THE OHIO RAIL DEVELOPMENT COMMISSION
REGULAR BI-MONTHLY COMMISSION MINUTES

MARCH 12, 2003

CALL TO ORDER AND ROLL CALL

Chairman James E. Betts called the meeting of the Ohio Rail Development Commission (ORDC) to order at 10:04 a.m. on March 12, 2003. Commission members present included: Chairman James Betts, Representative Jeanine Perry, Solomon Jackson, Jim Battin representing ODOD Director Bruce Johnson, Don Yerks, Tom McOwen, Janet Weir Creighton, Herk Wolfe and Mike Ciotola, representing ODOT Director Gordon Proctor. Members absent included Larry Sowers and Senators Larry Mumper and Robert Hagan.

Chairman Betts stated he would have to leave the meeting early and would deviate from the agenda due to several topics that needed be to addressed. He stated the Commission would adjourn to Executive Session in the next room as soon it became available.

APPROVAL OF THE MINUTES OF THE JANUARY FULL COMMISSION MEETING

Chairman Betts asked for a motion to approve the minutes from the January 9, 2003 Full Commission meeting. Commissioner Creighton moved to approve the minutes and Commissioner Wolfe seconded the motion. The minutes were approved as presented.

FINANCE REPORT

Secretary-Treasurer Matthew Dietrich presented the Finance report to the commission members. Mr. Dietrich asked the members to refer to the Project Funding Summary Report found in the packet. He indicated that the GRF (grant) balance for FY 2003 would be $218,949 after all recommended projects were approved. He noted that the balance within the Revolving Loan Fund would be $1,065,050 after the proposed projects were approved.

EXECUTIVE DIRECTOR'S REPORT

Director Seney reported that several meetings have taken place with ODOT regarding the Taft Administration's proposal to merge ORDC into ODOT. He reported that the Merger Task Force that will transition ORDC to ODOT is meeting weekly and that things are going well. Director Seney stated the double-stack clearance issues on the CSX Hamiltion line are being developed into a proposed project. There was a brief discussion on the double-stack project.

COMMITTEE OF THE WHOLE

Chairman Betts convened the new ORDC "Committee of the Whole" to consider proposed projects and other issues.

McDermott Industries - Resolution 03-03

Commissioner Jackson recused himself from discussion. Beverly Lee, ORDC Project Coordinator, provided a brief overview of McDermott's plan to expand its existing operations. McDermott Industries had requested a grant of $25,000 and a loan of up to $250,000 to finance 100% of the costs to build a new spur to service its facility in McDermott. Carl Pertuset of McDermott addressed Commissioner Yerks' questions regarding NS approval of the spur and provision of incentives.

Great Miami & Scioto Railway Trestles Approved Project Briefing

Lou Jannazo presented an approved project briefing on the Great Miami & Scioto Railway Trestle Project. He stated the Great Miami requested $54,400 in grant funding to repair three trestles located at MP 9.7, MP 10.2 and MP 10.5 on the City of Jackson owned rail line in Jackson County. Staff recommended providing $45,200 of the requested grant funding. Fred Stout, President of the Great Miami Railway was present for questions.

Commissioner Yerks stated the Projects Input Summary created by staff was a job well done.

Panhandle Jewett Bridge Repair Approved Project Briefing

Lou Jannazo presented an Approved Project briefing on the Panhandle Jewett Bridge. He stated that the C&OR requested a grant of $95,000 for the repair of its deck plate girder bridge over Conotton Creek at MP 71.85. Staff recommended up to $25,000, not to exceed 26% of total projects costs toward the total project. Bill Strawn, President of the Ohio Central Railroad, was present for questions.

MOTION FOR EXECUTIVE SESSION

Chairman Betts asked for a motion to proceed into Executive Session to discuss personnel issues

in relation to ORDC's merger into ODOT, the early retirement incentive plan, ORDC vs. Gatherco litigation and potential intervention by ORDC in the City of Mentor vs. CSX Transportation Inc. (CSX)/Norfolk Southern Corporation (NS), et. al. matter. Commissioner McOwen moved to approve the motion and Commissioner Creighton seconded it. The motion passed unanimously. The Commission moved to Executive Session at approximately 10:45 a.m.

RECONVENING OF THE COMMITTEE OF THE WHOLE

Chairman Betts reconvened the meeting at 11:55 a.m. He asked for a motion for Don Yerks to be named temporary "Presiding Officer." Commissioner Ciotola so moved and Commissioner Jackson seconded. The motion was approved.

Chairman Betts left the meeting shortly after the vote. Commissioner Yerks asked for a motion to move to the Committee of the Whole. Commissioner Creighton made the motion, Commissioner Ciotola seconded it. The motion passed unanimously.

ORDC Employee Retirement Incentive Plan - Resolution 03-02

Matt Dietrich gave a brief overview of the proposal to for an employee retirement incentive plan that would consist of a two year buyout for all eligible ORDC employees. He stated the plan would cost the ORDC up to $350,000 for PERS retirement costs of those accepting the buyout. Commissioner Wolfe made a motion to take the resolution forward to the Full Commission and Commissioner Jackson seconded. There was no opposition to take it forward.

City of Mentor vs. Norfolk Southern & CSX Transportation, Inc. et al.

Julian Suso, City Manager of Mentor, introduced John Conrad, City Engineer and Peter Poulos, legal counsel. Mr. Suso stated the City of Mentor has a congestion problem. Mr. Suso noted that the City advised the Commission about the Plaza Boulevard project in 2000. He stated that Mentor currently has two major crossing issues, one being a major grade separation project at Heisley Road, the other being the Plaza Boulevard extension project. Mr. Suso stated that Mentor is seeking court approval to extend Plaza Boulevard across CSX and NS tracks and that the case is going to trial in a few weeks. He asked ORDC not to interfere with the lawsuit, but if ORDC chooses to interfere, Mentor would like the ORDC to ask the railroads to assist with the Plaza Boulevard project implementation.

John Conrad, Mentor's City Engineer stated they have the 6^th largest commercial area in the State of Ohio. Studies on the corridor indicate it will be experiencing gridlock in the near future. Several maps were distributed illustrating the proposed Plaza Boulevard extension. Commissioner Yerks asked if Mentor had given any thought to doing a grade separation. Mr. Conrad stated the cost was too high, somewhere around $15 million for a grade separation.

Peter Poulos, legal counsel for the City of Mentor, said the ORDC submitted documentation to the STB when Conrail was being acquired by CSX/NS showing their concerns with the Mentor congestion problem. He stated the ORDC has been well aware of the problem in Mentor. Mr. Poulos asked for the ORDC not to interfere and let the courts decide on how to resolve the congestion problem. He stated if ORDC did interfere, it should be on behalf of the City.

Joseph Santoro, attorney for Norfolk Southern, stated that NS has concerns about the Plaza Boulevard project because there are two sets of tracks 100 feet apart. NS is concerned with the crossing having approximately 15,000 cars and trucks daily for traffic, with 82 trains a day running in this area. He distributed copies of a letter and e-mail from the ORDC stating its concerns about the safety of this project. Mr. Santoro stated he believed an underpass would be possible with the cost around $10 million according to NS engineers using engineering parameters of the City. Mr. Santoro asked ORDC to intervene in this lawsuit on the railroad's behalf.

Larry Solvensky, attorney for CSX, stated CSX has the same safety concerns as NS. He stated CSX has operational concerns in addition to safety. He stated that ORDC has a unique perspective of crossing safety that the court needs to hear and requested ORDC to intervene in the lawsuit on the railroads' behalf.

Commissioner Yerks deferred action to the Full Commission. A motion was made by Commissioner McOwen to move the issue for vote to the full commission, seconded Commissioner Ciotola. Motion approved with seven votes to the affirmative, one recused.

The Committee of the Whole adjourned at 12:55 p.m. for a short break and reconvened at 1:10 p.m.

Tier 2 Rail Rehabilitation Projects - Resolution 03-04

Lou Jannazo gave a brief overview of the Tier 2 projects as described in Resolution 03-04. He stated the Project Input Summary provides a good overall description. Commissioner Creighton made a motion to take the project before the full commission for approval and Commissioner Wolfe seconded. The motion was approved.

R. J. Corman Railroad, Western Ohio Line - Resolution 03-05

Lou Jannazo presented a project briefing on the R. J. Corman (RJC) project. He stated RJC had requested a $520,502 grant to rehabilitate its Western Ohio line from Lima to Celina, 25 miles of the 81-mile Western Ohio system. He stated that staff recommends that ORDC provide a $300,000 grant toward the rehabilitation of the 25-mile Lima to Celina Line. Brad Brown, Sales/Marketing Manager from RJC, was present. He stated this rehabilitation project will keep train speeds up to 25 mph. Commissioner Ciotola inquired about the life expectancy of the proposed improvement. Mr. Jannazo responded 7 to 10 years. Commissioner Creighton made a motion to take the project before the full commission for approval and Commissioner McOwen seconded. The motion was approved.

WESTCO Urbana Industrial Track Rehabilitation Resolution 03-06

Lou Jannazo presented a project briefing on the WESTCO project. WESTCO requested a $250,000 grant to rehabilitate 5.3 miles of track on the Urbana Secondary which is owned by WESTCO and served by the Indiana & Ohio Central Railroad. Staff recommended that $155,800 be provided from FY 2003 funds with the remainder considered in FY 2004. Mr. Jannazo stated the railroad has been investing in the line. Larry Himes, Secretary-Treasurer of WESTCO, was present for questions. Mr. Himes stated the grant was to WESTCO not the I&O Railroad. He also noted that WESTCO had secured other funds for the project through a State Infrastucture Bank loan. Commissioner Wolfe made a motion to take the project before the full commission for approval and Commissioner Creighton seconded. The motion was approved.

Camp Chase Industrial Railroad Rehabilitation Resolution 03-08

Lou Jannazo presented a project briefing on the Camp Chase project. Camp Chase requested a $312,120 grant and a $312,210 loan for the rehabilitation of its entire 14 mile long railroad between Columbus and Lilly Chapel in Madison County. Staff recommended loaning Camp Chase the entire $780,300 needed to upgrade the line. Mr. Jannazo stated that Camp Chase needs ties to improve speed on the line. Russell Peterson, President of Camp Chase was present for questions. Commissioner Wolfe made a motion to take the project before the full commission for approval and Commissioner McOwen seconded. The motion was approved.

W&LE River Styx Bridge Repair Resolution 03-07

W&LE Akron Subdivision Line Rehabilitation Resolution 03-09

W&LE Sandyville Line Rehabilitation Resolution 03-10

Commissioner Wolfe recused himself. Lou Jannazo presented project briefings on the River Styx Bridge Repair, Akron Subdivision Line and the Sandyville Line Rehabilitation. On the River Styx Bridge project W&LE had requested a $124,000 grant and a $496,000 loan to repair its bridge at MPH 143.32 on its Akron to Spencer to Carey mainline and staff recommended full funding of this request. On the Akron Subdivision Line, W&LE requested a $52,000 grant and a $208,000 loan for the rehabilitation of a 22-mile section of the mainline between Akron and Spencer on the W&LE Akron Subdivision line and staff recommended proceeding with the full loan request. On the Sandyville Line W&LE requested a $42,000 grant and a $166,208 loan for the rehabilitation of its 13-mile long Sandyville line and staff recommended proceeding with the full request. Steve Wait, President of W&LE was present for questions. Commissioner Yerks questioned why ORDC continued to fund W&LE projects while W&LE still has a lawsuit pending against ORDC and stated that the W&LE lawsuits cost ORDC significant funding for defense. Commissioner Yerks made a motion to table all three projects. Commissioner Ciotola seconded it. Jim Seney called for discussion and raised safety issues about the River Styx Bridge project. Steve Wait stated WLE had already made temporary repairs on the bridge and it would be okay for one or two more years. Mr. Wait asked the ORDC to take the projects off the table and he'll take the message about ORDC's issues with W&LE back to Brewster. Commissioner Yerks made a motion to accept the W&LE's withdrawal of Resolution 03-07, 03-09 and 03-10. Commissioner Ciotola seconded it. All present approved the motion. Mr. Wolfe had recused himself.

ADJOURNED COMMITTEE OF THE WHOLE TO FULL COMMISSION

The Committee of the Whole adjourned at 2:05 p.m. for a short break.

RECONVENED TO FULL COMMISSION

The Full Commission reconvened at 2:06 p.m.

CALL TO ORDER

Commission members present included: Presiding Officer Don Yerks, Solomon Jackson, Jim Battin, Tom McOwen, Janet Weir Creighton, Herk Wolfe and Mike Ciotola. Members absent included: Chairman Jim Betts, Larry Sowers, Senators Robert Hagan and Larry Mumper, Representative Jeanine Perry.

ORDC Employee Early Retirement Incentive Plan - Resolution 03-02

Chairman Don Yerks asked for a motion to approve Resolution 03-02. Commissioner Creighton made a motion to approve the Resolution. Commissioner Wolfe seconded. Chairman Yerks stated he was reluctant to spend the money set aside for the early retirement incentive plan because he would rather see the funds applied toward future rail projects. Director Seney responded by noting that ODOT has previously indicated that in the event of an emergency they would make the buyout work. He also indicated the money set aside for the retirement plan is spread over a period of fiscal years. The roll was called. Resolution 03-02 passed with six affirmative votes, two absent and one abstained.

McDermott Industries - Resolution 03-03

Commissioner McOwen made a motion to approve Resolution 03-03. Commissioner Battin seconded. A short discussion followed. The roll was called. Resolution 03-03 passed with five affirmative votes, one negative, two absent and one recused.

Tier 2 Rail Rehabilitation Projects - Resolution 03-04

Chairman Don Yerks asked for a motion to approve Resolution 03-04. Commissioner Creighton made a motion to approve the Resolution. A short discussion followed. Commissioner McOwen seconded. The roll was called. Resolution 03-04 was approved with six affirmative votes, one negative, and two absent.

R. J. Corman Railroad, Western Ohio Line - Resolution 03-05

Chairman Don Yerks asked for a motion to approve Resolution 03-05. Commissioner McOwen made a motion to approve the Resolution and Commissioner Jackson seconded. The roll was called. Resolution 03-05 was approved with six affirmative votes, two absent and one abstained.

Westco Urbana Industrial Track Rehabilitation Amended - Resolution 03-06

Staff stated that because the W&LE projects had been withdrawn, FY 2003 funds were now available to fully fund the the WESTCO project in FY 2003. A motion to amend Resolution 03-06 to increase FY 2003 grant funding from $155,800 to $250,000 was made by Commissioner McOwen and seconded by Commissioner Wolfe. The amendment passed with seven affirmative votes and two absent.

Commissioner Wolfe made a motion to approve amended Resolution 03-06 and Commissioner Jackson seconded. The roll was called. Amended Resolution 03-06 was approved with seven affirmative votes and two absent.

Camp Chase Industrial Railroad Rehabilitation - Resolution 03-08

Chairman Don Yerks asked for a motion to approve Resolution 03-08. Commissioner McOwen made a motion to approve the Resolution. Commissioner Ciotola seconded. The roll was called and Resolution 03-08 was approved with seven affirmative votes and two absent.

City of Mentor vs. Norfolk Southern & CSX Transportation, Inc. et al.

Commissioner Jackson recused himself. A written motion was distributed to the Commissioners. Commissioner Wolfe made a motion to amend the motion to clarify that ORDC would intervene "in opposition to the at-grade crossing." Commissioner Ciotola seconded the amendment. The roll was called and the amendment was approved with six affirmative votes and one recused. Commissioner Ciotola then made a motion to approve the amended motion and Commissioner Yerks seconded. The rolled was called and the amended motion passed with six affirmative votes and one recused.

COMMISSION BREAK

The Commission adjourned at 2:44 p.m. for a short break and reconvened at 2:49 p.m.

OLD BUSINESS

Commissioner Yerks asked about the status of the rail consolidation project at Toledo and the elimination of Nasby diamond. Jim Seney responded the Nasby diamond project is on hold. Commissioner Yerks also asked whether the Columbiana County Port Authority project funds which were not being used at the present could be used on one of the rail rehabilitation projects this year. Mr. Dietrich answered that the use of these encumbered funds for an approved project would not be prudent.

NEW BUSINESS

Commissioner Yerks passed out TMACOG's National Passenger Plan.

Jim Ong from the Brotherhood of Locomotive was recognized to speak. He commended the Commission for their actions on the at-grade crossings issue and that approving crossings at-grade is going backwards. He stated the brotherhood has started a program of retiring crossings and they don't want a new one, particularly in a high density situation. He said he is not privy to the W&LE lawsuit, apparently the W&LE upset the Commission in some way. He stated the actions of the Commission affect his members who work on these railroads and would prefer to see projects judged on the merits of the project and not on whether or not someone is angry with the W&LE.

At this point Commissioner Creighton excused herself from the meeting.

PUBLIC COMMENT

Spence Wendelin Maumee & Western RMW Ventures

Spence Wendelin, President of the Maumee & Western Railroad, gave an overview of his loan situation. He asked the Commission to waive his $600,000 balloon payment to the ORDC so that he could invest $600,000 back into his line along with $400,000 from RMW. He asked that the Commission make a motion to turn the loan into a grant. In lieu of that action, he asked that the Commission delay action on the balloon payment until May.

Jim Seney stated the Commission should not to do this because the Maumee & Western and RMW Ventures do not have the capital to rebuild the railroad, and the loan should be left to run its course. Debate ensued. Commissioner Yerks stated the matter should be tabled for now. Commissioner Wolfe made a motion to table the request and Commissioner Ciotola seconded it. The motion was tabled.

Commissioner Yerks adjourned the meeting at 4:03 p.m.