Op-Ed: Deal for Freight Train Service Not Only Shady but Illegal

Editor's note: The author is a board member of the North Coast Rail Authority and a Novato resident. The views expressed here represent are his views only and not of the North Coast Rail Authority. This op-ed is a follow-up to one he wrote for Novato Patch in March. To read the earlier piece, click here.

By Bernard Meyers

Where should hundreds of millions of your tax dollars go ... to pay for police, fire service and schools or to a private freight railroad operator that was able to get a lease with a public agency via back-room dealings and meetings that violated public disclosure law?

What if that lease was never examined to see if it was fiscally prudent?

That scenario may soon be coming down the track, unless that lease is amended to avoid the inevitable result. The public agency is the North Coast Rail Authority, and the operator is the Northwestern Pacific Co.

In January 2006, NCRA requested proposals from operators to haul freight on its right-of-way, which includes tracks that run through Novato. Five entities responded. NCRA’s activities — interviewing the bidders, choosing NWP’s bid, and the negotiations for the lease — were performed by NCRA’s operator committee, whose meetings were held without any public notice and without any public participation. The committee appears to have violated the state law governing the public’s right to observe public business, known as the Brown Act.

• The operating committee did not report in any meaningful way to the public; when it reported to the NCRA board, it did so in secret in board closed sessions;
• The selection criteria utilized by the operating committee and the board was never revealed to the public, and there is no way to determine how or why NWP was chosen;
• In June 2005, the committee met at former Congressman Doug Bosco’s office; in December, the committee apparently interviewed an owner of the Island Mountain Quarry in rural northwest California; between the time the request for proposal was issued in January 2006, and the choice of NWP as the winner in May, NCRA utilized the quarry owner in a pitch to the state for funding, and NWP listed both that owner and Bosco as principals;
• The May 2006 telephonic board meeting at which NWP was chosen violated the law; its notice failed to identify the locations from which members called in and failed to give the real intent of the meeting. No members of the public were present;
• After NWP was chosen, lease negotiations started. While NCRA still had the ability to negotiate with another bidder, it did not - giving NWP every advantage, to the taxpayers’ detriment. Other bids were more favorable (two included a percentage of revenues going to NCRA), but NCRA stuck with NWP;
• The notice for the September 2006 board meeting when the lease was supposedly approved does not adequately indicate that the lease was to come before the board for approval. The result is that the public did not see the lease in its final form before it was signed;
• At no time, from the time the request for proposal was considered through the time the lease was signed, was any member of the public able to comment on the substance of the dealings.

Because a long-term lease can have severe financial repercussions, it is essential for the agency to make every effort to include the public in its decision-making and explain its reasoning. Unfortunately, this lease is the product of secret dealings, with old friends on either side, and without proper public notice or input.

Now that NWP is getting ready to roll, it wants to change some of the lease terms without giving NCRA and the public sufficient time to consider options. The NCRA needs skilled, unbiased counsel to guide it to a fiscally prudent agreement. Over $1 billion in taxpayer dollars could be riding on this. 

We need to have public overview and insist on fiscal prudence. Otherwise, vital public services will be shoved into the baggage car while the operator rides in first class.