatcars out of Sacramento to be used in movies, which IMHO is a joke because they don't make westerns like they used to. All the while a true movie expert, Jim Clark, is sitting in the audience at these meetings and the Commission won't listen to his input. Nuff said, let's wrap it up, eh?)

Moving on, sparing you much of the gory detail, Ron Allen's heart was broken and the commission decided to sell the cars. Again, make sure you read Karen Woodmansee's Nevada Appeal article here: http://www.nevadaappeal.com/article/20080709/NEWS/821590344

12 VIRGINIA AND TRUCKEE RAILROAD REPORT (TOM GRAY)

There was no report from Tom Gray, he was off in Wisconsin getting two new passenger cars shipped back to Virginia City to run on his railroad. They will be called the Virginia City and the Gold Hill.

13 NORTHERN NEVADA RAILWAY FOUNDATION REPORT (JANICE AYRES)

There was no report from the group that just received $30,000 to fund their Railroad Reflections show.

14 PROJECT COORDINATOR REPORT

Kevin Ray mentioned his appearance at the June 21 Virginia Truckee Railroad Historical Society meeting in Virginia City.