2008/12/08 Important Notes from the December Meeting of the Nevada State Commission for the Reconstruction of the Virginia & Truckee Railway (http://www.vtrailway.com/)
Click here for the detailed agenda.
Here are the more-important items resulting from the subject meeting, that are not discussed elsewhere. This is by no means a complete transcript. A more in-depth analysis appears on the Reno Railfans website (http://www.renorailfans.com/), specifically at http://www.renorailfans.com/v-n-t-meetings-minutes/2008-12-December-virginia-truckee-reconstruction.html.
Editorial note: The acquisition of an operator for the extended (Commission's) line has been dragging out since 2006. After conducting a bidding cycle, the Commission named Sierra Railroad of California as the winning bidder, but did not award a contract to them. Rather, they issued a Memorandum of Understanding (MOU). This issue is about to come to a head and interested parties may want to familiarize themselves with the Nevada Administrative Code Title 33 to determine whether or not you think the Commission's actions in this matter have the force of law, if a protest is likely, or if a new acquisition process will be required.
Item 6: Treasurer's Report (Ron Allen). A forward pro-forma balance sheet has been projected for June 30, 2010. A positive balance of $787,400+/- is projected.
Item 8 and Item 9: Engineering Report (Ken Dorr) and Legal Counsel's Report (Mike Rowe, Esq). Phase 2A/2B is physically complete and most inspections are complete. This will trigger NDOT reimbursement. Total variance at completion is ($600k). That is, $600k over-run. Preliminary engineering has started for Phase 3 and Right-of-Way (ROW) setting will begin once the engineering is 60% complete. The Commission approved the initiation of property appraisals along the ROW as soon as each ROW section is set. The reason for overlapping the engineering and ROW appraisals is that the latter is a very lengthy process.
It should be noted that the Svetic property at Gold Hill has just had its appraisal completed. By prior agreement with the Commission, the owners agreed to accept the appraised value, and so this acquisition should complete soon.
It was also noteworthy that Q&D Construction is slightly ahead of schedule and has a positive variance. The central pier for the bridge over Highway 50 will be completed at the end of this week. Project completion will be June, or even May with good weather. [The GHHS will take additional aerial photographs as weather permits].
Item 11: V&T Report. Tom Gray introduced his new marketing director, Craig Brinkman.
Items 13 and 14: Sierra Operating Agreement and Carson Depot Remodeling. These items were continued to February. The continuance was at the request of the Virginia & Truckee Railroad and supported by the Gold Hill Historical Society.
Items 15 and 16: Operating MOU with Sierra Nevada Railroad and Transfer of Lease for Locomotive #18 to Sierra Nevada Railroad Corporation. (Robert Pinoli.) This was the pivotal point of the meeting. The Sierra Railroad, in the form of its wholly-owned operating subsidiary, Sierra Entertainment, wanted to novate both subject documents to a new entity, Sierra Nevada Railroad Corporation. Many members of the audience and four members of the Commission realized that this action would permit the company to walk away from any operating agreement if they couldn't make a profit at running the V&T, and that through cross-contracting arrangement with the Sierra Railroad, would allow the Sierra Railroad to take all profits, provide no capital to the new operations, and push all liabilities onto the Nevada entity.
To the gasps of the audience, the Commission approved the novation of the existing MOU to the new company. But, at the insistence of John Tyson, the Commission continued the matter on the lease of Locomotive #18 to future meetings. It was noted that the lease did not even have a definite termination date. In most jurisdictions, this would invalidate the entire lease.
Member Tyson said he would no longer vote on future motions involving agreements with outside parties unless the written agreements were made available to him for review.
The audience applauded.
The Sierra Railroad operated #18 for 21 days in 2007 and 14 days in 2008. This leaves an average of 190 days per year of operation available before 2/18/2016, which is when the current boiler certificate will expire.
Item 17: Sierra Railroad Report (Robert Pinoli). The Sierra Railroad has been doing some guerilla (zero-cost) marketing for the future long-ride V&T: Talking it up at the National Tourism convention and printing a notice on 1.5 Million brochures being distributed for other marketing purposes. No actual investment in the reconstructed railroad was mentioned.
Item 19: Project Report (Kevin Ray). 1,500 free-to-the-public tickets for train rides were distributed by the Chamber of Commerce, and many positive letters were received.