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.

WARNING: These are not official meeting minutes! These are prepared by Jim Lohse of Reno Railfans and the Comstock Historical Society. The official meeting minutes are posted on the vtrailway.com website after they are approved a month later.

CHANGE IN REPORT FORMAT: For these reports I am going to lean more toward summary and less toward transcription. I have many strengths, but transcription is not one of them! It just takes me too much time to watch the video I take at the meetings and write down every word. I may begin posting videos of the interesting parts in addition to these written summaries.

ONE MORE NOTE: Somehow all the agenda items wound up with a 6 in front of them. Sorry for the typo, someday I'll go back and fix it.

NEVADA APPEAL ARTICLE

There was a newspaper article about this meeting in the Nevada Appeal, Sale of proposed V&T operator may be in works

Meeting Summary – After last month's rather sedate and short meeting, the sparks flew again. The two items that dominated the meeting were the Commission's deliberation of buying land that's for sale in Gold Hill between the Gold Hill Station and Highway 342. The official line from the commission's engineer Ken Dorr is that they need access to the rails. Also discussed was an extension of the agreement that allows the Gray's (real) Virginia & Truckee Railroad to run longer trips on the newly extended Re-con rails.

Also notable were public comments and Ron Allen's (false) claim that the Nevada Attorney General had “vindicated” the Commission of all wrongdoing. More on all this in the details below

Public comments were voluntarily cut short by me and others after Bob Hadfield said the meeting room had to be available by 5pm for the Carson City Convention and Visitor's Bureau meeting.

4. PUBLIC COMMENT ON NON-AGENDIZED ITEMS

After the housekeeping was done, minutes were approved, etc, it was time for public comment.

That pesky Commission gadfly Jim Lohse was first to get up and speak. In light of Bob Hadfield's call for brevity, I held back on a couple comments that I will bring out at the next meeting. I said first that I still wasn't clear when public comment occurred on agenda items. (In the past I have just jumped in when it seemed right, and Mayor Marv has gotten made at me. I had asked Bob Hadfield to clarify when public comment on agenda items was appropriate and never got a final answer.) I noted that I would have a comment on the Gold Hill item and would wait to be prompted.

I said that I wished the Commission would write guest editorials in the Nevada Appeal to explain their positions in light of people (like me) who write negative Letters to the Editor.

At the previous meeting Attorney Mike Rowe said he intentionally didn't respond to public records requests in part due to attorney-client privilege. I noted that attorney-client relations are a one-way street. While an attorney can't say what a client told them, a client is free to tell all. I suggested that instead of denying legitimate requests based on attorney-client privilege, the request should be forwarded to the client (the Commission) who would then be free to respond.

I then went on to say I was 95% sure that Sierra Railroad had been sold to Patriot Rail, and it appeared that Patriot Rail as a company is not interested in passenger operations. I also mentioned that the rumor on trainorders.com is that the Skunk Train line is up for sale, basically for scrap value. I said that Sierra had been up for sale since early in 2008. I said I didn't have all the answers but that's what going on, and suggested it was something for the Commission to look into. I said I didn't know how it would affect the Commission's plan to use Sierra as an operator.

KIM FEGERT'S QUESTIONS ABOUT ADDING TWO COMMISSION SEATS AND NNRF

Then Kim Fegert came up to the podium. Kim is president of the Gold Hill Historical Society. He said he three questions. He came across interesting information about the Northern Nevada Railway Foundation. He said in the minutes from the last Foundation meeting, an amendment to SB 334 was discussed at that meeting to add two new seats to the railroad Commission. The item had three names associated with it: Janice Ayres, Bob Hadfield and (Carson City Mayor) Marv Teixeira.

Kim went on to read from the Foundation Meeting Minutes. One new Commission seat would be for the Foundation and one new seat for Carson City. Kim asked, “is this in fact the case?” Kim asked how that would improve the functioning of the Commission. Kim's third question was about conflicts of interest between the Commission and the Foundation when the Commission funds the Foundation.

Commission Chairman Bob Hadfield is also a boardmember of the NNRF. The Commission has given money to the Foundation.

DISCLAIMER – MY CRITICISM IS FOCUSED ON THE COMMISSION

I personally think the Foundation, as a private non-profit, can do whatever they want to. My concern is about public tax money that is funneled to the private fund-raising group. I especially like Jim Clark, a Foundation boardmember. He hosted the Railway Reflections film series at Piper's Opera House, and I thought it was great!

(One more disclaimer: if you follow the link to the Railway Reflections website, it says they raise funds for the “restoration of the Virginia and Truckee Railroad.” This is a bit of an inside joke. The Virginia and Truckee Railroad is a private tourist line that's been running in Virginia City for over 32 years. They don't see a dime of this money! Whatever money is raised (after expenses it's not much, if any) goes to the Commission, which is restoring what they call the Virginia and Truckee Railway. Sometimes when I see Tom Gray I ask, how's that charity money being spent? Answer: the V&T Railroad is a self-sustaining private entity that doesn't receive government or Foundation money.)

WHO GIVES MONEY TO WHO?

OK, now I'm going to go off on this one, because the supposed Fundraisee (Commission) has been giving money over time to the supposed Fundraiser (NNRF). In My Humble Opinion...

I thank Kim Fegert for bringing this up, he saved me the trouble. Here's my concern: the Northern Nevada Railway Foundation is supposed to raise funds for the Commission. If you ask them, they raised a million dollar donation from NCOT (the Nevada Commission on Tourism). This is their claim to fame, since then the Commission has paid the Foundation more money than the Foundation has raised for the Commission.

DISCUSSION OF NORTHERN NEVADA RAILWAY FOUNDATION

Before I go on, let's look at the million dollar NCOT donation. This is a great source of controversy and angst. The NCOT donation was gotten in part by Janice Ayres, and in part by the work of others not related to the Foundation. At the time Janice Ayres helped get this NCOT money, she was also the Chairperson of the railroad Commission. The question is, which “hat” was she wearing, did she help raise this money as Chairperson or as a Foundation member.

To me the smoking gun is (not) in the Northern Nevada Railway Foundations IRS 990 forms. These are standard publicly available forms that a 501(c)(3) must file if it raises over $25,000 in a fiscal year. You can go to the Foundation Center website and look up these forms for yourself. Just type in Northern Nevada Railway Foundation and choose Nevada, then click find and you get to the page listing the NNRF 990's for 2004-2007.

You will not find any $1 million donation listed in their IRS records. With all due respect, they either did raise the money and forgot to put it in their 990's (not good) or they didn't raise that money. What Kim is getting at is something I ask about later, what is the net-net fund-raising done by the Foundation. The Commission recently gave the Foundation $30,000 to help fund Railway Reflections. While this event is touted by the NNRF as a fantastically successful event, it failed in terms of raising money, which is the NNRF's reason for existence.

More on this in Item 12, where I directly state I can't find the net-net fund-raising numbers for the foundation.

DENNIS JOHNSON'S PUBLIC COMMENT

Next was Dennis Johnson, from Carson City. Dennis is a smart guy who is running against Shelly Aldean for a Supervisor's seat in the November, 2008 election. Dennis has had a long career working for government agencies managing development projects. He is an expert in eminent domain who helped work on the Nevada redevelopment reform legislation after the 2005 Kelo case. Dennis has many (I think correct) complaints about the Commission's (IMHO) lazy management of public money.

Background – in the last meeting Dennis complained that Project Attorney Mike Rowe didn't respond to his request for public documents. (Mike Rowe ignored my requests too.) In addition to giving the (IMHO false) reason of attorney-client privilege, Mike Rowe said that Federal Law prevented him from answering Dennis' request. Dennis knows more about Federal Law than the rest of the room put together.

( I had stated at the August meeting that at least a courtesy reply would be nice, instead of being ignored. To go on a tangent, the Commission often holds love-fests and pats themselves on the back for donating “free time” to the project. I guess Mike Rowe was out of free time that month, because he told me if he responded he would have to bill the Commission and it wouldn't be cheap. This is no reason to ignore public records laws, if you're not going to answer a public records request you have to notify the requester within five days.)

Back to Dennis Johnson's September public comment. He said that after being ignored by Mike Rowe he wanted to thank Bob Hadfield and Kevin Ray for seeing that his request was fulfilled. Dennis went on to say that the documents provided a “little bit of insight and a lot of entertainment.”

Dennis asked Chairman Hadfield to refer Project Attorney Mike Rowe to US regulation 49 CFR 29.106, which says that the Commission must pay all closing costs instead of splitting closing costs with the property seller.

He said thank you and sat down.

NEXT ... ARCHAEOLOGIST REPORT ON HALFWAY HOUSE DIG

Mike Charuso (sp?) the archaeologist for the Halfway House did (part of phase 2C) said the report from the Halfway House did was going to be ready around December, and that in October there would be a Great Basin archaeological conference, where he hoped to present a paper on the bones and other things found at the Halfway House site.

FYI, Halfway House is just north of Highway 50 where the bridge is going to be placed during Phase 2C construction. The right-of-way runs through this protected historic/archaeological site and the site was dug up before construction will be allowed to begin. In a separate meeting, Ken Dorr noted that an 1870's fifty-cent piece was found along with an arrowhead.

6. treasurer report – Ron Allen

Once again there was no Treasurer's report. Ron Allen promised that by next month the Treasurer's report would be complete. This was supposedly due to the way revenues come in and bills are paid.

Washoe County Commissioner (and Railroad Commissioner) Bonnie Weber protested, and said there needed to be a staff member to assist getting the report ready. She was concerned about transparency, and suggested there be a staff person added to help the volunteer Ron Allen. Ron answered that there is a staff person, but the information isn't available.

Last year in October the Commission voted a resolution that this wouldn't happen again, and it has happened three times in the last few months.

Bonnie Weber has been clear on her opposition to this approach. She said at the last meeting that she wouldn't vote on approving the Treasurer's report if there were no written report.

Moving on... Kevin Ray said the Treasurer's report is separate from the next item, and noted that the bills have already been paid for Item 7...

6. ACTION TO RATIFY THE PAYMENT OF BILLS SUBMITTED

Once this item came up Commissioner Dwight Millard asked for clarification on what Kevin Ray just said, that the bills to be ratified “have already been paid.” He gave a mild protest, asking “what exactly are we doing?” He asked if once he gets the report in the future, if he doesn't like something “can I take it back?” Good for him, IMHO. As is usual, in the face of improper procedure, the improper procedure was followed.

Kevin Ray explained that most of the bills are all part of contracts, and things have been done this way for some time. Kevin noted that these bills are part of a previously approved budget. Mike Rowe chimed in that this practice goes back to the Tri-County Railway Commission and their habit of having quarterly meetings.

Dwight confirmed that all the bills were either under contract and/or in the budget. Dwight asked, given all that, “who's watching us to make sure we don't go over budget.”

Ron Allen piped up, “I can answer that, Bob Hadfield and I do.” Now I feel better!

Bonnie Weber asked where the checks and balances were. Ron Allen answered, “we rely on our Engineers.” Ken Dorr spoke about the process where the engineer keeps track of the bills and forwards them to the Commission for payment. He seemed to indicate that the Engineer approves change orders.

Ken Dorr then started talking about widgets and widget price changes in answering Jim Bauschke's answer.

Dwight Millard said he'd really like to see a spreadsheet outlining all the payments.

6. PHASE 2-4 ENGINEERING report – ken Dorr

Ken Dorr mentioned that Phase 2C had been advertised and received FHWA and NDOT approvals. He noted that 25 planholders and a dozen general contractors were looking at the project. He noted that typically 60% of the interested parties submitted bids, so perhaps seven bids.

Ken mentioned that Phase 2C would include the bridge across Highway 50. He noted the bridge would be “the most dramatic V&T sign on the project.”

Update on 2A and 2B, on the last leg of construction. Surface, lining and ballasting was being done, and then a little cleanup work needs to be done, and the section of track from American Flat then above Silver City and down to the Frehner / Road and Highway Builders Pit at the end of Industrial Parkway.

Ken mentioned the Engineer's and Contractor's Special train ride that was being paid for without public dollars.

NOTE: I CAN'T FIND MY TAPE FOR PART 2! The most interesting part of the meeting, Items 9 and 11, are items I will simply summarize. For some stupid reason I can't find my tape! D'oh!

6. 1. Review and possible action to approve a conditional offer to purchase two parcels of property in Gold Hill, NV, Storey County APN's 002-063-22 and 002-63-24, from Robert and Virginia Svetic.  The conditions include, but may not be limited to: 1) the property being appraised at or above the listed asking price; 2) approval by the Commission of the purchase; and 3) a survey of the property being supplied to, and verified by, the Commission. - MICHAEL ROWE

   2. Review and action on the proposal from Manhard Consulting Ltd. to locate the preliminary boundary for APN 02-063-08, Lots 1,2,3 and 16.  This Item will be considered only in the event that the Commission acts to approve a conditional offer to purchase the parcels identified in Item 9A.

Ok, here's the deal in a nutshell. If you drive from Virginia City to Silver City on State Highway 342, you pass through Gold Hill. About a mile out of VC is a steep downhill very sharp S-curve called Greiner Grade (or maybe Greiner's Hill/Curve, I forget.) Once you get out of this S-curve you approach the railroad crossing for the Gray's Virginia & Truckee Railroad tracks as they approach the Gold Hill Depot. Once you cross those tracks, to your right is some vacant land, and behind that, between the vacant land and the tracks is the Gold Hill Depot. This is all before you get to the Gold Hill Hotel.

There are two parcels just past the tracks, one owned by the Grays and one owned by Joe Curtis of Virginia City. Previously the Commission considered leasing Joe Curtis' parcel, but never did follow through on that.

About 100' past the railroad crossing are two more lots owned by a local resident. These lots front onto Highway 342, and the back of the lots touches Telegraph Road, a public road that comes up behind Gold Hill Hotel and leads to the doorstep of the Gold Hill Historical Society's Depot. Telegraph Road also provides access to the railroad tracks.

The Commission's official line is that they need this land for access, though what kind of access was never explained. The upshot is that the land is listed for $80,000, but a preliminary guesstimate from the appraiser felt the land was only worth $60-65,000. The Commission is not allowed to buy land for more than an appraisal price.

The Commission decided not to make an immediate decision, but instead to counter offer $65,000 contingent on the land appraising at $65,000. Notice they are already in negotiations with the landowner before the appraisal is in.

Dennis Johnson got up again to explain to the Commission what, according to Federal Law, was wrong with their approach. He pointed out that the Commission had it backwards, that they were negotiating with the seller before the appraisal was in.

At the end of his comments Dennis mentioned that he was teaching a class in the next few months about managing public money in Federally administered projects. He invited the Commissioners to attend the class.

6. rIGHT oF wAY AcqUISITIONS and attorney's report - MICHAEL ROWE

I don't think there was anything to report, if I ever find my tape 2 I will double check.

6. 1. VIRGINIA AND TRUCKEE RAILROAD REPORT and possible COMMISSION action to approve track use agreement with the VIRGINIA AND TRUCKEE RAILROAD COMPANY – TOM GRAY

   2. Review and action on request of V&T RR to modify the existing track use agreement, or enter into a new track use agreement for the commission owned track including the track constructed in phase 2A/B.  The commission may approve of the request with conditions imposed on the user.  If approved, a new track use agreement would supersede the existing agreement that expires on 31 December 2008; if the existing agreement is modified it would supersede the existing agreement but expire on 31 December with any new conditions that are approved by the commission.

At the beginning of the meeting Bob Hadfield corrected the agenda to separate 11a and 11b so that 11a would simply be Tom Gray's report on the Virginia & Truckee Railroad. The possible action to approve a track use agreement was moved properly into Item 11b.

Tom Gray got up to speak and almost immediately the sparks began to fly. Before the meeting Project Engineer Ken Dorr had paid Tom to run an Engineer's Special on October 15. This is by invitation to all the people who have worked on the project, from Manhard Consulting to various government agencies. This special train will run down much of the reconstructed tracks.

Ken and Tom got into a rather heated discussion of whether Tom was going to be able to provide a train large enough to carry the 200 people who are invited. Tom noted that he still had to run his regular service and that would limit the cars he has available to run the Special. Ken asked at one point, “do you want to cancel the special?” Tom retorted, “do you?” Ken said he wanted his $2000 check back. Cooler heads prevailed and by the next morning Tom and Ken had worked out the issue.

I would note that when you invite 200 people to a special event, significantly less than 200 people will show up. There was probably never an issue in the first place. With all due respect to Tom Gray and Ken Dorr, I am still scratching my head as to why this was part of the V&T Railroad Report, it seems like it would have been better handled offline.

Tom went on to report good things about the season in Virginia City and talked about special events like the Comstock Civil War Re-enactor's Battle Trains.

For 11B, the decision to renew the extended operating agreement allowing the Virginia & Truckee Railroad to operate further down the new tracks was delayed until Granite Construction finished the job in the next month or two. The existing agreement was continued to the end of the year. Not much to report, we're still waiting to see that the Virginia & Truckee gets to operate on the full length of the new track.

6. Northern nevada railway foundation report including financial update on Railway reflections fund-raiser – Janice ayres

Due to the missing tape, I only caught the very end of a Northern Nevada Railway Foundation report by Marcia Burgess and “the Train Man” Jim Clark. At the very end, Bonnie Weber asked if she could attend the meeting mentioned on the 17^th. Marcia Burgess replied that “the meetings are open so anyone can attend.” Weber said OK.

This was a shocking statement to me. For background, I was approached by someone working on an old book project that was supposed to be a fund-raiser for the NNRF. The “Locomotives of the V&T” book was to be reprinted after being updated, and the project manager had moved away from the area. I had asked a few foundation members about the project and they didn't know anything about it. I had planned to go to the early September NNRF meeting to ask about this forgotten project the NNRF was supposed to be financing. A couple foundation members told me the meetings were open to the public.

At an August 31 Comstock Historical Society event I managed, I asked Steven Saylor about attending the meeting. Steven is the only paid staff member, in charge of running Railway Reflections. He told me the meetings were closed.

So when Marcia Burgess said the meetings were open I did my best Horshack imitation from the audience and asked, “is there public comment on this item or not?” Hadfield said, “it's only a report but ... go ahead.”

I got up and outlined my concern that Steven Saylor told me the meetings were closed, but others said the meetings were open. I then make clear that I love the Foundation and Jim Clark, my next comment was not about the Foundation, but about the Commission. I asked “what is the net-net fund-raising for the commission, I'm having trouble getting that number ... I'd kind of like to know have they raised more than they've been given by the Commission? I don't expect an answer...”

6. discussion and possible action to have representation at the Nevada governor’s conference on tourism in Reno in December – Kevin ray

Kevin Ray talked about going to the Governor's Conference. He needs $245 for registration, didn't need travel costs because it was in Reno, and asked about getting a table there for $750 to appear before all the people there, including tour operators.

Bonnie asked (a rather ignorant question for a Commissioner) “who is the Governor's appointee to this commission?” The answer was Dwight Millard, who was out of the room at this point. Bonnie said, “too bad he left. Bonnie wondered if Millard could get a discounted rate to have a booth and attend the conference at a special rate.”

The Commission approved Kevin Ray's attendance at the conference.

6. Project coordinator REPORT - Kevin ray

Kevin Ray, the project coordinator, talked about the Carson City Convention and Visitor's Bureau working with Tom Gray of the Virginia and Truckee Railroad to offer a free train ride for the people of Carson City. Kevin said for the 31 days of October the people of Carson City can come ride the 4pm train for free. The 4pm train takes an extended trip on the newly installed track to Donovan siding.

Bob Hadfield encouraged those people that live in Carson City to go ride the train.

6. Commission chairman report - Robert hadfield

Bob Hadfield said he had no report, then talked a bit that he thinks about the project all the time. He said if anyone thinks he needs to do more, just call him and tell him. He has previously given out his home phone number.

6. COMMISSIONER COMMENTS

John Flanagan, Commissioner from Storey County (Virginia City) mentioned that a proposal was in the works to put windmills along several miles of ridgeline above Virginia City, Gold Hill and Silver City.

WHY RON ALLEN THINKS HE SMELLS LIKE A ROSE AND OTHER LEGAL THEORIES

Ron Allen's comment was most notable. “This was a letter is response to complaints about some of the Commission's practices.” He went on, “It does validate ... sometimes it appears to certain people that we're not doing a satisfactory job in a satisfactory manner, and this vindicates us of that.”

Please note that a complaint letter about SOME of the practices is being used by Ron Allen to vindicate all their practices. Read on for detail, but realize this was a challenge to press the Commission where their practices don't meet with legal requirements. Because this project has received Federal funding, legal requirements include Federal Law and the Code of Federal Regulations. A letter from the STATE AG doesn't vindicate the Commission on CFR requirements.

Back to Ron Allen, complaints had gone to the Attorney General's Office regarding maybe 3 of 20 or 30 items where the Commission allegedly violates government law. The Attorney General wrote a letter to the Commission stating they were closing their file. The letter only addressed minor issues about how the agendas are written. I have not seen this letter yet.

In a conversation with the AG's office this morning (9/10/08) I was told that the AG doesn't have oversight over the Commission because it's a local agency. The AG rep I spoke to said if the public is not happy with the Commission they have to sue them directly in court. The AG made clear that the letter did not represent an approval of all Commission actions, just that nothing the Commission did wrong came under the jurisdiction of the Nevada State Attorney General.

While Ron Allen claimed the AG letter “vindicated” the Commission, the AG said it did no such thing!

LAWBREAKING 1 – HOW TO KEEP THE MEETINGS IN CARSON CITY

I can give two examples where the Commission ignores/breaks state law. The enabling law says the Commission SHALL rotate their meetings among the represented counties, yet every meeting is in Carson City. Here's the part of the law:

Sec. 5. Meetings; limitation of liability of Commissioners.

3. The governing bodies shall each make available an appropriate meeting room and provide adequate clerical staff and equipment to provide adequate notice of the meeting and to produce minutes and audio recordings or transcripts of the meeting and any other assistance necessary to allow the Commission to comply with the provisions of chapter 241 of NRS.

4. The Commission shall alternate the location of its meetings among the facilities provided pursuant to subsection 3.

I was told by a Commission member that if the meetings had to rotate they might only do quarterly meetings, not monthly meetings. GOOD! Perhaps if they only met quarterly they'd have to be more focused on serving the public, or at least they have less opportunity to waste taxpayer dollars.

LAWBREAKING 2 – HOW TO IGNORE THE LAW, LOSE FUNDING AND BE LESS ACCOUNTABLE

Next is a part of the law that says the Commission shall allocate costs among represented bodies by determining the allocation of benefits among the five counties represented:

Sec. 9. Budget; funding of costs; Commission not entitled to distribution of revenue from supplemental city-county relief tax.

1. The Commission shall adopt a budget for its operation and for each project it proposes for presentation to the governing bodies. Each budget must be accompanied by a proposed allocation of the net cost of the budget among the governing bodies which must be based upon the benefit of the Commission or project to the jurisdiction of the governing body or another equally appropriate indicator.

2. Upon final determination and allocation of the costs by agreement of the governing bodies, each governing body shall include its portion of the costs in its budget for the purposes of chapter 354 of NRS and shall fund its share... (by various methods – ed note)

This part of the law is a dead letter. According to the Commission, the budgets have never included the proportionality/allocation estimate called for in Sec 9, Subsection 1&2. On one hand the Commission might say, the “bad” counties like Washoe and Lyon aren't willing to significantly fund the project, so why should they bother figuring out the proportionality.

On the other hand, since the Commission has never shown or proved the benefit to Washoe and Lyon County, why should they be expected to provide funding.

According to the law if this proportionality report WAS included with the budget the “bad” Counties would have to pony up.

In summary, the Commission is too lazy to do a proportionality report as required by law. The Counties would be legally required to pay up according to their share of the benefits. This doesn't happen, thus the Commission blames the evil counties for not paying their fair (unspecified) share.

The worst effect of this “lawbreaking” is that budgets are passed and plans are made without the counties being on the hook to pay for them. And we still wonder why the costs are out of control? There's no incentive to look at ways of saving money.

You can look these up at the Nevada Legislature's page for V&T Special Act.