MINUTES OF THE OHIO RAIL DEVELOPMENT COMMISSION

REGULAR BI-MONTHLY MEETING

JANUARY 13, 2005

CALL TO ORDER AND ROLL CALL

The meeting was called to order by Chairman James E. Betts at 9:43 a.m. Members present included: Chairman Betts, Dan Roberts, Howard Wood, Tom McOwen, Herk Wolfe, Eric Neff, Solomon Jackson, Larry Sowers and James Hartung. Eight voting members present; one absent.

Members absent included: Janet Weir Creighton, Representatives Jeanine Perry and Steven Buehrer and Senator Robert Hagan.

APPROVAL OF THE MINUTES OF THE NOVEMBER MEETING

Chairman Betts asked for a motion for approval of the minutes from the November meeting. Commissioner Sowers moved to approve the minutes and Commissioner Hartung seconded the motion. The minutes were approved as presented.

EXECUTIVE DIRECTOR’S REPORT

Executive Director Seney indicated that his Executive Director’s report had been distributed and he would be happy to answer any questions anyone may have. Commissioner Jackson asked about the retirement of Dave Reid and whether Tim Perkins, who is assuming Mr. Reid’s duties, was ready to take on the role of track inspector, due to the job’s complexity and Mr. Reid’s years of field experience. Director Seney reported that Tim has trained with Mr. Reid and that Mr. Reid is available to us on a consulting basis, if necessary. Director Seney announced that he is very comfortable with Tim assuming these new duties. He also reported that at least two other staff members will be trained in track inspection.

Commissioner Hartung took an opportunity to thank Director Seney for his “outstanding presentation on the Ohio Hub” that he recently made in Toledo. He indicated the presentation was extremely well-received and was pleased to have had an opportunity to see it. Chairman Betts echoed Commissioner Hartung’s sentiments.

Commissioner Wood announced that he would “re-look at the scope and availability of funding for the Ohio Hub study” (note: there was a reduction in the amount budgeted from ODOT to ORDC from $500,000 in federal planning funds to $150,000). Director Seney thanked Commissioner Wood for his offer.

FINANCE REPORT

Secretary-Treasurer Matthew Dietrich presented the Finance Report to the Commissioners (page 3 in the Commissioners’ packets). Mr. Dietrich reported that a total balance of $921,340 is available through FY ‘05 (June 30, 2005). Chairman Betts asked if anyone had any questions regarding the Finance Report. There were no questions.

OHIO HUB STUDY PRESENTATION

Director Seney gave a presentation on the Ohio Hub Study. The presentation is what Marie Keister and ORDC staff (Director Seney, Don Damron, Stu Nicholson and Lynda Nelson) is using to promote the passenger rail system throughout Ohio. To date, staff members have met with community leaders and have conducted open public meetings in the following cities: Toledo, Lima, Columbus, Springfield and Cincinnati. A meeting for the Galion/Mansfield area is scheduled in February. The cities of Dayton, Cleveland and Youngstown will be scheduled for presentations soon. Director Seney reported that these meetings are being well attended and very well received.

PROJECTS

There are no projects/resolutions to approve at this meeting.

APPROVED PROJECT BRIEFING

Ohio & Pennsylvania Railroad - City of Columbiana Emergency Culvert Repair

Mr. Lou Jannazo, ORDC’s Chief Planner, presented the Approved Project Briefing for the emergency culvert repair in the City of Columbiana. The City of Columbiana applied for 50 percent grant funding to replace the culvert at MP 14.3 on the Columbiana County Port Authority-owned and Ohio & Pennsylvania Railroad-served rail line. Hurricane-related rains have caused excessive flood damage to the culvert and damage to the track. Director Seney has committed to provide $45,000 in grant funding toward the total cost of the project; expected to be approximately $80,000 without contingencies. Approximately $9,000 in engineering work is needed for the project. The City of Columbiana will fund this expense as well as an additional $14,000 toward the total project cost. A short discussion followed.

INFORMATIONAL BRIEFINGS

Appraisal of the Panhandle Rail Line

Matthew Dietrich distributed the appraisal review summary of the Panhandle Rail Line which was conducted by Mr. George Wehner and Mr. John Hentz for ME Companies and reviewed by Mr. John Garvin and Dr. Frank Stapleton of Continental Appraisal Company. The appraisal was broken into two categories: 1) an appraisal of the track and fixtures (as submitted by George Wehner for ME Companies and reviewed by Dr. Stapleton for Continental Appraisal Company) and 2) an appraisal of the real estate (as submitted by John Hentz for ME Companies and reviewed and adjusted by John Garvin for Continental Appraisal Company). The track and fixtures portion of the appraisal was agreed upon at a value of $17 million. However, the real estate portion of the appraisal identified a discrepancy between the appraiser and the appraiser reviewer’s determination in its value. The appraised value of the corridor, as submitted by ME Companies, was estimated at $14.7 million. Adjustments made to the appraised value by Continental were estimated at $7.5 million. Therefore, the adjusted real estate value is currently estimated to be $7.2 million. Discussion followed.

Update on Trackage Rights and Rail Service Agreements;

Potential Sale of the Piney Fork Line to Ohi-Rail Corporation

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Lou Jannazo presented an overview of the potential sale of the state-owned Piney Fork Line. He indicated that in December, Director Seney signed a multi-party agreement to enable the Columbus & Ohio River Railroad to gain trackage rights to serve Apex Environmental/Liberty Waste Transportation located at MP 68.1 on the line. An appraisal review of the line will be completed soon. When the final appraised value is determined, an offer letter to Ohio-Rail Corporation, the interested buyer, will be sent. The appraised value of the line, prior to receiving verification from the appraisal reviewer, is estimated at $1.2 million; $1,182,000 in track and fixtures and $100,000 in real estate. ORDC staff will submit a letter to Ohi-Rail Corporation, upon Commission approval, offering the Piney Fork Line to Ohi-Rail for the appraised value of the line, whatever that number may be once the appraisal reviewer has completed their report. ORDC staff is requesting that the Commissioners provide staff direction as to how, and whether, to proceed with negotiations on the Trackage Rights and Rail Service Agreements. Discussion followed. Mr. Richard Delatore, Vice President of Schiappa Coal Company, addressed the Commission and spoke on behalf of Ohi-Rail Corporation. Mr. Delatore indicated that the principals of Ohi-Rail are the same principals who own the Apex Landfill and who have worked tirelessly to keep the railroad in existence. Apex was recently sold to Liberty Waste Transportation. He reported that a previous loan that ORDC approved to Ohi-Rail would be paid back by rolling it into the purchase price of the line (approx. $384,000). He thanked the Commission for its consideration of the sale. Additional discussion followed that resulted in the Commissioners instructing staff NOT to offer the Piney Fork to Ohi-Rail at Net Liquidation Value. The Commissioners want further investigations to determine if NLV is the proper price. They expressed concerns that ORDC might get more than NLV for the line because of the new Apex/Liberty municipal solid waste facility. Chairman Betts recommended that ORDC staff revise the letter (Exhibit “C”, page 22 of packet) and indicate that ORDC will be willing to enter into negotiations with Ohi-Rail regarding a potential sale of the Piney Fork Line but pending the final approval of the Commission.

OLD BUSINESS

Chairman Betts acknowledged Stu Nicholson, ORDC’s Public Information Officer, for keeping the Commissioners apprized of pertinent information concerning ORDC. Chairman Betts asked Mr. Tracy Drake, Executive Director of the Columbiana County Port Authority, to speak on one of the articles Stu disseminated regarding the Port Authority and the Ohio & Pennsylvania Railroad. Mr. Drake reported on an issue with an escrow account that exists as a result of Railroad Ventures, Inc., the previous operator of the line, going into bankruptcy. The Railroad left substantial amounts of deferred maintenance that the Port Authority is trying to correct. Mr. Drake identified that once these issues are resolved, and a determination is made regarding the release of the funds from the escrow account, the Ohio & Pennsylvania Railroad, the line’s new operator, projects more traffic on the line that has ever occurred in its history.

NEW BUSINESS

Chairman Betts acknowledged Director Jim Seney for his 35 years of service to the State of Ohio. He presented Director Seney with a service pin and certificate.

PUBLIC COMMENT

Bill Allman spoke on the monthly meeting that MORPC hosts (Citizens Advisory Committee) and indicated that it is a very worthwhile meeting to attend. Mr. Allman also reported that The Sierra Club of Ohio is undertaking an effort to support the Ohio Hub plan. The Sierra Club has 5000 members.

Art Arnold, President of the Ohio Railroad Association, spoke on the Ohio Hub Economic Impact Study that ORDC proposed and his Association had concerns about and reported that he has had several meetings with members of the State Controlling Board, ODOT and others regarding finding an alternative funding source to fund the studies. Commissioner Roberts asked why Mr. Arnold did not voice his concern at the previous meeting when the studies were presented. Mr. Arnold responded by indicating that he felt it was necessary to get the opinions of his members prior to raising any type of opposition to the studies.

Mr. Wayne Sittler, a representative of Jamestown Trace (the development that was flooded in the City of Columbiana), expressed his appreciation of the Ohio Central’s interest in the line and its willingness to repair the issues that will prevent future flooding. Mr. Sittler also thanked the Rail Commission for its assistance in this critical situation.

ADJOURNMENT

Chairman Betts adjourned the meeting at 12:00 p.m.