Terri Shaw's report on Commision meeting

Meeting of C&TS Railroad Commission
Saturday, January 25, 2003
Antonio, CO
All Commissioners were present.
Item: Minutes of the January 11, 2003 meeting were approved.
Item: Chama “Main Street Enhancement” program.
Chairman Salisbury introduced Joe Garcia of the New Mexico Highway and Transportation Department to explain the improvement work on Highway 17 to begin in the fall. This program is currently in the planning stage with about 30% designed. These highway improvements will directly impact portions of land owned by the C&TSR Commission. He wanted the commission to see the designs as currently laid out on. Another meeting will be held at Chama City Hall at the 50% design stage, in March 2003. At that time, the design will receive its last public input regarding parking, drainage, and merchant parking. Then the design will be frozen, and “you won’t see us anymore, until heavy equipment shows up to begin construction.”
The main impacts on the C&TSR property involve parking and a detention pond. The parking pattern used on Terrace Avenue must be changed from perpendicular to parallel parking. This will result in a loss of parking spaces. The other point of impact is south of the southern exit from the railroad parking lot. A catch basin for water runoff is to be constructed in the area sometimes called “the park.” [Note: this is in the same general area but north of the location considered for the construction of a car repair facility by the Friends.]
Mr. Garcia reiterated several times that the on-street parking as currently and historically practiced cannot continue, due to the need to conform to Federal highway design and safety standards. There must be two full-width driving lanes, with full-width shoulders on each side, then parallel parking only will be allowed on the east side of the highway (the side owned by the C&TSR Commission). Mr. Garcia also stated that the state expects the traffic on Highway 17 to triple in the next 20 years and they want to make the improvements now.
Concurrent with the building of the mile-plus of roadway enhancements is the rebuilding of the highway bridge over the Rio Chama just north of town.
Both of these projects are scheduled to start after the railroad season is over, about November of 2003. The work for the bridge rebuilding project is scheduled to be 45-60 days in length and the Chama Main Street Improvements are scheduled to be approximately 90 days.
He gave his phone number in Santa Fe for oral comments: 505-827-5489.
Item: Operating Company Negotiations.
Commissioner Malnar was called on to summarize the status of negotiations with RGRPC. [Reporter’s note: meetings were held Monday, January 20th and Wednesday, Thursday, and Friday January 22-24.] He stated first that negotiations were incomplete. There are two categories of issues that are being discussed: holdover issues from 2002 about amounts owing from the commission to RGRPC and vice versa and the terms of an operating agreement.
As to the first category, it had been discussed at the beginning of the week with an agreement to disagree and explore the possibility of arbitration. RGRPC’s negotiator, Rich Casford, had presented some new ideas on Friday and Malnar would be discussing them with him. Malnar stated his preference for resolving the amounts between the parties instead of spending money on arbitration.
As to the second, he and Casford have reviewed how the railroad operates and the roles and responsibilities that must be filled. They are making a distinction between an operating contract model and a management contract model. The former is what has existed in the past where railroad property was leased to a company that operated and maintained the railroad and paid rent to the commission from its revenues. However, none of the proposals responding to the RFP accepted this model. Under the management contract model discussed, RGRPC would conduct marketing and advertising, sell tickets, train and supervise the employees carrying out reservations, operations, and maintenance tasks and revenues would flow to the commission. The commission would pay the management company would be paid its expenses and a management fee on a periodic basis. He concluded that there are some sticking points in this model yet to be worked out.
Q&A
Q: At the meeting two weeks ago it was stated that the track and shop projects would be separated from the management contract, was this still the case?
A: [Malnar] This is an issue to be resolved. RGRPC says it has to have control over the maintenance work during the operating season.
Q: On the amounts owing from one party to the other, how far apart are they in dollars?
A: [Malnar] The amounts requested by one from the other are less than $100,000. The disputed amounts are about $60,000 from RGRPC to the commission and $30,000 from the commission to RGRPC. [Note: no one asked what arbitration would cost.]
Q: How much does it typically cost to run the railroad?
A: About $2-2.5 million.
Q: How long a contract is being discussed?
A [Malnar] Because this is a new model and no one know quite how well it will work, they are thinking that it will be for a year to try it out and make adjustments.
Q: Why doesn’t the commission hire other managers and run all aspects of the railroad?
A: [Malnar] We have to hire more than a general manager, there are other management positions that would have to be filled in a very sort time. And there is a lot of work that needs to be overseen in addition to operation – locomotives, passenger cars, track improvement.
Item: Other Business
Chairman Salisbury first called on Friends’ President, Terri Shaw.
Ms. Shaw stated that because the Friends was a co-applicant with the commission on the EDA grant, she had been provided with copies of the applications to be the project manager. She had reviewed them and e-mailed a memo to the commissioners on Thursday. The purpose of her memo was to highlight job aspects that the commission needed to determine before the screening and selection process could go forward.
She said that of the 13 resumes received, there were some with experience working with steam locomotives and many with project management experience in manufacturing and construction. Of the ones with steam experience, very few were qualified to make the kind of judgments that a project designer would have to make. Consequently, the commission needed to determine how it was going to get this level of advice.
Ms. Shaw then introduced Barbara Deaux, Executive Director of the North-Central New Mexico Economic Development District. EDA contracts with her agency to identify and plan projects for EDA funding. On the C&TS’s project she will act as a liaison between EDA and the commission. She described to the commission what kind of professional advice the EDA would want the commission to have to represent its interests and answered their questions.
Ms. Shaw commented that at this stage of the granting process, the information EDA requested was aimed at bringing to light factors that might cause the project to stall, not be completed, or cost more than anticipated. Ms. Deaux characterized these factors as legal issues, lack of proper facilities to do the work or inability to manage or accomplish the planned effort.
Ms. Shaw went on to outline the aspects of the project manager position that needed commission determinations: clarification of duties, whether it was to be a full time or part time position, the duration of the project, the salary range and relocation.
Q&A
Q: The job announcement stated that either individuals or companies could apply. Did any competent engineering firms apply.
A: [Shaw] Because the commissioners had not had a chance to review the resumes nor had she and the commissioners yet discussed the applicants, it was not appropriate to comment on that.
Q: Why is the Friends involved in this grant at all?
A: Because the Friends is providing half of the required match.
Q: How will the funds be administered?
A: The Friends and the commission have a memorandum of understanding that calls for the commission to be the lead agency, receive the funds, and pay program expenses.
Q: [Malnar] Your list is the kind of things that one would expect in a job description, was a job description written prior to publication?
A: The description that the commission published said only that the project manager would be responsible for all aspects of the program, which I interpret to mean someone with the technical expertise and experience to judge what work needed to be done and devise the sequence and strategy of the repairs.
Comment: [John Swartz] Work on the locomotives must satisfy the FRA as well as the EDA.
Comment: [Shaw] Yes, the FRA is the regulator and its regulations must be satisfied. However, in doing so, how long it takes and what it costs are not really of concern to them. The EDA does care about such things.
Q: When can matching money be spent?
A: [Deaux] Typically EDA wants the matching funds to be spent at the same time as the grant. In this case, work has already begun. The commission has requested what is called an early start date. If approved, funds from both the commission and the Friends can be spent before the grant money starts to flow.
[Note: another reporter has delivered the opinion that my participation in the “evaluation of a field of applicants which includes the RGRPC raises some large issues of fairness and protection of the interests of the C&TS versus the interests of the RGRPC.” First, he misunderstands the definition of conflict of interest. Legally, such a conflict exists when the interest of a decision maker who stands to financially gain from the decision is not revealed to the decision making body. In this case, I and my successor will participate in the screening and evaluating process but the selection decision will be made by the commission and the Friends’ board. Obviously, the commissioners know that I care about RGRPC and will consider it in weighing my opinions. Second, the Friends are contributing significant funding to this project and our participation in choosing the project manager is a requirement for that contribution.]
The Chairman then asked for other questions from the audience.
Q: What is the commission planning to do about marketing?
A: [Salisbury] We haven’t gotten that far yet.
Q: Business in Chama are getting inquiries and do not have any printed information to give them. Could they go together and pay for printing copies of last year’s brochure or rack card to send out?
Comment: The brochure and rack card are copyrighted property. Also, the commission should review and approve the content of anything that is mailed to the public.
A: [Salisbury] Perhaps some of the people wanting to have such material should get together and draft something.
Comment: The commission has made intellectual property rights a big issue. The kind of publication we are talking about is the Commission’s intellectual property and it should step up to the plate to decide what the card or flyer will say.
Carl Turner and Dick Cowles described efforts that are being made to obtain some additional NM funding for marketing.
Q: Can you today say whether the railroad will operate this season and on what date it will start?
A: [Salisbury] No.
A: [Turner] It will run.
Comment: There are several factors that affect the answer to this question and no one should believe that being ready to operate will be easy.
A: [Malnar] While we want to speak optimistically, the commissioners recognize that we may not make a start date of Memorial Day weekend.
Next, Mark Yates, supervisor of the shop work, was called on for a report. He reviewed the work being done in Antonito on tenders and passenger cars and the work being done in Chama on locomotives.
Q&A
Q: [Malnar] What is the approach to working on the locomotives – all concurrently or is there a priority?
A: 487 is the priority but getting it done first depends on what repairs are found to be needed, getting materials, and fixing the driving boxes, which can’t be done at the Durango & Silverton as contemplated. A slotter or vertical shaper was needed to do the driving boxes and the commission was trying to secure one. [Note: RGRPC purchased this equipment but funds to ship it from the California State Railroad Museum and set it up in the shop has not yet been authorized by the commission.]
Q: What about work on the boilers?
A: This week he received the inspection report on 484 [Note: after the commission reimbursed RGRPC for the consultant’s fee]. At the TRAIN convention in November, the FRA/TRAIN Standards Committee reported some changes in the calculations to be made for the new Form 4. Consequently, the consultant will be making some changes but it does not expect the overall results to change.
Q: Did the consultant find anything you didn’t expect?
A: Yes, a portion of the front flue sheet will have to be replaced. The shop has ordered the sheet metal for it and will have it shaped to fit.
Comment: [Malnar] It sounds like we’re falling behind schedule.
A: There are always unanticipated problems. We anticipated that the driving boxes would need work but not that the D&S could not do the work.
Q: Can anyone else do the work?
A: Maybe the Grand Canyon shops, I haven’t researched others. I have checked with machine shops in Farmington but they don’t have slotters.
Q: Do you know how much money is being saved by the work being done in house on the wheel lathe?
A: No, I don’t really know.
Comment: The shop crew is to be congratulated for getting it working. [applause]
The Commission then passed a motion that Steve Malnar work on developing an interim rack card.
Then there was a discussion about going into executive session. This was not on the published agenda but could have been added by amending the agenda at the beginning of the meeting. Since this was not done, another meeting had to be scheduled.
The next meeting set for Saturday, February 8, 2003 in Chama, NM.