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Untitled (2) Betts Patterson ^ ��.. Mines MAR - 9 200 Attorneys at Law Taro Kusunose tkusunose@bpmlaw.com March 8, 2001 VIA FACSIMILE AND POST Ms. Shelly A. Badger Yelm City Administrator City of Yelm, Washington 105 Yelm Avenue West P.O. Box 479 Yelm, WA 98597 Re: Assignment of YRPL to the City of Yelm Dear Shelly: I have enclosed a copy of the letter I recently received via email from the Association of American Railroads ("AAR"). The reporting mark"YRPL"has now been successfully assigned to the City. During my review of the document, I noticed that that point of interchange with BNSF (bottom of page 1 of the letter) is erroneously listed as Yelm, rather than as Roy, as it should have been listed. I have pointed out the error to the AAR and I should be receiving an amended assignment letter shortly. I now plan to work with Steve Day to begin the temporary embargo process soon. On a different note, I have been giving the Department of Fish and Wildlife issue some further thought. I should advise you that the City will not be able to take advantage of the environmental indemnification provision in the Donation Agreement(wherein BNSF agrees to indemnify the City for the costs of certain kinds of environmental cleanup above and beyond the initial ten thousand dollar outlay) if we cannot forward a demand letter from the Department to BNSF by November of this year. On the other hand, even if we are able to get the demand letter to BNSF on time, based on my review of the Agreement and the facts, BNSF could potentially make a credible legal argument A Professional Service Corporation One Convention Place,Suite 1400 ui(206)292-9988 701 Pike Street fax(206)343-7053 111046/030801 1232/57820001 Seattle WA 98101-3927 www.bpmlaw.com Where business gets results Ms. Shelly A. Badger March 8, 2001 Page 2 that the provision simply does not apply under our facts (for other reasons I will not discuss here). Accordingly,we also have some reason to not want to see that letter any sooner than it has to arrive. In the end however, if the Department is going to send the City a demand letter sometime soon, I hope that it arrives before November of this year. Having said all this, it may be that there is little that the City can do other than to patiently await receipt of the Department's demand letter. Anyway, I was writing to congratulate the City on its receipt of the reporting mark that it had requested. Congrats! Please feel free to contact me if you have any questions or concerns. Very truly yours, l Taro Kusunose TK:tk Enclosure cc: Steve Day 1110461030801 1235157820001 _' � � I, I I �.. it ASSOCIATION OF AMERICAN RAILROADS John J.Carroll Senior Asst.Vice President-Business Services March 6, 2001 File: RM-The City of Yelm Washington d/b/a Yelm Roy Prairie Line YRPL-079 Mr. Stephen L. Day/Taro Kusunose Attorneys for the City of Yelm, Washington 8001 Financial Center 1215 Fourth Avenue Seattle, WA 98161-1090 Dear Messrs. Day and Kusunose: I have received your payment for the assignment of reporting mark YRPL. Reporting mark YRPL and AAR Accounting Rule 260 code number 079 are hereby assigned with the effective date of and SCAC inception date of March 1, 2001 to Yelm Roy Prairie Line, a Class III rail carrier. Those codes should be shown, as applicable, in all tariffs in which the new railroad participates. I have also received the following documents: • AAR Interchange Agreement. • Copy of your Surface Transportation Board Finance Docket Number 33961. • Operating address and telephone number of an officer of the new railroad who will be the contact for other railroads and for placing on our mailing list. You have indicated the following person should be added to our mailing list and will be the contact person for inquiries from railroads: Ms. Shelly A. Badger Yelm City Administrator City of Yelm, Washington 105 Yelm Avenue West P. O. Box 479 Yelm, WA 98597 Tel: (360)458—8405 Fax: (360)458—4348 Email shelly@yelmtel.com • Approximate miles of track to be operated. 4.57 miles of track located between Milepost 20.99 near Roy, WA., and Milepost 25.56 near Yelm, WA. in Pierce and Thurston Counties, Washington. • Name of any interchange carrier(s) that the new railroad has entered into agreement with for the interline receipt, delivery of equipment and the point(s) of interchange: B N S F atYetfii, WA. • Date or approximate date that the new railroad will begin operating. Scheduled to commence operations on or about March 1, 2001. As information for those receiving copies of this letter, AAR Accounting Rule 260 code number 079 has no record of prior use. The assignment of these reporting marks is based in part on your Notice of Exemption filed with the Surface Transportation Board (STB) on behalf of the Yelm Roy Prairie Line. If at any time your authority to operate is denied or revoked by the STB, the AAR will follow-up by canceling assignment of the marks. If you have any questions, please contact Mr. Robert Burkhart with RAILINC at (919) 651- 5004 or email: Robert.Burkhart@railinc.com Sincerely, John J. Carroll Copies to: Paul Levine-National Motor Freight Traffic Assn. M. F. Clemens, Jr.-Surface Transportation Board Irean Lewis-Federal Railroad Administration Pete Coleman-Official Railway Equipment Register M. B. Reilly, Jr.-American Short Line Railroad Assoc. G. Ozburn-American Short Line Railroad Assoc. Robert M. Perbohner-U.S. Railroad Retirement Board Copies to a list of railroad officers (names not shown)which have expressed an interest in being informed of railroad reporting mark assignments. Copies to AAR, RAILINC and Railroad Personnel sent by EMAIL B. Pague, Supvr., Billing Systs. & Div. Secy., TS Div.-Interchange Agreement enclosed. D. Keen-Economist, PL&C D. Miller-Dir. Fin. & Acct., PL&C S. Rahim-Asst. IRF Analyst, BSD G. Forrest-Asst. iRF Analyst, BSD S. Hladick, RAILINC n Nabi-Dir_ Dam.9rdH Prev X 1 nadinrg 3arfG, TS DIV, C. Allmacx-Dir. RR Radio Serv., C&S Div. T_ Warb,-W-Dir. Car Movement Analysis, BSD J. Nugent-Dir. Equipment Management, RAILINC D. Mirante-Sales Representative, RAILINC W. Freeman-Asst. Bil./Coll. Supv., COG R. Hobb-Director Car Service, BSD R. Burkhart-Mgr, Asset UtiIizgtion/Reporting Marks, BSD J. Moran-Dir. UMLER Servs., BSD F. Dunleavy Jr.-Mgr. UMLER Servs., BSD S. Smith-Supv. Deprescription &Analysis, BSD M. Wearing-Transp. Analyst J. Good-Car Service Specialist, CPRS } f #,#vAW Date: March 06, 2001 File: 18:16 Mr. Stephen L. Day/Taro Kusunose Attorneys for the City of Yelm, Washington 8001 Financial Center 1215 Fourth Avenue Seattle, WA 98161-1090 Dear Messrs. Day and Kusunose: Sub: Confidential UMLER Passkey The confidential UMLER passkey that has been assigned for the reporting mark YRPL is: JBQQ. Confidential passkeys are assigned to each owner to protect unsolicited activity from being reported by non-owners to add, change or delete the owner's equipment from the UMLER file. Please provide this passkey to the personnel responsible for submitting your UMLER information impressing upon them the confidentiality aspects of this passkey. The submissions received without passkeys or incorrect passkeys will cause your data to be rejected. Owners providing their passkey to an agent should negotiate the security criteria in order to protect your equipment from unwanted activity. It is recommended that when an owner cancels the agent's contract that the owner apply for a new passkey. This can be accomplished by e-mailing UMLER(o)railinc.com. In order to facilitate the appropriate marshalling of railroad cars to meet the age criteria of Interchange Rule 3, the age information will be provided to railroads and private shops to avoid the premature testing of cars' air brakes as specified in Rule 3. A., 3. Business Services Division • Interline Service 7001 Weston Parkway • Suite 200 •Cary • NC • 27513 • Phone: (919) 651-5038 • Fax: (919) 651-5405 Law Offices BETTS JAN 2 2 2001 PATTERSON & MINES, P s. 800 Financial Center 1215 Fourth Avenue Seattle,Washington 98161-1090 Fax: 206-343-7053 Taro Kusunose Phone: 206-292-9988 entail: tkusunose@bpmlaw.com January 19, 2001 Ms. Shelly Badger City Administrator City of Yelm 105 Yelm Avenue West P.O. Box 479 Yelm, WA 98597 Re: City of Yelm - YRPL Dear Shelly: Please find enclosed, three documents for your review. The first is a letter that I drafted for your signature from the City of Yelm, to Ms. Monita Clark of the AAR. The AAR requires all of the information listed in this document before they will assign"YRPL" to the City. The AAR requires that this information be printed out on the letterhead of the entity which will own the requested reporting mark. Accordingly, I have drafted a document which can be photocopied onto City of Yelm letterhead. In the alternative, I can email you the document. Please let me know if you would like me to email it to you. Please make sure that the letter is on City of Yelm letterhead before you sign it. The second document is the AAR's Interchange Agreement. In short, the signer declares on behalf of the prospective user of the mark, that it will abide by certain rail industry standards of conduct. All parties already registered with the AAR have signed this agreement; all parties wishing to register with the AAR must also sign this. This agreement is mandatory. If you require further explanation as to the standards described, please let me know. Please either sign this document before a notary public, or sign the document and then affix the City of Yelm's seal. There exist other optional agreements to which the mark user can join at this point. These agreements, however, are more detailed in their regulation of rail practices, and we feel that they should be reviewed and entered into later by the rail operator and not the City, if at all. 106390/011901 1847/57820001 Ms. Shelly A. Badger January 19, 2001 Page 2 Finally, I am forwarding AAR's invoice for the assignment of YRPL to the City of Yelm. At your earliest convenience, please have the City prepare a check in the amount of four hundred dollars ($400) payable to the "Association of American Railroads." When both documents have been executed and the check prepared, please send them back to me. I will submit all of the above, along with other documents, to the AAR, by February 10, 2001, at the latest. This registration with the AAR is required in order for the City to both obtain "YRPL," and to embargo the Prairie Line. Please do not hesitate to contact me if you have any questions or concerns. Sincerely, Taro Kusunose TK:tk cc: Steve Day Enclosures 106390/011901 1847/57820001 Memo To: Taro Kusunose From: Dana Spivey for Shelly Badge j'9 Date: February 1, 2001 Subject: City of Yelm- YRPL Please find enclosed the three documents you asked Shelly to review- 1) signed letter to Ms. Monita Clark,on City of Yelm letterhead 2) signed& notarized AAR Interchange Agreement 3) AAR's invoice with payment information If you have any questions,please feel free to call me at 360-458-8816, or Shelly directly at 360- 458-8405. Thank you! City o Yelm 4 � 105 Yelm Avenue West Y E LM P.O. Box 479 WA6HINOT0N Yelm, Washington 98597 (360) 458-3244 January 19, 2001 VIA FACSIMILE AND POST Ms. Monita Clark Transportation Specialist Association of American Railroads RAILINC Services--Business Services Division 7001 Weston Parkway, Suite 200 Cary,North Carolina 27513 (919) 651-5006 (919) 651-5401 (fax) Re: RM—The Citv of Yelm Washington d/bla Yelm Roy Prairie Line OML) Dear Ms. Clark: The information below is provided in response to your request of January 10, 2001. 1. Operating Address: City of Yelm, Washington 105 Yelm Avenue West P.O. Box 479 Yelm, Washington, 98597 2. Telephone and Fax Number: Telephone: (360) 458-8405 Fax: (360) 458-4348 3. Name and Title: Shelly A. Badger Yelm City Administrator 106224/011901 1542/57820001 Ms. Monita Clark January 19, 2001 Page 2 4. Track Mileage and Points of Operation: Approximately 4.57 miles located between Milepost 20.99 near Roy, Washington, and Milepost 25.56 near Yelm, Washington, in Pierce and Thurston Counties, Washington, respectively. 5. Interchange Carriers: The new railroad has not entered into agreement with any interchange carriers for the interline receipt and delivery of equipment. 6. Approximate Date that the new Railroad will begin Operating: March, 2001. 7. Copy of STB Finance Docket,which provides Authority to Operate: Please find attached, a copy of STB Finance Docket No. 33961. 8. Transfer of Reporting Mark; Merger: N/A. No reporting mark is being transferred. Only one railroad is involved in this transaction. Please do not hesitate to contact me at the address and phone number printed above, or the City's attorneys with regard to this transaction, Stephen L. Day and Taro Kusunose ((206) 292-9988). Very truly yours, -,Is, 11 � , Shelly A. B ger City Administrator, City of Yelm, Washington SB:tk 106224/011901 1542/57820001 ASSOCIATION OF AMERICAN RAII,ROADS INTERCHANGE AGREEMENT The Subscriber here to adopts and agrees,jointly and severally, with each and all other parties (whether corporations, partnerships, or individuals) owning or possessing railroad cars used for the transportation of commodities, which parties have respectively entered into agreements in effect similar to this instrument, that the Subscriber will abide by the Code of Rules governing the condition of, repairs to and settlements for freight cars for the interchange of traffic, as formulated and promulgated by the former Master Car Builders' Association and by the Association of American Railroads (Division V — Mechanical) or by either thereof (which rules are designated on the minutes of said Association's proceedings and are commonly known as "Interchange Rules"), and by each of said rules, and as well will abide by each and all decisions and interpretations of the Arbitration Committee provided for the said Code of Rules, until this agreement on the part of the Subscriber shall be terminated by three months' notice in writing, filed with the Secretary (or such other officer as from time to time shall be acting as Secretary) or said Railroad Association, or of such body as shall at the time have succeeded thereto. Dated, signed and sealed th i day of orLil)m nV A. D. 200,9.1 LEGAL NAME OF COMPANY CITY OF YELM, WASHINGTON (Please print full name as it appears on official documents.) Officer(Please print or type) SHELLY A. BADGER Signature Title CITY ADMINISTRATOR/ g%oma, N NrTAR,,, r F'usuc, • NOTE: If subscriber be a partnership, then following signatures of the respective partners Should be added the words "doing business as " (inserting the partnership or trade name). *MUST BE NOTARIZED OR AFFIXED WITH A COMPANY SEAL Business Services Group 50 F.Street,N.W.,Washington,D.C.20001-1564 4 Phone(202)639-2373 Invoice Invoice Number: YRPL001 Date:January 10,2001 To: Ship to(if different address): Mr. Stephen L. Day/Taro Kusunose Attorneys for the City of Yelm, Washington 800 Financial Center 1215 Fourth Avenue Seattle, WA 981 61-1 090 SALESPERSON ORDER NO. Fed. ID Number SHIPPED VIA F.O.B. TERMS BSMDC01 YRPL 53-6000125 FEDEX/UPS/ Shipper Upon Receipt US Mail QTY. DESCRIPTION UNIT PRICE TOTAL 1 Administrative Fee(Road Marks)YRPL-To be reserved 400.00 400.00 City of Yelm, Washington d/b/a Yelm Roy Prairie Line REMITTANCES SHOULD BE MADE PAYABLE TO THE 0.00 ASSOCIATION OF AMERICAN RAILROADS 400.00 SALES TAX RATE% SALES TAX 0.00 SHIPPING& HANDLING TOTAL DUE $400.00 Credit Card Payment : (� Mastercard CC# :yy5q 5OLr2 D ► lUc�I Cardholder's Name:r-kq t,r � 'P�� ,� 41Q� A I Cardholder's Signature: �J �( I �c�� ,�/ Exp. Date: 07/0 I THANK YOU FOR YOUR ORDER! Mail payment along with ALL other paper work back to the following address: �C,� f C, _ate f UU � I r Ms. Monita Clark �,f/O�t t- �GGRC (/VlCZ1GC1 �L Transportation Specialist RAILINC Services (AAR) The Highwoods Centre I / 7001 Weston Parkway, Suite 200 1-p 1 Cary, NC 27513 �1 X { i Law Offices � C 1:1E-, 0 V E BETTS PATTERSON DEC - 2000 & MINES, P s. 800 Financial Center I1215 Fourth Avenue Seattle,Washington 98161-1090 Fax: 206-343-7053 Taro Kusunose Phone: 206-292-9988 tkusunose@bpmlaw.com December 7, 2000 VIA FACSIMILE AND POST Ms. Monita Clark Railinc 7001 Weston Parkway, Suite 200 Cary, North Carolina 27513 Tel: (919) 651-5006 Fax: (919) 651-5401 Re: Reporting Mark Dear Ms. Clark: This firm's client, the City of Yelm, Washington, recently acquired a shortline in the state of Washington. Our client desires to establish its shortline's presence under the Association of American Railroads ("AAR"). Furthermore, our client wishes to temporarily embargo the line with the AAR, as soon as possible. Accordingly, as a first step, I am forwarding to you a proposed reporting mark, and a finance docket number for the Surface Transportation Board ("STB") filing for our client's recent shortline acquisition. 1) Proposed Reporting Mark: First Choice: YPRL for Yelm Roy Prairie Line j Second Choice: YPRR for Yelm Prairie Railroad Please let me know if either mark is still available in the National Motor Freight database. 101920/120700 1440/57820001 - Ah x .A Fox F, Y ' tit 46 � ¢ .. o� - , •N�-+�+ F ° � tc>;•. 'X1'3 - �� TIN ly F f ,S , i-. lit < y ; Ga xp` S771 16 d oil oy 2. M, Ms. Monita Clark December 7, 2000 Page 2 2) STB Finance Docket Number: 33961 Please feel free to contact me at the address and phone number printed above. Thank you for your assistance in this matter. I look forward to your response. Very truly yours, Taro Kusunose TK:tk cc: Ms. Shelly Badger 101920/120700 1435/57820001 Betts ri PattersonPMines I Attorneys at Latin Taro Kusunose tkusunosc@bpmla%r.com February 7, 2001 VIA OVERNIGHT MAIL Ms. Monita Clark Transportation Specialist Association of American Railroads RAILINC Services--Business Services Division 7001 Weston Parkway, Suite 200 Cary, North Carolina 27513 Re: RM-The City of Yelm Washington d/b/a Yelm Roy Prairie Line (YRPL) Dear Ms. Clark: Please find enclosed the information requested for the assignment of the reporting mark, YRPL, to our client the City of Yelm. Please do not hesitate to contact me if you have any questions or concerns. Very truly yours, Taro Kusunose TK:tk Enclosures cc: Steve Day Ms. Shelly Badger A Professional Service Corporation One Convention Place,Suite 1400 (206)292-9988 701 Pike Street ;.,,.(206)343-7053 108201/020701 1635/57820001 Seattle WA 98101-3927 ,.,w.bpm1ow.corn Where business gets results ASSOCIATION OF AMERICAN RAILROADS Monitor Clark Transportation Specialist FOR ASSIGNMENT/TRANSFER OF RAILROAD REPORTING MARKS January 10, 2001 File: RM-The City of Yelm Washington d/b/a Yelm Roy Prairie Line YRPL Mr. Stephen L. Day/Taro Kusunose Attorneys for the City of Yelm, Washington 800 Financial Center 1215 Fourth Avenue Seattle, WA 98161-1090 YRPL reporting marks will be reserved for a period of thirty (30) days, after which your reporting mark transaction will be canceled. All of the items listed below are part of the requirements for the assignment/transfer of private reporting marks. Please provide only the items indicated and check-off the "Customer Verification" blank by each requested item to insure that it has been accomplished and included in your mailing back to me. Please include a completed copy of this letter in your return mailing to me. Customer Verification V Enclosed is an invoice to cover the administrative fee for the assignment/transfer of your requested reporting marks. THIS FEE IS NON-REFUNDABLE. Y Blank copy of the AAR Interchange Agreement for execution. This document MUST be notarized or affixed with company seal . The company name signed on this agreement will be the name that the requested RAILINC Services-Business Services Division, 7001 Weston Parkway,Suite 200,Cary, NC 27513(919)651-5006 fax:(919)651-5401 reporting marks will be assigned to. Please give consideration to punctuation, abbreviations, etc. Some of the following information might be contained in your filing with the Surface Transportation Board (STB) or for Canadian Railroads the Canadian Transport Authority (CTA) and Mexican Railroads the Concession issued by the Mexican Government for operating authority. To expedite the assignment of your reporting marks, please provide the following requested information in writing on company letterhead: Provide the operating address, telephone and fax number including title(s) of officer(s) for the new railroad who will be the contact for other railroads / and for placing on our mailing list. V Provide approximate miles of track to be operated and identify points (cities and states) of rail operations . NIS List the name of any interchange carrier(s) that the new railroad has entered into agreement with for the interline receipt, delivery of equipment and provide the point (s) (cities/states) of interchange. Unless the interchange(s) are established and were transferred to the new railroad we need written confirmation from the railroad(s) you indicate as interchange partner(s) . Please carefully list each correct interchange point and carriers. An incorrect listing of this information could delay the assignment process. For further information, please / contact Mrs . Shiroon Rahim at (919) 651-5043 . �/ Date or approximate date that the new railroad will / begin operating. v Copy of STB Finance Docket (for Canadian Railroads, 'Certificate of Fitness' and 'Concession' for Mexican Railroads) which provides authority to operate. CANADIAN AND MEXICAN RAILROADS MUST HAVE COPIES OF AUTHORITY TO OPERATE TRANSLATED TO ENGLISH. �WA For the transfer of reporting marks it is mandatory that current owner of the marks provide written authorization to transfer the reporting marks to a new owner. If two or more railroads are involved in this transaction, it will be considered as a merger under AAR rules. Pease indicate if this is the case. (YES NO ti/ ) —n/a— Copy of AAR Guide For New Railroads. This book was published to assist new railroads with policy, procedures, contact names and telephone numbers within the AAR. n/a Copy of Circular No. OT-10 -- Code of Car Service Rules/Code of Car Hire Rules. IMPORTANT: — Copies of the Car Service/Car Hire Agreement and 10706 Agreement are enclosed. These should be executed returning one copy to the AAR and retaining one copy for your files, if you wish to participate and take advantage of AAR's Car Hire and Car Service Rules. Blank copy of Car Service/Car Hire Agreement. Two copies of the 10706 Agreement. Return only one copy. Also enclosed is a letter referencing car hire deprescription. Please fill out the participant contact form if you wish to list a contact. The reporting marks and a three digit AAR Accounting Rule 260 Code number will be assigned upon receipt of the letter containing all of the information requested along with the executed agreements, regulatory filing and payment of the invoice. Assignment of reporting marks by the =AR is predicated upon your receipt of proper regulatory operating authority and marks become effective upon the granting of such authority. Should operating authority be denied or revoked, the marks will be withdrawn from assignment. Sincerely, Mo,r to C/171-L, �_:V-21 Invoice �f V � Invoice Number: YRPL001 Date:January 10, 2001 To: Ship to(if different address): Mr. Stephen L. Day/Taro Kusunose Attorneys for the City of Yelm, Washington 800 Financial Center 1215 Fourth Avenue Seattle, WA 98161-1090 SALESPERSON ORDER NO. Fed. ID Number SHIPPED VIA F.O.B. TERMS BSMDC01 YRPL 53-6000125 FEDEX/UPSI Shipper Upon Receipt US Mail QTY. DESCRIPTION UNIT PRICE TOTAL 1 Administrative Fee(Road Marks)YRPL-To be reserved 400.00 400.00 City of Yelm, Washington d/b/a Yelm Roy Prairie Line REMITTANCES SHOULD BE MADE PAYABLE TO THE 0.00 ASSOCIATION OF AMERICAN RAILROADS 400.00 SALES TAX RATE% SALES TAX 0.00 SHIPPING& HANDLING TOTAL DUE S400.00 Credit Card Payment : Qa Mastercard CC# :qI 6, Cardholder's Name:Cl41ti �: ( �I1� �Sll(��c l�"• .� .{l�(� 6 Cardholder's Signature: (� ; �/JC/�f�?'`/ Exp. Date: J THANK YOU FOR YOUR ORDER! Mail payment along with ALL other paper work back to the following address: Ms. Monita Clark Transportation Specialist RAILINC Services (AAR) The Highwoods Centre 7001 Weston Parkway, Suite 200 Cary, NC 27513 ASSOCIATION OF AMERICAN RAILROADS INTERCHANGE AGREEMENT The Subscriber here to adopts and agrees,jointly and severally, with each and all other parties (whether corporations, partnerships, or individuals) owning or possessing railroad cars used for the transportation of commodities, which parties have respectively entered into agreements in effect similar to this instrument, that the Subscriber will abide by the Code of Rules governing the condition of, repairs to and settlements for freight cars for the interchange of traffic, as formulated and promulgated by the former Master Car Builders' Association and by the Association of American Railroads (Division V — Mechanical) or by either thereof (which rules are designated on the minutes of said Association's proceedings and are commonly known as "Interchange Rules"), and by each of said rules, and as well will abide by each and all decisions and interpretations of the Arbitration Committee provided for the said Code of Rules, until this agreement on the part of the Subscriber shall be terminated by three months' notice in writing, filed with the Secretary (or such other officer as from time to time shall be acting as Secretary) or said Railroad Association, or of such body as shall at the time have succeeded thereto. Dated, signed and sealed th day of A. D. 2000.1 LEGAL NAME OF COMPANY CITY OF YELM, WASHINGTON (Please print full name as it appears on official documents.) Officer(Please print or type) SHELLY A. BADGER Signature 'AJ]" l ., T f -)w Title CITY'ADMINISTRATOR _TL, ,°•'�'�F,' J L`(S-caP, NOTE: If subscriber be a partnership, then following signatures of the respective partngzs should be added the words "doing business as " (inserting the partnership or trade name). *MUST BE NOTARIZED OR AFFIXED WITH A COMPANY SEAL Business Services Group 50 F.Street,N. W.,Washington,D.C.20001-1564 + Phone(202)639-2373 I/ Ole THF�p.Q� 36 Ci o Yelm a r+ lrRS:�yr-oy 105 Yelm Avenue West P.O. Box 479 YELM WASHINGTON Yelm, Washington 98597 (360) 458-3244 January 19, 2001 VIA FACSIMILE AND POST Ms. Monita Clark Transportation Specialist Association of American Railroads RAILINC Services--Business Services Division 7001 Weston Parkway, Suite 200 Cary, North Carolina 27513 (919) 651-5006 (919) 651-5401 (fax) Re: RM--The City of Yelm Washington d/b/a Yelm Roy Prairie Line (YRPL) Dear Ms. Clark: The information below is provided in response to your request of January 10, 2001. 1. Operating Address: City of Yelm, Washington 105 Yelm Avenue West P.O. Box 479 Yelm, Washington, 98597 2. Telephone and Fax Number: Telephone: (360) 458-8405 Fax: (360)458-4348 3. Name and Title: Shelly A. Badger Yelm City Administrator 106224/011901 1542/57820001 Ms. Monita Clark January 19, 2001 Page 2 4. Track Mileage and Points of Operation: Approximately 4.57 miles located between Milepost 20.99 near Roy, Washington, and Milepost 25.56 near Yelm, Washington, in Pierce and Thurston Counties, Washington, respectively. S. Interchange Carriers: The new railroad has not entered into agreement with any interchange carriers for the interline receipt and delivery of equipment. 6. Approximate Date that the new Railroad will begin Operating: March, 2001. 7. Copy of STB Finance Docket, which provides Authority to Operate: Please find attached, a copy of STB Finance Docket No. 33961. 8. Transfer of Reporting Mark; Merger: N/A. No reporting mark is being transferred. Only one railroad is involved in this transaction. Please do not hesitate to contact me at the address and phone number printed above, or the City's attorneys with regard to this transaction, Stephen L. Day and Taro Kusunose ((206) 292-9988). Very truly yours, Shelly A. Badger City Administrator, City of Yelm, Washington SB:tk 106224/011901 1542/57820001 31445 SERVICE DATE-NOVEMBER 22, 2000 DO FR-4915-00-P DEPARTMENT OF TRANSPORTATION Surface Transportation Board [STB Finance Docket No. 33961] City of Yelm, Washington—Acquisition Exemption—Line of The Burlington Northern and Santa Fe Railway Company The City of Yelm, Washington (the City),a municipality of the State of Washington, a noncarrier, has filed a notice of exemption under 49 CFR 1150.31 to acquire approximately 4.57 miles of rail line known as the Prairie Line' from The Burlington Northern and Santa Fe Railway Company (BNSF)between milepost 20.99 near Roy, WA, and milepost 25.56 near Yelm, WA, in Pierce and Thurston Counties, WA. The City certifies that its projected revenues as a result of this transaction will not exceed those that would qualify it as a Class III rail carrier. The transaction is expected to be consummated on or shortly after November 16,2000.' The City states that it is its intent to have the above line operated by a yet-to-be- determined third party rail operator. The City further states that the line will be temporarily embargoed pending line maintenance and selection of an operator in the near future. The City reported that it intended to consummate the transaction on or before November 16, 2000 (emphasis added). The earliest the transaction can be consummated is November 16, 2000, the effective date of the exemption (7 days after the exemption was filed). The City's representative has been notified and has confirmed that consummation would not take place before November 16, 2000. STB Finance Docket No. 33961 If the notice contains false or misleading information, the exemption is void ab initio. Petitions to revoke the exemption under 49 U.S.C. 10502(d) may be filed at any time. The filing of a petition to revoke will not automatically stay the transaction. An original and 10 copies of all pleadings, referring to STB Finance Docket No. 33961, must be filed with the Surface Transportation Board, Office of the Secretary, Case Control Unit, 1925 K Street, N.W., Washington, DC 20423-0001. In addition, a copy of each pleading must be served on Stephen L. Day, 1215 - 4th Avenue, Suite 800, Seattle, WA 98161-1090. Board decisions and notices are available on our website at "WWW.STB.DOT.GOV." Decided: November 15, 2000. By the Board, David M. Konschnik, Director, Office of Proceedings. Vernon A. Williams Secretary - 2 - Page 1 of 1 From: Taro Kusunose <tusunose@bpmlaw.com> To: 'Shelly@yelmtel.com' <Shelly@yelmtel.com> Cc: Steve Day <sday@bpmlaw.com> Date: Monday, February 05, 2001 9:38 AM Subject: AAR registration Shelly: I hope things are going well for you. I just wanted to remind you that I will need to submit Yelm's documents to the AAR soon. Let me know if you have any questions or concerns. Since I last wrote to you, our firm has moved! Oust a few blocks down the street). Our new address is Betts, Patterson& Mines, P.S. One Convention Place, Suite 1400 701 Pike Street Seattle, WA 98101 I now have a direct phone line. I can be reached at(206)268-8646 Taro 02/08/2001 Law Offices BETTS PATTERSON Ep � & MINESP s. 800 Financial Center 1215 Fourth Avenue Seattle,Washington 98161-1090 Fax: 206-343-7053 aro Kusunose Phone: 206-292-9988 entail: tkusunose@bpmlaw.com December 12, 2000 Ms. Shelly Badger City Administrator City of Yelm 105 Yelm Avenue West P.O. Box 479 Yelm, WA 98597 Re: City of Yelm - YRPL Dear Shelly: I recently received the enclosed literature and application from the American Shortline and Regional Railroad Association("ASLRRA"). The City of Yelm, or the RAC,may want to consider having the Yelm-Roy Prairie Line(YRPL)join the association. The benefits of membership, as well as the costs, are set forth in the literature. Please feel free to contact me if you have any questions or concerns. Sincerely, r Taro Kusunose TK:tk Enclosure 102368/121200 1029/57820001 t i E -' , L.....,....... __. � i AMERICAN SHORT LINE AND REGIONAL RAILROAD ASSOCIATION The Voice of America's Independent Railroads Kathleen M. Cassidy Executive Director - Membership Services e-mail: kcassidy@aslrra.org November 27, 2000 Attn: Taro The Prairie Line c/o Betts, Patterson & Mines 1215 Fourth Avenue, Suite 800 Seattle,WA 98161-1090 Dear Taro: Thank you for your request for membership information. Enclosed you will find an ASLRRA brochure, copies of our weekly newsletter, Views and News and ASLRRA's safety newsletter,the annual meeting program recently held in Chicago, Illinois, the associate member directory, "Suppliers to Small Railroads"and a railroad membership application and dues schedule. One of ASLRRA's most significant functions is to provide members with information concerning government and industry affairs as well as trends and activities. ASLRRA also advises federal agencies and Congress of the impact rules and regulations will have on small carriers. Final rules and regulations are distributed, often with a summary highlighting significant features, so that members may review and comply with them. ASLRRA has developed model programs for Class II and III railroads for random drug and alcohol testing, roadway worker protection, and locomotive engineer certification. FRA has approved these programs. We also developed a model Book of Rules for small railroads as well as a Safety Handbook. ASLRRA's staff is available to answer questions and provide assistance whenever necessary. The Association can also assist ASLRRA members on all traffic and publishing matters. ASLRRA members stay informed through a regular schedule of meetings: four spring regional meetings; a fall annual meeting and exhibition; and educational and training seminars. ASLRRA's annual meeting includes an exhibition showcasing goods and services especially for small railroads. Working for the interests of short line and regional railroads since 1913, our continuing mandate is to represent the membership effectively, and promote the interests of our segment of the industry. We are proud of our track record. We would be very pleased to welcome The Prairie Line as a new member of ASLRRA. Let me know if I can provide any further assistance. Sincerely, 4j') Kathleen M. C ssidy /kmc enclosures 1120 G Street,N.W.,Suite 520 Washington,DC 20005-3889 Phone: (202)628-4500 Fax: (202)628-6430 E-Mail:aslrra®aslrra.org i AMERICAN SHORT LINE AND REGIONAL RAILROAD ASSOCIATION The Voice of America's Independent Railroads APPLICATION FOR MEMBERSHIP RAILROAD MEMBER ASLRRA is a non-profit, incorporated association comprised of short line and regional railroads, with a Board of Directors elected regionally. The action of the Association is advisory only and not binding upon any of its members. Full Membership: Any railroad located in the continental or territorial United States, Canada, or Mexico, is eligible for full membership. Except as otherwise directed by the Board of Directors, there shall be a separate membership for each railroad member. The undersigned company hereby applies for membership in American Short Line and Regional Railroad Association (ASLRRA): Company Name Address City State Zip Phone Fax e-mail address Website: Company Contacts: (Please note additional addresses,phone numbers,etc.on a separate sheet) President Chief Operating Officer Title Controller/CFO Name Title Engineer Certification Rep. Title Drug & Alcohol Program Administrator (if applicable) Title Parent Company/ Owner: Alpha Code: Route miles operated: Class ll, III, or S&T State(s) railroad operates in Connecting carrier(s): Please complete the attached Dues Schedule and return the application to the ASLRRA office. Thank you Region /Dues / AO / Word—Address/Name/State/Reg'I/ / Status / V&N / Welc NOTE: Dues payments to American Short Line and Regional Railroad Association are not deductible as charitable contributions for federal income tax purposes, but may be deductible as a business expense.The portion of annual membership dues attributable to lobbying activities is not deductible. Currently, 25%of members'dues are not deductible. 1120 G Street,N.W.,Suite 520 Washington,DC 20005-3889 Phone: (202)628-4500 Fax: (202)628-6430 E-Mail:aslrra®aslrra.org AMERICAN SHORT LINE AND REGIONAL RAILROAD ASSOCIATION MEMBERSHIP DUES RAILROAD MEMBERSHIP DUES AND FEES: Full membership is open to any freight railroad located in the United States, Canada, or Mexico. Except as otherwise directed by the Board of Directors, there shall be a separate membership for each railroad member. Multiple member railroads owned or operated by a single entity will pay dues based on a graduated formula as shown below. Dues Rate: $4.75 per $1,000 annual railway operating revenue Class III Minimum Dues: $925 per year Class III Maximum Dues: $4,250 per year Class II Dues: $5,000 per year Canadian and Mexican Railroads: $925 per year Multiple Member Railroad Dues Computation Schedule: Railroad groups of 3 but less than 10 will pay 60% of dues based on current revenue rate and caps. Railroad groups of 10 but less than 20 will pay 55% of dues based on current revenue rate and caps. Railroad groups of more than 20 will pay 50% of dues based on current revenue rate and caps. REN/RAILINC Service Fee (if applicable): $50 per year ASSOCIATE MEMBER DUES: Associate membership is open to tourist and excursion railroads and companies which supply goods and/or services to the railroad industry. Supplier Companies: $1,000 per year Excursion and Tourist Railroads: $925 per year ASLRRA Constitution, Article IX Payment of Dues Each member shall pay such dues as may be determined by the Board of Directors as necessary for conducting the affairs of the Association. Computation of Dues (a) Dues of full members shall be based on the total annual railway operating revenues of each such member. (b) The total operating revenues for the second previous year shall be used in calculating such dues. (c) The Board of Directors may, for good cause, authorize deviations from the provisions of this Section. Report of Revenues Each member shall submit a report to the Association of total annual railway operating revenues by March 31st of each year covering the preceding calendar year. Law Offices BETTS PATTERSON , & MINES, Ps. 800 Financial Center 1215 Fourth Avenue Seattle,Washington 98161-1090 Fax: 206-343-7053 Stephen L. Day Phone: 206-292-9988 eMail: sday®bpmlaw.com November 27, 2000 Ms. Shelly Badger Director of Public Works City of Yelm 105 Yelm Avenue West P.O. Box 479 Yelm, WA 98597 Re: City of Yelm -Purchase of BNSF Branch Dear Ms. Badger: Enclosed for your file is a copy of the notice we received today from the Surface Transportation Board. Sincerely, Kathy Titterington Secretary to Stephen L. Day SLD:kt Enclosure 99982/112700 1333/57820001 31445 SERVICE DATE -NOVEMBER 22, 2000 DO FR-4915-00-P DEPARTMENT OF TRANSPORTATION Surface Transportation Board [STB Finance Docket No. 33961] City of Yelm, Washington—Acquisition Exemption—Line of The Burlington Northern and Santa Fe Railway Company The City of Yelm, Washington (the City), a municipality of the State of Washington, a noncarrier, has filed a notice of exemption under 49 CFR 1150.31 to acquire approximately 4.57 miles of rail line known as the Prairie Line' from The Burlington Northern and Santa Fe Railway Company (BNSF)between milepost 20.99 near Roy, WA, and milepost 25.56 near Yelm, WA, in Pierce and Thurston Counties, WA. The City certifies that its projected revenues as a result of this transaction will not exceed those that would qualify it as a Class III rail carrier. The transaction is expected to be consummated on or shortly after November 16, 2000.2 ' The City states that it is its intent to have the above line operated by a yet-to-be- determined third party rail operator. The City further states that the line will be temporarily embargoed pending line maintenance and selection of an operator in the near future. 2 The City reported that it intended to consummate the transaction on or before November 16, 2000 (emphasis added). The earliest the transaction can be consummated is November 16, 2000, the effective date of the exemption (7 days after the exemption was filed). The City's representative has been notified and has confirmed that consummation would not take place before November 16, 2000. STB Finance Docket No. 33961 If the notice contains false or misleading information, the exemption is void ab r initio. Petitions to revoke the exemption under 49 U.S.C. 10502(d)may be filed at any time. The filing of a petition to revoke will not automatically stay the transaction. An original and 10 copies of all pleadings, referring to STB Finance Docket No. 33961, must be filedwith the Surface Transportation Board, Office of the Secretary, Case Control Unit, 1925 K Street,N.W., Washington, DC 20423-0001. In addition, a.copy of each pleading must be served on Stephen L. Day, 1215 -4th Avenue, Suite 800, Seattle, WA 98161-1090. Board decisions and notices are available on our website at "WWW.STB.DOT.GOV." Decided: November 15, 2000. By the Board, David M. Konschnik, Director, Office of Proceedings. Vernon A. Williams Secretary - 2 - Law Offices BETTS PATTERSON & MINES, Ps. Nov 2 2000 t, 800 Financial Center 1215 Fourth Avenue Seattle,Washington 98161-1090 Fax: 206-343-7053 Stephen L. Day Phone: 206-292-9988 eMail: sday@bpmlaw.com November 20, 2000 Ms. Shelley Badger Director of Public Works City of Yelm 105 Yelm Avenue West P.O. Box 479 Yelm, WA 98597 Re: City of Yelm -Purchase of BNSF Branch Dear Ms. Badger: Enclosed for your file is a conformed copy of the Notice of Exemption filed on November 9, 2000 with the Surface Transportation Board. Sincerely, Kathy Titterington Secretary to Stephen L. Day SLD:kt Enclosure 99982/112000 1141/57820001 BEFORE THE SURFACE TRANSPORTATION BOARD FINANCE DOCKET NO. THE CITY OF YELM WASHINGTON 9 - --ACQUISITION-- M�NpS`e N� BURLINGTON NORTHERN SANTA FE RAILWAY NOTICE OF EXEMPTION Dated: For Filing: 97555/M 0700 1150/57820001 BEFORE THE SURFACE TRANSPORTATION BOARD FINANCE DOCKET NO. NOv ! � SNS THE CITY OF YELM,WASHINGTON --ACQUISITION— 9 'a THE BURLINGTON NORTHERN SANTA FE RAILWAY NOTICE OF EXEMPTION The City of Yelm, Washington, a municipality duly organized, validly existing and in good standing under the laws of the State of Washington, (hereinafter referred to as "City of Yelm"), has filed a notice of exemption for acquisition of Burlington Northern and Santa Fe Railway Company's line (hereinafter referred to as"the Prairie Line") located between Milepost 20.99 near Roy, Washington, and Milepost 25.56 near Yelm, Washington, in Pierce and Thurston Counties, Washington. As required by 49 C.F.R. § 1150.34, a caption summary is set forth in Exhibit A. City of Yelm submits the following information in compliance with 49 C.F.R. § 1150.33: (a) Name and address of applicant: City of Yelm, Attn: Shelly A. Badger, Yelm City Administrator, 105 Yelm Ave. West, P.O. Box 479, Yelm, Washington 98597. - 2 - 97555/?10700 1150/57820001 (b) Name.address and telephone number of representative of applicant who should receive correspondence: Stephen L. Day, Betts, Patterson&Mines,P.S., 1215— 4th Avenue, Suite 800, Seattle, Washington 98161-1090; (206) 292-9988. (c) Statement concerning agreement: An agreement between applicant City of Yelm, and BNSF is complete. Execution of the agreement is expected to occur on or before November 10,2000,with the closing on November 16, 2000, contingent upon the meeting of certain conditions including City of Yelm's compliance with the procedures of the Surface Transportation Board(STB). (d) Operator: It is the City of Yelm's intent to have the acquired line of railroad operated by a yet-to-be-determined third party rail operator. The City of Yelm expects to announce a Request For Proposals by potential third party rail operators of the acquired rail property, in the near future. There are no active shippers currently located on the line. The line will be temporarily embargoed pending line maintenance and selection of an operator. (e) Brief summary of proposed transaction: City of Yelm will acquire from BNSF, the rail line located in Pierce and Thurston Counties,Washington between MP 20.99 near Roy, Washington, and MP 25.56 near Yelm, Washington. 1. Name and address of transferror: The Burlington Northern and Santa Fe Railway Company, 3017 Lou Menk Drive, Fort Worth,TX 76131-2830. 2. Proposed time schedule. The closing will occur on or before November 16, 2000. 3. Mileposts. Approximately MP 20.99 to MP 25.56. 4. Total route miles. Approximately 4.57 miles. - 3 - 97555/P10700 1150/57820001 (f) MR. A map indicating the area to be served, origins,termini, stations, cities, counties and state, is attached. (g) Certificate of revenue. The required certificate is attached. (h) Additional information. This notice of exemption is part of an effort to preserve the potential for rail service on the subject line to aid in economic development efforts by the City. Applicant acknowledges that it must preserve intact all sites and structures more than 50 years old until compliance with the requirements of Section 106 of the National Historic Preservation Act, 16 U.S.C. § 470, is achieved. renbmitted, 1 1 Betts, Patterson&Min , P.S. 1215 —4th Avenue, Suite 800 Seattle, WA 98161-1090 (206)292-9988 Counsel for Applicant: City of Yelm, Washington - 4 - 97555/?10700 1150/57820001 EXHIBIT A Applicant City of Yelm hereby submits the following caption summary prepared in accordance with 49 C.F.R. § 1150.34: SURFACE TRANSPORTATION BOARD Notice of Exemption STB FINANCE DOCKET No. The City of Yelm, Washington--Acquisition-- Burlington Northern and Santa Fe Railway Company The City of Yelm, Washington, a municipality duly organized, validly existing and in good standing under the laws of the State of Washington, (hereinafter referred to as "City of Yelm"),has filed a notice of exemption to the acquisition of Burlington Northern and Santa Fe Railway Company's(hereinafter referred to as`BNSF") line between Milepost 20.99 near Roy, Washington, and Milepost 25.56 near Yelm, Washington, in Pierce and Thurston Counties, Washington. Comments must be filed with the Board and served on Stephen L. Day,whose address is Betts, Patterson& Mines, P.S., 1215 —4th Avenue, Suite 800, Seattle, Washington 98161-1090, and whose telephone number is (206) 292-9988. There are no other class exemptions being used. The notice is filed under 49 C.F.R § 1150.31. If the notice contains false or misleading information, the exemption is void ab initio. Petitions to revoke the exemption under 49 U.S.C. § 10502(d) may be filed at any time. The filing of a petition to revoke will not automatically stay the transaction. - 5 - 97555/110700 1150/57820001 YELM - ROY, WASHINGTON LINE I•as N st LICOMA!•ML 111?'11aC R1 E R 2 E. •130 131 35' '131 133(FORT LEWIS) 131 •PANAWAY 10 MG 3'L' 3 3 �� D ROY �_; •,.,�. .w _—.—`ice _ � V -��' r•��\ I F 0 R T L aoa LK _n Pi I L `.I T A R• Y R E A I 0 1 tfj -------- ----- --- _ i 9 39)00 -16 r ERVATION % • err..• -- �„ ' -•----- =r--- ., • ; :: YELM.. .•: tet' *`� - /: i � E .• YY•� t �a.pit � t •b � r 326 t•4- •a£�1stlsu • =•_\�6. 0•••��I� r:\• + w \' s` ! • t «S \ •-CJS••• t`,? •\ i `• •'� 11 McKenna � � � •• 'f6 �. �� '' 1 Ram ! gee\ c4cvArs �1 I I •�`''�...cr_ '\ �ti_ cam-• �• `•�� i• .-. ��••�,� < 1 70 - .�/ •+V � \ .1�\ R - - YELM - ROY, WASHINGTON LINE (J V pyx"c r�Jro Henrys } P Ravensdale Auburn `v Block Palm, Ctamona :hone t a TACOMA Ion er Qy cp vel nterSumner Weston HC1sda locoom W Puyallup Mee er Tocomo tro KEVIE midland ldcrton TllOcu t�lcG ilso McMfll!n upont gtl sponoo/ay Irv% O OLYMPIA Fw FredrIckeon Graham Thrift ROY ° "" ' Tumwater &V S . 70 4' K r o a 0AR 20 0 00 8olmoro1 �i, y O-e Capitol YELM Y.opowsin E. oly ' Flum P 25.56 McKenna Cloy City tlerock m Alaytown JE wastern Jc* Q - egole < °Q KV nC O oD RoWer � 60 � +� oJ Tenho �� VaIL 5h � I iGCO G B'ucodo O V TE Nationol 0�0 WUOUsh Poisn Centralic Mineral &� CHEHALIS ! ok G� lvide Napovine Morton W(Nock City of Yelm m oder Olequa 0 b 10 MItES Castle Rock 0 b 10 15 KLOMETM r Certificate in Accordance with 49 C.F.R. § I I50.33(g) I, Shelly A. Badger,Yelm City Administrator, City of Yelm, Washington, hereby certify that applicant City of Yelm's projected revenues as a result of the transaction covered by this notice of exemption will not exceed those that would qualify it as a Class III carrier. - 6 - 97555/110600 1714/57820001 VERIFICATION STATE OF WASHINGTON ) ss. COUNTY OF THURSTON ) I, Shelly A. Badger,being duly sworn,depose and state that I am Yelm City Administrator for the City of Yelm, Washington, that I am authorized to make this verification, and that I have read the foregoing Notice of Exemption, and know the facts asserted therein are true and accurate as stated to the best of my knowledge, information and belief. DATED this 11�-- day of��C1/�111�dP�1� , 2000. ('" Shelly A. Badg Signed and sworn to before me on��l/�� / , 2000 by Shelly A. Badger. _��•�� gyp, SP/!% i O \SS�ON i ; - otary Public i �djfoiAe State of PUBOG ; Washington 3• l�! i ��,�'•.,�y_ j ,0 . ' O % Printed Name: S 1 E My appointment expires: - 7 - 97555/1#0600 1714/57820001 Law Offices BETTS SE�[ p�l� PATTERSON & MINES, P.S. Ncv 13 2C00 J 800 Financial Center 1215 Fourth Avenue Seattle,Washington 98161-1090 Fax: 206-343-7053 Stephen L. Day Phone: 206-292-9988 entail: sday@bpmlaw.com November 8, 2000 VIA FEDERAL EXPRESS SurfaceTr sportation Board 1925 K treet N.W. Was gton, D.C. 20423-0001 Re: Notice of Exemption City of Yelm, Washington-- Acquisition and Operation--The Burlington Northern Sante Fe Railway Dear Sir or Madam: Enclosed for filing is original and two copies of the Notice of Exemption referenced above along with our filing fee check in the amount of$1,200.00. Please "copy receive" one copy and return it to us in the enclosed self-addressed, stamped envelope. Thank you for your courtesies in this regard. Should you have any questions, please do not hesitate to contact our office. V ryknL. ours, Ste ay SLD:tk \ Enclosures cc: Shelly A. Badger Dennis W. Wilson 98319/110800 1119/57820001 Yelm Prairie Rail Line XRR Making Connections The Project In 1999, with local and Federal funds, the City of Yelm made an investment of over $300,000 when it acquired a 4.5 mile section of soon-to-be-abandoned rail line running between Yelm and Roy from Burlington Northern Santa Fe. Yelm, always focused on the future, desired to preserve the track between Yelm and Roy not only for a pedestrian trail, but also to serve Yelm's industrial area and to provide future transportation op- tions. Having a short-line railroad serve Yelm is just a quarter mile from reality, as the end of the Yelm Prairie Line is just a crossing away from the Tacoma Rail Mountain Division Line. Tacoma Rail has been in the short line railroad business for years, and currently provides regional connections between the Ports of Tacoma and Olympia, Fredrickson, Centralia, Eatonville, and Morton. Tacoma Rail has applied for financing to make the connection between the Yelm Prairie Line and the Mountain Division Line which would allow access to Yelm's industrial area as well as critical re- dundancy to the mainline system, providing access to business along the Point Defiance Bypass (Sound Transit) and Fort Lewis in case the usual rail corridor is unavailable. The Need The Yelm Prairie Line from Roy to the Yelm Industrial Area requires refurbishment in order to be util- ized by Tacoma Rail. The Benefits The growing community of Yelm is on the cusp of becoming a sustainable community that provides local housing, shopping, and jobs. The development of Yelm's industrial area is key to achieving this vision as outlined in the Growth Management Act in order to achieve a local economy capable of supporting Yelm's burgeoning residential growth. The Yelm Prairie Line will create a regional connection that will become a strong part of the South Sound economy, extending the short line railroad connections by Tacoma Rail to another node in the region. iF Pride of the Prairie P.O. Box 479 Yelm, WA 98597 (360) 458-3244 The Request Mayor Ron Harding $1 ,500,000458-8401 mayor@ci.yelm.waAJS Refurbishment of 4.5 miles of existing rail Administrator line, including a bridge crossing of the Shelly Badger Nisqually River ' ' 458-8406 shellyb@ci.yelm.wa.us Yelm Prairie Rail Line R R Making Connections The Project In 1999, with local and Federal funds, the City of Yelm made an investment of over $300,000 when it acquired a 4.5 mile section of soon-to-be-abandoned rail line running between Yelm and Roy from Burlington Northern Santa Fe. Yelm, always focused on the future, desired to preserve the track between Yelm and Roy not only for a pedestrian trail, but also to serve Yelm's industrial area and to provide future transportation op- tions. Having a short-line railroad serve Yelm is just a quarter mile from reality, as the end of the Yelm Prairie Line is just a crossing away from the Tacoma Rail Mountain Division Line. Tacoma Rail has been in the short line railroad business for years, and currently provides regional connections between the Ports of Tacoma and Olympia, Fredrickson, Centralia, Eatonville, and Morton. Tacoma Rail has applied for financing to make the connection between the Yelm Prairie Line and the Mountain Division Line which would allow access to Yelm's industrial area as well as critical re- dundancy to the mainline system, providing access to business along the Point Defiance Bypass (Sound Transit) and Fort Lewis in case the usual rail corridor is unavailable. The Need The Yelm Prairie Line from Roy to the Yelm Industrial Area requires refurbishment in order to be util- ized by Tacoma Rail. The Benefits The growing community of Yelm is on the cusp of becoming a sustainable community that provides local housing, shopping, and jobs. The development of Yelm's industrial area is key to achieving this vision as outlined in the Growth Management Act in order to achieve a local economy capable of supporting Yelm's burgeoning residential growth. - The Yelm Prairie Line will create a regional connection that will become a strong part of the South Sound economy, extending the short line railroad connections City of Yelm by Tacoma Rail to another node in the region. Pride of the Prairie P.O.IF Box 479 Yelm, WA 98597 (360) 458-3244 The Request or Ron Harding $1 ,500,000 (360) 458-8401 mayor@ci.yelrn.wa.us Refurbishment of 4.5 miles of existing rail Administrator line, including a bridge crossing of the Shelly Badger Nisqually River •' 84' shellyb@ci.yelm.wa.US � Tacoma y _ Olympia V Lacey 7 i nqp Z. Fart Lewis TYimioa ter ' Yelm "N. ti Rainier n'u"° South Sound Rail ^ Ea tonsil to= -Tacoma Rail Ye1mjRoy Prairie Line �Long Haul Rai jUP.9NSF) a Commutx Rail;Sound Trans R) &ucod --�- Comer Shot Line Rad ZQ r f Fo/t Lewis W Centralia r Chehalis m Roy r # PLANNED � CONNECTION ►,�f��"",:�i .��' 10 Q i -- ` sr+ess� —,Tacoma - �..r1 N 2- 1.v"p r--ilvmp is Lacey S" `Qp -- Fart Lewis f �-�.. � `-•�. 7lAl=ter y Yelm t v,� r + -Rainier Tienino -- - South Sound Rail Fwtmn ilis — Tacoma Rail i YelmIRoy Prairie Line i � Long Haul Rail(UP.9NSF' ucoda Commubr Rai(Sourd Transit' _ B �._ �.. Otter Shat Une Rai (, kl FO/t Lewis r l Cs�trniia Roy r <v PLANNED CONNECTION O ` x ti , Roy Connection .�.�,■!. Freight Rail Assistance Packet—September 2008 TACOMA RAIL Contact Information TACOMA PUBLIC UTILITIES Alan Hardy Interim Superintendent Tacoma Rail 2601 SR 509 North Frontage Road Tacoma,WA 98421 Phone: (253)502-8896 Fax: (253)922-9088 alan.hardy@cityoftacoma.org Project Description Presently,BNSF Railway provides rail service to Roy,WA via a spur from Lakewood,WA.There is one customer at Roy,Wilcox Farms,which receives feed grain.The volume of traffic at Roy is not sufficient for BNSF to continue service to Roy in the long run.Tacoma Rail's Mountain Division passes along the south side of Roy and is parallel to the BNSF line for a short distance on the west side of Roy. This project would construct a connection approximately 4300 feet long(including a crossing of SR 507) between Tacoma Rail and BNSF west of Roy and transfer service at Roy to Tacoma Rail,thereby providing for continued rail service to Wilcox Farms. In addition,Tacoma Rail will work with the City of Yelm to market and institute rail service to the Yelm owned rail line between Roy and Yelm. This line, which was purchased by Yelm from the BNSF in 1999,could serve 1 existing industry in Yelm,and provides access to 2-80 acre potential industrial properties. This connection would also supply a secondary access point to/from the McChord AFB-Fort Lewis military installations: Currently the only way in/out is through Nisqually. Any disruption of service along the 10 mph max track due to track conditions would render rail movement unavailable until disruption is corrected. Currently the service to Lakeview is to run a train between East Olympia to Nisqually on the Mainline with a see-saw movement at the Nisqually plant. The operation on the mainline is approx 11 miles however with the see-saw movement and congestion on the mainline this I 1 mile movement can/has taken upwards of 3 hours. Taking this train off the mainline to service the customers on the Lakeview line will remove congestion caused by this"short train"which occupies a space on the mainline that could be occupied by a freight train of up to 1.5 miles long or a passenger/commuter train. RAIL Page 1 TACO M A TACOMA PUBLIC UTILITIES Project Schedule Project Milestone Month/Year Complete project definition June 2009 Begin preliminary engineering July 2009 Complete environmental documentation NA Complete right-of-way certification(may include acquisition) NA Start construction December 2009 Construction complete and project functionally operational February 2010 Project Cost Design Right or Construction Construction Construction Total Engineering Way Engineering Other Contract Estimated $1,903,000 Project Cost Committed Local Funds Additional Local Funds Requested Other Committed $1,403,000 Funds WSDOT Funds Requested $500,000 Proposed Funding Funding Source Public or Private Cash or In-Kind Amount Percentage Local—Port/Rail District Local—Other Railroad WSDOT Public Cash $500,000 26% WSDOT-Rail Bank Other BNSF Cash $1,403,000 74% Total $1,903,000 100% Yearly Maintenance Annual maintenance of the connection and crossing of SR 507 will be the responsibility of Tacoma Rail. In addition,the Pro Forma for this project includes maintenance of the 9 miles of Tacoma Rail's Mountain Division between Frederickson, WA(the location of the closest customer)and Roy, as well as the project and the current BNSF track at Roy. Annual maintenance is estimated at$60,000. This includes vegetation clearing/weed control,track inspection and general expenses. TACOMA .= RAIL Page TACOMA PUBLIC UTILITIES Shipper Benefits and Reduced Costs Wilcox Farms will enjoy the benefits of continued rail service. Should rail service at Roy be discontinued, the alternatives for Wilcox are to bear the cost of transloading and trucking or relocation to another rail serviced site.If transloading were the better option,Wilcox would likely close the Roy mill anyway,and truck direct to the farm. Hytec,the existing industry in Yelm,manufactures fiberglass products.Certain of their commodities may be divertible from truck to rail,but the low volumes do not by themselves justify the connection nor provide a significant contribution to the project justification. Safety Improvements No specific safety improvements are a part of this project. List of Shippers Wilcox Farms 40400 Harts Lake Valley Road Roy, WA 98580 Tax from Industrial Development Being part of the City of Tacoma,Tacoma Rail doesn't pay property taxes. However,Tacoma Rail does pay the City of Tacoma's Gross Earnings Tax at 8 percent and Washington State's Utility and Business Tax at 1.5 percent. Details have been included in the pro-forma(Attachment D). Reducing System Wide Rail Delays Not applicable Environmental Impacts • Are there wetlands or streams on or near your project site?If yes,how close is your project site to those wetlands or streams? o Not applicable. • Has your project site been evaluated for archaeological or historic resources?If yes,please submit the cultural resources report. o No. • What animals,birds,and plants are present on your project site(those species that would be considered endangered,threatened,or monitored by state or federal agencies)? o None known. • Have you completed the State Environmental Policy Act(SEPA)process?If yes,please submit a copy of the documentation. o No. • What federal,state,and local permits will be needed for your project? o To be determined TACOMA -� RAIL Page 3 TACOMA PUBLIC UTILITIES Geographical Balance and Support for Regional Economies According to the information provided at the website located at: http://www.workforceexplorer.com/article.asp?articleld=8098&PAGEI D=&SUBID= Neither Pierce County nor Thurston County are listed as economically distressed by the Washington State Department of Community,Trade and Economic Development(CTED). Economic Development Benefits The project will preserve jobs at Roy that might otherwise relocate with the Wilcox Farms Feed Mill. Employment is presently less than 10 people. Shipper Savings: The shipper will save the cost of transload from another rail served location or relocation of the mill to another mill.The estimated cost of transloading and trucking is$400,000 per year.The proposed BNSF contribution to this project is based on the savings to BNSF in transload cost reimbursement to Wilcox. Project Business Plan Management profile: Alan Hardy is the railroad's Interim Superintendant and has worked for Tacoma Rail since August of 2004.Before coming to Tacoma Rail,Mr.Hardy worked 9 years for the nation's largest and the world's 2nd largest railroad track equipment manufacturer and contract services company as supervisor and manager assigned to the Union Pacific and Burlington Northern Santa Fe railroads in large scale construction and maintenance contracts.Before that he worked for a very successful short line railroad owned by and serving a Fortune 500 paper company in Northwest Florida.He held the positions of Signal Maintainer,Assistant Roadmaster and Roadmaster during his 21 year career there.Mr.Hardy graduated from Wallace Community College in Dothan,Alabama with a two year technical degree in electronics. Mr. Hardy has completed a variety of railroad related courses and seminars and has been a member of the American Railway Engineering and Maintenance-of-Way Association since 1982. Marketing plan: Based on Wilcox Farms present business levels,Tacoma Rail will serve Roy approximately 2 days per week.Traffic will be interchanged with BNSF at Tacoma,WA and handled by Tacoma Rail through Frederickson,WA to Roy. Tacoma Rail will also work on generating new business with Wilcox,with Hytec at Yelm and with other potential customers looking to develop new plants. We estimate that at least 50 additional carloads can be generated in 2011. Operations plan: TACOMA :111-r RAIL Page TACOMA PUBLIC UTILITIES A connection at Roy to the Prairie Line would open up the possibilities to service the Wilcox Farms facility in the town of Roy, allow secondary,emergency access to the McChord AFB-Fort Lewis military installations,and allow a service to the Lakeview area without adding to the congestion on the mainlines between East Olympia and Nisqually. Wilcox Farms—estimated at 400 railcars per year(8 per week). Service could be factored in from the Frederickson area or from the south Centralia/Chehalis area. It also could be argued that the operational and marketing possibilities for this connection would allow strong potential to locate a transloader in the Roy/Yelm area that would have access to both the Port of Tacoma and Grays Harbor area. This connection would also supply a secondary access point to/from the McChord AFB-Fort Lewis military installations: Currently the only way in/out is through Nisqually. Any disruption of service along the 10 mph max track due to track conditions would render rail movement unavailable until disruption is corrected. Lakeview Service: Currently the service to Lakeview is to run a train between East Olympia to Nisqually on the Mainline with a see-saw movement at the Nisqually plant. The operation on the mainline is approx 11 miles however with the see-saw movement and congestion on the mainline this 11 mile movement can/has taken upwards of 3 hours. Taking this train off the mainline to service the customers on the Lakeview line will remove congestion caused by this"short train" which occupies a space on the mainline that could be occupied by a freight train of up to 1.5 miles long or a passenger/commuter train. Tacoma Rail's Safety Manual(Attachment F),details the emergency contacts,training and safety plan. Track maintenance is done to FRA standards according to the required track classification. Financial plan: Tacoma Rail is a 100 percent self supported railroad. Rates are negotiated with the Class I Carriers.Tacoma Rail's revenue factors will be set to fully compensate Tacoma Rail for the added cost of train operations and maintenance,as well as a pro-rata contribution toward maintenance of the track beyond Frederickson to Roy. Annual Financial reports for 2005,2006 and 2007 are included as Attachment E. The pro-forma(Attachment D)includes the added service levels obtainable with the addition of the Roy Connection. Additional Comments This project will further strengthen Tacoma Rail's operations on the Mountain Division.The additional traffic for Wilcox Farms will increase the traffic and revenue base of the rail line.The potential to develop new industries in Yelm further strengthens the line contribution to the economic climate in South West Pierce and eastern Thurston counties. TACOMA :T RAIL Page TACOMA PUBLIC UTILITIES ATTACHMENT A LETTERS OF SUPPORT TACOMA '=I-` RAIL Page TACOMA PUBLIC UTILITIES ` it"1�ii�►' '%!� i� ! r'n 4 'iY�i�G• it ii' - �' ' �di7��i a 'MIMI ILI tet_. rA MEN fir► '�'� AdW Washington State MW Department of Transportation Economic Rail projects fall into three potential funding packages 1. FHWA Funds: $27.2 billion of which the state will receive $492 million This is the only source for small freight rail projects and we have been notified of 52 potential projects. Only 11 project proponents have so far submitted their application packet for evaluation. We understand that all the funds are being used for road projects. If it is decided to allocate funds to rail we recommend that we put $5 m into an extra Freight Rail Assistance Program and we allocate based on the evaluation we do on the 52 projects which the legislature could approve in the usual way during the current session. We would have to comply with the requirement to obligate the funds in 90 days. 2. FRA Amount There are two sections (decision dates are much different to FHWA funds): 1. Amtrak — $1.3 billion (All funds will be submitted to Amtrak by 3/19/09 and they have to complete the projects by 2/17/2011). Amtrak has one project on their list in Washington State—Amtrak Maintenance Facility in Seattle. 2. High Speed Passenger Rail Corridors - $8 billion • This was far greater than expected and so far there is no criteria. The USDOT has to issue a strategic plan for spending the funds by 4/17/09. They then have until 6/17/09 to issue the guidelines and the competitive selection process. • Funds have to be obligated by 9/30/2012 but there is no completion date • There are only 11 high speed rail corridors and the Pacific Northwest Rail Corridor (Vancouver BC to Eugene, OR) is one of them. • If an equal allocation is given to Washington state, we would receive over $700 M. • Our initial list based on a likely total package of $1.5 B totaled $454.7 M with shorter obli- gation timelines. • The revised list includes additional projects based on the increased funding now avail- able but until the criteria is released we are not certain how these projects will be placed in a competitive process. • The list is ranked to reflect what can be done in the timeframe but also follows the Mid- Range Amtrak Cascades Plan. (It is developed without knowledge of the criteria to know how these would rank). • As several states have few projects ready to start, (needing environmental work) we rec- ommend applying for as many projects as possible that would be ready as it is likely we could receive extra funds. Discretionary Funds - $1.5B (decision dates are further into the future than FHWA funds) • Applies to both passenger and freight rail. (Other modes are also eligible). • Minimum project size $20M—maximum project size $300M. Maximum per state $300M . Criteria will be published 5/18/09 Submissions have to be made by 8/16/09 USDOT select projects by 2/17/2010 Complete by 2/17/12 Again without the criteria it is difficult to know how projects will be assessed. If for example there are ad- ditional points for a mix of modes in the application then we would examine how projects in Everett, Bel- lingham and Seattle may be linked together. Currently we have only 3 non-passenger rail projects that are in excess of the $20M lower limit. 1. West Vancouver Port Access—$27.8M 2. Puget Sound & Pacific &Tacoma Rail/Blakeslee Junction—(we may be able to link to 1-5 widen- ing.) Rail element only Phase 1A and 1 B—$33.81 M* 3. Northern Columbia Basin (Moses Lake) $36.3M Order based on cost/benefit analysis. This project may qualify under the high speed passenger rail funds but it will depend upon how stringent the criterion is when published. WSDOT Proposed Intercity Rail Passenger Projects (in recommended order) $692.3 million total 1. Vancouver—Yard Bypass and W 39th Street Bridge $45.1 million Constructs capacity improvement that includes a bypass of freight yard and 39th Street grade separation. This project will improve schedule reliability and is part of the improvements for the 5th Amtrak Cascades round trip. Construction is already underway on the project. There is currently $115 million in funding available. Based upon current estimates, there is a shortfall of$45.1 million that needs to be addressed to complete the project. 2. Tacoma-Point Defiance Bypass $60.0 million This project reroutes passenger trains to an inland route. The bypass is on an existing rail line that runs along the west side of Interstate 5, from south Tacoma through Lakewood and DuPont. It reconnects back to the BNSF Railway main line near Nisqually, on the east side of 1-5. Construction is scheduled to begin in early 2009. WSDOT currently has $59.58 million programmed for its portion of the project, which will not be available for several years. Sound Transit is proposing using FTA stimulus funds for the D to M Street portion of this project. The outcome of their proposal is uncertain. Funds could be obtained from this program if Sound Transit is unsuccessful. 3. Stanwood Station $600,000 A new station platform for Amtrak Cascades service will be constructed in Stanwood and will provide con- nections between local transit providers and Amtrak Cascades. Construction of the station began in winter 2008. SEPA environmental documentation is complete. Construction would be completed by June 2009. Work could begin in less than 90 days. The current project cost estimate is $4.4 million, which is $600,000 greater than available state funding for the project. 4. Everett Curve Realignments and Storage Tracks $2.2 million This project realigns curves to improve speeds for passenger trains up to 50 mph, a 15-20 mph increase. Results in a 2-minute reduction in Seattle-Vancouver, BC schedule. Also guarantees the continued opera- tion of the second train on this route. There is currently $14 million in state funds available for the project. Based upon current estimates, there is a budget shortfall of approximately $2.2 million. The SEPA environmental documentation is complete. Environmental permitting is scheduled for completion in December 2008 with construction beginning imme- diately after permitting is obtained. 5. Cascades - Four New Train Sets $108 million This project would purchase new train sets with a seating capacity of approximately 300 each, providing necessary equipment for up to four additional daily Seattle-Portland round trips. In addition, the existing Amtrak Cascades fleet will be reconfigured to provide four train sets with a seating capacity of approxi- mately 300 for consistency throughout the entire fleet. The purchase of rail equipment is difficult to estimate. A larger order of equipment generally results in lower per unit costs. In addition, the ability to option into an existing production run could reduce unit costs by up to 25%. 6. Capitalized Maintenance 97.4 million WSDOT has been working with BNSF to determine capitalized maintenance needed to bring the rail corri- dor up to a "state of good repair" that will virtually eliminate slow orders throughout the corridor. These funds would provide for a multi-year program that is anticipated to improve reliability and on-time perform- ance from approximately 62% of today to more than 90% within five years. 7. Kelso to Martin's Bluff Rail Project The Kelso to Martin's Bluff Rail Project has been planned in multiple phases: 7a. Phase 1 - New Siding–Milepost 105.5 to 110.0 $47.1 million This initial phase of the project adds a signalized arrival and departure track, associated switches and crossovers that would hold up to two full-length freight trains. The project would clear the main lines, pro- viding capacity necessary for additional and more reliable Amtrak Cascades service. 7b. Phase 2– Kelso to Longview Jct 3`d Main (MP 96.2 to MP 102.1) $110 million This project phase builds upon other phases to construct a 4.5 mile 3rd main line between Kelso Station and Longview Jct. South. Three bridges would be constructed and a 5,000 foot storage would be con- verted to a main line. The project would allow passenger and freight trains to get around freight trains en- tering and leaving the highly congested Longview Yard area. 7c. Phase 3 – Kalama 3`d Main (MP 105.8 to MP 108.9) $64.9 million This phase builds upon other phases to construct a 2.9 mile main line track around the Port of Kalama area. Completion of this work will allow passenger trains to get around freight congestion in the area. 8. King Street Station Track and Signal Upgrades $120 million This project will allow access from all main lines to all station tracks and improve reliability for trains enter- ing or leaving King Street Station from the north. Improvements include track upgrades, platform up- grades, switches and interlockings to allow for Amtrak long distance, Amtrak Cascades and Sounder Com- muter trains to move in and out of the station simultaneously. 9. Blaine—Swift Customs Facility Siding $3.8 million The project provides additional siding track to allow freight trains awaiting customs inspections to move out of the way of oncoming Amtrak Cascades trains. The siding will allow freight train inspections to occur off the main line, helping ensure that passenger trains operate on time. The project was originally scheduled to begin construction in September 2008. NEPA documentation is complete and minor wetland permitting is pending with the Army Corps of Engineers. Final engineering design indicates that the $6 million currently funded is not adequate to build the project. An additional $3.8 million is necessary to build the project as designed. Construction can begin within 120 days. 10. Advanced Signal System/Positive Train Control $30.2 million In conjunction with BNSF's federally mandated implementation of Positive Train Control, this project would equip 16 passenger locomotives, control points and active warning system devices (grade crossing warn- ing devices) with system interface to allow improved safety, rail capacity, reliability and potential for higher speed travel. 11. Centralia– New Crossover near China Creek $3.0 million Construction of this crossover provides flexibility for trains to move between tracks when entering and de- parting Centralia's Union Depot, ensuring that passengers can exit the train on the west side of the rail line adjacent to the station. The estimated construction cost of this project is $3.0 million (2008 estimates). Amhk Washington State Transportation Building Department of Transportation 310 Maple Park Avenue S.E. Paula J. Hammond, P.E. P.O.Box 47300 Secretary of Transportation Olympia,WA 98504-7300 360-705-7000 May 21,2008 TTY: 1-800-833-6388 www.wsdot.wa.gov City of Yelm PO Box 479 MAY 2 3 2008 Yelm, WA 98597 i;Y: SUBJECT: Freight Rail Investment&Freight Rail Assistance Programs The Washington State Department of Transportation(WSDOT)Freight Systems Division is accepting applications for the Rail Bank. The Freight Rail Bank is a loan program authorized by the Washington State Legislature. The program was created to promote economic development through the advancement of freight rail activities.The goal of the Freight Rail Bank is to assist with the funding of smaller capital rail projects that help improve freight movement by rail. The Freight Rail Assistance Program is a program that provides grants directed toward large projects where it is difficult to gain a contribution and where the rail location or the project concerned is of strategic importance to the state as well as the local community. Both programs are administered by WSDOT and require the applicants to provide a business plan for the project and are subject to a cost/benefit calculation to ensure that they are cost effective. The criteria is slightly different with the Freight Rail Bank as the application process allows the applicant to self score 80%of their marks which are based on such things as their own contribution and number of additional jobs that the project will bring to the area. All criteria in the Freight Rail Assistance program is scored by WSDOT acting with the Washington State Department of Community,Trade and Economic Development(CTED)and covers aspects of environmental improvements(aimed at achieving the Governors greenhouse gas emissions mission),transference of traffic from road to rail modes,and economic impact to the state as a whole. If you have any general questions,you may contact Angela Risher at 360-705-7900, or by sending an email to rail@wsdot.wa.gov. Sincerely, Andrew Wood Deputy Director, State Rail&Marine Office AM ► Washington State Department of Transportation t � e � r Frewigh alInvestn-M . . Bank Call forJro'ects - 2008 p wil" yy i LG i .. -. ,.i'.. -.:,. •-sem ` APPLICATION PACKET Rail Bank Application Packet Table of Contents I. Background and Overview Page 2 II. Frequently Asked Questions Page 4 III. Application Page 6 Rail Bank Application Packet I. BACKGROUND AND OVERVIEW Authorization • The Washington State Legislature requires the Washington State Department of Transportation (WSDOT), under ESHB 2878, Section 310, Chapter 121, Laws of 2008, to issue a call for Rail projects. • Clause 1(b) states that these projects are due from the Department "By November 1, 2008, the department shall submit a prioritized list of recommended projects to the Office of Financial Management and the transportation committees of the legislature". • The Governor and Legislature expect these projects to be prioritized using the following priorities and in order of relative importance: (i) Economic, safety, or environmental advantages of freight movement by rail compared to alternative modes; (ii) Self-sustaining economic development that creates family-wage jobs; (iii) Preservation of transportation corridors that would otherwise be lost; (iv) Increased access to efficient and cost-effective transport to market for Washington's agricultural and industrial products; (v) Better integration and cooperation within the regional, national, and international systems of freight distribution; and (vi) Mitigation of impacts of increased rail traffic on communities. • The Governor and Legislature provided $2.5 million for the Freight Rail Investment Bank program during the 2007-2009 Biennium. It is anticipated the Washington State Legislature will allocate $5.0 million for Rail Bank projects in 2009-2011. • The goal of the Rail Bank is to assist with the funding of smaller capital rail projects. Funds will be available for up to $250,000 and MUST be matched by at least 20 percent of funds from other sources. 2 Rail Bank Application Packet Project Proposals Project proposals may be submitted if they include one or more of the following benefits to the state: • Advance Washington State economic development goals. • Leverage state participation by allocating cost responsibilities among beneficiaries. • Demonstrate that there is a low likelihood of obtaining public benefits without public involvement. Project examples include: • Strategic multimodal consolidation centers. Project proponents to provide: o Service agreement from BNSF and/or UP. o Volume commitment from shippers. o Business analysis of value offered. • Rail Rolling Stock purchases (powered or unpowered). • Intermodal transfer or transload facilities or terminals, including attached fixtures and equipment used exclusively for this facility. • Terminals,yards, roadway buildings, fuel station, or railroad wharves or docks, including attached fixtures and equipment used exclusively in the facility. • Railroad signal, communication, or other operating systems, including components of such systems that must be installed on locomotives or other rolling stock. • Siding track. • Railroad grading or tunnel bore. • Track including ties, rails,ballast or other track material. • Bridges,trestles,culverts or other elevated or submerged structures. 3 Rail Bank Application Packet Application Process Please submit applications by mail or e-mail. We cannot accept applications by fax. Application packets must be post-marked no later than September 5. 2008. E-mail submissions must be received by 11:59 p.m. on September 50'. Please send completed applications to: Washington State Department of Transportation State Rail and Marine Office PO Box 47407 Olympia,WA 98504-7407 rail@wsdot.wa.gov If you wish to use express or private-mail delivery,please send to: Washington State Department of Transportation State Rail & Marine Office 310 Maple Park Ave. SE,Rm. SA17 Olympia,WA 98501-2361 If you have any questions or wish discuss your project and the application process, please contact: Kevin Jeffers - Capital Projects Manager 360-705-7982 Andrew Wood - Deputy Director 360-705-7938 WSDOT will review the applications and compile a prioritized list of project proposals that will be submitted to the legislature by November 1, 2008. If approved and funded by the Governor and the Legislature,these funds will be available after July 1,2009. The following criteria will be used to evaluate and prioritize proposals: 40 points Value to the community expressed in dollar terms. This may be all or some of the state,the local community or the freight system. 35 points Strategic benefit(how integral is this to future development of the rail line,the area,the specific business, etc.). 25 points Matching funds(scaled according to the contribution). 4 Rail Bank Application Packet II. Frequently Asked Questions Who is eligible to submit an application to the Rail Bank? Qualified applicants include: • Publicly owned railroads • Port districts • Rail districts • Local governments Is this program open to applicants from the private sector? No. Because this is a loan program, it is not possible to include organizations from the private sector as the state constitution prohibits loans to the private sector. How much money is available? It is anticipated the Washington State Legislature will allocate $5.0 million for Rail Bank projects in 2009-2011. Are all these payments made as grants? No, all payments from the Rail Bank are made by way of loans. Am I limited to one application? No. Applicants may make more than one application. However, it should be kept in mind each project requires matched funding and the same match may not be used more than once. A project may not be subdivided to increase the size of the claim to more than $250,000. Each submission should be for a separate and unrelated project. Who makes the decision about what projects are funded? Applicants will score themselves using the matrix attached to this packet. WSDOT will verify and alter these scores if they appear to be incorrect. The list submitted to the Office of Financial Management will be ranked in order of the highest scores. In the event of a tie the project that was submitted first will be allocated funds first. What does WSDOT staff do with the applications? WSDOT staff will review the applications to determine whether they meet the minimum criteria as set out in this packet. They will then rate them against the application criteria and verify the correctness of the applicant's score. Staff may ask the applicant for more information, and may contact shippers, the railroad involved, and others to secure additional information or to verify information already gathered. Staff may visit the project site to verify information or develop further information. 5 Rail Bank Application Packet Can I protect confidential information? All successful applications are subject to public records disclosure laws for the state of Washington. If any information contained in the application is confidential or proprietary,please identify those components clearly. Please note that specific information may be marked as proprietary; it is not acceptable to mark the whole application. The state of Washington will protect information to the extent allowable by law. If there is a public records request,the Freight Systems Division will notify the applicant that such information will be released on a specified date. If the applicant wants to keep the information confidential, it is the applicant's responsibility to obtain a court injunction within ten days of the notice to protect proprietary data. If the applicant fails to obtain the court order prohibiting disclosure, the Freight Systems Division will release the requested information on the date specified. What is the "benefit to cost" requirement? There is a statutory requirement that all freight rail assistance projects must deliver more benefits than cost. WSDOT staff will evaluate the economic benefits,project viability, safety,roadway preservation,rail system improvements, and environmental benefits of proposed projects,and provide that information along with cost information to the Governor's office and the legislature. WSDOT will perform a cost/benefit calculation for each application based on the responses to the requested information in this packet. What is rail banking? Rail banking is a separate term and is not to be confused with the Freight Rail Investment Bank Program. Washington State may have an interest in retaining rail lines at risk of abandonment, if they may become economically viable at a future date. If it appears that a line could become economically viable within ten years,the line may be rail banked or purchased by the state to prevent its loss as a rail corridor. A rail banked line may be used as a trail on a temporary basis. Maintenance or other changes on a rail banked line used as a trail must preserve the ability to use the line as a railroad in the future. What is the difference between this program and the Freight Rail Assistance Program? This program is a loan program, intended for either smaller projects or as a small part of a larger project where state funds would enable the project to be completed. The Freight Rail Assistance Program is directed toward larger projects, ones where it is difficult to gain a contribution and where the rail location or the project concerned is of strategic importance to the state as well as the local community. 6 Rail Bank Application Packet III. Application WSDOT will use the information provided in the application to evaluate and prioritize the project proposal. Please answer each item that applies to your project as thoroughly as possible. 1. Contact information Please include: • Contact name and title • Organization name • Address • Phone and fax numbers • E-mail address • Provide contact information for all organizations and companies that are involved in planning, funding or providing in-kind support, or railroad operation service for the project. 2. Project description Please provide an overview of the project in two to three paragraphs, including: • Existing conditions • What you are proposing to do? • Where is the project located? • Which railroad(s) will serve the project's customers? • The intended outcome Attachments required with application: • Detailed vicinity map clearly showing site plan and project limits. • Letter of support from railroad. • Provide photographs of the site of the project that identify specific landmarks, points on track, buildings, and/or shipping areas. 3. Project Schedule Please provide actual or target completion date for each milestone (remember no funds can be distributed prior to July 1, 2009): Project Milestone MonthNear Complete project definition Begin preliminary engineering Complete environmental documentation Complete right-of-way certification (may include acquisition) Start construction Construction complete and project functionally operational 7 Rail Bank Application Packet 4. Project cost Provide an estimate of project costs. Design Right of Construction Construction Construction En inee ing Way Engineering Other Contract Total Estimated Project Cost Committed Local Funds Additional Local Funds Requested Other Committed Funds WSDOT Funds Requested* • * May not exceed $250,000 (in total) Attachment required with application: • Project cost estimate, reviewed and signed by an engineer licensed in the state of Washington. (This estimate applies to construction projects and should be broken down to show the costs of each element.) 5. Proposed Funding Indicate funds for the project that are coming from various sources, and indicate if the funds are cash payments or benefits in kind. Funding Source Public or Private Cash or In-Kind Amount Percentage Local—Port/Rail District Local—Other Railroad WSDOT Public Federal Funds Public Other Total Attachment required with application: • Funding commitment letters from all funding partners. 8 Rail Bank Application Packet 6. Yearly maintenance costs Provide the estimated costs for maintenance for the project starting in the year they will be realized. Maintenance costs may include but are not limited to vegetation clearing,ballast renewal, and tie replacement. 7. Reduced road impacts Provide specific information and supporting documentation for freight that will be shipped by rail as a direct result of project development-before and after project completion: • Total length of truck mileage per one way trip that will move to rail as a result of the project. • Type of trucks (e.g. semi,parcel, wide or oversize load) • Types of products that are being transported (e.g. grain, steel, lumber, computers). • Provide the number of rail cars shipped on the project-impacted segment of the railroad line in years 2002-2007. Provide type/weight of rail cars, if known. • Provide an estimate of the total number of rail cars that will be shipped over the affected rail line segment for years 2009 -2014 if the project is built. • How much of that additional rail traffic is currently transported by trucks? What route do those trucks follow? Please give route names and mileposts. • How many rail cars will be diverted to truck transport if the project is not completed? What route will those trucks follow? Please give route names and mileposts. 8. Shipper benefits or reduced costs Benefits derived from lower logistic costs and the difference of shipping products by rail compared to other modes. • Difference in cost of shipping by rail (e.g. Truck Rate vs. Rail Rate—this may vary depending on commodity, location, destination, etc. give supporting information) • Improvements in reliability of service • Improvement to rail access • Provide a list of shippers that use the rail line or rail-related facility today, and the number of rail carloads shipped by each shipper using that segment in 2007. • Provide a list of shippers that will use the rail line if the project is completed, and the estimated total number of rail cars each will ship. How is this commodity currently moving? • Include a contact person's name,title, company name, email address and phone number for each current and prospective shipper. 9. Safety improvements Describe existing hazard(s)within the project limits and how the proposed project improves safety: • The estimated annual amounts of freight tonnage that will use rail as a direct result of the project. • Specific information on property damage that may be reduced or eliminated. • Specific information on injury accidents that may be reduced or eliminated. 9 Rail Bank Application Packet 10. Value to the community • How will the project benefit the community? This may be the state, the local community or the system-wide freight network. • Provide a dollar valuation for each of these communities and how the value was arrived at. If one or more of these communities is not impacted,then specifically say so in your packet application. • The sort of things that you will need to take into consideration will be the impact on any job retention or creation. Include any delays that are minimized by the project. Show too, the value to the freight system. Does the project mean that congestion at this or another location is reduced? 11. Tax from Industrial Development Property taxes generated from new industrial development. Provide the following information and supporting documentation: • Type of industrial development • Assessed value of the industrial development 12. Reducing system-wide rail delays Please explain how the proposal will eliminate or reduce overall rail system delays. Examples of delay reduction: • Realignment of rail track to increase speeds on the mainline or at junctions. • Provision of a longer run-around loop to avoid a train having to be split to be run-around. • Lengthen sidings to enable a facility to receive longer trains and avoid the end of the train standing foul of the main line until removed by a switching locomotive. 13. Preservation of rail line • Explain how your project proposal will preserve service on the line if the rail line is at-risk of immediate abandonment. • Will the proposed project restore service on an inactive rail line? 14. Environmental impacts Explain the environmental benefits and impacts that will result from the project, specifically: • The estimated annual truck trips reduced by using rail as a direct result of the project. Remember that most rail projects have environmental impacts and will require a degree of environmental work. Answer the following questions as part of your applications: 10 Rail Bank Application Packet • Are there wetlands or streams on or near your project site? If yes, how close is your project site to those wetlands or streams? • Has your project site been evaluated for archaeological or historic resources? If yes, please submit the cultural resources report. • What animals, birds, and plants are present on your project site (those species that would be considered endangered, threatened, or monitored by state or federal agencies)? • Have you completed the State Environmental Policy Act(SEPA)process? If yes,please submit a copy of the documentation. • What federal, state, and local permits will be needed for your project? 15. Geographic balance and support for regional economies Is the project in a county listed as economically distressed by the Washington State Department of Community, Trade and Economic Development(CTED)? If the project is not in one of the listed counties,but the rail line on which the project is located runs through one of them, detail any positive economic outcomes that would be a benefit to an economically distressed county. Please refer to the following web address for a map and list of distressed counties: http://www.workforc c explorer.com/article.asp?articleId=8098&PAG EID=&SUBID= 16. Automobile Delay and At-Grade Crossings At-grade crossing delays of automobiles are costs that may be reduced or eliminated by certain types of projects. At-grade separation projects eliminate delays while other projects may reduce them. Provide the following information and supporting documentation: • At-grade crossing location • Traffic information for trains and automobiles o Average Annual Daily Traffic for each at-grade crossing o The average time that trains block each at-grade crossing • Narrative on how the project will result in the elimination or reduction in delays 17. Economic development benefits o Please state how many long-term jobs will be created by the project and the anticipated employment growth over a 5-year period. In the alternative, state how many long-term jobs will be lost if the project is not constructed. o What is the current payroll of jobs that will be preserved by completing this project? What is the projected payroll of jobs that would be created,both on the railroad and in the industries it would serve? o For each group of jobs that will be sustained or created,please provide the name of a contact person,the company's name, and a phone number; see shippers list. Shipper savings If this project is constructed please explain the impacts on rail-dependant shippers, existing and potential. How much would shippers save in freight charges, if any? Explain the current method of shipping, how that would change, and what the rates are for the current and prospective methods. 11 Rail Bank Application Packet 18. Project Business Plan The following areas to be included in the business plan. Management profile Provide a profile of rail management experience and results, education and training for rail operators (and port or regional entity project managers, if applicable). Marketing plan • What new or extended freight services will the rail operator, port or local government provide as a result of this plan? • Where and when will the service be offered? • Provide a profile of types of customers that will find value in the new/extended services. • What additional value will customers derive from this plan? • What will differentiate this freight service from regional competition? Include an analysis of substitute competition such as truck and barge. • Profile current and future demands in rail-dependent sectors served in market area(grain, industrial, intermodal, timber/wood products, etc.). • Provide action plan to reach rail carload sales projections. • Provide action plan to check results quarterly and adjust marketing plan to actuals. Operations plan. Provide operations plan for rail services to be provided upon completion of proposed project, including: • Service schedule: operational hours. What services will be provided? • Service outline/interchange plan between short-line and main line railroad. • Switching operations plan, if applicable. • Key personnel contacts; emergency contacts. • Action plan indicating suggested service metrics and how the company will report actual performance against service metrics. • Personnel, training and certification plan. • Safety plan. • Track structure maintenance plan. Financial plan • A financial plan for the project (you may use the same one that was used to obtain the matching funds if you have one). 12 Rail Bank Application Packet 19. Additional comments Please provide any additional information or reasoning that you would like considered as part of your project proposal. Check List of Required Attachments: ✓ Detailed project vicinity map clearly showing site plan and project limits. ✓ Letter of support from railroad. ✓ Estimate of project cost, reviewed and signed by an engineer licensed in the state of Washington. ✓ Funding commitment letters from all funding partners. ✓ A business plan for the project. ✓ A completed matrix for each submission (this is outlined on the next page). ✓ Answers to each specific question outlined in the application. Especially note the requirements of the environmental questions as outlined in#14 above. 13 Rail Bank Application Packet Complete the matrix below: Section 1 —Contribution—Maximum 25 points Total <20% 20% 25% 30% 35% 40% >45% Not Valid 0 5 8 12 11 22 25 Section 2 —Strategic Interest—Contribution Maximum 35 points Total Each Yes, score 5 points • Does this provide a new rail connection? Yes/No • Is the project supporting a short-line operation? Yes/No (increasing its viability) • Does this mitigate impacts of rail traffic on local Yes/No communities? • Does the product allow transfer of mode to rail? Yes/No • Is the project crucial to the economic operations Yes/No of a specific business? • Does this create better integration within freight Yes/No systems? • Will the project protect a rail asset that is Yes/No deteriorating without the help? Section 3—Value to the Community—Maximum 40 points Total Each Yes, score 5 points • Will this project add 10 or more jobs? Yes/No • Will this project add 50 or more jobs? Yes/No • Will this project add 100 or more jobs? Yes/No • Is it located in a distressed economic county?* Yes/No • Viability of project based on business plan—up to 20 points Leave blank *See Note 15 on page 11. 14 Rail Bank Application Packet Help with your application WSDOT will be running a series of workshops to help potential applicants with their paperwork. We will give examples of completed applications and cost benefit models. We will also be available to answer any questions that you may have. Workshops last a maximum of two hours. Space is limited and workshops may be cancelled if there are no reservations. To attend one of the above workshops, please make your reservation by sending an email to rail a,wsdot.wa.gov or calling 360-705-7900, stating which workshop you wish to attend and how many people will be in your party. Location Address Date Time WSDOT SW Region HQ Wednesday, June 18, 2008 8:00 a.m. Conference Room 211 11018 NE 51St Circle Vancouver, WA 98682-6686 WSDOT SC Region HQ Wednesday, June 18, 2008 2:00 p.m. Main Level Conference Room 2809 Rudkin Road Union Gap, WA 98903-1648 WSDOT Eastern Region HQ Thursday, June 19, 2008 8:00 a.m. Lincoln County Conference Room 2714 North Mayfair Street Spokane, WA 99207-2090 WSDOT NC Region HQ Thursday, June 19, 2008 2:00 p.m. Conference Room 1511 North Wenatchee Avenue Wenatchee, WA 98807-0098 WSDOT Olympic Region Friday,June 20, 2008 2:00 p.m. Lakewood Maintenance Facility 1121141"Avenue SW Tacoma, WA 98499 WSDOT NW Region Thursday, June 26,2008 8:00 a.m. Mount Vernon Conference Room 4100 Cedardale Road Mount Vernon, WA 98274-9599 WSDOT NW Region Thursday, June 26, 2008 2:00 p.m. Conference Room 15700 Dayton Avenue North Seattle, WA 98133-5910 15 Washington State Department of Transportation a �4 r ? b� y Freight Rail Assistance m all for projects - 2008 APPLICATION PACKET Freight Rail Assistance Application Packet Table of Contents I. Background and Overview Page 2 II. Frequently Asked Questions Page 4 III. Application Page 6 1 Freight Rail Assistance Application Packet I. BACKGROUND AND OVERVIEW Authorization The Washington State Legislature authorized the Washington State Department of Transportation (WSDOT) to provide grants to: • Support branch lines and light density rail lines • Provide or improve rail access to ports • Maintain adequate mainline capacity • Preserve or restore rail corridors and infrastructure State Benefits As required by RCW 47.76, projects must be shown to maintain or improve the freight rail system in the state and benefit the state's interests. Project proposals may be submitted if they include one or more of the following benefits to the state: • Improve freight mobility • Increase economic development opportunities • Increase domestic and international trade • Preserve or add jobs • Reduce roadway maintenance and repair costs • Reduce traffic congestion • Improve port access • Enhance environmental protection • Enhance safety • Support economic viability of branch lines or light density lines • Maintain adequate mainline capacity • Preserve or restore rail corridors and infrastructure Project examples include: • Rehabilitate tracks, or restore tracks that were removed • Upgrade tracks to handle heavier rail cars and/or improve system velocity • Provide a rail connection to existing industries not currently served by rail • Develop rail infrastructure that can be proven essential to attract new businesses • Repair damaged rail infrastructure • Increase rail system capacity and/or velocity in general • Preserve a rail corridor • Improve connections to a port or transload facilities • Construct transload or other facilities • Purchase or rehabilitate railroad equipment 2 Freight Rail Assistance Application Packet Application Process Please submit applications by mail or e-mail. We cannot accept applications by fax. Application packets must be post-marked no later than September 5, 2008. E-mail submissions must be received by 11:59 p.m. on September 5t". Please send completed applications to: Washington State Department of Transportation State Rail and Marine Office PO Box 47407 Olympia, WA 98504-7407 rail@wsdot.wa.gov If you wish to use express or private-mail delivery, please send to: Washington State Department of Transportation State Rail & Marine Office 310 Maple Park Ave. SE, Rm. SA17 Olympia, WA 98501-2361 If you have any questions or wish discuss your project and the application process, please contact: Kevin Jeffers - Capital Projects Manager 360-705-7982 Andrew Wood - Deputy Director 360-705-7938 WSDOT will review the applications and submit a prioritized list of project proposals to the Governor's Office of Financial Management by November 1, 2008. The legislature will consider the submitted projects during the 2009 session. The following criteria will be used to evaluate and prioritize proposals: 25 points Economic development benefits (Cost/Benefit Analysis will be performed by WSDOT) CTED will assist WSDOT in the awarding of marks in this section. 15 points Viability of proposal: financial sustainability 10 points Financial and/or in-kind participation by local agency, railroad, private companies and other funding sources 10 points Safety improvements and/or urgent needs 10 points Preservation of rail corridor 10 points Reduction of delay on statewide railroad system 10 points Geographic balance 05 points Reduced impacts on roads 05 points Environmental benefits 3 Freight Rail Assistance Application Packet II. Frequently Asked Questions Is this program open to applicants from the private sector? No. The funds for this program are provided from a source which prohibits their use for the private sector. How much money is available? We anticipate that the Washington State Legislature will allocate $2.75 million for freight rail assistance projects in 2009-2011. The legislature will determine how those funds will be spent based upon the applications submitted through WSDOT. It may choose to increase or decrease the funding that will actually be made available for the 2009-2011 biennium. Who makes the decision about what projects are funded? WSDOT will prioritize the applications using criteria developed by the Department, and send a prioritized list of projects to the Governor's office for determination about which projects to submit to the legislature. The legislature will consider the project recommendations and decide which projects to fund in the upcoming budget. When the budget is passed, the bill is subject to the Governor's acceptance or veto. What does WSDOT staff do with the applications? WSDOT staff will review the applications to determine whether they meet the requirements of RCW 47.76, and rate them against the application criteria. Staff may ask the applicant for more information, and may contact shippers, the railroad involved, and others to secure additional information or to verify information already gathered. Staff may visit the project site to verify information or develop further information. Can I protect confidential information? All successful applications are subject to public records disclosure laws for the state of Washington. If any information contained in the application is confidential and/or proprietary, please identify those components clearly. Please note that specific information may be marked as proprietary; it is not acceptable to mark the whole application. The state of Washington will protect information to the extent allowable by law. If there is a public records request, the Office of Freight Strategy and Policy will notify the applicant that such information will be released on a specified date. If the applicant wants to keep the information confidential, it is the applicant's responsibility to obtain a court injunction within 10 days of the notice to protect proprietary data. If the applicant fails to obtain the court order prohibiting disclosure, the Freight Systems Division will release the requested information on the date specified. 4 Freight Rail Assistance Application Packet What is the "benefit to cost" requirement? There is a statutory requirement that all freight rail assistance projects must deliver more benefits than cost. WSDOT staff will evaluate the economic benefits,project viability, safety, roadway preservation,rail system improvements, and environmental benefits of proposed projects, and provide that information along with cost information to the Governor's office and the legislature. WSDOT will perform a cost/benefit calculation for each application based on the responses to the requested information in this packet. What is rail banking? Rail banking is a separate term and is not to be confused with the Freight Rail Investment Bank Program. Washington State may have an interest in retaining rail lines at risk of abandonment, if they may become economically viable at a future date. If it appears that a line could become economically viable within ten years,the line may be rail banked or purchased by the state to prevent its loss as a rail corridor. A rail banked line may be used as a trail on a temporary basis. Maintenance or other changes on a rail banked line used as a trail must preserve the ability to use the line as a railroad in the firture. What is the difference between this program and the Freight Rail Investment Bank Program? The Freight Rail Assistance program is directed toward larger projects, ones where it is difficult to gain a contribution and where the rail location or the project concerned is of strategic importance to the state as well as the local community. The Freight Rail Investment Bank program is a loan program, intended for either smaller projects or as a small part of a larger project where state funds would enable the project to be completed. 5 Freight Rail Assistance Application Packet III. Application WSDOT will use the information provided in the application to evaluate and prioritize the project proposal. Please answer each item that applies to your project as thoroughly as possible. 1. Contact Information Please include: • Contact name and title • Organization name • Address • Phone and fax numbers • E-mail address • List all organizations and companies that are involved in planning, funding, and/or providing in-kind support, or railroad operation service for the proposal and provide contact information for each one. 2. Project Description Please provide an overview of the project in two to three paragraphs, including: • Existing conditions • What you are proposing to do • Where the project is located • Which railroad(s) will serve the project's customers • The intended outcome Attachments required with application: • Detailed vicinity map clearly showing site plan and project limits. • Letter of support from railroad. • Provide photographs of the site of the project that identify specific landmarks, points on track, buildings, and/or shipping areas. 3. Project schedule Please provide actual or target completion date for each milestone: Project Milestone Month/Year Complete project definition Begin preliminary engineering Complete environmental documentation Complete right of way certification (may include acquisition) Start construction Construction compete and project functionally operational 6 Freight Rail Assistance Application Packet 4. Project cost Provide an estimate of projects costs. Design Right of Construction Construction Construction Total Engineering Way Engineering Other Contract Estimated Project Cost Committed Local Funds Additional Local Funds Requested Other Committed Funds WSDOT Funds Requested Attachment required with application: • Estimate of project cost, reviewed and signed by an engineer licensed in the state of Washington. 5. Proposed funding Indicate funds for the project that are coming from various sources, and indicate if the funds are cash payments or benefits in kind. Funding Source Public or Private Cash or In-Kind Amount Local - Port District Local -Other Railroad WSDOT Public Federal Funds Public Other Total Attachment required with application: • Funding commitment letters from all funding partners. 7 Freight Rail Assistance Application Packet 6. Yearly maintenance costs Provide the estimated costs for maintenance for the project starting in the year they will be realized. Maintenance costs may include but are not limited to vegetation clearing, ballast renewal, and tie replacement. 7. Reduced road impacts Provide specific information and supporting documentation for freight that will be shipped by rail as a direct result of project development- before and after project completion: • Total length of truck mileage per one way trip that will move to rail as a result of the project. • Type of trucks (e.g. semi, parcel, wide or oversize load) • Types of products that are being transported (e.g. grain, steel, lumber, computers). • Provide the number of rail cars shipped on the project-impacted segment of the railroad line in years 2002-2007. Provide type/weight of rail cars, if known. • Provide an estimate of the total number of rail cars that will be shipped over the affected rail line segment for years 2009 - 2014 if the project is built. • How much of that additional rail traffic is currently transported by trucks? What route do those trucks follow? Please give route names and mileposts. • How many rail cars will be diverted to truck transport if the project is not completed? What route will those trucks follow? Please give route names and mileposts. 8. Shipper benefits or reduced costs Benefits derived from lower logistic costs and the difference of shipping products by rail compared to other modes. • Difference in cost of shipping by rail (e.g. Truck Rate vs. Rail Rate—this may vary depending on commodity, location, destination, etc. give supporting information) • Improvements in reliability of service • Improvement to rail access • Provide a list of shippers that use the rail line or rail-related facility today, and the number of rail carloads shipped by each shipper using that segment in 2007. • Provide a list of shippers that will use the rail line if the project is completed, and the estimated total number of rail cars each will ship. • Include a contact person's name, title, company name, email address and phone number for each current and prospective shipper. 9. Safety improvements Describe existing hazard(s) within the project limits and how the proposed project improves safety: • The estimated annual amounts of freight tonnage that will use rail as a direct result of the project. • Specific information on property damage that may be reduced or eliminated. • Specific information on injury accidents that may be reduced or eliminated. 8 Freight Rail Assistance Application Packet 10. Urgent need • Explain any special issues that create an urgent need. Examples of urgent projects might include: o Repairs to a tunnel wall that has started to bulge o Provision of a temporary trestle while a bridge is repaired An urgent need can also be created by special factors that would greatly increase the cost of the project if delayed two years or more. Routine inflation is not considered. Examples of special factors include: • If a bridge is not repaired, it may become unusable within the two-year period and have to be entirely replaced. • A rail line needs to be built in conjunction with a road or other construction project. Without coordinated construction, the rail project will be dramatically more expensive in the future. 11. Tax from Industrial Development Property taxes generated from new industrial development. Provide the following information and supporting documentation: • Type of industrial development • Assessed value of the industrial development 12. Reducing system-wide rail delays Please explain how the proposal will eliminate or reduce overall rail system delays. Examples of delay reduction: • Realignment of rail track to increase speeds on the mainline or at junctions. • Provision of a longer run-around loop to avoid a train having to be split to be run-around. • Lengthen sidings to enable a facility to receive longer trains and avoid the end of the train standing foul of the main line until removed by a switching locomotive. 13. Preservation of rail line • Explain how your project proposal will preserve service on the line if the rail line is at-risk of immediate abandonment. • Will the proposed project restore service on an inactive rail line? 14. Environmental impacts Explain the environmental benefits and impacts that will result from the project, specifically: • The estimated annual truck trips reduced by using rail as a direct result of the project. 9 Freight Rail Assistance Application Packet Remember that most rail projects have environmental impacts and will require a degree of environmental work. Answer the following questions as part of your applications: • Are there wetlands or streams on or near your project site? If yes, how close is your project site to those wetlands or streams? • Has your project site been evaluated for archaeological or historic resources? If yes,please submit the cultural resources report. • What animals,birds, and plants are present on your project site(those species that would be considered endangered,threatened, or monitored by state or federal agencies)? • Have you completed the State Environmental Policy Act(SEPA)process? If yes,please submit a copy of the documentation. • What federal, state, and local permits will be needed for your project? 15. Geographic balance and support for regional economies Is the project in a county listed as economically distressed by the Washington State Department of Community, Trade and Economic Development(CTED)? If the project is not in one of the listed counties,but the rail line on which the project is located runs through one of them, detail any positive economic benefits that would accrue to the distressed county. Please refer to the following web address for a map and list of distressed counties: http://www.workforceexplorer.com/article.asp?articleld=8098&PAGEID=&SUBID= 16. Economic Development Benefits State the number of permanent, full-time direct jobs created and/or retained as a result of the economic activity being supported by this project. Direct jobs refer to new jobs in companies, developments, or sites specifically resulting from the Rail project. Do not include temporary jobs created in project construction or indirect"multiplier"jobs. Retained jobs do not include existing jobs unless there is an immediate threat the company or development will relocate outside of the State of Washington and documentation is provided. • Number of full time direct jobs created • Number of full time jobs retained • Hourly wage for all new jobs • Hourly wage for all retained jobs • What is the current payroll of jobs that will be preserved by completing this project? What is the projected payroll of jobs that would be created, both on the railroad and in the industries it would serve? • For each group of jobs that will be sustained or created,please provide the name of a contact person,the company's name, and a phone number; see shippers list. Shipper savings If this project is constructed please explain the impacts on rail-dependant shippers, existing and potential. How much would shippers save in freight charges, if any? Explain the current method of shipping,how that would change, and what the rates are for the current and prospective methods. 10 Freight Rail Assistance Application Packet 17. Project Business Plan Management profile Provide a profile of management experience and results, education and training, for rail operators (and port or regional entity project managers, if applicable.) Marketing plan • What new and/or extended freight services will the rail operator,port or local government provide as a result of this plan? • Where and when will the service be offered? • Provide a profile of types of customers that will find value in the new/extended services. • What additional value will customers derive from this plan? • What will differentiate this freight service from regional competition? Include an analysis of substitute competition such as truck and barge. • Profile current and future demand in rail-dependent sector served in market area(grain, industrial, intermodal,timber/wood products, etc.). • Provide action plan to reach rail carload sales projections. • Provide action plan to check results quarterly and adjust marketing plan to actuals. Operations plan Provide operations plan for rail services to be provided upon completion of proposed project, including: • Service schedule: operational hours. What services will be provided? • Service outline/interchange plan between shortline and mainline railroad • Switching operations plan, if applicable • Key personnel contacts; emergency contacts • Action plan indicating suggested service metrics and how the company will report actual performance against service metrics • Personnel,training and certification plan • Safety plan • Track structure maintenance plan Financial plan Attachments required with application: • Income statements, cash flow statements and balance sheets for years 2005 —2007. • Proformas for 2009, 2010, and 2011 assuming that the project is funded. 11 Freight Rail Assistance Application Packet 18. Additional Comments Please provided any other information or reasoning that you would like considered in support of your project. Check List of Required Attachments: ✓ Detailed project vicinity map clearly showing site plan and project limits. ✓ Letter of support from railroad. ✓ Estimate of project cost, reviewed and signed by an engineer licensed in the state of Washington. ✓ Funding commitment letters from all funding partners. ✓ A business plan for the project. ✓ Answers to each specific question outlined in the application. Especially note the requirements of the environmental questions as outlined in#14 above. 12 Freight Rail Assistance Application Packet Help with your application WSDOT will be running a series of workshops to help potential applicants with their paperwork. We will give examples of completed applications and cost benefit models. We will also be available to answer any questions that you may have. Workshops last a maximum of two hours. Space is limited and workshops may be canceled if there are no reservations. To attend one of the above workshops, please make your reservation by sending an email to rail ,wsdot.wa.gov or calling 360-705-7900, stating which workshop you wish to attend and how many people will be in your party. Location Address Date Time WSDOT SW Region HQ Wednesday June 18,2008 8:00 a.m. Conference Room 211 11018 NE 50 Circle Vancouver, WA 98682-6686 WSDOT SC Region HQ Wednesday June 18,2008 2:00 p.m. Main Level Conference Room 2809 Rudkin Road Union Gap, WA 98903-1648 WSDOT Eastern Region HQ Thursday June 19, 2008 8:00 a.m. Lincoln County Conference Room 2714 North Mayfair Street Spokane, WA 99207-2090 WSDOT NC Region HQ Thursday June 19, 2008 2:00 p.m. Conference Room 1511 North Wenatchee Avenue Wenatchee, WA 98807-0098 WSDOT Olympic Region Friday June 20, 2008 2:00 p.m. Lakewood Maintenance Facility 112114 I't Avenue SW Tacoma, WA 98499 WSDOT NW Region Thursday June 26, 2008 8:00 a.m. Mount Vernon Conference Room 4100 Cedardale Road Mount Vernon, WA 98274-9599 WSDOT NW Region Thursday June 26,2008 2:00 p.m. Conference Room 15700 Dayton Avenue North Seattle, WA 98133-5910 13 TIB and FMSIB to Sponsor BNSF Rail Impact Consultations with Local Agencies Page 1 of 2 Shelly Badger From: Stephanie Ray Sent: Wednesday, February 14, 2007 11:08 AM To: Shelly Badger Subject: FW: TIB and FMSIB to Sponsor BNSF Rail Impact Consultations with Local Agencies FYI Kind of interesting as it pertains to rail... s From: TIB Info [mailto:TIBinfo@tib.wa.gov] Sent: Wednesday, February 14, 2007 11:00 AM To: Stephanie Ray Subject: TIB and FMSIB to Sponsor BNSF Rail Impact Consultations with Local Agencies The Washington State Transportation Improvement Board (TIB) and Freight Mobility Strategic Investment Board (FMSIB) are working together to improve coordination between local governments and railroads. We are seeking the best ways to assist you in obtaining railroad review of transportation capital projects. BNSF is providing a unique opportunity to local agency customers of TIB and FMSIB. If you have a current or future capital project that effects BNSF right-of-way or facilities, you can get valuable on-the-spot advice about BNSF design requirements and review process. BNSF engineers will be available for brief consultation meetings on Monday. April 9, 2007 in Everett. We have co-located these meetings with the American Public Works Association Spring Conference for your convenience. Space is limited. These meetings will not be held unless a reasonable number of agencies request consultation timeslots. We plan to schedule a similar event at the October APWA Fall Conference in Spokane subject to demand. Eastern Washington agencies should come to Everett if your project schedule requires. Here's what you need to do now. Please reply by Friday, February 23, 2007 to eileenb@tib.wa.gov if you are interested in scheduling a consultation meeting. You will receive a confirmation notice with time and location. Please include: Name Title Agency Phone Email address Project name Note TIB or FMSIB participation if any (TIB or FMSIB participation not required for consultation) Briefly describe project relationship to BNSF facilities Note any particular scheduling constraints so we can find you a convenient timeslot If you have any questions, you may call Steve Gorcester at (360) 586-1139. NOTE: TIBlnfo@TIB.wa.gov is an unmonitored email address. This e-mail address is only used to send informational notices to TIB's customers and other interested parties. 2/14/2007 It TIB and FMSIB to Sponsor BNSF Rail Impact Consultations with Local Agencies Page 2 of 2 Do not reply to this e-mail. If you have a question or concern regarding the content of this e-mail, please see our TIB Staff Page at http://www.tib.wa.gov/Contact/TlBStaff.asp and send your inquiry to the appropriate TIB Staff member. 2/14/2007 Sound Transit tozet$75 million in federal transportation bill/Northwest -The Olympian Pagel of? F M I Customu Care News Entertainment I Special Sectionsse 49 c The Olympian, Olympia Washington Friday,November 14,2003 News I search Go Forecast Northwest Email this story &Printable version kSubscribe News Today South Sound Communities Northwest Sound Transit to get$75 million in federal transportation bill Business THE ASSOCIATED PRESS Sorts WASHINGTON-- Sound Transit would get On the Web Opinion $75 million for its light rail project under an Paid Obituaries agreement reached Thursday by House and www.soundtransit.org Announcements Senate negotiators. Corrections The money represents the full amount requested by the Bush administration Features and the Seattle-based transit agency,which broke ground on the long-delayed Living project last weekend. Special Sections Entertainment The money is part of a $500 million funding agreement approved last month Movie Listings by the federal Transit Administration and would bring total federal funding for Outdoors the 14-mile, $2.5 billion project to $166 million. Travel The latest funds were included in a huge bill financing the Transportation and Technology Treasury departments for the budget year that began Oct. 1. Photo Gallery Horoscope Washington state would get$236 million in federal transportation funding For The Record under the $88.9 billion measure,which lawmakers hope to push through Death Notices Congress in the next week. The bill also funds some smaller agencies. Lottery Besides Sound Transit, the bill would allocate more than$11 million to Past Editions: Seattle-Tacoma International Airport-- including$4 million for a third Date -1 runway and $7.3 million to upgrade its air traffic control system. Marketplace Spokane International Airport would get$8 million for a new air traffic Careers control system, and the General Services Administration would get nearly $10 Cars million to build a new border station at the Canadian border in Blaine. Homes Apartments Other major funding includes $3 million to widen U.S. Highway 12 near Personals Walla Walla; $3 million for a trolley line in downtown Seattle; and $5 million Classifieds for so-called clean-air buses in King County. Grocery Coupons King County Executive Ron Sims,who chairs Sound Transit's board of Dining Guide directors, hailed the agreement as the latest in a string of good news for the BusinessDirectory once-beleagured rail line. Customer Care Sims credited Democratic Sen. Patty Murray, who served on the House-Senate Subscribe conference committee and played a key role in securing the full $75 million All Forms for Sound Transit. httD://www.theolvmDian.com/home/news/20031114/northwest/149108.shtml 11/14/2003 Sound Transit to.get $75 million in federal transportation bill /Northwest -The Olympian Page 2 of 2 Place Ad "Once again, Sen. Patty Murray has come through for the people of our Job Openings congested region," Sims said. Contact Us Circulation Murray, ranking Democrat on the Senate Transportation Appropriations Newsroom subcommittee, also was in a celebratory mood. Online "At a time when our federal budget is stretched thin, I am pleased that the Management importance of these funds has been recognized by my colleagues in the House Read for Life and Senate," she said in a statement. The figure equaled the amount approved by the Senate, but was $60 million more than what had been earmarked by the House in its version of the News for Your transportation bill. wireless device The $236 million for road construction, buses, airports and other projects is in addition to $600 million the state will receive this year under formula-driven grants from the transit administration and the Federal Highway Administration. 002003 The Olympian Return to Northwest section Daily Sections : I more Local News 002003 The OlvmDian. Use of this site signifies your agreement to the tennis of r { l?11Cl�t"slCl service. GF Rodfrut uwvorI L!Ik`_� oaar+irr Gannett USA Gannett Read for Today_ Foundation Life htto://www.theolvmr)ian.com/home/news/20031114/northwest/149108.shtml 11/14/2003 City of Yelm Public Works Dept. Memo To: Shelly Badger, CAO From:Steph C, Public Works CC: File Date: 4/22/2002 Re: 103rd Creek/West Road I am sharing this with you! You may get one of these for our BNRR grant? It does not appear to me like we need to do anything further. Also, I did not realize that the Yelm Creek Grant had any federal funding? Let me know if you think that we need to respond with any information, etc. Steph • Page 1 e ...T.47F,. o b 4' 4 Jj �yC ltl89`a" STATE OF WASHINGTON DEPARTMENT OF ECOLOGY P.O. Box 47600 • Olympia, Washington 98504-7600 (360) 407-6000 • TDD Only (Hearing Impaired) (360) 407-6006 April 17, 2002 Stephanie Conners Yelm City of PO Box 479 Yelm, WA 98597-0479 Dear Ms. Conners: RE: Federal Funds from Ecology Calendar Years 2000 and 2001 The Department of Ecology, as a recipient of federal funds, is required to notify all of our sub-recipients of those federal funds, of their responsibilities under federal law. If as a sub-recipient of federal funds, you receive $300,000 or more in federal funds annually, you are required to have an audit conducted in accordance with Office of Management and Budget(OMB) Circular A-133. You can find this circular at the following federal website: http://www.whitehouse.gov/omb/circulars/al33/al33.htrnl The Department of Ecology is also required to notify you of the actual amount of federal funding we provided to you during the past year. The attached report identifies each agreement your agency has with our agency for which you are listed in our files as the contact person. The report detail includes each payment for each agreement during calendar years 2000 and 2001, as well as the amount of each payment that consisted of federal funds. The Catalog of Federal Domestic Assistance(CFDA)Number and the name of the awarding federal agency are also provided for your use. We will provide this information to you annually in the future, shortly after the end of each calendar year. As a reminder, all subrecipients of federal funds are also required to comply with Federal Circulars on Uniform Administrative Requirements (A-102 or A-110) and Cost Principles (A-87, A-21, or A-122) as appropriate for your type of organization. These federal circulars can be found at the following federal website: hLtp://www.whitehouse.gov/omb/circulars 04 Stephanie Conners Yelm City of Page 2 of 2 April 17, 2002 Please note that your agency could be receiving additional letters for additional agreements, sent to other contact people in your agency. It is important that the information contained in this letter be received by the management personnel in your organization who would be responsible for complying with the above regulations. If you do not feel that you are the appropriate person in your organization to make this determination, please share this letter with the appropriate management personnel within your organization. If you have any questions at all, please contact Jim Massaia at (360) 407-7071; Cheryl Hanson at (360) 407-7063; or me at(360) 407-7052. Sincerely, Gary M. Zeiler Fiscal Officer GMZ:lr(104LO402.aoc) Enclosure cc: Bev Huether, SEA Agreement files Federal Funds from Department of Ecology Calendar Year 2000 & 2001 Payments to Recipient Recipient: YELM CITY OF Contact: STEPHANIE CONNERS ESTIMATED AMOUNT OF PAYMENT FEDERAL TOTAL FEDERAL AGREEMENT/ DATE AGREEMENT FUNDING THIS PAYMENT FUNDING THIS PAYMENT # (yyyymmdd) CFDA AMOUNT AGREEMENT AMOUNT PAYMENT G0000147 78,000.00 12,152.59 -01 20000428 11.419 19,190.05 9,595.03 -02 20000908 11.419 5,115.14 2,557.57 $24,305.19 $12,152.60 CFDA# Federal Agency CFDA Title 11.419 National Oceanic And Atmospheric Administration Coastal Zone Management Administration Awards Page 1 of 1 Shelly Badger From: "Steve Day" <sday@bpmlaw.com> To: "Shelly A. Badger(E-mail)" <shelly@yelmtel.com>; "Joe Williams (E-mail)" <Willgrpjsw@aol.com> Sent: Tuesday, April 23, 2002 7:14 PM Subject: Revenue stream for RR Dear Shelly and Joe, A client of mine has been approached about the potential of storing rail cars. He is aware of the Yelm line and he would like to talk to you about splitting the income for storing the cars. Since you are both clients, all I can do is introduce you to the opportunity and let you deal with him directly. If you are interested, please call Byron Cole Operations Manager Ballard Terminal Railroad Meeker Southern Railway (206) 782-1447 bycole@gwest.net Stephen L. Day Betts Patterson & Mines, P.S. h_ttp_[Lwww.bpmlaw.com One Convention Place, Suite 1400 701 Pike Street Seattle, WA 98101-3927 Phone (206) 292 - 9988 Fax (206) 343-7053 This is a privileged and confidential communication. If you are not the addressee, you may not read, copy or distribute this email. If you receive this email in error, please advise us by return mail or call (206) 292-9988 so that we may correct our records. 4!24!2002 Rail Page 1 of 6 Aft Naws Site index I Contact WSDOT I WSDOT Hom MAP Washington State kepartri"t of Transportation r RIDE THE TMN morw', State Freight Rail Assistance Program » Amtrak Cascades » Stations Funds in the state's Essential Rail Assistance Account (ERAA) may be issued to the „ Sounder Commuter various county rail districts, port districts, counties, economic development councils, Rail and cities as low interest loans or grants. If a project is on a privately-owned railroad, funds are provided as loans only. These funds may be used for the following purposes: • Rail Lines Map • Acquiring, rehabilitating, or improving rail lines; •Abandoned Lines • Purchasing or rehabilitating railroad equipment that is necessary to maintain • Rail Terms essential rail service; • Railroads &Contacts • Constructing railroad improvements to alleviate port access or mainline congestion; • Freight Commodities • Constructing transloading facilities (rail facilities for loading/unloading rail cargo) • Rail Homepage to increase business on light density lines or to alleviate the impacts of abandonment; Glick the Map for • Preserving or operating light density lines; or {Community Commute • Preserving rail corridors for future rail purposes by purchasing rights-of-way. and Travel Listings r This program is contingent on the outcome of a referendum in November regarding statewide transportation revenue. For more information about the Freight Rail Assistance Program, please contact Ray Allred at 1-800-822-2015 (in Washington), 360-705-7903, or e-mail Ray at allredr@wsdot.wa.gov. _ t What Projects Have Benefited From This Program? (D, Click here to enlarge map Yakima River Railroad Bridge Emergency Repairs In February 2001, fire destroyed a 300-foot, all-wood section of the Yakima River RELATED 7 Bridge in Richland, WA. The trestle provided the only means of rail access in Richland for potato processor Lamb-Weston Inc., Henningsen Cold Storage Co., locomotive • Transit builder Talgo LRC, and a few other businesses. Since the Port of Benton owns the • Transportation Demand trestle, the port applied for and received a grant from WSDOT to make repairs. Within Managment 34 days, rail service was restored. Without the repairs, approximately 3,000 heavy • Special Needs truckloads per year would have been added to state highways, increasing highway Transportation maintenance costs and decreasing air quality. III �• ��r�§l��!g�!p -�4P IV��l • WSDOT Rail Office I I I iI�iVYult�l I4, i Stabilizing the Blue Slide Tunnel On its way to Metaline Falls,WA, the Pend Oreille Valley Railroad travels through the 90-year-old Blue Slide Tunnel. A year ago, the tunnel was likely to collapse—decayed support timbers endangered not only the tunnel, but also the highway running above. To make repairs, the Pend Oreille Valley Railroad applied for and received a grant from WSDOT to repair 113 feet of concrete wall and 100 feet of timber set within the 1,100- foot-long tunnel. The work was completed in spring 2001. http://www.wsdot.wa.gov/rail/projects/state_assistance.cfm 6/26/2002 Rail Page 2 of 6 Hoquiam River Bridge Rehabilitated The Puget Sound and Pacific Railroad runs from Centralia, WA to Hoquiam, WA. Between the two cities, a 90-year-old mechanical swing span railroad bridge crosses the Hoquiam River. Unfortunately, the bridge suffered years of neglect, becoming dangerous to travel. The Puget Sound and Pacific Railroad received a loan from WSDOT to make necessary repairs, which were completed in early 2001. Since the bridge has been repaired, it accommodates 286,000-pound freight cars. Preserving this rail service keeps approximately 4,000 heavy truckloads per year off state highways, reduces highway maintenance costs, and preserves essential rail service to Hoquiam, benefiting both the community and employers. `- IYIPII@ a�M�Nfl�i/IIIIIaM _.. Construction of Track and Turnouts at the Port of Grays Harbor A leading handler of forest products, the Port of Grays Harbor is in the process of locating a new forest product manufacturing facility, and possibly a fiber optics company, on Port property. In preparation for the increased movement of goods, the Port received a grant from WSDOT to construct approximately 4,000 feet of track and three turnouts. The completed project keeps about 3,900 heavy truckloads off state highways and reduces highway maintenance costs. -VIA, .„" i s 1. ♦ l«:e'x� .._ •$�X,e �4 i ++a2vci.S,� Rehabilitation of Light Density Short Lines in Lincoln and Whitman Counties The central Washington branch of the Palouse River and Coulee City Railroad was in dire need of rehabilitation due to deferred maintenance. In addition to drainage work, the branch needed over 14,000 rotten and defective railroad ties replaced, and over 29,000 tons of crushed rock to stabilize the track bed. A loan from WSDOT was used to complete the repairs. Preserving these light density lines keeps approximately 15,000 heavy truckloads per year off state highways, reducing highway maintenance costs. http://www.wsdot.wa.gov/rail/projects/state_assistance.cfm 6/26/2002 Rail Page 3 of 6 e w I11I i �I Port of Olympia In 1999 the Port of Olympia needed to increase their railroad track capacity to keep up with the demand from tenants and shippers. Increased track capacity allows the Port of Olympia to provide a lower cost alternative in transporting cargo for their tenants and shippers, attract new business to the port, and keep approximately 2,000 heavy truck loads off the highways each year resulting in a reduction in highway maintenance costs. Port of Grays Harbor In order for the Port of Grays Harbor Industrial Area to maintain and increase the usage of the existing rail line, construction of two new rail spurs—tracks that extend a short distance from the regular track—were needed. These spurs would allow the Port to expand the transport of bulk goods such as lumber, pulp, chemicals, and logs. a pp i� In 1999 the Port of Grays Harbor applied for and received a grant from the Washington State Department of Transportation to construct the two rail spurs. The completion of the rail spurs created additional benefits, not only to the Grays Harbor area, but also to the state of Washington. Some of the benefits resulting from this project include: 1. Removing approximately 2,100 heavy truck loads off of Washington State highways, thus reducing highway maintenance costs; 2. Preserving rail service in the Grays Harbor area; 3. Decreasing shipping costs for businesses located in Grays Harbor; and 4. Safer transportation of hazardous materials. Ballard Terminal Rehabilitation In 1998 the Ballard Line, which serves the waterfront along the north side of Lake Washington Ship Canal, teetered on the verge of being abandoned by Burlington Northern and Santa Fe Railway (BNSF) due to poor track conditions. After negotiations between the Ballard Terminal Railroad Co. (BTRC), BNSF, city of Seattle, and Adventure Trail, the rail line was purchased for rehabilitation of the tracks and construction of a trail to run adjacent to the tracks. Ballard Terminal Railroad Co. applied for and received a loan from WSDOT to rehabilitate the line. With the completion of the project, the BTRC reestablished rail service to rail dependent businesses along the north shore of Salmon Bay and the Ship Canal. Without the rehabilitation, lost rail business would have added approximately 520 heavy truck loads per year onto Washington State highways, increasing highway maintenance costs causing possible relocation of plants and facilities, and deterring future businesses wanting to relocate there. http://www.wsdot.wa.gov/rail/projects/state_assistance.cfm 6/26/2002 Rail Page 4 of 6 Palouse River and Coulee City Rehabilitation In September 1996, the Palouse and Coulee City Railroad (PCC) purchased a 108- mile rail line, stretching from Cheney to Coulee City, from the BNSF. This rail line served many communities including Reardan, Davenport, Creston, Wilbur,Almira, Hartline, and Coulee City. This light density line became the victim of deferred maintenance under BNSF, and when PCC assumed operation of the line, it faced huge and immediate rehabilitation requirements to maintain rail service. If the line were lost to abandonment, the diversion of freight from rail to truck would have added approximately 14,000 heavily loaded trucks to Washington State highways annually. This additional wear and tear on Washington highways would have increased maintenance costs by$3.7 million per year. By WSDOT providing a loan to the railroad, the rehabilitation of the line went forth, essential rail service was preserved, and increased truck traffic, along with roadway maintenance costs, were averted. .atayyj IS Y+f Emergency Flood Damage Repairs on the Blue Mountain Railroad In February 1996, heavy rains in eastern Washington caused severe damage to miles of rail lines located in Whitman, Walla Walla, and Columbia Counties. In order to restore these rail lines to safe operation, massive repairs were in order. These repairs consisted of replacing trackbed, ballast, ties, fill, bridge piers, timbers, and removing flood debris from culverts and bridges. With WSDOT providing capital funding to the Blue Mountain Railroad, the repairs were completed and service resumed by December 1996. u Lewis &Clark Railway Acquisition/Rehabilitation The Lewis &Clark Railway Company (LINC) operates a 29.5-mile railroad that lies between Rye, a station located in Vancouver, and Chelatchie in Clark County, Washington. Clark County, who is the current owner of the railroad, purchased the line http://www.wsdot.wa.gov/rail/projects/state_assistance.cfm 6/26/2002 Rail Page 5 of 6 in November 1986,from the Chelatchie Prairie Railroad. LINC provides both freight and excursion passenger service to the communities of Barberton, Brush Prairie, Battle Ground, Heison, Moulton Falls, and Yacolt. Wallboard, raw materials to make plastics bottles, and transformers are just a few of the commodities that rely on the rail line, not to mention the future potential industrial growth the area could experience. In the winter of 1996, a 3.6-mile of track, that connects the BNSF mainline to the county's rail corridor, experienced severe damage due to heavy flooding. This damage caused all rail service to be suspended to all shippers on the Lewis &Clark Railway. BNSF agreed to donate the affected line to Clark County (estimated donation value of $4.8 million) who in turn attained a grant from WSDOT to repair the flood damage. If service had not been restored to this line, it would have added approximately 2,334 annual heavy truckloads to the Washington State highways, causing approximately$42,223 in added yearly highway maintenance costs. Tunnel Repairs on the Pend Oreille Valley Railroad The Pend Oreille Valley Railroad (POVA) provides rail service from Newport, WA to Metaline Falls,WA. In particular, it serves two major shippers north of the Blueside Tunnel—Vaagen Brothers Lumber Company in Ione and LaFarge Corporation in Metaline Falls. In 1995 failing timber support sets inside the Blueside Tunnel threatened rail service to the shippers. If emergency repairs were not completed, rail service north of the tunnel would cease, causing businesses to either close down or find other means of transporting their goods, deterring new businesses from moving in, and causing the rail line to be abandoned. POVA applied for and received financial assistance from the state of Washington using ERAA funds to complete the improvements and continue rail service. Because of these improvements the shippers are able to continue to ship approximately 850 rail cars a year. This calculates to approximately 2,550 heavy truckloads being kept off the Washington State highways and a cost savings in highway maintenance. F V4 �y{ i qp n Other Projects . 1994–Rehabilitation of the Walla Walla to Dayton Line of the Blue Mountain http://www.wsdot.wa.gov/rail/projects/state_assistance.cfm 6/26/2002 Rail Page 6 of 6 Railroad (in combination with LRFA) • 1993 to 1994—Loans for acquisition of two locomotives and funding of maintenance-of-way equipment to be leased by Port of Whitman County to the Blue Mountain Railroad • 1993—Acquisition of the Toppenish to White Swan Line • 1993—Acquisition for corridor preservation of the 14.6-mile Yelm to Tenino Line • 1993—Acquisition of the Othello to Royal City Line • 1992—Acquisition and rehabilitation of the Port of Centralia Line 2002 Freight Rail Assistance Projects Rehabilitating 53 Miles of Line From Frederickson to Morton The Tacoma Rail Mountain Division has proposed to rehabilitate 53 miles of rail line, which includes bridge repair, tie renewal with added ballast and surfacing, and selected rail replacement. The railroad has received a grant from WSDOT to make these repairs and work is in progress. Restoring rail service to three sawmills in Morton can remove 16,380 large truck trips per year off of State Route 12. Improving Rail Line From Omak to Oroville The Cascades and Columbia River Railroad provides the only rail service in Okanogan County. The six miles of track located at the north end of the line needs upgrading in order to handle heavier rail cars. The railroad received a loan from WSDOT to upgrade the track. Preserving rail service to Oroville keeps approximately 11,250 heavy truckloads per year off state highways. Constructing a Spur at White Swan The Toppenish, Simcoe, and Western Railroad provides rail service over a 22-mile line running from Toppenish to White Swan, WA. Yakima County, owner of the rail line, has applied for a grant to reconstruct a former track serving the Yakama Forest Products Mill and minor rehabilitation of 20 miles of the main track. Details are still being finalized. Successful completion of this project will keep approximately 1,100 heavy truckloads per year off state roadways. Copyright WSDOT©2002 Traffic&Roads I Site Index I Contact WSDOT I WSDOT Business I WSDOT Home http://www.wsdot.wa.gov/rail/projects/state_assistance.cfm 6/26/2002 ..,E...R..B N.."EWS WASHINGTON STATE OFFICE OF TRADE AND ECONOMIC DEVELOPMENT BUILDING FOU ION"oR TIE Fu Volume 3, Issue 5 NOVEMBER 2001 CERB conditionally approved state loan and grant investments for the Ports of Pend Oreille, Garfield, and Quincy and for Grays Harbor County economic development infrastructure projects totaling $1,750,000. CERB approved the projects contingent upon new capital budget funds and other projected revenues becoming available. Currently, expenditures of CERB's new capital budget appropriation are frozen while the state explores options for addressing a major projected revenue shortfall. PORT OF PEND OREILLE PORT OF GARFIELD T he Port of Pend Oreille, in Pend Oreille County, The Port of Garfield, in G---field County, received received conditional approval of a$75,000 general conditional approval of a$20,000 general obligation obligation loan and a$75,000 grant for construction loan and a$80,000 grant to assist in the construction of approximately 3,500 feet of rail track portions to of a new access road from Highway 12 and a new be relocated,replaced and connected to the main line. bridge to cross Pataha Creek, on port property. The The Port will construct a 150-foot building for Ryan new access road will provide safe and adequate access Industries' expanded operation in Washington State. for trucks, by-passing the current route on residential Ryan Industries repairs rail cars to Federal Railroad streets. This is the only industrial site in Garfield Administration and Association of American Railroad County and is the sole potential location to help standards. The Port owns,maintains and operates 85 diversify the county's economic base from its miles of railroad and does business as the Pend dependency upon agriculture. The Port of Garfield Oreille Valley Railroad (POVA). Ryan Industries is a estimates 38 full-time jobs will be created by future good fit with the basic functions of the Port, and with business developments as a result of the new access CERB's help in financing the rail improvements,the road and bridge linking the Port to Highway 12. company's expansion will diversify the local economy from dependence on timber harvest and paper manufacturing. Ryan Industries estimates 21 P 0 RT OF QUINCY full-time jobs will be created and 9 full-time jobs will The Port of Quincy, in Grant County, received be retained. conditional approval of a$125,000 general obligation loan and a $375,000 grant. CERB funds will assisi is GRAYS HARBOR COUNTY the construction of a rail switch, approximately 1,000 feet of track and modifications to an existing intersec- Grays Harbor County received conditional ap- tion signal. The improvements will connect the proval of a$700,000 general obligation loan and a Burlington Northern Santa Fe mainline to a 2,500 foot $300,000 grant to construct 6,600 feet of rail spur double track loop around the interior of the port's and ballast on public right—of—way owned by Grays 320-acre Intermodal Industrial Park. The site is sur- Harbor County that will connect directly to the rounded by a local road system that is maintained by Puget Sound and Pacific Railroad(PSAP)mainline. the City of Quincy and Grant County. The new en- The spur line will bring Sierra Pacific Industries, a trance to the site will be serviced in the future by the modern, state-of-the-art mill to the county and is one City of Quincy, with plans to upgrade the entry road step towards re-establishing local job growth in tim- to an all-weather road for truck traffic. While there ber, still the dominant economic base of the county. are no businesses currently linked to this project, the Sierra Pacific Industries estimates 150 full-time jobs Port is in negotiations with two significant businesses will be created upon attaining rail access. at this time. 120 full-time jobs are estimated to be created from future business developments. MEMBERSHIP UPDATE CERB BOARD MEMBERS AND STAFF Nov. 2001 GOVERNOR APPOINTED PUBLIC REPRESENTATIVES Three CERB Board members, Judith Boekholder,Board Chair Senator Pat Hale Jeff Matson, Port Official, Joe Pin- Toppenish,Washington Joint Legislative Committee on City Official Economic Developement zone, Representative of a Large Business West of the Cascades and Senator Tim Sheldon *Earl Davenport,Board Vice-Chair Senate Economic Development& Judith Boekholder, City of TOppen- *New Vice-Chair will be voted Telecommunications Committee ish Cit Official, and CERB Chair, on for January 2002 meeting. City Representative Jim Dunn have all been re-appointed by Gov- House Trade&Economic ernor Locke to serve additional LeRoy Allison Warden,Washington Development Committee three-year terms. County Official Representative Velma Veloria House Trade&Economic Six-year CERB member, Earl Daven- Steven Evans Development Committee Walla Walla,Washington AGENCY REPRESENTATIVES port will retire from the Board after the !november 15, 200-1 meeting. Small Business Representative John Doyle Board members will elect a Vice- Elisabeth Harper Department of Transportation Chair at the January 17, 2002 Mount Vernon,Washington Gary Kamimura meeting. Small Business Representative Employment Security Department Robin Pollard Jack Pittis Office of Trade& ' During his tenure on the Board Earl Port Angeles,Washington Economic Development served as the CERB Representative Public Representative Skeets Johnson for a Large Business East of the Cas- Department of Revenue cades. He lives in Colville, Washing- Joe Pinzone CERB/CEAC ton and works for Vaagan Brothers camas,Washington Lumber. Earl's dedication t0 Wash- Large Business Representative Kate Rothschild CERB Program Manager ington State and his wonderful sense Jeffrey Matson April Wilson of humor will be missed by the CERB Sunnyside,Washington CERB Administrative Support Board and staff. We wish him well Port Official Tina Cohen in all his future endeavors. Special Projects Manager Tom Trulove Dara Fredericksen,Managing Dir. Cheney,Washington Community Economic The CERB Board Public Sector Economist Assistance Center .� wishes ou all Leroy Williams PROJECT UEV. SERVICES y Bremerton,Washington Dick Larman,Managing Director Happy Holidays!! Small Business Representative Project Development Services Brent Bahrenburg �1 Miland Walling Project Development Bickleton,Washington Terry Lawhead (el Small Business Representative Project Development CERB is a state economic development resource strategically focused to help business and industry create and retain jobs in partnership with local communities. CERB provides financing for construction of public facilities that support private sector development and increased employment opportunities. Management support is provided by the Office of Trade & Economic Development that works to enhance Office of and promote sustainable economic vitality. t ITrade&Economic Communities with potential projects are encouraged to contact Development CERB staff at 360.725.4058 or by e-mail to: KateR@cted.wa.gov Washington State.Pour bordea No boundaries." Railroad Advancement and Infrastructure Law for the 21st Century (Introduced in the Senate) S I 't) IS 107th CONGRESS 1st Session S. 1530 To provide improved safety and security measures for rail transportation, provide for improved passenger rail service, and for other purposes. IN THE SENATE OF THE UNITED STATES October 11, 2001 Mr. HOLLINGS (tor himself, Mr. BIDEN, Mr. BREAUX, Mr. CLELAND, Mr. SCHUMER, Mr. KERRY. Mr. ROCKEFELLFR, Mr. CARPER, Mr. JEFFORDS, and Mr. DURBIN) introduced the following bill; which was read twice and referred to the Committee on Commerce. Science, and Transportation A BILL To provide improved satety and security measures for rail transportation, provide for improved passenger rail service, and for other purposes. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, SECTION 1. SHORT TITLE. This Act may be cited as the 'Railroad Advancement and Infrastructure Law for the 21 st Century'. SEC. 2. 1-YEAR EXTENSION OF AUTHORIZATION. (a) IN GENERAL- Section 24104(a) of title 49, United States Code, is amended-- (1) by striking 'and' in paragraph (4); (2) by striking '2002,' in paragraph (5) and inserting '2002; and'; and (3) by inserting after paragraph (5) the following: (6) $1,200,000,000 for fiscal year 2003,'. (b) Repeal of Self-Sufficiency Requirements- (1) Title 49 AMENDMENTS- Chapter 241 of title 49, United States Code, is amended-- (A) by striking the last sentence of section 24101(d); and (B) by striking the last sentence of section 24104(a). (2) AMTRAK REFORM AND ACCOUNTABILITY ACT AMENDMENTS- Title 11 of the Amtrak Reform and Accountability Act of 1997 (49 U.S.C. 24101 nt) is amended by striking sections 204 and 205. (3) COMMON STOCK REDEMPTION DATE- Section 415 of the Amtrak Reform and Accountability Act of 1997 (49 U.S.C. 24304 nt) is amended by striking subsection (b). (c) LEASE ARRANGEMENTS- Amtrak may obtain services from the Administrator of General Services, and the Administrator may provide services to Amtrak, under section 201(b) and 211(b) of the Federal Property and Administrative Service Act of 1949 (40 U.S.C. 481(b) and 491(b)) for fiscal year 2002 and each fiscal year thereafter until the fiscal year that Amtrak operates without Federal operating grant funds appropriated for its benefit, as required by sections 24101(d) and 24104(a) of title 49, United States Code. SEC. 3. EMERGENCY AMTRAK ASSISTANCE. (a) IN GENERAL- There are authorized to be appropriated to the Secretary of Transportation for the use of Amtrak for the 2-year period beginning on the date of enactment of this Act-- (1) $471,000,000 for systemwide security upgrades, including hiring and training additional police officers, canine-assisted security units, and surveillance equipment; (2) $998,000,000 to be used to complete New York tunnel life safety projects and rehabilitate tunnels in Washington, D.C., and Baltimore, Maryland; (3) $949,000,000 for bridges, track, power, and station improvements to increase capacity and improve reliability of rail passenger transportation in the Northeast Corridor; (4) $656,000,000 for equipment, including-- (A) the overhauling and returning of 45 passenger cars and 5 locomotives to service, (B) the upgrading and overhauling of 231 passenger cars and 33 locomotives, and (C) the purchase of 10 new trainsets, of which sum at least 25 percent shall be used for operations outside the Northeast Corridor (unless the Secretary determines that demand for such operations outside the Northeast Corridor is less than 25 percent); and (5) $77,000,000 for incremental operating costs, including reservation centers, overtime compensation, and mechanical terminals (net of incremental revenues). (b) AVAILABILITY OF FUNDS- Amounts appropriated pursuant to subsection (a) shall remain available until expended. (c) COORDINATION WITH EXISTING LAW- Amounts made available to Amtrak under this section shall not be considered to be Federal assistance for purposes of part C of subtitle V of title 49, United States Code. SEC. 4. REHABBATATION, IMPROVEMENT, AND SECURITY FINANCING. (a) DEFINITIONS- Section 102(7) of the Railroad Revitalization and Regulatory Reform Act of 1976 (45 U.S.C. 802(7)) is amended to read as follows: '(7) 'railroad' has the meaning given that term in section 20102 of title 49, United States Code; and'. (b) GENERAL AUTHORITY- Section 502 of the Railroad Revitalization and Regulatory Reform Act of 1976 (45 U.S.C. 822) is amended-- (1) by striking 'Secretary may provide direct loans and loan guarantees to State and local governments,' in subsection (a) and inserting 'Secretary shall provide direct loans and loan guarantees to State and local governments, interstate compacts entered into under section 410 of the Amtrak Reform and Accountability Act of 1997 (49 U.S.0 24101 nt),'; (2) by striking 'or' in subsection (b)(1)(B); (3) by redesignating subparagraph (C) of subsection (b)(1) as subparagraph (D); and (4) by inserting after subparagraph (B) of subsection (b)(1) the following: '(C) to acquire, improve, or rehabilitate rail safety and security equipment and facilities; or'. (c) EXTENT OF AUTHORITY- Section 502(d) of the Railroad Revitalization and Regulatory Reform Act of 1976 (45 U.S.C. 822(d)) is amended-- (1) by striking '$3,500,000,000' and inserting '$35,000,000,000'; (2) by striking '$1,000,000,000' and inserting '$7,000,000,000'; and (3) by adding at the end the following new sentence: 'The Secretary shall not establish any limit on the proportion of the unused amount authorized under this subsection that may be used for 1 loan or loan guarantee.'. (d) COHORTS OF LOANS- Section 502(f) of the Railroad Revitalization and Regulatory Reform Act of 1976 (45 U.S.C. 822(f)) is amended-- (1) in paragraph (2)-- (A) by striking 'and' at the end of subparagraph (D); (B) by redesignating subparagraph (E) as subparagraph (F); and (C) by adding after subparagraph (D) the following new subparagraph: '(E) the size and characteristics of the cohort of which the loan or loan guarantee is a member; and'; and (2) by adding at the end of paragraph (4) the following: 'A cohort may include loans and loan guarantees. The Secretary shall not establish any limit on the proportion of a cohort that may be used for 1 loan or loan guarantee.'. (e) CONDITIONS OF ASSISTANCE- Section 502 of the Railroad Revitalization and Regulatory Reform Act of 1976 (45 U.S.C. 822) is amended-- (1) in subsection (f)(2)(A), by inserting ', if any' after collateral offered'; and (2) by adding at the end of subsection (h) the following: The Secretary shall not require an applicant for a direct loan or loan guarantee under this section to provide collateral. The Secretary shall not require that an applicant for a direct loan or loan guarantee under this section have previously sought the financial assistance requested from another source. The Secretary shall require recipients of direct loans or loan guarantees under this section to apply the standards of section 22301(f) and (g) of title 49, United States Code, to their projects.'. (f) TIME LIMIT FOR APPROVAL OR DISAPPROVAL- Section 502 of the Railroad Revitalization and Regulatory Reform Act of 1976 (45 U.S.C. 822) is amended by adding at the end the following new subsection: '(i) TIME LIMIT FOR APPROVAL OR DISAPPROVAL- Not later than 180 days after receiving a complete application for a direct loan or loan guarantee under this section, the Secretary shall approve or disapprove the application.'. (g) FEES AND CHARGES- Section 503 of the Railroad Revitalization and Regulatory Reform Act of 1976 (45 U.S.C. 823) is amended-- (1) by adding at the end of subsection (k) the following: 'Funds received by the Secretary under the preceding sentence shall be credited to the appropriation from which the expenses of making such apprasals, determinations, and findings were incurred.'; and (2) by adding at the end the following new subsection: '(1) FEES AND CHARGES- Except as provided in this title, the Secretary may not assess any fees, including user fees, or charges in connection with a direct loan or loan guarantee provided under section 502.'. (h) SUBSTANTIVE CRITERIA AND STANDARDS- Not later than 30 days after the date of the enactment of this Act, the Secretary of Transportation shall publish in the Federal Register and post on the Department of Transportation web site the substantive criteria and standards used by the Secretary to determine whether to approve or disapprove applications submitted under section 502 of the Railroad Revitalization and Regulatory Reform Act of 1976 (45 U.S.C. 822). SEC S. CAPITOL GRANTS FOR RAILROAD TRACK (a) AMENDMENT- Chapter 223 of title 49, United States Code, is amended to read as follows: 'CHAPTER 223--CAPITAL GRANTS P'OR RAILROAD TRACK `Sec. 22301. Capital grants for railroad track. 'Sec. 22301. Capital grants for railroad track '(a) ESTABLISHMENT OF PROGRAM- '(1) ESTABLISHMENT- The Secretary of Transportation shall establish a program of capital grants for the rehabilitation, preservation, or improvement of railroad track (including roadbed, bridges, and related track structures) of class II and class Ill railroads. Such grants shall be for rehabilitating, preserving, or improving track used primarily for freight transportation to a standard ensuring that the track can be operated safely and efficiently, including grants for rehabilitating, preserving, or improving track to handle 286,000 pound rail cars. Grants may be provided under this chapter-- '(A) directly to the class II or class III railroad; or '(B) with the concurrence of the class II or class 111 railroad, to a State or local government. '(2) STATE COOPERATION- Class 11 and class 111 railroad applicants for a grant under this chapter are encouraged to utilize the expertise and assistance of State transportation agencies in applying for and administering such grants. State transportation agencies are encouraged to provide such expertise and assistance to such railroads. '(3) INTERIM REGULATIONS- Not later than December 31, 2001, the Secretary shall issue temporary regulations to implement the program under this section. Subchapter II of chapter 5 of title 5 does not apply to a temporary regulation issued under this paragraph or to an amendment to such a temporary regulation. (4) FINAL REGULATIONS- Not later than October 1, 2002, the Secretary shall issue final regulations to implement the program under this section. '(b) MAXIMUM FEDERAL SHARE- The maximum Federal share for carrying out a project under this section shall be 80 percent of the project cost. The non-Federal share may be provided by any non-Federal source in cash, equipment, or supplies. Other in-kind contributions may be approvcd hi, the Sccrctary nit a case by case basis consistent with this chapter. '(c) PROJECT ELIGIBILITY- For a project to be eligible for assistance under this section the track must have been operated or owned by a class 11 or class 111 railroad as of the date of the enactment of the Railroad Advancement and Infrastructure Law for the 21st Century. '(d) USE OF FUNDS- Grants provided under this section shall be used to implement track capital projects as soon as possible. In no event shall grant funds be contractually obligated for a project later than the end of the third Federal fiscal year following the year in which the grant was awarded. Any funds not so obligated by the end of such fiscal year shall be returned to the Secretary for reallocation. '(e) ADDITIONAL PURPOSE- In addition to making grants for projects as provided in subsection (a), the Secretary may also make grants to supplement direct loans or loan guarantees made under title V of the Railroad Revitalization and Regulatory Reform Act of 1976 (45 U.S.C. 822(d)), for projects described in the last sentence of section 502(d) of such title. Grants made under this subsection may be used, in whole or in part, for paying credit risk premiums, lowering rates of interest, or providing for a holiday on principal payments. (f) EMPLOYEE PROTECTION- The Secretary shall require as a condition of any grant made under this section that the recipient railroad provide a fair arrangement at least as protective of the interests of employees who are affected by the project to be funded with the grant as the terms imposed under section 11326(a), as in effect on the date of the enactment of the Railroad Advancement and Infrastructure Law for the 21st Century. '(g) LABOR STANDARDS- '(1) PREVAILING WAGES- The Secretary shall ensure that laborers and mechanics employed by contractors and subcontractors in construction work financed by a grant made under this section will be paid wages not less than those prevailing on similar construction in the locality, as determined by the Secretary of Labor under the Act of March 3, 1931 (known as the Davis-Bacon Act; 40 U.S.C. 276a et seq.). The Secretary shall make a grant under this section only after being assured that required labor standards will be maintained on the construction work. '(2) WAGE RATES- Wage rates in a collective bargaining agreement negotiated under the Railway Labor Act (45 U.S.C. 151 et seq.) are deemed for purposes of this subsection to comply with the Act of March 3, 1931 (known as the Davis-Bacon Act; 40 U.S.C. 276a et seq.). '(h) STUDY- The Secretary shall conduct a study of the projects carried out with grant assistance under this section to determine the public interest benefits associated with the light density railroad networks in the States and their contribution to a multimodal transportation system. Not later than March 31, 2003, the Secretary shall report to Congress any recommendations the Secretary considers appropriate regarding the eligibility of light density rail networks for Federal infrastructure financing. '(i) AUTHORIZATION OF APPROPRIATIONS- There are authorized to be appropriated to the Secretary of Transportation $350,000,000 for each of the fiscal years 2002 through 2004 for carrying out this section.'. (b) CONFORMING AMENDMENT- The item relating to chapter 223 in the table of chapters of subtitle V of title 49, United States Code, is amended to read as follows: SEC:. 3. HIGH-SPEED RAII, CORRIDOR PLANNING AND DEVELOPMENT. (a) CORRIDOR PLANNING AND DEVELOPMENT- (1) AMENDMENTS- Section 26101 of title 49, United States Code, is amended-- (A) in the section heading, by inserting 'and development' after 'planning', (B) by inserting 'AND DEVELOPMENT' in the heading of subsection (a) after 'PLANN ING'; (C) by inserting 'and development' after 'corridor planning' each place it appears'; (D) by striking 'improvements.' in subsection (b)(1) and inserting 'improvements, or if it is an activity described in subparagraph (M) or (N)'; (E) by striking 'and' at the end of subparagraph (K) of subsection (b)(1); (F) by striking 'partnerships.' in subparagraph (L) of subsection (b)(1) and inserting 'partnerships,-'; and (G) by adding at the end of subsection (b)(1) the following: '(M) the acquisition of locomotives, rolling stock, track, and signal equipment; and '(N) security planning and the acquisition of security and emergency response equipment.'; and (H) by inserting 'and development' after 'planning' in subsection (c)(2). (2) CONFORMING AMENDMENT- The item relating to section 26101 in the table of sections of chapter 261 of title 49, United States Code, is amended by inserting 'and development' after 'planning'. (b) AUTHORIZATION OF APPROPRIATIONS- Section 26104 of title 49, United States Code, is amended to read as follows: 'See. 26104. Authorization of appropriations '(a) FISCAL YEARS 2002 THROUGH 2009- There are authorized to be appropriated to the Secretary-- '(1) $25,000,000 for carrying out section 26101; and '(2) $25,000,000 for carrying out section 26102, for each of the fiscal years 2002 through 2009. '(b) FUNDS TO REMAIN AVAILABLE- Funds made available under this section shall remain available until expended.'. (c) DESIGNATED HIGH-SPEED RAIL CORRIDORS- The Secretary of Transportation shall give priority in allocating funds authorized by section 26104 of title 49, United States Code, to the following High-Speed Rail Corridors: (1) California Corridor connecting the San Francisco Bay area and Sacramento to Los Angeles and San Diego. (2) Chicago Hub Corridor Network with the following spokes: (A) Chicago to Detroit. (B) Chicago to Minneapolis/St. Paul, MN., via Milwaukee, WI. (C) Chicago to Kansas City, MO., via Springfield, IL., and St Louis, MO. (D) Chicago to Louisville, KY., via Indianapolis, IN., and Cincinnati, OH. (E) Chicago to Cleveland, OH., via Toledo, OH. (F) Cleveland, OH., to Cincinnati, OH., via Columbus, OH. (3) Empire State Corridor from New York City, NY., through Albany, N.Y. to Buffalo, N.Y. (4) Florida High-Speed Rail Corridor from Tampa through Orlando to Miami. (5) Gulf Coast Corridor from Houston TX., through New Orleans, LA., to Mobile, AL., with a branch from New Orleans, through Meridian, MS., and Birmingham, AL., to Atlanta, GA. (6) Keystone Corridor from Philadelphia, PA., through Harrisburg, PA., to Pittsburgh, PA. (7) Northeast Corridor from Washington, D.C., through New York City, N.Y., New Haven, CT., and Providence, R.I., to Boston, MA. (8) New England Corridor from Boston, MA., to Portland and Auburn, ME., and from Boston, MA., through Concord, N.H., and Montpelier, VT., to Montreal, P.Q. (9) Pacific Northwest Corridor from Eugene, OR., through Portland, OR., and Seattle, WA., to Vancouver, B.C. (10) South Central Corridor from San Antonio, TX., through Dallas/ Fort Worth to Little Rock, AK., with a branch from Dallas/Fort Worth through Oklahoma City, OK., to Tulsa, OK. (11) Southeast Corridor from Washington, D.C., through Richmond, VA., Raleigh, N.C., Columbia, S.C., Savannah, GA., and Jesup, GA., to Jacksonville, FL., with a branch from Raleigh, N.C., through Charlotte, N.C., and Greenville, S.C., to Atlanta, GA., a branch from Richmond, to Hampton Roads/Norfolk, VA., and a connecting route between Atlanta, GA., to Jesup, GA. 12- 3-01 ; 3:36PM;TRPC ;360 754 4413 # 1/ 4 t THURSTON REGIONAL PLANNING COUNCIL FAX TRANSMITTAL SHEET TO: She/lt �aq FAX PHONE: �Sg-' T j 71� CONTACT PHONE: FROM: ?"wex(kre57L- FAX PHONE: 360) 754-4413 CONTACT PHONE: _(360) 786-5480 There are a total of pages, including this page. COMMENTS: Plea able- . '177d4-t IF YOU DO NOT RECEIVE ALL PAGES, CALL THE ABOVE CONTACT PHONE NUMBER 360 754 4413 it 2/ 4 Shelly— Here is the template and a rough draft of how it will look. You'll notice that a couple of categories have been retitled and reordered from the draft. The template is what you should follow. Thanks for putting this together, despite your busy week Karen Parkhuk@co.thurston.wa.us 12- 3-01 ; 3:36PM;TRPC ;360 754 4413 # 3/ 4 • Template for Legislative Package 1. Title of Project/Issue: 1 � 2. Paragraph with project description: approximately 75-100 words 3. Requested Action: One sentence telling Legislature what we're asking for. 4. Supported by: List of organizations that will likely support the project/issue, i.e. Association of Washington Cities. We will contact the organization to verify support ��s�� ; i v� 5. Staff Contact: TPRC staff contact FACTS: Issue: 1-2 sentences with brief project description and request Location: Western Washington, or statewide, or Thurston County Stakeholders: Who are likely partners or who will be impacted by project, i.e. state & local government, railroads, ports. Timeframe: Ongoing, or 2002-3 biennium, or Phase 2 of 4-year study Impacts: Which of these broad categories are likely to be impacted by project/issue: Freight Mobility System Efficiency Economic Vitality Safety System Preservation Seamless Connections Congestion Relief Sustainable Environment Government Efficiency Personal Mobility 12- 3-01 3:36PM;TPPC ;360 754 4413 # 4/ 4 Providing*Visionary Leadership on Regional Plar)s. Policies and Issues THURSTON REGIONAL PLANNING COUNCIL 2404 HERITAGE COURT W#B OLYMPIA,WASHINGTON 98502-6031 it i.11+ti Frei h A • t cress b Rail FAR Corridor: g y C Co idor. Phase II In 1999, the Washington State k Legislature approved partial funding for a FAR Corridor study for the south Puget Sound region. The FAR Corridor can meet important regional and statewide objectives: to relieve congestion on I-5; improve freight movement; build on existing public rail investments; and provide economic development opportunities. Preliminary findings in April 2000 K indicate that the FAR Corridor alternative is likely the most cost- effective way of adding freight capacity to the I-5 corridor by upgrading under-utilized rail lines for non-priority freight trains. Full funding for the study was put on hold pending final fiscal impacts of Initiative 695. Requested Action: Provide funding to complete the FAR Corridor study of the most feasible alternative route for existing and future freight traffic movement. r Partners: 4 WSDOT r Association of Washington Cities 5 Association of Washington Counties .; r' Staff Contact: Jailyn Brown } (360) 786-5480 b brownj@co.thurston.wa.us TRANSMISSION VERIFICATION REPORT TIME : 12/05/2001 18:59 DATE DIME 12/05 18:58 FAX NO./NAME 7544413 DURATION 00:00:41 PAGE{S} 03 RESULT OK MODE STANDARD ECM ��OF TIIE 4 c^ FAx TRANSMISSION CITY OF YELM PO BOX 479 - 105 YELM AVE W YELM YELM WA 98597 WASHING TON 360-458-3244 Fax: 360-458-4348 To:yk j4 Pei,Lh Lt(s r i Date: � . Fax#: ,L)q% Pages: including this cover sheet. From: Subject: #ctc Wa3 Pu-� e—040 ((�� - — t/�, s S- C/ cue � & `�,& co ** If you do not receive all copies or any copy is not legible, please call (360)458-3244 as soon as possible. ds/c\o(riccVormsVax 3 Page 1 of 1 Shelly Badger From: "Shelly Badger" <shelly@yelmtel.com> To: <parkhuk@co.thurston.wa.us> Sent: Wednesday, December 05, 2001 6:03 PM Attach: trperailleg info.DOC Subject: Yelm Rail connection Karen, well it is not Tuesday, but it is before Thursday morning! Hope this gets to you in time, I am going to fax it also, in case of an e-mail glich. I could only get the project description to 110 words, it started quit long and I kept skimming and skimming, hopefully another set of eyes can find 10 unnecessary words. I will be in Police Chief interviews all day Thursday and Friday, so hopefully this takes care of what you need for the leg. packet. If you do need me, please call my Admin. Asst. Dana Spivey at 458-8816 and she can get a message or question to me between interviews. Thanks for your patience and support! Shelly 12/5/2001 Project Title: Yelm Roy Prairie Line and Tacoma Rail Mountain Division Rail Connection Project Description: construction of a 1/ mile track connection between the City of Yelm owned rail line and the Tacoma Rail Mountain Division short line to provide common carrier rail freight service to Yelm's industrial area and the Miles Sand and Gravel Company located between Roy and Yelm. A primary benefit to the transportation system is the ability to offer direct rail service to the Miles Sand and Gravel Pit, converting up to 22,000 heavy semi-truck loads of gravel per year from State Route 507 to freight trains. Tacoma Rail Mountain Division will connect with the Sounder Commuter trains in Tacoma. Consequently, a connection creates a future commuter train opportunity in Yelm Requested Action: An appropriation of$750,000 to construct a 1/ mile track connection between the City of Yelm owned rail line and the Tacoma Rail Mountain Division short line near Roy on the Miles Sand and Gravel property. Supported by: Washington State Department of Transportation Rail Office, Thurston Regional Planning Council, City of Yelm, City of Roy, Yelm Area Chamber of Commerce and Miles Sand & Gravel. file:yelm6 \ V\ `n Yelm/Roy Prai 'e Line and Tacoma Rail Connection Project Description: An appropriation of$750,000 is needed to construct a quarter mile track connection to provide common carrier rail freight service to the City of Yelm's industrial park and to the Miles Sand and Gravel Company located between Roy and Yelm. The rail connection would be made in the vicinity of Roy between the City of Yelm owned rail line and the common carrier short line railroad known as the Tacoma Rail Mountain Division. This $750,000 would be used to purchase the right of way real estate for the new rail line plus the actual construction cost of the rail line. Currently, the four mile (Roy to Yelm) City of Yelm owned rail line does not have rail service to offer businesses or prospective businesses that the City of Yelm is attempting to lure to the City of Yelm Industrial Park. (Not having direct access to rail freight transportation can cause prospective businesses to locate elsewhere.) The primary benefit to the Washington State Department of Transportation of this rail connection is the ability to offer direct rail service to the Miles Sand and Gravel Pit. The Miles gravel pit is located between the City of Yelm rail line and Tacoma Rail Mountain Division. By building this rail connection, the potential exists to significantly reduce heavy truck traffic on State Route 507 (an increasingly congested urban arterial) by converting gravel truck shipments to rail. There is the potential to remove up to 22,000 heavy semi-truck loads of gravel per year from State Route 507 to freight trains. Converting these big truck shipments to rail could significantly reduce highway maintenance costs and free-up badly-needed highway capacity in this area of south Pierce County. Tacoma Rail Mountain Division will also connect with the Sounder Commuter Trains in Tacoma. Consequently, with a Tacoma Rail connection future commuter train potential exists from Yelm Requested Action: file:yelm6 FROM :WSDOT RAIL 360 705 6821 2001, 12-06 16: 11 #562 P.01/02 t Washington State Facsimile Transmittal Department of Transportation PATE TIME NO.OF PA (Ind.TrenB.) Call for Pickup Deliver TO FROM Ray Allred, Rail.Planning Specialist LOCATi— LOCATION 511�� WSDOT Rail Office VOICE P ONE NO. FAXPRONEla, VO E PH E FAX PHOIYE NO. (360) 705-7903 (360) 705-6821 COMMENT$ �� 111z?-x !`e-/v,'0 01 UqO 6.67- Fries LuSDOT I NOTICE: Some fax machines produce copies on thermal paper. The image produced Is highly unstable and will deteriorate significantly in a few years. This record should be copied on a plain paper copier prior to filing as a record. DOT Fo"700.450 EF Redsed W94 FROM :WSDOT RPIL 360 705 6621 2001,12-0S 16:11 #S62 P.02/02 1 charges imposed on the department by the credit and debit card 1 2 companies. In no event may the use of credit or debit cards authorized 2 3 by this section create a loss of revenue to the state. The use of a 3 4 personal credit card doeB not rely upon the credit of the state as 4 5 prohibited by Article VIII, section 5 of the state Constitution. 5 6 (5) The legislature recognizes that projected revenues to the Puget 6 7 Sound ferry operating account for the 2001--2003 biennium may be up to 7 8 $30 , 000, 000 less than what is required to fund the appropriation 8 9 provided in this section. The legislature .intends to fully evaluate 9 10 the extent of the shortfall and make a supplemental appropriation 10 11 during the 2002 legislative session. 11 12 12 NEW SECTION. Sea. 230. FOR THE DEPARTMENT OF TRANSPORTATION-- 12 . 13 RAIL--PROGRAM Y--OPERATING 14 14 Multimodal Transportation Account--State 1r 15 Appropriation . . . . . . . . . . . . . . $ 32 , 704, 000 lE 1. 16 NEW SECTION Sec. 231. FOR THE DEPARTMENT OF TRANSPORTATION-- l: 17 RAIL--PROGRAM Y--CAPITAL 1 18 Essential. Rail Assistance Account--State 2 19 Appropriation . . . . . . . . . . . . . . - $ 200, 000 2 20 Multimodal Transportation Account--State 2 21 Appropriation . . . . . . . . . . . . . . . . $ 11, 610, 000 2 22 Multimodal. Transportation Account--Federal 1 2 23 Appropriation . _ . . . . . . . . . . . . $ 9, 630, 000 2 24 Washington Fruit Express Account--State 2 25 Appropriation . . . . . . . . . . . . . . . . $ 500, 000 26 TOTAL APPROPRIATION . . . . . . . . . $ 21, 940, 000 1 6 27 The appropriations in this section are subject to the following 28 conditions and limitations and specified amounts are provided solely 29 for that activity: $2, 000, 000 of the multimodal transportation 30 account--state appropriation is provided solely for the Grays Harbor 31 loop project. 32 NEW S&CTION. Sec. 232 . FOR THE DEPARTMENT OF TRANSPORTATION-- 33 LOCAL PROGRAMS--PROGRAM Z--OPERATING 34 Motor Vehicle Account--State Appropriation . . . $ 6, 231, 000 35 Motor Vehicle Account--Federal Appropriation $ 2, 569, 000 36 Multimodal Transportation Account--State 3ESSB 5327 .PL p. 22 Law Offices D BETTS AUG 2000 PATTERSON & MINES, Ps. 800 Financial Center 1215 Fourth Avenue Seattle,Washington 98161-1090 Fax: 206-343-7053 Stephen L. Day Phone: 206-292-9988 eMail: sday®bpmlaw.com August 11, 2000 Shelly Badger City Administrator City of Yelm 105 Yelm Ave. W. P.O. Box 479 Yelm, WA 98597 Re: Railroad Rehabilitation and Improvement Financing Program Dear Shelly: The Federal Railroad Administration recently finalized rules to implement the Congressional Railroad Rehabilitation and Improvement Financing Program. The rules have been controversial and application for these loans has been complicated by the internal politics at FRA. Nevertheless, the fund provides a realistic source of financing for acquisition, improvement and rehabilitation of new freight railroad facilities. I recently received the enclosed letter from R.L. Banks &Associates, Inc., one of the more well- known transportation consulting services in the country. Bob Barks is particularly well respected in the industry. If you have any interest in pursuing loans under this program, I recommend Bob Banks and his organization highly. ncerely, St he ay SLD:kt Enclosure 87590/081100 1531/99990008 R.L. BANKS & ASSOCIATES, INC.lb 1717 K Street, NW, Washington, DC 20036-5331 202.296.6700 Fax 202.296.3700 August 7, 2000 transport@rlbadc.com 6 Beach Road, #250 Tiburon, CA 94920-0250 415.789.5061 Fax 415.789.5019 Mr. Stephen L. Day Betts Patterson & Mines PS 800 Financial Center 1215 Fourth Avenue Seattle, WA 981 61 -1 090 Opportunity: Railroad Rehabilitation and Improvement Financing Program Dear Mr. Day: Effective September 5, the Federal Railroad Administration's Railroad Rehabilitation and Improvement Financing Program earmarks $3.5 billion in direct loans and loan guarantees to railroads, state and local governments, government-sponsored authorities and corporations and joint ventures with a railroad (including at least a $1 billion loan pool explicitly for short lines and regionals), to "acquire, improve, rehabilitate, develop or establish new freight railroad, intermodal, or passenger facilities." R.L. Banks & Associates, Inc. (RLBA), an Associate Member of the American Short Line and Regional Railroad Association, is enthusiastic about this because it marks a modest step towards bringing into balance U.S. National Transportation Policy, which until now has almost exclusively dedicated government support to the railroad industry's competitors. But you can't just throw a switch and get a loan for your railroad, state or community. The Final Rule published by FRA spells out a long and relatively complex process which must be followed by applicants seeking loans. In a nutshell, prospective borrowers must follow procedures similar to those required by commercial lenders: • collateral is generally required, which must have a credible value; • present and future demand for the railroad or facility needs systematic documentation, through market analyses and studies; • anticipated benefits in the form of improved or increased economy and efficiency and/or cost savings must be demonstrated; • safety contributions or enhancements must be described; • anticipated maintenance costs of the new or improved equipment or facility must be shown; and • environmental impact information must be provided. Page 2 Sub-section 260.29 of the new rule states: Applicants may utilize independent third-party consultants to prepare a financial evaluation of the proposed project and the applicant, if approved by FRA. Providing such an evaluation would greatly assist FRA in the evaluation of the application and would significantly reduce the time necessary for FRA to process the application. We encourage the use of third-party consultants (emphasis supplied). Furthermore, Jack Wells, Deputy Administrator of FRA, was quoted in "Rail Business," July 31 , 2000, as saying "FRA is encouraging potentia/ borrowers to save themselves an 'investigation charge' by the FRA by getting an independent financial consultant to research the borrowers' situation. " RLBA has been hired by FRA on numerous small railroad projects, including assisting it in evaluating applications for Federal loans. Since RLBA has analyzed freight railroad investments for more than 50 railroads and financial institutions, RLBA is fully familiar with the requirements of commercial lenders with respect to loans secured by railroad fixed plant and/or rolling stock and is therefore highly qualified to prepare loan applications acceptable to FRA. RLBA also has performed dozens of similar assignments for small railroads and their bankers, in which RLBA carried out evaluations similar to those required by FRA in the RRIF loan application procedures. Having been engaged by parties representing the full spectrum of emerging railroad development interests, RLBA brings tremendous perspective to its short line and regional railroad assignments. On business plan development projects, RLBA has worked with industrial clients and entrepreneurs to build and express comprehensive and consistent sets of assumptions and unit factors which accurately depict their railroad business prospects, before both corporate managements/boards and would-be lenders. In numerous "due diligence" studies, RLBA his provided viability opinions based on comparison of the information made available to it, with experience gleaned from the successful conclusion of dozens of quite similar studies and decades of staff employment at several rail carriers. RLBA also has appraised locomotives and rolling stock, and estimated the value of short line and regional railroad enterprises or parts thereof as going concerns, as liquidated assets, or for sale to neighboring carriers. The firm has performed some of the above described services for the following carriers or lenders/investors, among others: Page 3 Anacostia & Pacific Company, Inc. Bank of America Bank of Boston Chicago, Central and Pacific Railroad Company Dakota, Minnesota & Eastern Railroad Corporation Delaware Otsego Corporation Iowa Interstate Railroad, Ltd. Kiamichi Railroad Company Louisville & Indiana Railroad Railroad Development Corporation RailTex Toledo, Peoria & Western Railway Corporation Wisconsin Central Ltd. RLBA is ready to assist you in preparing every technical aspect of your loan application because our staff members include experienced freight railroaders who understand a variety of related issues, including but not limited to: • track and infrastructure evaluation; • railroad asset, equipment and going concern valuation/appraisal; • operations, maintenance and capital costing; • financial analysis; • cost-benefit and economic impact analyses; and • business planning. RLBA is headquartered in downtown Washington, convenient to the FRA and other government agencies, ideally positioned to serve your needs with economy and efficiency. The cost of our work will vary with project definition. However, we know that short lines and regionals have limited resources and we are prepared to provide appropriate fee quotations. Please call either one of us at 202-296-6700 to discuss how we can help you prepare a persuasive application for your share of RRIF funds. Sincerely, Robert L. Banks Charles H. B nks RLB/CHB:slc Washington State Transportation Building Department of Transportation P.O.Box 47300 Sid Morrison Olympia,WA 98504-7300 Secretary of Transportation March 22,2000 To All Local Agencies & WSDOT Regional Administrators RE: 2000 Railroad/Highway Crossing Program Request for Projects The 1998 Transportation Equity Act for the 21'Century(TEA-21) includes funding for State/Local Agency Railroad Crossing Improvement Program. The goal of this program is to fund safety improvements to reduce the number of fatalities, injuries, and crashes at public grade crossings which may include the elimination of grade crossings. The Highways&Local Programs Service Center has funding available for the installation of new crossing protection devices,passive crossing protection devices,upgrade of existing signal devices,railroad crossing closures, and pedestrian crossing improvements for high priority projects. We will be selecting up to $15 million of railroad/highway crossing improvement projects from the submittals. The federal funding amount has been limited to $250,000 per crossing improvement. In that regard, we request that your agency evaluate your railroad grade crossings and identify those which have had: (1) accident experience; (2)high accident potential; (3) high ADT for vehicles and/or pedestrians; and(4)passive crossings with very little accident potential but would benefit from some additional signing with high intensive reflective sheeting. Enclosed are the criteria in which crossings will be evaluated; the sight distance table;the "Railroad Crossing Information Form"(hard copy); and instructions on how to submit an electronic form. If you wish to participate in this program, complete the information form (either electronically or hard copy)and return a hard copy to my office, no later than 5:00 p.m. on May 15, 2000. Please ensure that all the information is current and complete on the form. H&LP Service Center Attn: Stephanie Tax PO Box 47390 Olympia, WA 98504-7390 FAX: (360) 705-6822 March 22,2000 Page 2 The statewide prioritized list of applications will determine which crossings are reviewed in the field by a diagnostic review team. On-site reviews will be performed on those crossings to finalize the funding for the high priority projects. Please contact Dave Mounts of my staff at(360)705-7380 if you have any questions. Sincerely, Pa&P.E. Assistant Secretary Highways& Local Programs Service Center PJH:ds ST Enclosures cc: WSDOT Executives Region Local Programs Engineers w/encl. Jerry Fay, TIB Jay Weber, CRAB Stan Finkelstein,AWC Karen Schmidt, FMSIB Rick Smith,Program Management Railroad/Highway Crossing Improvement Program Statewide Criteria The following briefly describes the process used to prioritize project submittals for potential funding under the Washington State Railroad/Highway Crossing Improvement Program. The priority matrix is the first of two basic screening processes to prioritize and select projects for funding under the Railroad/Highway Grade Crossing Improvement program. Based upon the information provided by the project proponent on each of the crossing elements, an initial ranking of potential projects is generated. From this initial ranking, the top projects are field reviewed for final prioritization. The field review is performed by a Rail Crossing Diagnostic Team, with representatives from the WSDOT H&LP Service Center, WSDOT Rail Office, WSDOT Region Local Programs,WUTC, the affected Railroad, and the affected agency. At the time of the field review,the entire project will be evaluated and the various elements discussed. The Diagnostic Team may, for example, determine that a proposed crossing closure does not effectively reduce accident potential or enhance a consolidation effort and remove those points; or it may determine that truck traffic currently uses a different route so that the proposed crossing no longer warrants the heavy truck traffic points. It may also affirm or add points based on the various elements noted in the field review matrix such as bike or pedestrian traffic. After the Diagnostic Team reviews the project, the application points and field review evaluation will determine the final ranking of projects for recommendation to the WSDOT Assistant Secretary for Highways&Local Programs Service Center. The maximum amount of federal participation per crossing is $250,000. The match requirements are 10% for design and 0% for construction. Summary of Evaluation Criteria: Weight Exposure Factor 8 Maximum Accidents 10 Maximum Crossing Closure 10 Maximum Routes 30 Maximum Roadway Items 10 Maximum Railroad Items 20 Maximum Sight Distance 9 Maximum Crossing Angle 8 Maximum TOTAL 105 Points Exposure Factor 8 Maximum Exposure factor based on traffic volumes on the rail line and crossing roadway (trains per day x vehicles per day) • Factors greater than 10,000 8 • Factors between 9.999 and 5,000 4 • Factors under 5,000 0 Accidents 10 Maximum • Any accident occurrence within the past 5 years attributed to the crossing area 10 • Lack of accident history 0 Railroad/Highway Crossing Improvement Program Statewide Criteria Crossing Closure 10 Maximum • Proposed closure of a crossing, either stand alone or as a part of a crossing consolidation effort 10 • No closure of a crossing 0 Routes 30 Maximum • Crossing located where significant hazardous materials cross the tracks either railroad or highway (items such as corrosive, ignitable,reactive, explosive or toxic) 10 • Bicycle/pedestrian (must include the amount of use) 5 • Heavy truck traffic (15% or more) 5 • Heavy bus traffic 10 Roadway Items 10 Maximum • Traffic signal within 200 feet of crossing or inadequate vehicle storage for those waiting for a train to pass 5 • Humped crossing (truck/trailer combination can high center, measured using the string method) 5 It should be noted that the 200 feet rule may be extended, with points allowed for crossings with signals more than 200 feet away, if it can be determined that traffic backups from the traffic signal exceed that distance and create a hazard as a result. Railroad Items 20 Maximum • Passenger trains on the rail line 10 • If the regulated train speed(per WLPTC) is between 5 to 25 miles per hour 5 • Any recorded near misses by railroad or law enforcement personnel 5 Sight Distance 9 Maximum • Sight distance less than the appropriate design distance,considering speeds and stopping requirements (see enclosed table) 9 • Adequate sight distance(see enclosed table) 0 Crossing Angle 8 Maximum The number of tracks and the roadway crossing angle (measured from parallel to the rail line)is considered. • 60 degrees or less on more than one set of tracks 8 • 61 to 80 degrees on more than one set of tracks 7 • 60 degrees or less on single sets of tracks 6 • 61 to 80 degrees on single sets of tracks 5 Railroad/Highway Grade Crossing Protection Sight Distance Diagram and Gate Warrant Form (Eng.) A TRAIN AT THIS DISTANCE ALLOWS A VEHICLE AT "A" TO SAFELY PROCEED ACROSS GRADE CROSSING I "A" 3 SECONDS I e a C \ / WET PAVEMENT BRAKING � �r DISTANCE AT POSTED "B" I \�'"� f--�,-/VISIBILITY TRIANGLE SPEED LIMIT I \ Y TRAFFIC CONE B ( 0� DISTANCE TRAVELED DURING Bi� / TRAIN REACTION TIME ASSESSED TO BE 3 SECONDS 0� ' A TRAFFIC CONE A Required Design Sight Distances for Combinations of Highway and Train Vehicle Speeds Train Speed Highway Speed in MPH 0 10 20 30 40 50 60 70 1 Distance Along Railroad from Crossing ("A") 10 162 126 94 1 94 99 1 107 118 129 20 323 252 188 188 197 214 235 258 30 484 378 281 281 295 j 321 352 387 40 645 504 376 376 394 428 470 I 516 50 807 630 470 j 470 492 534 586 644 60 967 756 562 562 590 642 704 774 70 1,129 882 656 656 684 750 822 904 80 1,290 1,008 752 752 788 856 940 1,032 90 1,450 1,134 844 844 884 964 1,056 1,160 - Distance Along Highway from Crossing ("B") 20 65 125 215 330 470 640 840 Note: 1 mph = 1.61 kph and 1 foot = .304 meters 10a:P65:DP/LAG3 Railroad/Highway Crossing Improvement Program Electronic Submittal Process For internet access to the Railroad/Highway Crossing Information form go to the WSDOT home page at: www.wsdot.wa.gov and click on Highways and Local Programs Service Center There is a train icon to click on that will have a run time version of the Filemaker Pro program. The form will come up and you can either enter new crossing information or update existing crossing information. After completing the form, click the add a new record button, and a screen will appear asking for the following: User name: rrcross Password: rgrbb The information will be automatically forwarded to our database. Also, you must print out a hard copy of the completed form and send it to: Highways & Local Programs Service Center Attn: Stephanie Tax PO Box 47390 Olympia, WA 98504-7390 or FAX it to Stephanie Tax at (360)705-6822 RAILROAD CROSSING INFORMATION_FORM DATE ENTERED AGENCY - CONTACT INFO Name Phone Email CROSSING NAME WUTC CROSSING # REGION DOT CROSSING # DATE REVIEWED ROADWAY DATA: RAILROAD DATA: Posted Speed Limit Railroad Name Traffic Count Year # of Tracks School Bus Per Day Train Speed _- Vehicles Per Day * Trains Per Day = Exposure Factor Existing Protection: ACCIDENTS: Fatal Accidents Injury Accidents Property Damage RATING FACTORS: Crossing Closure O Yes Q No Traffic Signal Less Than 200 Feet g From Crossing / Poor Vehicle Storage O Yes O No Hazardous Materials O Yes O No Poor Crossing Grade Q Yes ONO Rail/Truck Bike/Pedestrian Use O Yes O No Passenger Train Use Q Yes O No Truck Route Q Yes O No Train Speed 0 to 25 MPH Q Yes ONO Bus Route Q Yes O No RR / Public Reported Near Misses O Yes O No SIGHT DISTANCES: Moving Stopped Required Moving Required Stopped Moving NE to NE - Stop NE to NE Moving NE to SW Stop NE to SW Moving SW to NE Stop SW to NE - Moving SW to SW Stop SW to SW Crossing Angle Comments: CITY OF ROY POST OFFICE BOX 700 ■ ROY,WASHINGTON 98580-0700 ■(253)843-1113 • FAX(253)843-0279 • 8:30-5:00(M-F) RFCEI . E� August 26 , 1998 SEP 11 1998 Kathryn M. Wolf, Mayor By. City of Yelm 105 Yelm Avenue West Yelm, WA 98597 Dear Mayor Wolf, On behalf of the City of Roy, I would like to express our complete support in your attempt to access grant funds from the Thurston Regional Planning Council for the purchase, operation and maintenance of the Roy-to-Yelm Shortline from the Burlington Northern Santa Fe Railroad. We recognize that this section of rail line is of the utmost importance to the local and regional economy, and must be preserved, and possibly expanded or improved. We understand that the City of Yelm has included this rail line in the formulation of their Comprehensive Growth Plan, as has the City of Roy. We both rely on the continued operation of this line to assist in the attraction and development of is and industrial business within our respectively designated industrial zones . The City of Roy extends its support to your proposal that will allow for the continued use of this important link in our multi-model transportation system. If you need any assistance in this matter, please do not hesitate to call . Thank you, ..�.'�/ 0 - _4�1 Joel A. Derefield Mayor, City of Roy Cc : Ken Garman, City of Yelm Shelli Badger, City of Yelm A March 30, 1999 Burlington Northern Railroad Analysis Cost Breakdown *Billed to date by David Evans: $10,072.20 *Received to date by David Evans: $10,260.30 *Credit as shown by David Evans: $(188.10) **Billed to date as shown by COY.- $10,072.50 **Billed out by City of Yelm:$10,411.11 ** Collected by City of Yelm:$8,660.86 **Additional cost incurred by City of Yelm: $1,750.25 ***Overpayment of invoice date 9110198 in amount of$514.80-- bill no's 7,8,9 have been applied. We have been credited this amount and have a remaining credit of$(188.10) The billing breakdown for the railroad analysis has been as follows: Port of Olympia Percentage Billed Received 33.3% Bill No. 1 2,207.70 735.90 ✓ 25.0% Bill No. 2 1,381.50 357.93 ✓ 25.0 % Bill No. 3 1,683.01 420.75 ✓ 25.0% Bill No. 4 514.80 128.70 ✓ 25.0% Bill No. 5 2,119.40 529.85 25.0% Bill No. 6 2,504.70 626.17 25.0% Bill No. 7 49.50 N/A 25.0% Bill No. 8 79.20 N/A 25.0% Bill No. 9 198.00 N/A TOTAL 10,737.81 2799.30 1643.28 Yelm Prairie Development Billed Received 33.3% Bill No. 1 2,207.70 735.90 ✓ 25.0% Bill No. 2 1,381.50 357.93 ✓ 25.0% Bill No. 3 1,683.01 420.75 ✓ 25.0% Bill No. 4 514.80 128.70 ✓ 25.0% Bill No. 5 2,119.40 529.85 25.0% Bill No. 6 2,504.70 626.17 ✓ 25.0% Bill No. 7 49.50 N/A 25.0% Bill No. 8 79.20 N/A 25.0% Bill No. 9 198.00 N/A TOTAL 10,737.81 2,799.30 2,269.45 City of Yelm Percentage Billed Received 33.3% Bill No. 1 2,207.70 735.90 ✓ 25.0% Bill No. 2 1,381.50 357.93 ✓ 25.0% Bill No. 3 1,683.01 420.75 ✓ 25.0% Bill No. 4 514.80 128.70 ✓ 25.0% Bill No. 5 2,119.40 529.84 ✓ 25.0% Bill No. 6 2,504.70 626.18 ✓ 25.0% Bill No. 7 49.50 N/A 25.0% Bill No. 8 79.20 N/A 25.0% Bill No. 9 198.00 N/A TOTAL 10,737.81 2,799.30 2,799.30 Miles Sand & Gravel Percentage Billed Received 12.5% Bill No. 2 1,381.50 153.84 ✓ 12.5% Bill No. 3 1,683.01 210.38 ✓ 12.5% Bill No. 4 514.80 64.35 12.5% Bill No. 5 2,119.40 264.93 ✓ 12.5% Bill No. 6 2,504.70 313.09 ✓ 12.5% Bill No. 7 49.50 N/A ✓ 12.5% Bill No. 8 79.20 N/A 12.5% Bill No. 9 198.00 N/A TOTAL 8,530.11 1,006.59 942.24 Wilcox Farms Percentage Billed Received 12.5% Bill No. 2 1,381.50 153.84 ✓ 12.5% Bill No. 3 1,683.01 210.38 ✓ 12.5% Bill No. 4 514.80 64.35 ✓ 12.5% Bill No. 5 2,119.40 264.93 ✓ 12.5% Bill No. 6 2,504.70 313.09 ✓ 12.5% Bill No. 7 49.50 N/A 12.5% Bill No. 8 79.20 N/A 12.5% Bill No. 9 198.00 N/A TOTAL 8,530.11 1,006.59 1,006.59 march99.costbreakdown.doc rt Page 1 of 1 From: Thera Black <BLACKVT@co.thurston.wa.us> F- To: garmann@yelmtel.com <garmann@yelmtel.com> Cc: connors@yelmtel.com <connors@yelmtel.com> Date: Thursday, March 11, 1999 1:48 PM Subject: Project list Hi, Ken and Stephanie! Attached is the list of all projects that were funded through last year's STP allocation process. It's in Word Perfect format. I'm also sending a hard copy, since I've got other things coming your way anyhow. That packet will also include the adopting resolution whereby TRPC agreed to amend these projects into the RTIP, the amended pages I submitted to TransAid, and some printout off the web of the amended STIP (since they never sent me anything other than a phone call). Hope this comes through okay for you. Let me know if you need any other information for the SCA grant. Thera 3/11/99 I Ulk- Page 1 of 1 From: Ken Garmann <garmann@yelmtel.com> To: moorehb@wsdot.wa.gov <moorehb@wsdot.wa.gov> Date: Wednesday, March 17, 1999 3:25 PM Subject: STP/TRPC T-21 Brian, Here's the information on the "Yelm to Lakeview BNSF Branch Line" with our STP/TRPC T-21 Grant. Funding Allocation Total Match c@ 15% Grant 1. P.E. $100,000 $ 15,000 $ 85,000 2. ROW 150,000 22,500 127,500 3. Const 150,000 22 500_ 127,500 $400,000 $60,000 $ 340,000 If you have any questions please call me at 458-4899. Thank you for your assistance on this matter. KLG 3/17/99 From: "Zevenbergen, Dave" <ZevenbD@wsdot.wa.gov> To: "Carlson, Todd" <CarlsoT@WSDOT.WA.GOV> Date: 17 Feb 1999 10:57 Subject: STIP Approval! Hello to all. Good News!! Effective yesterday, February 16th, we received verbal approval of the 1999 STIP. Now begins the process of putting together STIP Amendment 99-01. Anticipated turn-in of this amendment is Fride ruary 26th. If you have any questions, please either email or call Dave 360-705-7384 (/ CC: "Davis, Kathleen" <DavisK@WSDOT.WA.GOV> 3• il •99 �� '-Thus '�s a c�a•- �' --j�-�z, o�iy -Tt-, 99 Z1 P a.,d all Esc' STP Pc-- — LL5cN5 5ZAVaf- --,K ova�V. �ncrz Tt _ c�si>oT Ivr� Tn a- L"_ z Qmp mir or drr�r,x +� ¢sr� cr- ccr,co.-rs YELM TO LAKEVIEW BNSF BRANCH LINE ACQUISITION Submitted by: City of Yelm Thurston Regional Planning Council Year Funded - 1999 YEL99013 rwbi tHa A�9� Cityo Yelm a M 105 Yelm Avenue West P.O. Box 479 YELM Yelm, Washington 98597 WASHINGTON (360) 458-3244 September 3, 1998 Thurston Regional Planning Council 2404 Heritage Court SW Suite B Olympia,WA 98502 RE: Meritorious Grant Application-Yelm to Lakeview Burlington Northern Santa Fe Branch Line Acquisition The City of Yelm is applying for$340,000 of grant funding. The grant funds will be utilized for the acquisition, maintenance, and operation of the Burlington Northern Santa Fe Railway (BNSF) branch line ruining from Lakeview (Lakewood) to Yelm, Washington. The approximately 15-mile long line currently carries freight traffic as far south as Roy. The portion of the line from Roy to Yelm is currently out of service due to a lack of traffic in recent years. In mid 1997, the City became aware of BNSF's desire to divest itself of the Roy-Yelm segment, either by sale or abandonment. A committee was formed to attempt to preserve rail service to Yelm and to explore utilization of the rail corridor for additional uses besides freight rail traffic. The committee has met.regularly, and demonstrated community support to preserve the rail line and to plan for its future use. A strong partnership between the City of Yelm, the Port-of Olympia, the Economic Development Council of Thurston County, the Yelm Chamber of Commerce,and a number of local businesses is actively discussing acquisition with BNSF. Since the beginning of 1998,the group has commissioned an inspection and condition analysis of the line, met with officials of the BNSF, confirmed the need to preserve the line, and formed a nucleus of community members who are committing both their time and financial resources to the project. The group has come together to preserve and improve this transportation asset. The condition of the rail line is generally good along its entire length with a recommended track speed of 25 MPH. There are currently two major shippers on the line. Fort Lewis ships approximately 1000 cars per year to various destinations from their Logistics Center. Wilcox Farms receives roughly 500 cars per year at their facility in Roy. There is good potential for developing additional traffic from industrial users between Roy and Yelm. P--)-kd pop- Besides the freight traffic, the line is an excellent candidate for a commuter rail operation from Yelm into Lakeview. Sound Transit has recently selected a site located immediately adjacent to the junction of the branch line with the BNSF line which will carry commuter rail into Tacoma and on to Seattle. This is an opportunity to tap into an important passenger transportation system for very modest costs. The acquisition, maintenance, and operation costs for a freight rail operation on the line have been estimated and are tabulated below. The costs for maintenance and operations represent anticipated costs for the first year of shortline operation. Acquisition Costs $ 150,000 Maintenance of Track and Structures 150,000 Operations 100.000 Total Costs $400,000 As an indication of the level of commitment in the community, the City of Yelm has enlisted financial'support for the project froma number of sources to provide matching funds for the grant. These committed funds are approximately 15% of the grant request amount and are well in excess of the minimum required by the program. This substantial assistance from the public and private sectors demonstrates the importance of this rail line to the communities and businesses which it serves. The matching funds for the grant are being contributed as follows. City of Yelm $ 20,000 Port of Olympia 20,000 WSDOT-Rail Program 11,500 Private Businesses Miles Sand&Gravel 2,500 Wilcox Farms 2;500 Prairie.Development 3.500 Total Matching Funds $ 60,000 In closing, this project represents a unique opportunity to preserve and enhance a vital transportation link in Thurston County. The continued availability of freight rail service to the Yelm and Roy areas is vital to business retention and development. It can provide a multi-modal freight option. One of the existing businesses has the potential for removing 200 truck trips per day off the road network. Rail served industrial properties in the.region are at a premium. Many new businesses will not even look at sites which do not have the capacity to be served by rail. Beyond the freight rail operations, this line provides`the ability to connect to the commuter rail system being developed by Sound Transit. This is a unique opportunity to provide passenger rail options to an area which is experiencing fast-paced growth with its associated traffic congestion. We believe that this project is one which must be undertaken. Thank you for your consideration. If you have any questions,please contact my office at 360458-8499. Sincerely, City of Yelm Ken Garm Public Works Director SLADE GORTON COMMITTEES: WASHINGTON APPROPRIATIONS 730 HART SENATE OFFICE BUILDING BUDGET (202)224-3"1 www.9enele.pov/-Qorton 'United �5tatcs senateANDCOMMERCE,SCIENCE, TRANSPORTATION WASHINGTON,DC 20510-4701 ENERGY AND NATURAL RESOURCES INDIAN AFFAIRS September 18, 1998 The Honorable Kathryn Wolf Mayor of Yelm P.O. Box 479 Yelm, WA 98597 Dear Mayor Wolf. I am writing in support of the City of Yelm's application for $340,000 of funding through the meritorious grant from the Thurston Regional Planning Council. It is my understanding the grant funds will be utilized to assist the City with the purchase, operation and maintenance of the Roy-Yelm Shortline from the Burlington Northern Santa Fe Railroad. The railroad project is clearly important to the business community of Yelm by providing the opportunity to preserve and enhance a vital transportation link in Thurston County for both passenger and freight rail operation. The City of Yelm has already enlisted financial support for the project from a number of sources to provide matching funds for the grant. These other sources include the Port of Olympia, Washington State Department of Transportation's Rail Program and the private sector. I am pleased to learn that the City of Yelm is taking proactive measures to preserve this section of rail and to further their economic development. I strongly support your grant application and hope it will receive the highest possible consideration. Sincerely, SLADE GORTON United States Senator 10900 N.E.FOURTH STREET 11120 GRAv¢uV LAKE Dnm So. 130 FemE BIxLOINf 897 U.S.COURT HOUSE Box 4083 9915 W.GRANORIDOE BLVD. SLKTE 82110 Sum 99 500 WEST 12TH STREET W.920 RIvERsom AVENUE 402 EAST YAx»4A AVENUE Sum M BELEEvUE.WA 98004 TACOMA.WA 98499 VRNcouvER,WA 98860 SroRANE,WA 99201 Y"wA4 WA 98901 KENNEWICK,WA 99336-2125 14251451-0103 (2631681-1646 13601 696-7838 15091353-2507 (509)248-80e4 16091 783-0840 PRINTED ON RECYCLED PAPER SCOMMIT-TEES:GORTON WASHINGTON APPROPRIATIONS 730 HART SENATE OFFICE BUILDING BUDGET (2021224-3441 www.9enate.gav!-gorton United Mates senate COMMERCE,SCIENCE, AND TRANSPORTATION WASHINGTON,DC 20510-4701 ENERGY AND NATURAL RESOURCES INDIAN AFFAIRS September 18, 1998 The Honorable Kathryn Wolf Mayor of Yelm P.O. Box 479 Yelm, WA 98597 Dear Mayor Wolf: I am writing in support of the City of Yelm's project proposal that will further transportation in Thurston County, using TEA-21, Section 1221 funding. It is my understanding the funding will be utilized to assist the City with the purchase, operation and maintenance of the Roy-Yelm Shortline from the Burlington Northern Santa Fe Railroad. The railroad project is clearly important to the business community of Yelm by providing the opportunity to preserve and enhance a vital transportation link in Thurston County for both passenger and freight rail operation. The City of Yelm has already enlisted financial support for the project from a number of sources to provide matching funds for the grant. These other sources include the Port of Olympia, Washington State Department of Transportation's Rail Program and the private sector. I am pleased to learn that the City of Yelm is taking proactive measures to preserve this section of rail and to further their economic development. I strongly support your grant application and hope it will receive the highest possible consideration. Sincerely, SLADE GORTON United States Senator 10900 N.E.FOURTH STREET 11120 GRAVELLY LAxE DRIVE So. 130 FEDERAL BUILDING 097 U.S.COURT HOUSE Box 4093 9915 W.GRANORnGE BLVD. SUM 02110 SurrE 80 500 WELT 12TN STREET W.920 RNERSIDE AvENuE 402 EAST YALIMA AVENUE SuIrE M BEuEvuE,WA 08004 TACOMA.WA 98499 VANCOOVER.WA 9%W SIOKANE,WA 09201 YAxRAA.WA 9(1901 KENNEwIcv.WA 99336-2125 (425)451-0103 (2531591-1646 (360)097838 f5091363-2507 (509)248-0084 (5091783-0610 PRINTED ON RECYCLED PAPER 0 Olympia Office: Residence: 412-B Legislative Building Washington State Senate 33419 Mountain Hwy E PO Box 40482 Eatonville, WA 98328 Olympia, WA 98504-0482 (253)847-3276 (360)786-7602 Senator Marilyn Rasmussen Cellular Phone: (206)370-3880 Toll-Free: 1-800-562-6000 e-mail:senrasmussen@msn.com e-mail:rasmusse_ma@leg.wa.gov 2nd Legislative District August 24, 1998 KATHRYN M. WOLF, MAYOR CITY OF YELM PO BOX 479 YELM, WA 98597 Re: Roy/Yelm Shortline Railroad Dear Mayor Wolf: Earlier this year a letter in support of the preservation of the Shortline was written to Burlington Northern. I am happy to support the City of Yelm in applying for the meritorious grant from the Thurston Regional Planning Council to assist in the purchase, operation, and maintenance of the Roy-Yelm Shortline from the Burlington Northern Santa Fe Railroad. This is a very important project. Thank you for your consideration of this application. Sincerely, VisIattiveSDistrict SS N Standing Committees: Agriculture&Environment, Ranking Minority Member Education Transportation Special Committees: Jt. Select Committee Education Restructuring • Jt. Select Committee on Lake Health Legislative Transportation Committee pR-yrr-a m ie State of STATE REPRESENTATIVEREPRESENTATIVEWashington HOI� Of GOVERNMENT REFORM&LAND USE 22nd DISTRICT RANKING MINORITY MEMBER SANDRA ROMERO Representatives TRANSPORTATION POLICY&BUDGET STATE 0 RALES _ b > ,yy ov ' INN9 w August 21, 1998 Kathryn M. Wolf, Mayor City of Yelm PO Box 479 Yelm, WA 98597 Dear Mayor Wolf: I am pleased to write that I support the City of Yelm in its application for a meritorious grant from the Thurston Regional Planning Council. The grant would assist the City of Yelm in the purchase, operation and maintenance of the Roy-Yelm Shortline from the Burlington Northern Santa Fe Railroad. If there is any other help I can give in this effort, please let me know. I'll be glad to do what I can. Sincerely, .7 i ra Romero Representative 22"d District LEGISLATIVE OFFICE: 415 LEGISLATIVE BUILDING,PO BOX 40600.OLYMPIA.WA 98504-0600 • (:3CA))786-7940 HOTLINE DURING SESSION: 14300-562.6000 • TDD: 14M)0-635.9993 E-MAIL: andcrson_rna@lcg.wa.gov PRINTED ON RECYCLED PAPER • ADAM SMITH 1505 LONGWORTH BUILDING WASHINGTON, 20515 9TH DISTRICT,WASHINGTON 9 12021 225 900 1 COMMITTEE ON NATIONAL SECURITY DISTRICT OFFICE: SUBCOMMITTEES: F TACOMA ROAD E. MILITARY PROCUREMENT �ongregg of the Uniteb 6tateg 3600 PORT OTACOMA,WA99424,SUITE 308 MILITARY INSTALLATIONS AND FACILITIES (253)926-46683 MERCHANT MARINE PANEL wouge of I&CPtegentatibeg TOLL FREE1-888-SMITH09 COMMITTEE ON RESOURCES ' '��ff j ft a-mail:edam.smith@mail.house.gov ll SUBCOMMITTEE: KAC11zlJmgton, DC 20515-4709 WATER AND POWER August 25, 1998 Kathryn Wolf Mayor City of Yelm PO Box 479 Yelm, WA 98597 Dear Mayor Wolf, I am writing to express my strong support of your application for the meritorious grant from the Thurston Regional Planning Council to assist with the purchase of the Roy/Yelm Shortline Railroad. Having worked with you and representatives from throughout the region, I am excited about the prospect of a community pulling together to preserve an incredibly vital link for the Yelm region. This is a key rail link, and losing this segment of track would effectively isolate the South Puget Sound region from rail traffic through Roy and Yelm. This segment must be preserved for the economic and industrial future of both communities. I am pleased to have the opportunity to share my support for this important project' Adam elSmith Member of Congress as/hpc PRINTED ON RECYCLED PAPER COMMITTEES: PATTY MURRAY APPROPRIATIONS WASHINGTON BUDGET LABOR AND HUMAN RESOURCES Uniu 9�tat%rwa �^„a� SCLCCT CERANS'AF AI E11tIC5��7.'L'` C'` VETERANS'AFFAIRS WASHIN(5TON,DC 20510-4704 September 1, 1998 The Honorable Kathryn Wolf City of Yelm PO Box 479 Yelm, Washington 98597 Dear Mayor Wolf. I am pleased to learn that the City of Yelm is applying for funding to assist with the purchase, operation and maintenance of the Roy-Yelm Shortline from the Burlington Northern Santa Fe Railroad. The city's acquisition of the shoreline would resurrect an important transportation corridor and could potentially expedite movement of both freight and passengers. The benefits would be both local and regional. I am confident that the Thurston Regional Planning Coupeil will give your proposal serious consideration. Sincerely, 617Murray United States Senator PM/mo 7930 W?'YMORE AVENUE 2088 JACK*CN FLMI1 HWIu NU W 901 15T AVENUE 140 FEDERAL DUILDINO 402 E.YAK)NIA AVENUE S,i1. F 506 600 W.12TH STREET SUrrr 3`90 SURE 903 915 2ND AVENUE EVERETT,WA 9H2O1 410*1 SEATTLE,WA 88.174-1003 Sporz t,WA 99201-3817 J160)6V&Nrn &-7vrn,S7 99EG0-2871 (509) 5.,WA BH901-2780 14257% 9-8515 (206)553-5445 (509)824-8615 160)653-7797 (509}45)-74b2 'hINTED ON RECYCLED PAPER Inivn.L suns U-MurteyT&murmy W-'n.D- 'rIC+NAw"W.Dnp!/fw—Wncw Q0vy--murray1 efa+ Washington State Senate PO Box 40482 Senator Karen Fraser (360)786-7642 Olympia,WA 98504-0482 22nd Legislative District FAX: (360) 786-7450 August 27, 1998 Kathy M. Wolf, Mayor City of Yelm P.O. Box 479 Yelm, WA 98597 Dear Kathy: I understand you are seeking a meritorious grant from the Thurston Regional Planning Council to help with the purchase, operation and maintenance of the Roy -Yelm Shortline section of rail currently owned by the Burlington Northern Santa Fe Railroad. Please count me among those who support this worthwhile project. I am grateful that the City of Yelm is taking a leadership role to preserve this section of rail. If I can be of assistance on this project in the future, please let me know. Sincere'- KAREN incer yKAREN FRASER State Senator 22'Legislative District Committees: Agriculture&Environment • Commerce&Labor • Ways&Means, Ranking Democrat-Capital Budget Joint Committee on Pension Policy • Joint Administrative Rules Review Committee qoRecyded onomic Development Councit of Thurston County 721 Columbia SW Olympia, WA 98501 (360) 754-6320 FAX(360)586-5493 http://www.orcolink.com/-edc edea orcalink.com August 24, 1998 The Honorable Kathryn M. Wolf Mayor City of Yelm Post Office Box 479 Yelm, Washington 98597 Dear Mayor Wolf: I am writing in regards to the preservation of the Burlington-Northern Santa Fe railline located in Yelm. Across the northwest, land with rail access for cost-effective product delivery is becoming scarce which is reflective of the increasing number of companies contacting our organization interested in industrial or light manufacturing land with rail access. For a town such as Yelm that does not have direct access to Interstate 5, the option of shipping by rail is extremely important to their economic vitality. Companies that locate in Yelm that cannot ship commerce by rail will congest Yelm Highway with large trucks. We support the City of Yelm in applying for the meritorious grant from the Thurston Regional Planning Council to assist with the purchase, operation and maintenance of the Roy-Yelm Shortline from the Burlington-Northern Santa Fe Railroad. Thank you for the opportunity to show our support in this matter. Sint 1 Dennis Matson Executive Director (� Port of Olympia Commissioners Jeff Dickison Steven Pottle Bob Van Schoorl August 28, 1998 Kathryn M. Wolf Mayor, City of Yelm PO Box 479 Yelm, WA 98597 Dear Mayor Wolf: The Port of Olympia's mission is to promote economic development throughout all of Thurston County. In this regard, we write to support the City of Yelm in applying for the meritorious grant from the Thurston Regional Planning Council to assist with the purchase, operation and maintenance of the Roy to Yelm Shortline from the Burlington Northern Santa Fe Railroad. The Yelm community has been working actively to promote economic development in that community. The Yelm Industrial Park has been designated for this purpose. Currently,the Roy to Yelm Shortline runs through the center of the industrial park. Because Yelm is located away from the I-4 corridor, maintaining a rail link to the industrial park is critical to the future economic development in this area. We urge the Thurston Regional Planning Council to approve the grant request in order for the City of Yelm to maintain the economic development and growth in the area. Sinc ely Nick Handy Executive Director 91S Washington Street NE,Olympia,WA 98S01-6931 Tel(360)S86-6150 Fax(360)S86-46S3 inquiries@portolympia.com I Executive Director,Nick Handy ohamher of M [aux 444 • Yelrn, Washington 98597 IP (3h(a) 458-6608 September 2, 1998 Thurston Regional Planning Council Board of Directors Olympia, WA Subject; Meritorious Grant Application Dear Council Membcrs: I support the City of Yelm in applying for the meritorious grant from the Thurston Regional Planning Council to assist with the purchase, operation and maintenance of the Roy— Yelm Shortline frotn the Burlington Northern Santa Fe Railroad. The railroad project is important to the business community of Yelm. The Chamber of Commerce's board of directors and membership have expressed a strong interest in supporting the project. Thank you for your time and consideration, Your support would be greatly appreciated by the Yelin Chamber of Commerce. Sincerely, #rCec,efiia, Jenkins Executive Director YELM PRAIRIE DEVEL-OPMENT COMPANY . August 2,.198 RE: Yelrn to l:akeview•Shortline Railroad•-$400,000.0r6nt from Thurston F�eginnat Planning Council .DearKen, This ietwe is t6 confirm today`s phone conversation. Our minimum commitment to the matching fund.portion of the brant will be$6,000, which at present is to include Miles -Saeid and Q_ v l'g portion. :As'other .businesses .commk.to the,project and.after we've had an opportunity to discuss the matter with Miies'.and Wilcox this amount niay be revised. It is our understanding that'.the goal,1s.$20,000 (with..�p to $.11,500 coming'from DOT): This $20,000 'matches'.ft City'.of Yelm's.$20'000 pledge and.,the'Port 'of . Olympia's $20;000 pledge.: The total pledges of $60,000 would exceed the 13,5% required for the matching Aunds portion of the-grant ' Advise if you requiri3 anything 61se. Sincerely, :. Joseph 5NV lliams. - 701 Pr4inq,-Park Lane NE -PD Box 5$10 -YeIM Washington 98597 Phoxie360AS8,'1801. ,Fax•360.458.8501 r Washington State Transportation Building Department of Transportation P.O.Box 47300 Sid Morrison Olympia,WA 98504-7300 Secretary of Transportation September 3, 1998 The Honorable Kathryn M.Wolf Mayor of Yelm PO Box 479 Yelm WA 98597-0479 RE: Roy to Yelm Shortline Railroad Dear Mayor Wolf: The Washington State Department of Transportation(WSDOT) supports the City of Yehn in applying for the meritorious grant from the Thurston Regional Planning Council to assist with the purchase, operation, and maintenance of the Roy-Yelm Shortline from the Burlington Northern Santa Fe Railroad. The WSDOT believes this project has excellent potential for providing mobility options to residents and businesses in the rapidly urbanizing Roy and Yelm areas. This rail line not only has potential to convert a portion of the heavy truck traffic moving over local roads to rail shipments,but there is also potential for a future commuter train connection from Yelm,Roy, and Ft. Lewis to the RTA commuter train station planned for Lakewood. At a time when the roads in the Yelm and Roy area are becoming increasingly congested, the WSDOT believes preserving this valuable urban rail corridor is a sound investment for providing future mobility options. Consequently, the WSDOT will contribute up to $11,500 for the TEA-21 local matching requirement for this project. Sincerely, AMES H. SLAKEY Director Public Transportation&Rail Division JHS-.cls I AWL Washington State Transportation Building pepartment of Transportation P.O.Box 47300 Olympia,WA 98504-7300 Sid Morrison Secretary of Transportation September 3, 1998 The Honorable Kathryn M.Wolf Mayor of Yelm PO Box 479 Yelm WA 98597-0479 RE: Roy to Yeb-a Shortline Railroad Dear Mayon'Wolf: The Washington State Department of Transportation (WSDOT) supports the City of Yelm in applying for the meritorious grant from the Thurston Regional Planning Council to assist with the purchase, operation, and maintenance of the Roy-Yelm Shortline from the Burlington Northern Santa Fe Railroad_ The WSDOT believes this project has excellent potential for providing mobility options to residents and businesses in the rapidly urbanizing Roy and Yelm areas. This rail line not only has potential to convert a portion of the heavy truck traffiic moving over local roads to rail shipments,but there is also potential for a future commuter train connection from Yelm,Roy, and Ft. Lewis to the RTA commuter train station planned for Lakewood. At a time when the roads in the Yelm and Roy area are becoming increasingly congested, the WSDOT believes preserving this valuable urban rail corridor is a sound investment for providing future mobility options. Consequently,the WSDOT will contribute up to $11,500 for the TEA-21 local matching requirement for this project. Sincerely, AMES H. SLAKEY Director Public Transportation&Rail Division JHS:cls THURSTON REGIONAL PLANNING COUNCIL 2404 HERITAGE COURT SW #B OLYMPIA, WASHINGTON 98502-6031 NEMORAND Members: TO: Bill Wiebe, WSDOT Planning & Programming Service Center City of Lacey Dave Zevenbergen, WSDOTT sAid Office City of Olympia FROM: Thera Black, Associate Plann City of Tenino DATE: November 17, 1998 City of Tumwater SUBJECT: Amendment #1 to the 1999-2001 RTIP for Thurston County City of Yelm Town of Bucoda Enclosed are supporting materials for Amendment #1 to the 1999-2001 Regional Town of Rainier Transportation Improvement Program for Thurston County. Thurston County Intercity Transit Amendment #1 concludes this region's Surface Transportation Program (STP) Port ci Olympia allocation process by incorporating these regionally prioritized projects into the recently adopted RTIP as funding secured with STP(U) or STP(R) revenue, as Griffin School District appropriate. All told, the member jurisdictions of TRPC elected to fund 22 projects North Thurston School District over the next four years with this revenue, as well as establish a Rural Community Olympia School District Support Program to benefit the region's smallest rural communities. Tumwater School District This Yelm Community Schools amendment package includes the following materials documenting the funding and Nisqually Indian Tribe programming details for the selected projects: • TRPC Amending Resolution 98-7; • Amendment Report #1 for the 1999-2001 RTIP for Thurston County; Charter Member Emeritus: 0Appendix H from the 1999-2001 RTIP, updated to reflect the amended The Evergreen State College projects; • Washington State STIP pages for the amended projects; • Prioritization and Financial Feasibility Detail by Fund Source, and a Summary of that detail, for the amended projects; and Harold Robertson,AICP 0 An electronic version of the STIP amendment (for Dave only). Executive,Director This amendment represents the final action needed to restore Thurston Regional Planning Council's RTIP to a fully-programmed and prioritized status. Bill and Dave, I appreciate your assistance in this significant undertaking! Please let me know if you have any questions regarding this amendment package. 57:rb cc: Martin Hoppe, City of Lacey (360)786-5480 Dave Riker, City of Olympia FAX 754-4413 Doug Johnston, City of Tumwater Ken Garmann, City of Yelm Dale Rancour, Thurston County Stefan Marks, Intercity Transit Brian Moorehead, WSDOT Olympic Region TransAid Theresa Morse, Federal Transit Administration Bill Wade, Federal Highway Administration Providing Visionary Leadership on Regional Plans, Policies and Issues October 30, 1998 THURSTON REGIONAL PLANNING COUNCIL RESOLUTION 98-7 RELATING TO AMENDMENT #1 to the 1999 - 2001 Regional Transportation Improvement Program for Thurston County. WHEREAS, the Thurston Regional Planning Council (TRPC), under its designation as the Metropolitan Planning Organization(MPO)and the Regional Transportation Planning Organization(RTPO) for the THURSTON COUNTY region, has the responsibility for biennially adopting and maintaining a Regional Transportation Improvement Program (RTIP); and WHEREAS, transportation projects must be included in the RTIP to be eligible for federal assistance under Federal Transit Administration and Federal Highway Administration funding programs; and WHEREAS, the projects included in Amendment #1 were identified through a comprehensive regional prioritization and selection process; and WHEREAS, the projects included in Amendment#1 are consistent with, and support, the goals and policies established in the 1998 Regional Transportation Plan Update; and WHEREAS, the projects included in Amendment #1 were reviewed and commented on t by the community prior to selection for funding; and WHEREAS, Thurston Regional Planning Council certifies that the requirements of 23 USC, Section 134 are met. Certification is a joint MPO/WSDOT statement concerning the planning process and is updated every two years; and WHEREAS, Thurston Regional Planning Council certifies that the RTIP meets all Federal and State air quality requirements. NOW THEREFORE BE IT RESOLVED BY THE THURSTON REGIONAL PLANNING COUNCIL: That the scope and content of Amendment#1 to the 1999 - 2001 Regional Transportation Improvement Program be submitted to the Governor's Office for approval with the understanding that minor changes may be required after federal review. ADOPTED: November 6, 1998. ATTES : 6&X*a ✓ �1.1/��axe Executive Director Chair Harold Robertson Judy Wilson 57Ab11098w704.173 APPENDIX H New Projects Added to the 1999-2001 RTIP Through Amendments This table will be updated throughout the year as new projects are amended into the RTIP. Amend Funding Source Agency Project Federal Justification for /1 Year I Title Funds Amendment 1 STP(R) Yelm E Yelm Avenue Safety Improve- $478 1998 Regional STP Allocation 1999 ments (All phases) Process—Selected Project 1 STP(R) Yelm BNSF Railroad Branch Line Ac- $340 1998 Regional STP Allocation 1999 quisition(All project phases) Process—Selected Project 1 STP(R) Yelm Y2/Y3 Corridor and Environ- $40 1998 Regional STP Allocation 1999 mental Study Process— Selected Project 1 STP(U) Intercity Regional Rideshare Program $21 1998 Regional STP Allocation 1999 Transit Process— Selected Project 1 STP(U) Lacey Martin Way East Roadway Re- $491 1998 Regional STP Allocation 1999 habilitation (All project phases) Process—Selected Project 1 STP(U) Lacey Pacific Avenue Roadway 1998 Regional STP Allocation 1999 Rehabilitiation(PE) $19 Process—Selected Project 1 STP(U) Lacey Martin Way West Roadway $27 1998 Regional STP Allocation 1999 Rehabilitiation (PE) Process—Selected Project 1 STP(U) Olympia 9' Ave Enhancement Project 1998 Regional STP Allocation 1999 (PE) $38 Process—Selected Project 1 STP(U) Olympia 9t°Ave Enhancement Project 1998 Regional STP Allocation 1999 (RW) $11 Process—Selected Project 1 STP(U) Olympia Harrison Ave Preservation Pro $65 1998 Regional STP Allocation 1999 ject(PE) Process—Selected Project 1 STP(U) Olympia Cooper Pt Preservation Project $480 1998 Regional STP Allocation 1999 (All project phases) Process—Selected Project 1 STP(U) Olympia 4' Avenue Bridge Construction $30 1998 Regional STP Allocation 1999 —Public Education Campaign Process—Selected Project 1 STP(U) Olympia Downtown Parking Meter Instal- $109 1998 Regional STP Allocation 1999 lation— Phase I Process— Selected Project 1 STP(U) Olympia Olympia Neighborhood Connec- $23 1998 Regional STP Allocation 1999 tions Plan Process— Selected Project 1 STP(U) Olympia Thurston County Bicycling $3 1998 Regional STP Allocation 1999 Guide Map—Phase I Process— Selected Project H - 1 APPENDIX H Amend Funding Source Agency Project Federal Justification for tt Year Title Funds Amendment 1 STP(U) Thurston Marvin Rd SE Improvements $28 1998 Regional STP Allocation 1999 County (PE) Process — Selected Project 1 STP(U) Thurston Marvin Rd SE Improvements $441 1998 Regional STP Allocation 1999 County (CN) Process— Selected Project 1 STP(U) Lacey Martin Way West Roadway Re- $227 1998 Regional STP Allocation 2000 habilitation(CN) Process— Selected Project 1 STP(U) Lacey College Street Roadway Rehabil- $51 1998 Regional STP Allocation 2000 itation(PE) Process—Selected Project 1 STP(U) Lacey College Street Roadway Rehabil- $427 1998 Regional STP Allocation 2000 itation(CN) Process—Selected Project 1 STP(U) Olympia 9'Avenue Enhancement Project $251 1998 Regional STP Allocation 2000 (CN) Process—Selected Project 1 STP(U) Olympia Harrison Ave Preservation Pro- 1998 Regional STP Allocation 2000 ject (CN) $435 Process—Selected Project 1 STP(U) Olympia Downtown Parking Meter Instal- $109 1998 Regional STP Allocation 2000 lation—Phase II Process— Selected Project 1 STP(U) Lacey Pacific Avenue Roadway Reha- $162 1998 Regional STP Allocation 2001 bilitation(CN) Process—Selected Project 1 STP(U) Lacey Sleater Kinney Roadway Reha- 1998 Regional STP Allocation 2001 bilitation (PE) $20 Process— Selected Project 1 STP(U) Lacey One-Way Couplet Roadway Re- 1998 Regional STP Allocation 2001 habilitation(CN) $494 Process— Selected Project 1 STP(U) Olympia Black Lake Blvd Preservation 1998 Regional STP Allocation 2001 Project (PE) $59 Process—Selected Project 1 STP(U) Olympia Black Lake Blvd Preservation 1998 Regional STP Allocation 2001 Project (RW) $11 Process—Selected Project 1 STP(U) Olympia Sleater Kinney Rd Preservation 1998 Regional STP Allocation 2001 Project (PE) $92 Process—Selected Project 1 STP(U) Olympia Sleater Kinney Rd Preservation 1998 Regional STP Allocation 2001 Project(RW) $14 Process— Selected Project 1 STP(U) Olympia 4`s Avenue Preservation Project $389 1998 Regional STP Allocation 2001 (ALL project phases) Process—Selected Project 1 STP(U) Tumwater Black Lake Blvd Preservation 1998 Regional STP Allocation 2001 Project (PE) $12 Process—Selected Pro'ect H - 2 SUMMARY OF 1998 REGIONAL STP ALLOCATIONS — Selected by TRPC on November 6, 1998 Project Title (ID#) Agency Sponsor Total Project Total STP Start Project Description Agency Contact Cost Award Year Regional Rideshare Program (ITA99026) Start-up costs associated with joining Metro's Rideshare Program, including hardware and software acquisition, telecommunication linkages, and initial Intercity Transit $35,000 $21,000 1999 promotional costs. This will enable Thurston County residents and Karen Parkhurst employees to access a much larger network of regional rideshare information. Martin Way East Roadway Rehabilitation (LAC99001) Structural overlay of Martin Way from Lacey city limits west of Marvin Road to city limits east of River Ridge Drive. Class II bike lanes will be added to City of Lacey $755,000 $490,750 1999 both sides of the road. This road serves five transit routes. It is a class 111 Martin Hoppe freight route. Total length = 1.04 miles. Sleater Kinney Road Roadway Rehabilitation (LAC99002) Structural overlay of Sleater Kinney Road from the 1-5 Interchange to City of Lacey Pacific Avenue. Existing sidewalk and curbing will be improved on both Martin Hoppe $280,000 $182,000 2001 sides of the road as needed. This road serves eight transit routes. It is a class 111 freight route. Total length = 0.38 miles. Pacific Avenue Roadway Rehabilitation (LAC99003) Structural overlay of Pacific Avenue for that section not within the one-way couplet area, from Golf Club Road to Sleater Kinney Road, and from Ulery City of Lacey Street to the city limits east of Carpenter Road. Class 11 bike lanes will be Martin Hoppe $280,000 $180,950 1999 added to both sides of the road on the eastern end of this project. One bus shelter will be added. This road serves five transit routes. It is a class 111 freight route. Total length = 0.59 miles. Martin Way West Roadway Rehabilitation (LAC99004) Structural overlay of Martin Way from College Street to Desmond Drive (excluding area under 1-5 interchange). Class 11 bike lane will be added to City of Lacey $395,000 $254,650 1999 the north side of the street, from 1-5 to Homebase Drive. Two bus shelters Martin Hoppe will be added to this segment of Martin Way. This road serves five transit routes. It is a class 111 freight route. Total length = 0.45 miles. -1- Project Title (ID#) Agency Sponsor Total Project Total STP Start Project Description Agency Contact Cost Award Year One-Way Couplet Roadway Rehabilitation (LAC99006) Structural overlay of the roadways within the one-way couplet conversion area— including Pacific Avenue, Lacey Boulevard, College Street—from City of Lacey $765,000 $494,100 2001 Golf Club Road to Ulery Street. Three transit shelters will be added to this Martin Hoppe project vicinity. This area serves six transit routes. It is a class 111 freight route. Total length = 2.3 miles. College Street Roadway Rehabilitation (LAC99007) Structural overlay of College Street from Martin Way to Montclair Drive SE. City of Lacey Sidewalk and curb improvements will be made where necessary. Three Martin Hoppe $740,000 $477,850 2000 bus shelters will be added to this project vicinity. This road serves six transit routes. It is a class 111 freight route. Total length = 1.97 miles. 4`h Ave Bridge Construction Public Education Campaign (OLY99027) City of Olympia Joint project between City of Olympia and Intercity Transit, in cooperation Sophie Stimson with WSDOT, Dept of GA, and TRPC. Comprehensive strategy and $50,000 $30,000 1999 outreach effort to attract travelers to alternative modes during construction Intercity Transit of the 4 Avenue Bridge rehabilitation project Intent is to mitigate bridge Karen Parkhurst construction impacts on the community. 9"' Avenue Enhancement Project (OLY99028) Minor widening of 91h Avenue from Black Lake Blvd to Decatur Street to accommodate two 5-foot bike lanes, and a 6-foot sidewalk on the north side City of Olympia $991,000 $300,000 1999 of the street Asphalt overlay will be done at the same time. Project will Dave Riker include four bus pads and benches, with bus shelters in two locations. This road serves three transit routes. Total length = 0.8 miles. Harrison Avenue Preservation Project (OLY99033) Overlay from Cooper Point Road to Division Street. This project will add bicycle lanes on both sides of the road, including loop detection at traffic signals for bikes. A `Light Guard Crossing'pedestrian signal will be added City of Olympia to the crosswalk near Target Place, and a raised pedestrian island with high $1,015,500 $500,000 1999 visibility crosswalks will be added in the vicinity of Hollywood Video. A bus Dave Riker shelter will be added at Division and Harrison, and benches will be added at other transit stops throughout the project area. This road serves five transit routes. It is a class IV freight route. Total length = 0.86 miles. -2- Project Title (ID#) Agency Sponsor Total Project Total STP Start Project Description Agency Contact Cost Award Year Cooper Point Road Preservation Project (OLY99034) Overlay from Black Lake Boulevard to Harrison Avenue. This project will retain existing lane configuration from Black Lake to Capitol Mall Drive, but reconfigure the rest of the length to accommodate a five-lane cross section for cars, and Class 11 bike lanes on both sides of the road. It includes a City of Olympia new, high visibility crosswalk with a `Light Guard Crossing'signal across Dave Riker $815,000 $479,750 1999 Cooper Point near the new skateboard park. Three bus pads will be provided at existing transit stops, and a shelter and bench will be added at a new bus stop near the skateboard park. Project includes a $25,000 contribution from Olympia Skateboarders. This road serves five transit routes. It is a class IV freight route. Total length = 0.90 miles. Black Lake Boulevard Preservation Project (OLY99035) Overlay, and minor widening to accommodate two car travel lanes and Class 11 bike lanes on both sides of the road. This is a coordinated effort City of Olympia with the City of Tumwater(see TUM99016). The Olympia segment of the Dave Riker $647,000 $420,550 2001 project includes the addition of two new transit pads and benches at Park Drive. This road serves two transit routes. It is a class IV freight route. Total length (Olympia segment) = 0.46 miles. Sleater Kinney Road Preservation Project (OLY99036) This is a joint project co-sponsored by the cities of Olympia and Lacey. It includes a structural overlay and restriping to accommodate a three-lane configuration from Martin Way to 6"'Avenue, and a two-lane configuration City of Olympia from 6`h Avenue to 15`h Avenue. It includes Class 11 bike lanes on both Dave Riker sides of the road. A five-foot sidewalk will be added on the westside of $1,978,000 $867,200 2001 Sleater Kinney from Martin Way to 15 th Avenue. High visibility crosswalks City of Lacey will be located at strategic intersections to accommodate pedestrians near Martin Hoppe the high school and area businesses. The project includes benches at transit stops along the project area. This road serves three transit routes. Total length = 0.66 miles. -3- Project Title (ID#) Agency Sponsor Total Project Total STP Start Project Description Agency Contact Cost Award Year 4"Avenue Preservation Project (OLY99037) Structural overlay and restriping from Capitol Way to Plum Street. Project City of Olympia includes benches for pedestrians, and improvement of the transit stop at Dave Riker $599,000 $389,300 2001 Adams Street. This road serves 14 direct and connecting transit routes It is a class IV freight route. Total length = 0.42 feet. Downtown Parking Meter Installation (OLY99039) This project will fund the installation of 700 parking meters in downtown Olympia, as per the Downtown Parking Management Strategy. Areas where these meters will be installed are primarily used for long-term City of Olympia $363,000 $217,800 1999 commuter parking. Reducing the supply of free parking will support local Dave Riker TDM efforts and free up additional parking for shoppers and customers. This effort includes the cooperation of the WA State Department of General Administration. Olympia Neighborhood Connections Plan (OLY99040) City of Olympia This pilot project is co-sponsored by the city of Olympia and the Energy Sophie Stimson Outreach Center. It will identify existing and potential neighborhood cul-de- $36,000 $23,000 1999 sac connections suitable for bicycle and pedestrian use. This will enhance Energy Outreach the multi-modal network in areas where retrofitting for auto connections is Center not feasible. Paul Horton Thurston County Bicycling Guide Map - Phase I (OLY99041) City of Olympia This represents the first phase of a project to create a region-wide bicycling Sophie Stimson guide map which will identify safe and convenient commute-and recreation- $5,000 $3,000 1999 routes. Phase I defines all the detail of the map content. Phase ll, when Energy Outreach funded, will entail the formal design and publication of the map. Center Paul Horton -4- Project Title (ID#) Agency Sponsor Total Project Total STP Start Project Description Agency Contact Cost Award Year Marvin Road SE Improvements (TCU99023) Reconstruction of Marvin Road SE, from Walthew Road to Pacific Highway Includes strengthening the road base, overlay, and restriping to accommodate two travel-lanes and five-foot bike lanes on both sides of the road. This project will be completed in conjunction with developer Thurston County $750,000 $469,000 1999 improvements required for the Sylvan Village development, to enhance Dale Rancour cost-effectiveness. This road serves two transit routes. It is a class IV freight route. Total length = 1.30 miles. [STP funds for this project include $355,000 in project award, and$113,692 in compensation for the Rural Community Support Program, described below]. Black Lake Boulevard Preservation Project (TUM99016) Structural overlay of Black Lake Boulevard, from Tumwater's north city limits to the south city limits. This is a coordinated effort with the city of Tumwater Olympia (see project OL Y99035). Project includes the addition of Class 11 Doug Johnston $225,000 $146,250 2001 bike lanes on both sides of the road, completing the missing link in the Black Lake Boulevard bike route. This road serves one transit route. It is a class IV freight route. Total length = 1.0 miles. East Yelm Avenue Safety Improvements (YEL99012) This was the highest ranked roadway project submitted for consideration. It will rectify several safety problems along a heavily traveled stretch of East Yelm Avenue (SR510), from 3"d Street to the Five Corners intersection. The project includes the completion of a center left-turn lane, drainage improvements to eliminate severe ponding'on the road surface, realignment of intersections at Clark Road and Vancil Road to eliminate City of Yelm $1,014,060 $477,790 1999 site-distance restrictions, improved street lighting, relocation of utility poles Ken Garmann and fire hydrants from the shoulder of the road, and a curb to separate pedestrian facilities from the roadway. Project will result in continuous bike lanes and sidewalks on both sides of the road. To achieve the most cost- effective results, this project will be coordinated with a WSDOT resurfacing project. This road serves one transit route. It is a class 111 freight route. Total length = .76 miles. -5- Project Title (ID#) Agency Sponsor Total Project Total STP Start Project Description Agency Contact Cost Award Year Yelm to Lakeview BNSF Branch Line Acquisition (YEL99013) This project includes the acquisition of approximately 15 miles of operating rail line from the Burlington Northern Sante Fe railroad, preserving a vital rail corridor from the city of Yelm to Lakewood. It will serve as an important freight corridor for SE Thurston and Pierce Counties. It also offers this Yelm $400,000 $340,000 1999 region a cost-effective opportunity to link with the greater Puget Sound Ken Garmann commuter rail system, Sound Transit which will terminate in Lakewood adjacent to the `Prairie Line,'as the Yelm line is being referred to. This effort represents a strong partnership involving local and regional organizations from government and the private sector. Y2/Y3 Corridor and Environmental Study (YEL99014) This effort will complete the Y2/Y3 corridor study, an effort to identify Yelm alternative corridors for relieving the traffic congestion created by the Ken Garmann $50,000 $40,000 1999 intersection of SR 507 and SR 510 in downtown Yelm. WSDOT has been an important partner in this overall project. Rural Community Support Program The Regional Council established this program to provide assistance to the region's smallest rural communities in meeting their transportation maintenance and safety needs. Due to federal constraints on how STP funds can be used, small rural communities are frequently precluded from applying for STP funds, or using them on their local roads. The Rural Community Support Program, or RCSP, compensates for those limitations Thurston County na by providing the communities of Bucoda, Rainier, Tenino, Yelm, and the Dale Rancour Nisqually Indian Tribe a set amount of`service credit'with Thurston County $113,692 (Included in 1999 Roads and Transportation Services. This enables these communities to get Thurston Regional the Marvin safety or maintenance needs met without the restrictions associated with Planning Council Rd project, use of federal funds. In return, the County is allocated a commensurate Thera Black TCU99023) amount of regional STP funding in compensation for the effort. Most of this money comes from the federally-required `rural'pool of funds. However, that is matched with 20 percent from the regional pool of funds due to the regional benefit associated with this program. The four year cost of this program is$113,692 in federal funds, which the County elected to add to the funds they were awarded for the Marvin Road Improvements. -6- FACTS ABOUT THE 1998 REGIONAL STP ALLOCATION PROCESS & RESULTS • The 1998 allocation process awarded federal funding for the period 1999 through 2002. This amount totaled $6.8 million over the four year period, of which $6.7 was allocated through a competitive process. This represents the only discretionary regional funding source available to the Regional Council's member jurisdictions for supporting goals and policies in the 1998 Regional Transportation Plan Update. • The Council established a regionally competitive process to determine the highest priority needs for funding. This process focused on: safety and preservation of the existing road network; projects that improve the efficiency and connections between alternative modes of travel; and Travel Demand Management programs that reduce commuter-generated traffic impacts. Other criteria factors included: support for transit; land use and linkages; freight mobility; other funding contributions; and project co-sponsors. The emphasis areas and criteria factors were drawn directly from the 1998 RTP Update. • A total of (43) project applications were received, reflecting over $14 million in STP funding requests. There was only $6.7 million available for allocation. All told, (22) projects were funded through the competitive allocation process. This included projects from Lacey, Olympia, Tumwater, Thurston County, and Intercity Transit. The $6.7 million in funding awards will leverage another $12.2 million in public and private contributions, resulting in almost $19 million in regional transportation improvements over the next four years. • Selected projects represent several partnerships and multi-jurisdictional efforts: ♦ the cities of Lacey and Olympia will work together on improvements to Sleater Kinney Road; ♦ the cities of Olympia and Tumwater will work together on improving 1 '/z miles of Black Lake Boulevard; + the city of Olympia and Intercity Transit will collaborate on a TDM public education campaign in conjunction with the 4" Avenue bridge construction project; + the city of Olympia will partner with the Energy Outreach Center on two projects designed to improve efficiencies of the bicycle and pedestrian networks; + the city of Yelm will coordinate safety improvements on Yelm Avenue with a WSDOT resurfacing project to keep costs lower for both agencies; and ♦ Intercity Transit will contribute 16 new transit shelters and several benches to the selected road projects. -7- • The Rural Community Support Program was established to provide assistance to the region's smallest communities in meeting their transportation safety and maintenance needs. This program will provide almost $95,000 in 'service credit' over the next four years to Bucoda, Rainier, Tenino, Yelm, and the Nisqually Indian Tribe for work with Thurston County Roads and Transportation Services. In return, Thurston County will be compensated with a commensurate amount of STP revenue from the 'rural' pool of funds, and another $18,950 from the 'regional' pool of funds to account for added administrative and coordination costs. Total four year compensation to the County for this program is $113,692. Thurston County has opted to add this revenue to its Marvin Road SE Improvements project, which was selected for funding through the competitive process, • The city of Yelm was awarded funding to acquire over 15 miles of operating rail line from Burlington Northern Sante Fe. This funding will be matched by contributions from Yelm, as well as those from the Port of Olympia, WSDOT's Rail Program, and three private businesses — Miles Sand & Gravel; Wilcox Farms; and Prairie Development. • Three TDM projects were selected for funding: + Intercity Transit will link its local rideshare program with the greater Puget Sound program maintained by Metro, providing residents and employees with a much larger rideshare data base to meet their needs; + Olympia and Intercity Transit will collaborate on the 4th Avenue Bridge Construction Public Education Campaign; and + Olympia's Downtown Parking Meter Installation will reduce the availability of free long-term commuter parking, directly supporting local and regional TDM and CTR efforts. • Over $950,000 will be spent on projects in the rural community over the next four years. This slightly exceeds the federally-required rural minimum of $947,000, consistent with the Council's direction that this is a minimum, not a maximum, to be allocated to rural projects. • 15 of the selected projects will get into the federal funding pipeline in 1999, with one or more phases scheduled to begin after the first of the year. Programming coordination will enable all 22 projects to be started by 2001, with all but four of them scheduled for completion before 2002. • The next round of regional STP funding allocations is slated for the first quarter of 2000. At that time, two years' worth of funding will be allocated, with subsequent processes occurring on a biennial basis. J.\PLANNER\BLACKVT\TRANS\STP\SUMMARY WPD -8- Washington State S. T. I. P. 1999 to 2001 (Project Costs in Thousands of Dollars) Date - November 15, 1998 Selection Criteria 4 DIGIT TIP Year Agency Name City Name County Name Amendment # 1 MPO/RTPO 1999-2001 RTIP dor Thurston County Washington State S. T. I. P. 1999 to 2001 (Project Costs in Thousands of Dollars) 11/17/1998 MPO : NON County : Thurston County Agency : Yelm Phase Data Func Project PIN Imp Total Start Federal Rap,etc. Local/ Cls Identification Number Type Length Date Fund Code Cost Code Cost State Total 06 12 .76 City:Yelm Revision: 1 E Yelm Ave Safety Improvements 06 E Yelm Avenue 3rd St to Five Corners intersection Enviromental Status is:Programmatic CE RW Required: No Auto, bike, ped safety improvements ALL 1/15/99 STP(R) 478 536 1014 Project Total 478 536 1014 00 YEL99013 32 15.0 City :Yelm Revision: 1 BNSF Railroad Branch Line Acquisition Yelm to Lakeview Enviromental Status is:Programmatic CE RW Required: No Acquisition& upgrade of BNSF rail line ALL 1/15/99 STP(R) 340 60 400 Project Total 340 60 400 07YEL99014 13 City:Yelm Revision: 1 Y2/Y3 Corridor&Environmental Study Enviromental Status is:Programmatic CE RW Required: No Complete by-pass corridor study, EIS ALL 2/1/99 STP(R) 40 10 50 Project Total 40 10 50 Agency Totals for Yelm 858 606 1464 2 Washington State S. T. I. P. 1999 to 2001 (Project costs in fhousands of Dollars) 11/15/1998 MPO: TRPC County : Thurston County Agency : Intercity Transit Phase Data Func Project PIN Imp Total Start Federal Rap,etc. Local/ Cis Identification Number Type Length Date Fund Code Cost Code Cost State Total 00 I 32 City: Revision: 1 Regional Rideshare Program Enviromental Status is:Programmatic CE RW Required: No Link IT rideshare program with Metro program ALL 9/1/99 STP(U) 21 14 35 Project Total 21 14 35 Agency Totals for Intercity Transit 21 14 35 3 Washington State S. T. I. P. 1999 to 2001 11/15/1998 (Project costs in thousands of Dollars) MPO: TRPC County : Thurston County Agency : Lacey Phase Data Func Project PIN Imp Total Start Federal Rap,etc. Local/ Cls Identification Number Type Length Date Fund Code Cost Code Cost State Total 14 07 1.04 City:Lacey Revision: 1 Martin Way East Roadway Rehabilitiation 06 Martin Way CL west of Marvin to CL east of River Ridge Dr Enviromental Status is:Programmatic CE RW Required: No Structural overlay with bike lanes ALL 2/1/99 STP(U) 491 264 755 Project Total 491 264 755 14 LAC99003 07 .59 City:Lacey Revision: 1 Pacific Avenue Roadway Rehabilitation 06 Pacific Avenue Sleater Kinney to east CL,not in 1-way couplet Enviromental Status is:Programmatic CE RW Required: No Structual overlay with bike lanes PE 9/1/99 STP(U) 19 11 30 CN 3/1/2001 STP(U) 162 88 250 Project Total 181 99 280 14 LAC99004 07 .45 City:Lacey Revision: 1 Martin Way West Roadway Rehabilitation 06 Martin Way College Street to Desmond Drive Enviromental Status is:Programmatic CE RW Required: No Structural overlay and bike lanes PE 2/1/99 STP(U) 27 15 42 CN 4/1/2000 STP(U) 227 125 352 Project Total 254 140 394 4 Washington State S. T. I. P. 1999 to 2001 11/15/1998 (Project costs in I'housands of Dollars) MPO : TRPC County : Thurston County Agency : Lacey Phase Data Func Project PIN Imp Total Start Federal Rap,etc. Local/ Cls Identification Number Type Length Date Fund Code Cost Code Cost State Total 14 07 1.97 City:Lacey Revision: 1 College Street Roadway Rehabilitation 06 College Street Martin Way to Montclair Dr SE Enviromental Status is:Programmatic CE RW Required: No Structural overlay&sidewalk improvements PE 3/1/2000 STP(U) 51 28 79 CN 4/1/2000 STP(U) 427 234 661 Project Total 478 262 740 14 LA 99002 07 .38 City : Lacey Revision: 1 Sleater Kinney Roadway Rehabilitation 06 Sleater Kinney Rd 1-5 interchange to Pacific Avenue Enviromental Status is:Programmatic CE RW Required: No Structural overlay & sidewalk improvements PE 3/1/2001 STP(U) 20 10 30 Project Total 20 10 30 14 07 2.3 City : Lacey Revision: 1 One-Way Couplet Roadway Rehabilitation Pacific Ave/Lacey Blvd Golf Club Road to Ulery Street Enviromental Status is:Programmatic CE RW Required: No Structural overlay of one-way couplet CN 7/1/2001 STP(U) 494 271 765 Project Total 494 271 765 Agency Totals for Lacey 1918 1046 2964 5 Washington State S. T. I. P. 1999 to 2001 (Project costs in fhousands of Dollars) 11/15/1998 MPO : TRPC County : Thurston County Agency : Olympia Phase Data Func Project PIN Imp Total Start Federal Rap,etc. Local/ Cls Identification Number Type Length Date Fund Code Cost Code Cost State Total 17 OLY9902805 8 City:Olympia Revision: 1 9th Avenue Enhancement Project 06 9th Avenue Black Lake Blvd to Decatur Enviromental Status is:EA RW Required: Yes Widen & overlay for bike,ped facilities PE 3/1/99 STP(U) 38 88 126 RW 4/1/99 STP(U) 11 27 38 CN 5/1/2000 STP(U) 251 576 827 Project Total 300 691 991 14 07 .86 City:Olympia Revision: 1 Harrison Ave Preservation Project 06 Harrison Avenue Cooper Point Rd to Division St Enviromental Status is:Programmatic CE RW Required: No Resurface, adding bike & ped facilities PE 3/1/99 STP(U) 65 68 133 CN 5/1/2000 STP(U) 435 448 883 Project Total 500 516 1016 16 4 07 .90 City:Olympia Revision: 1 Cooper Pt Road Preservation Project 06 Cooper Pt Road Black Lake Blvd to Harrison Ave Enviromental Status is:Programmatic CE RW Required: No Resurface, adding bike&ped facilities ALL 4/1/99 STP(U) 480 335 815 Project Total 480 335 815 6 Washington State S. T. I. P. 1999 to 2001 11/15/1998 (Project (:osts in I'housands of Dollars) MPO : TRPC County : Thurston County Agency : Olympia Phase Data Func Project PIN Imp Total Start Federal Rap,etc. Local/ Cls Identification Number Type Length Date Fund Code Cost Code Cost State Total Ig OLY9903607 .66 City:Olympia Revision: 1 Sleater Kinney Rd Preservation Project 06 Sleater Kinney Rd Martin Way to Oly N CL Enviromental Status is:Programmatic CE RW Required: Yes Structural overlay w/bike& ped facilities PE 3/1/2001 STP(U) 92 118 210 RW 4/1/2001 STP(U) 14 17 31 Project Total 106 135 241 14 LY99037 07 .42 City:Olympia Revision: 1 4th Avenue Preservation Project 4th Avenue Capitol Way to Plum Street Enviromental Status is:Programmatic CE RW Required: No Structural overlay w/ped facilities ALL 3/1/2001 STP(U) 389 210 599 Project Total 389 210 599 Agency Totals for Olympia 2119 2105 4224 9 Washington State S. T. I. P. 1999 to 2001 11/15/1998 (Project costs in fhousands of Dollars) MPO : TRPC County : Thurston County Agency : Olympia Phase Data Func Project PIN Imp Total Start Federal Rap,etc. Local/ Cls Identification Number Type Length Date Fund Code Cost Code Cost State Total 14 31 City:Olympia Revision: 1 4th Ave Bridge Construction Public Ed Campaign 4th Avenue Enviromental Status is:Programmatic CE RW Required: No TDM campaign in conjunction w/construction ALL 5/1/99 STP(U) 30 20 50 Project Total 30 20 50 00 12 City:Olympia Revision: 1 Downtown Parking Meter Installation-Phase II Various Various, per Downtown Plan Enviromental Status is:Programmatic CE RW Required: No Install parking meters ALL 4/1/2000 STP(U) 109 73 182 Project Total 109 73 182 00 0 9 12 City:Olympia Revision: 1 Downtown Parking Meter Installation-Phase I Varies Downtown, as per Plan Enviromental Status is:Programmatic CE RW Required: No Installation of parking meters ALL 5/1/99 STP(U) 109 73 182 Project Total 109 73 182 7 Washington State S. T. I. P. 1999 to 2001 11/1511998 (Project costs in Thousands of Dollars) MPO : TRPC County : Thurston County Agency : Tumwater Phase Data Func Project PIN Imp Total Start Federal Rap,etc. Local/ Cls Identification Number Type Length Date Fund Code Cost Code Cost State Total 16 1 07 1 0 City :Tumwater Revision: 1 Black Lake Blvd Preservation(Tum segmerQ� Black Lake Blvd NCLtoSCL Enviromental Status is:Programmatic CE RW Required: No Structural overlay w/bike lanes PE 3/1/2001 STP(U) 12 7 19 Project Total 12 7 19 Agency Totals for Tumwater 12 7 19 11 Washington State S. T. I. P. 1999 to 2001 11/15!1998 (Project costs in I'housands of Dollars) MPO : TRPC County : Thurston County Agency : Olympia Phase Data Func Project PIN Imp Total Start Federal Rap,etc. Local/ Cls Identification Number Type Length Date Fund Code Cost Code Cost State Total 00 OLY99040 32 City:Olympia Revision: 1 Oly Neighborhood Connections Plan 31 Various Enviromental Status is:Programmatic CE RW Required: No Identify bike/ped cul-de-sac connections ALL 1/15/99 STP(U) 23 13 36 Project Total 23 13 36 00 OLY99041 32 City:Olympia Revision: 1 Thurston County Bicycling Guide Map-PhA� I Various Enviromental Status is:Programmatic CE RW Required: No Phase I of a regional biking guide ALL 1/15/99 STP(U) 3 2 5 Project Total 3 2 5 16 07 .46 City:Olympia Revision: 1 Black Lake Blvd Preservation Project(Oly Ament) Black Lake Blvd South CL to 21 st Ave SE Enviromental Status is:Programmatic CE RW Required: Yes Structural overlay w/bike lanes PE 3/1/2001 STP(U) 59 31 90 RW 4/1/2001 STP(U) 11 6 17 Project Total 70 37 107 8 Thurston Regional Planning Council 1999-2001 REGIONAL TRANSPORTATION IMPROVEMENT PROGRAM FOR THURSTON COUNTY AMENDMENT #1 —REPORT 1. Time Frame This amendment affects years 1999, 2000, and 2001. •. 2. PPr jectc Included This amendment includes (22) projects that were selected for regional Surface Transportation Program (STP) funding by Thurston Regional Planning Council through a comprehensive, collaborative regional prioritization process. It includes projects for Lacey, Olympia, Tumwater, Yelm, Thurston County, and Intercity Transit. In conjunction with the Rural Community Support Program, it includes almost $1 million of funding for rural projects, another $600,000 for multi-modal and TDM projects, and almost $4 million for roadway safety and preservation projects in the incorporated and unincorporated urban growth areas of Lacey, Olympia and Tumwater. It reflects three multijurisdictional efforts above and beyond the cooperative Rural Community Support Program. All told, this amendment package represents the highest priority regional transportation needs to be funded with this STP revenue over the 1999-2001 time period. Table 1 identifies the selected projects and their regional identification numbers, their total costs, and the 1999-2001 STP funding awards. (Note: Several project phases have STP funding programmed for 2002, which is not included in this amendment.) Please refer to Appendix H of the 1999-2001 RTIP, included with this report, for details on the cost and timing of specific project phases. 3. Priority of Projects The priority of these projects was determined through a regional prioritization process developed and executed by the member jurisdictions of Thurston Regional Planning Council. Priority of these projects as reflected in years one, two, or three of the Regional Transportation Improvement Program was established in cooperation between TRPC and the local jurisdictions, in accordance with local planning and programming needs. -1- 1999 2001 RTTA fnr Thnrcton County — Amendment f#1 4. Financial Plan Regional STP funding availability, upon which this amendment is based, was provided by the TransAid Office of WSDOT. It reflects regional STP funding authority for 1999, 2000, and 2001, and the 1998 carryover amount that was not previously programmed. This amendment will result in a fully programmed 1999-2001 Regional Transportation Improvement Program for Thurston County, restoring the programming and obligation capacities beneficial to the region, as well as local and state agencies. 5. CDQP=ti M Development of a prioritization process, project selection, and approval of amendment 98- 7 to include selected projects in the 1999-2001 RTIP was the responsibility of the member jurisdictions of Thurston Regional Planning Council, in cooperation with its Transportation Policy Board. The Regional Council includes membership from the following agencies: Cities of Lacey, Olympia, Tenino, Tumwater, and Yelm; towns of Bucod.a and Rainier; Thurston County; the Nisqually Indian Tribe; Intercity Transit; Port of Olympia; Griffin School District; North Thurston School District; Olympia School District; Tumwater School District; and Yelm Community Schools. The Transportation Policy Board includes the following representation: Cities of Lacey, Olympia, Tenino, Tumwater, and Yelm; town of Rainier; Thurston County; the Nisqually Indian Tribe; Intercity Transit; Port of Olympia; Olympia School District; Yelm Community Schools; Providence St. Peter Hospital (major employer); two citizen advisors; the Washington State Department of Transportation, Olympic Region; and the Washington State Department of General Administration. 6. Public Involvement Candidate projects were made available for public review and comment prior to the TPB review and recommendation to Regional Council. Project notebooks were available from September 25, 1998 through October 5, 1998 at the following locations: Lacey, Olympia, Temno, Tumwater, and Yelm Timberland Libraries; the Evergreen State College Library; the Energy Outreach Center library; and Thurston Regional Planning Council. Notification of regional STP allocation process, project review and comment was published in The Olympian and the Tacoma News Tribune on September 27 and September 29. Seven comments were received through this effort, but they did not affect project descriptions or competitive rankings. -2- Washington State S. T. I. P. 1999 to 2001 1111511998 (Project costs in Thousands of Dollars) MPO : TRPC County : Thurston County Agency : Thurston County Phase Data Func Project PIN Imp Total Start Federal Rap,etc. Local/ Cis Identification Number Type Length Date Fund Code Cost Code Cost State Total 16 07 1 3 City Inside MPO Revision: 1 Marvin Rd SE Improvements 06 Marvin Rd SE Walthew Rd to Pacific Highway Enviromental Status is:Programmatic CE RW Required: No Structural overlay w/bike lanes PE 4/1/99 STP(U) 28 17 45 CN 5/1/99 STP(U) 441 264 705 Project Total 469 281 750 Agency Totals for Thurston County 469 281 750 10 1999-2001 RTIP for Thurston County — Amendment #1 A public hearing on the candidate projects was held before the Transportation Policy Board on October 14, 1998, at 8:00. No further testimony was offered. 7. Congestion Msnagement Thurston County is not designated as a Transportation Management Area and therefore, is not required to establish and monitor a Congestion Management System. 8. Air Quality Thurston Regional Planning Council has 1tfli been designated a nonattainment area for Carbon Monoxide (CO) or Ozone (03) as defined under the Federal Clean Air Act and the Washington State Clean Air Act. Therefore, an air quality analysis is = required as part of amendment #1 to the 1999-2001 Regional Transportation Improvement Program. 9. RTP Consistemy Criteria developed for project prioritization and selection were based directly on the goals and policies of the 1998 Regional Transportation Plan Update. Specifically, the criteria emphasized: • safety, preservation and maintenance projects, recognazing the importance of taking care of the roads in which public funds have already been invested; • projects that enhance an integrated, multi-modal transportation network; and • effective travel demand management programs that improve transportation network efficiency. In addition, criteria addressed land use and linkages, cost effectiveness, transit frequency, freight mobility, and inclusion in locally or regionally adopted plans. 10. Intermodal/Multi modal Ap rn oach Projects identified in this amendment support intermodal or multi-modal coordination where appropriate. -3- 1999-2001 RTIP for Thurston County — Amendment ##1 Fundiny Flexibility This regional process used funding flexibility inherent in the provisions of ISTEA and TEA21 to: • identify emphasis areas and a selection process for funding priority projects appropriate to this region's transportation goals; • emphasize the safety and preservation of the existing transportation system as a funding priority, funding 14 important roadway projects that will maintain and improve the region's transportation network, while supporting overall transit, bicycle, pedestrian, and freight mobility goals; • `set-aside' a minimum of ten percent of available regional funds for multi-modal enhancements and TDM programs, funding six important regional projects that could not otherwise have been funded at this time; • fund the acquisition and upgrade of a branch line of the Burlington Northern Sante Fe railroad, preserving this important freight connection to the rural community of Yelm; • use the federal rural funding requirements as a minimum, not a maximum, to be spent in rural Thurston County, dedicating slightly more than the minimum to the region's rural communities; • establish a `Rural Community Support Program' whereby the region's smallest rural communities receive `service credit' with Thurston County Roads and Transportation Services for necessary safety and maintenance projects which.they are unable to finance within their budgets, and for which the County is reimbursed with STP funds applied to a project already receiving federal funds; and • fund the final phase of a major corridor and environmental study that will identify alternatives for addressing roadway congestion at the intersection of two major state highways in the smallrural city of Yelm. 12. Croce Regional_ Consistency The projects included in this amendment were identified through a regional process that involved local agencies throughout Thurston County. However, the projects only affect those areas within the Thurston County MPO and RTPO so no further coordination with adjacent counties was initiated. -4- 1999-2001 RTIP for Thurston County - Amendment #1 Table 1 AMENDMENT #1 PROJECT LIST 1999-2001 Regional Transportation Improvement Program for Thurston County ID# Agency Project Title Total Cost 99-01 STP Award ITA99026 Intercity Transit Regional Rideshare Program $ 35,000 $ 21,000 LAC99001 Lacey Martin Way East Roadway Rehabilitation $ 755,000 $ 490,750 LAC99002 Lacey Sleater Kinney Rd Roadway Rehabilitation' $ 280,000 $ 10,500 LAC99003 Lacey Pacific Avenue Roadway Rehabilitation $ 280,000 $ 180,950 LAC99004 Lacey Martin Way West Roadway Rehabilitation $ 395,000 $ 254,650 LAC99006 Lacey One-Way Couplet Roadway Rehabilitation $ 765,000 $ 494,100 LAC99007 Lacey College Street Roadway Rehabilitation $ 740,000 $ 477,850 OLY99027 Olympia 4'h Avenue Bridge Construction Public $ 50,000 $ 30,000 Education Campaign(TDM Project, w/IT) OLY99028 Olympia 9i°Avenue Enhancement Project $ 991,000 $ 300,000 OLY99033 Olympia Harrison Avenue Preservation Project $ 1,015,500 $ 500,000 OLY99034 Olympia Cooper Point Road Preservation Project $ 815,000 $ 479,750 OLY99035 Olympia Black Lake Blvd Preservation Project' $ 647,000 $ 69,550 (w/Tumwater) OLY99036 Olympia Sleater Kinney Rd Preservation Project' $ 1,978,000 $ 105,414 (w/may) OLY99037 Olympia 4'Avenue Preservation Project $ 599,000 $ 389,300 OLY99039 Olympia Downtown Parking Meter Installation $ 363,000 $ 217,800 OLY99040 Olympia Olympia Neighborhood Connections Plan- $ 36,000 $ 23,000 A Pilot Project(w/Energy Outreach Center) OLY99041 Olympia Thurston County Bicycling Guide Map- $ 5,000 $ 3,000 Phase I (w/Energy Outreach Center) TCU99023 Thurston Marvin Rd SE Improvements2 $ 750,000 $ 469,000 County TUM99016 Tumwater Black Lake Blvd Preservation Project' $ 225,000 $ 12,285 (w/Olympia) YEL99012 Yelm East Yelm Avenue Safety Improvements $ 1,014,060 $ 477,790 YEL99013 Yelm Yelm to Lakeview BNSF Branch Line $ 400,000 $ 340,000 Acquisition ryEL99014 I Yelm Y2/Y3 Corridor and Environmental Study $ 50,000 $ 40,000 PROJECT NOTES: t These projects have additional phases programmed for 2002, also supported with regional STP funds. 2 The STP funding for this project includes$113,692 for the County's participation in the `Rural Commumty Suvvort Program,' a regional STP-based program which provides the region's smallest communities `service I � THS p•�'9 �k �r City of Yelm 41 1t1 105 Yelm Avenue West YELM P.O. Box 479 WANMINOTON Yelm, Washington 98597 (360) 458-3244 VIA USPS EXPRESS MAIL November 8, 2000 Mr. Richard A. Batie Manager, Shortline Development Burlington Northern Santa Fe 2650 Lou Menk Drive,Flr 3 Fort Worth,Texas 76131-2830 RE: Roy-Yelm,Washington Rail Corridor Donation Contract& Real Estate Purchase and Sale Agreement l/1_ Dear M� tie: Pursuant to our conversations with Dennis Wilson,we are sending to you two fully executed "Agreements for Donation of Certain Assets, Rights and Obligations of The Burlington Northern and Santa Fe Railway Company to The City of Yelm"and"Real Estate Purchase and Sale Agreements"for the Roy to Yelm rail corridor. Upon full execution by BNSF,please forward one original to me. As of today, Steve Day, Betts Patterson&Mines,P.S.,has filed the Notice of Exemption paperwork with the Surface Transportation Board on behalf of the City of Yelm. My understanding from Taro Kusonose,Betts Patterson&Mines is that the City of Yelm will send a check in the amount of$300,000 made out to Apex Property&Track Exchange, Inc.to your attention on November 16,2000 via USPS Express Mail. We thank you for your continued support of this transaction. Please contact me at 360458-8405 if you have any further questions. Sin rely: �yl Shelly A. a1�ger l City Administrator cc: Dennis W. Wilson,Attorney for the BNSF(w/enclosure via USPS Express Mail) Jerry Johnson, BNSF(w/enclosure via USPS Priority Mail) Mike Roper, BNSF(w/enclosure via USPS Priority Mail) David Detjen, BNSF (w/enclosure via USPS Priority Mail) Mary Nan Doran, BNSF(w/enclosure via USPS Priority Mail) Steve Day, Betts Patterson& Mines, PS (w/enclosure via USPS Express Mail) Mayor Kathryn M. Wolf(w/enclosure,hand delivered) Joe Williams,Chair,Yelm Rail Advisory Committee(w/enclosure via USPS Mail) Z t AGREEMENT FOR DONATION OF CERTAIN ASSETS,RIGHTS AND OBLIGATIONS OF THE BURLINGTON NORTHERN AND SANTA FE RAILWAY COMPANY TO CITY OF YELM AGREEMENT FOR DONATION OF CERTAIN ASSETS, RIGHTS AND OBLIGATIONS OF THE BURLINGTON NORTHERN AND SANTA FE RAILWAY COMPANY TO CITY OF YELM THIS AGREEMENT("Agreement")is entered into as of this day of October, 2000, between THE BURLINGTON NORTHERN AND SANTA FE RAILWAY COMPANY, a Delaware corporation ("BNSF"), and The City of Yelm, a municipality in the the State of Washington("City"). WHEREAS, BNSF desires to donate and convey to City, on the terms and conditions set forth in this Agreement,BNSF's rail line and rail corridor ownership interests in its rail line segment between Milepost 20.99 in Roy,Washington,and Milepost 25.56 in Yelm,Washington(collectively, "Rail Line"),together with BNSF's rights to conduct rail freight transportation business on the Rail Line, and certain other rights and obligations as specified in this Agreement; and WHEREAS, City desires to accept this donation from BNSF, and to acquire the Rail Line, BNSF's rights to conduct rail freight transportation business on the Rail Line, and certain other rights and obligations as specified in this Agreement, pursuant to the terms and conditions set forth in this Agreement; 1 NOW, THEREFORE, City and, BNSF agree as follows: 1. Donation Conveyances and Assignments. (a) BNSF shall donate and convey to City, on the date of Closing (as defined later herein), by Quitclaim Deed delivered by BNSF to City on that date, all of BNSF's ownership interest in BNSF's Rail Line(except a retained license to operate over such portion of the track at and near Roy, Washington as is necessary or convenient to interchange rail traffic between City and BNSF at Roy, Washington), which shall include all rail corridor land between the endpoint Mileposts of the Rail Line and all improvements that are located thereon. The Rail Line is-described specifically in Attachment 1 to the Quitclaim Deed set forth as Exhibit A attached hereto,and made a part hereof. BNSF and City acknowledge that the Rail Line does not include the parcel of land in Yelm, Washington that is being conveyed by BNSF to City in a separate transaction following the date of this Agreement. (b) BNSF shall convey to City,effective on the date of Closing,BNSF's right to conduct rail transportation business on the Rail Line, subject to the terms and conditions set forth in this Agreement,the Quitclaim Deed,the Bill of Sale and/or any agreement assigned by BNSF to City by the terms of this Agreement. (c) BNSF shall convey to City, on the date of Closing, by delivering to City on the date of Closing a Bill of Sale identical in form to the Bill of Sale set forth as Exhibit B attached hereto, and made a part hereof,all of BNSF's ownership interest in all personal property that,on the date of the Closing,does not constitute improvements on the Rail Line,but which then are present on the real property comprising the Rail Line. This conveyance shall be subject to the terms and conditions set forth in this Agreement,the Bill of Sale, the Quitclaim Deed and/or any agreement 2 assigned by BNSF to City by the terms of this Agreement. (d) BNSF hereby assigns to City, effective on the date of Closing, subject to all terms and conditions set forth in this Agreement, the Quitclaim Deed, the Bill of Sale and/or any agreement assigned by BNSF to City by the terms of this Agreement, all assignable rights and obligations of BNSF to the extent such rights and obligations are effective after Closing, to the extent that they are related to the Rail Line and are set forth in any agreement identified on Exhibit C attached hereto and made a part hereof. City hereby accepts the assignment of all such rights and obligations of BNSF, effective on the date of Closing, in accordance with the terms of each applicable agreement and the terms of this Agreement. BNSF,and not City, shall be responsible for performing all of BNSF's duties in assigned agreements which are required to be performed on or before the date of Closing. City, and not BNSF, shall be responsible for performing all assigned duties in assigned agreements which are required to be performed after the date of Closing. City acknowledges that BNSF reserves, and City does not acquire, all rights and obligations set forth in any agreement identified in Exhibit C to the extent those rights or obligations are related to property owned by BNSF after Closing. If any contract is related to the Rail Line and is intended to be assigned by BNSF to City, in whole or in part,but inadvertently is not identified in Exhibit C, BNSF promptly shall provide to City a copy of any such contract immediately upon locating it, and City, as of the date of its receipt of such copy, shall assume the rights and obligations in such contract to the extent they are related to the Rail Line. BNSF believes that Exhibit C is a complete or nearly complete list of all contracts related to the Rail Line that are intended to be assigned by BNSF to City. City shall make no claim against BNSF arising out of any failure to obtain a consent to assignment from any party to any agreement assigned by BNSF to City,in whole or in part. BNSF 3 does not believe that any consents to such assignments are necessary. 2. Conditions of Donation. City hereby accepts the following conditions to BNSF's donation of the Rail Line, and it's conveyance and assignment to City of other rights and obligations as described in Paragraph 1: (a) City accepts all transferred real property and personal property "AS IS, WHERE IS" and "with all faults." City acknowledges that certain track_ materials are missing from the Rail Line and that it cannot support train operations until certain repairs are made. (b) Commencing at 12:01 a.m. on the date following Closing, and continuing thereafter, City shall assume all common carrier obligations related to the Rail Line. (c) City shall take all actions and execute all documents that may be necessary or helpful in connection with BNSF's charitable donation tax deduction for donation of the Rail Line, including City executing the Donee Acknowledgment section of Internal Revenue Service Form 8283. (d) City shall pay all costs of Closing (except BNSF's cost of preparation of documents to be delivered at Closing), including, but not limited to, any escrow and service fees,real estate transfer taxes,excise taxes,recording fees and sales taxes associated with this Agreement or any of the conveyances governed by this Agreement. 4 3. Government Approval. City, at its sole expense, shall prepare and file such documents as may be required to secure approval, or exemption from approval, of this transaction by the federal Surface Transportation Board ("STB"). City shall make all reasonable efforts to obtain this approval or exemption in time for this transaction to close on November 16, 2000. City shall permit BNSF to review prior to filing all documents proposed by City to be filed with the STB or any court to secure legal approval or-exemption of this transaction. 4. Representations and Warranties. (a) BNSF hereby represents and warrants to City, and City's successors and assignees, the following facts, as of the date of this Agreement and as of the date of Closing: (1) BNSF is a corporation duly organized,validly existing,and in good standing under the laws of the State of Delaware, and is qualified to do business as a foreign corporation in the State of Washington. (2) BNSF has the corporate power and authority to enter into this Agreement and carry out its obligations under this Agreement; (3) The execution, delivery and performance of this Agreement have been duly authorized and approved by all necessary corporate actions of BNSF,and no further corporate proceedings of BNSF are required to complete the transactions covered by this Agreement; (4) All of BNSF's obligations set forth in this Agreement constitute legal, valid 5 and binding obligations of BNSF which are enforceable against BNSF in accordance with their terms,except to the extent enforcement may be limited by bankruptcy, insolvency or reorganization law; (5) There is no provision in the Certificate of Incorporation or By-Laws of BNSF which prohibits the execution of this Agreement or consummation of the transactions covered by this Agreement; and (6) No representation or warranty by BNSF in this Agreement contains any untrue statement of a material fact, nor omits any material fact that is necessary to make any representation or warranty not materially misleading. (b) City hereby represents and warrants to BNSF, and all successors and assignees of BNSF, the following facts, as of the date of this Agreement and as of the date of Closing, except where specifically noted to be as of the date of Closing only: (1) City is municipality duly organized, validly existing and in good standing under the laws of the State of Washington; (2) City is a qualified donee within the meaning of Section 170(c)(1) of the Internal Revenue Code of 1986, as amended; (3) City has all requisite business authority to purchase BNSF's rights and properties which are conveyed to City by this Agreement; to enter into this Agreement; to conduct rail freight transportation business on the Rail Line (as of the date of Closing only);and to perform all of City's obligations under this Agreement; (4) The execution of this Agreement and consummation of the transactions which 6 are a part of this Agreement have been duly authorized and approved by all necessary actions by City, and immediately upon execution of this Agreement by City's authorized representative, all of City's obligations set forth in or referenced in this Agreement shall constitute legal, valid and binding obligations of City, or City's successors or assignees, which obligations are enforceable against City in accordance with their terms, except to the extent enforcement may be limited by applicable bankruptcy, insolvency, reorganization or other laws affecting the enforcement of creditors' rights generally and the application of general principles of equity; (5) There is no provision in the Charter of City,or any applicable law,ordinance or regulation, that prohibits the City's execution of this Agreement or it's consummation of the transactions covered by this Agreement; (6) As of the date of Closing only, City shall have obtained all legal authority which is necessary to enable City lawfully to conduct rail freight transportation operations over the Rail Line as a common carrier, commencing at 12:01 a.m. on the day following the date of Closing; and (7) No representation or warranty by City in this Agreement contains any untrue statement of a material fact, nor omits any material fact that is necessary to make any representation or warranty not materially misleading. 5. Inspection and Condition of the Rail Line. (a) By signing this Agreement, City acknowledges that City has inspected the 7 Rail Line, including all improvements and structures on the Rail Line, and all land to be conveyed as part of this transaction. City further acknowledges that: (i)except as set forth in this Agreement, no representation has been made by BNSF to City concerning the state or condition of the Rail Line, or the age of any improvements on the Rail Line; (ii)City has not relied upon any statement or declaration of BNSF, oral or in writing,as an inducement to entering into this Agreement, other than as stated in this Agreement; and(iii)all terms of this transaction are set forth in this Agreement. (b) BNSF HEREBY DISCLAIMS ANY REPRESENTATION OR WARRANTY, WHETHER EXPRESS OR IMPLIED, AS TO THE DESIGN OR CONDITION OF THE-RAIL LINE, ITS MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE, THE QUALITY OF THE MATERIAL OR WORKMANSHIP OF THE RAIL LINE, OR THE CONFORMITY OF THE RAIL LINE TO ITS INTENDED USES. BNSF SHALL NOT BE LIABLE TO CITY FOR ANY INCIDENTAL OR CONSEQUENTIAL DAMAGES (INCLUDING STRICT LIABILITY IN TORT)WITH RESPECT TO THE DESIGN, CONDITION, QUALITY, SAFETY,MERCHANTABILITY,OR FITNESS FOR ANY PARTICULAR PURPOSE,OF THE RAIL LINE, OR THE CONFORMITY OF THE RAIL LINE TO ITS INTENDED USES. BNSF DONATES AND CONVEYS,AND CITY ACCEPTS,THE RAIL LINE IN "AS IS, WHERE IS" AND "WITH ALL FAULTS" CONDITION,AND SUBJECT TO ALL LIMITATIONS ON THE RIGHTS, INTEREST AND TITLE OF BNSF TO THE PROPERTY COMPRISING THE RAIL LINE. 6. Liability and Indemnity. (a) Cooperation in Defense. City and BNSF agree that, following the date of Closing, 8 they will cooperate as necessary in defense of any claim, demand, investigation or litigation arising out of the ownership or operation of the Rail Line. (b) Definition of Losses. In this Agreement, the term "Losses" shall include all costs, expenses, fees or liabilities of, or in any way related to: (i) any violation of law or regulation, (ii) any damage to property,the environment or natural resources,(iii) any bodily injury or death of any person, or (iv) the breach of any contract, including this Agreement to the extent set forth in this Agreement. "Losses" shall include,but not be limited to, all costs of claims, activities in response to enforcement,costs ofinvestigation and remediation,damages,judgments,awards,orders,decrees, payments,fines,penalties,assessments,court costs,and attorney, consultant and expert witness fees, and shall include cost recovery or contribution claims made pursuant to CERCLA or similar federal or state laws. (c) General Liability and Indemnity. (1) BNSF's General Liability and Indemnity. Except as provided in Paragraph 6(d)of this Agreement,BNSF shall be responsible for,and shall indemnify, defend and hold harmless City fully against, all Losses which: (i) arise out of BNSF's ownership or operation of the Rail Line, prior to the date of Closing; or (ii) result from any breach by BNSF of any representations or warranties of BNSF that are set forth in this Agreement, or any failure by BNSF to perform any obligations of BNSF under this Agreement. (2) City's General Liability and Indemnity. Except as provided in Paragraph 6(d) of this Agreement, and further except for Losses resulting from one or more representations or warranties of BNSF as set forth in this Agreement 9 containing any untrue or materially misleading statement of a material fact, or omitting any material fact that is necessary to prevent that representation or warranty from being materially misleading, City shall be responsible for, and shall indemnify, defend and hold harmless BNSF fully against, regardless of any negligence of BNSF, all Losses which: (i) arise out of City's ownership or operation of the Rail Line after 12:01 a.m. on the day following the date of Closing; (ii) result from any breach by City of any of its -representations or warranties set forth in Paragraph 4(b) of this Agreement,or any failure by City to perform any of its obligations under this Agreement; (iii) result from claims of third parties caused by City's nonperformance or required performance under any contract, lease, permit, license, easement or commitment relating to the Rail Line, if that contract, lease,permit, license, easement or commitment is identified in Exhibit C, or City has notice by BNSF of it and such contract, lease, permit, license, easement or commitment was intended to be assigned to, and assumed by, City at Closing; and (iv) are proximately caused, to any extent, by the activities, operations or presence of City or any of its agents, contractors, representatives,permittees or invitees,or any of their employees, who are on or near the Rail Line. (d) Environmental Liability and Indemnity. (1) City's Acknowledgments with Respect to the Rail Line. City acknowledges that BNSF has provided City with full access to inspect the Rail Line. 10 (2) BNSF's Environmental Liability and Indemnity. Notwithstanding any other liability or indemnification provision in this Agreement, BNSF shall be responsible for, and shall indemnify, defend and hold harmless City (including its successors and assignees)fully against, Losses incurred due to any claim, demand or litigation,to the extent it is based on any violation or requirement of any applicable environmental statute, ordinance, rule, regulation, order or decision(collectively, "Environmental Laws"), and the Losses arise from: (i) any chemical,material or substance thatis now,or at the time in question is, regulated or governed by any law, the release of which creates any liability under any applicable law;or(ii)any other material which, when released, would cause ecological damage in violation of any applicable Environmental Laws (items described by (i) or (ii) above are referenced hereinafter as"Hazardous Materials")located on,under or near the Rail Line,to the extent that such Losses: (A) were caused by one or more acts or omissions of BNSF that occurred prior to the date of Closing, and that could not have been discovered by City in a reasonable inspection of the Rail Line; and (B) result from any written claim made by a party other than City, ("Claims")that is delivered to BNSF within one year following the date of Closing; and (C) exceed$10,000 in the aggregate in that year. (3) City's Environmental Liability and Indemnity. As a condition of BNSF's 11 donation of the Rail Line, and notwithstanding the liability and indemnity provisions set forth in Paragraph 6(c) of this Agreement, City shall be responsible for, and shall indemnify,defend, and hold harmless BNSF fully against, regardless of any negligence of BNSF, Losses incurred due to any claim, demand or litigation, to the extent it is based on any violation or requirement of any applicable environmental statute, ordinance, rule, regulation, order or decision, and the Losses arise from any Hazardous Materials located on, under or near the Rail Line, to the extent that such Losses either: (A) resulted from any cause or causes that were not the result of one or more acts of BNSF that occurred prior to the date of Closing which could not have been discovered by City in a reasonable inspection of the Rail Line; or (B) were caused by one or more acts of BNSF that occurred prior to the date of Closing which could not have been discovered by City in a reasonable inspection of the Rail Line, and result from a Claim delivered to BNSF within one year following the date of Closing,but only up to $10,000 in the aggregate in that year; or (C) do not result from a Claim that is delivered to BNSF within one year following the date of Closing. (4) Arbitration of Allocation of Liability Between City and BNSF. Any dispute between City and BNSF as to allocation between them of Losses for which 12 both City and BNSF are responsible under the terms of this Paragraph 6 shall be settled by binding arbitration in accordance with the rules of the American Arbitration Association, or with the rules of such other alternative dispute resolution service as BNSF and City may agree. (5) City To Comply With Hazardous Materials Laws. City agrees to comply with all applicable federal, state and local laws, regulations and rules concerning handling and disposal of Hazardous Materials in connection with City's ownership of,-and-activities nandnear,the_RailLine.--_-_ ---------- --- (6) Liability Remedies and Obligations Are Exclusive. City and BNSF agree that the remedies and obligations set forth in this Paragraph 6 shall be exclusive remedies and obligations of each one to the other with respect to any Losses relating to the release or existence of Hazardous Materials on or near the Rail Line. (e) BNSF to Deliver Certain Property Records to City. BNSF shall make good faith efforts to deliver to City, at or before the date of Closing, originals or copies of whatever records, prints, archival information,or other evidence that BNSF locates in a reasonable search of BNSF's records,which bears upon the use of,maintenance,or title to the real estate comprising the Rail Line. If, at any time after Closing, BNSF locates any other documents which bear upon the use of, maintenance, or title to any such real estate, BNSF promptly shall provide originals or copies of those documents to City. BNSF shall indemnify and hold harmless City against any and all Losses that City incurs that result from BNSF not having delivered any relevant and necessary documents which bear upon the use of, maintenance, or title to any such real estate at or before Closing. 13 7. Assignment. Any assignee,including any successor in interest,of City's rights under or property acquired by this Agreement, must first assume in writing delivered to BNSF all of City's continuing and existing, or thereafter arising, obligations under this Agreement, and under any then effective contract assigned by BNSF to City, in whole or in part, in accordance with the terms of this Agreement. 8. Obligations are Continuing. The representations,warranties and obligations of BNSF and City in this Agreement are continuing and survive the Closing and delivery of the Quitclaim Deed. Terms of continuing obligations in this Agreement are subject to amendment only by a written contract signed by City and BNSF, or their respective successors or assignees. 9. Liens and Encumbrances. BNSF represents and warrants that,to BNSF's knowledge,BNSF has not caused or suffered, and will not cause or suffer prior to the date of Closing, any liens or encumbrances to secure the payment of a debt of BNSF to be filed against the Rail Line which would materially adversely affect City. BNSF represents and warrants that,to BNSF's knowledge,except for: (i)the lien of BNSF's General Lien Mortgage, dated November 10, 1896, between BNSF's predecessor, Northern Pacific Railway, and the Mercantile Trust Company, as supplemented, and(ii)the lien of BNSF's Consolidated Mortgage,dated March 3, 1970,between BNSF's predecessor, Burlington 14 Northern,Inc., and Morgan Guaranty Trust Company of New York, as supplemented(collectively, "Mortgages"), BNSF has not caused or suffered any lien or encumbrance to secure the payment of a debt of BNSF to be filed against BNSF's ownership interest in the Rail Line, and BNSF warrants that the liens of the Mortgages will not materially adversely affect City. BNSF will deliver to City, within a year following Closing, an executed release of BNSF's ownership interest in the Rail Line from the liens of the Mortgages. Until such releases are delivered to City, BNSF shall indemnify City against any Losses that City incurs after Closing that result from BNSF not having delivered such executed releases_to City._City agrees to take title to the Rail Line assets and ownership interests conveyed by the terms of this Agreement subject to all liens and encumbrances on those assets and ownership interests. 10. Pending Public Works Projects. BNSF has no knowledge of any pending government funded public works projects on the Rail Line. 11. City to Offer to Hire BNSF's Qualified Employees. City shall consider for initial employment in operating and maintaining the Rail Line any of BNSF's employees who are eligible to work on the Rail Line on the date of this Agreement. City shall give priority hiring consideration for any such positions to such employees of BNSF who are represented by the Brotherhood of Maintenance of Way Employees. City shall offer to hire for any such positions at salary levels and other terms and conditions of employment that are determined by City to be appropriate, all of those employees who City, in its sole discretion, determines to be 15 best qualified and needed. City promptly shall notify BNSF of the name of each of BNSF's current employees who City offers to hire,and also the name of each of these employees who City actually hires. City shall assume a neutral stance in any Brotherhood of Maintenance of Way Employees union organizing effort. 12. Closing. (a) The closing("Closing")of this transaction shall occur on November 16, 2000, or another date mutually agreed by the parties in writing. (b) At Closing,BNSF shall deliver to City the following documents: (1) An original executed, attested and notarized Quitclaim Deed to the Rail Line in exact form as the Quitclaim Deed attached hereto as Exhibit A; and (2) An executed Bill of Sale in exact form as the Bill of Sale attached hereto as Exhibit B. (c) At or before Closing, Shortline shall deliver to BNSF copy of City's City Code, and any applicable Sections from the Revised Code of Washington, as adopted by reference by the City in the City Code. 13. Proration. Prepaid rentals, utilities, and other income or fees attributable to the Rail Line interests to be transferred by BNSF to City, under the terms of this Agreement shall be prorated between BNSF and City in such manner as to allocate to BNSF all income and expenses attributable 16 to the Rail Line that has been received,or for which bills have been received,on or prior to the date of Closing; and to allocate to City all income and expenses attributable to the Rail Line that is received, or for which bills are received, after the date of Closing. BNSF shall be responsible for all real estate taxes applicable to the Rail Line through the date of Closing. City shall be responsible for any taxes applicable to City as owner of the Rail Line after the date of Closing. 14. Interchange. (a) City and Railway may interchange rail freight traffic, cars and locomotives to and from each other on tracks on the northeastern end of the Rail Line, at Roy, Washington. The track or tracks used for this interchange shall be known as the"Interchange Track." (b) Cars and their contents that are delivered by one party to the other on the Interchange Track shall be deemed to be in the possession of the receiving party as of the time they are placed on the Interchange Track and uncoupled from the delivering party's train or engine,except that if any such car is rejected by the receiving party under the Interchange Rules of the Association of American Railroads ("AAR") or any successor rules, the refused car shall be deemed to remain in the possession of the delivering party until that car is accepted by the receiving party. 15. Car Hire Costs. The party in possession of any car shall be responsible for all car hire costs,per diem expenses and mileage allowances payable with respect to such car, for any per diem charges for trailers or containers carried by such car, or for any equipment use charges applicable to any RoadRailer equipment or similar carless intermodal technology. 17 16. City and BNSF to Publish Combination Rates to and From Roy, Washington. BNSF may establish combination rates to and/or from Roy, Washington, as appropriate,to handle rail freight traffic interchanged between BNSF and City at Roy, Washington. City may establish combination rates to and/or from Roy, Washington,as appropriate,to handle the rail freight traffic that originates or terminates on the Rail Line. 17. Time is of the Essence. Time is of the essence in this Agreement. 18. Transfer of Operations. All responsibility and authority for conducting rail operations on the Rail Line shall be transferred from BNSF to City at 12:01 a.m. on the day following the date of Closing. 19. Transfer of Liabilities; Payment of Charges. For the period before and including the day of Closing, BNSF shall be responsible for: (a)all common carrier rail operations, including car supply,on the Rail Line; (b)any freight loss and damage claims attributable to rail operations over the Rail Line; and(c) all car accounting and all car hire and car mileage allowance payments relating to rail operations over the Rail Line. At and after 12:01 a.m. on the day following the date of Closing, City shall be responsible for: (d) all common carrier rail operations, including car supply, on the Rail Line; (e) any freight loss and damage claims attributable to rail operations over the Rail Line; and (f) all car accounting and all 18 car hire and car mileage allowance payments relating to rail operations over the Rail Line. 20. Electronic Data Interchange. Within six months following the month in which City and BNSF interchange any freight cars at Roy, Washington, City must have the ability to send and receive electronically waybills, advanced consists, and bills of lading; as well as Train II reports and passing/placement reportings for performance purposes. Transaction reporting should be at industry standard levels or one level behind. 21. Applicable Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Texas. 22. Effect of Waiver. Any waiver by any party to this Agreement, or failure by any such party to insist upon full and complete performance by any other party to this Agreement of its obligations set forth in this Agreement,shall not constitute a waiver or release of such party's right to insist upon full and complete performance of any other obligations in this Agreement, or a waiver or release of such party's right to insist upon full and complete performance of the obligations that were waived or not enforced for periods prior to, or following, the waiver or failure to insist upon full and complete performance. This Agreement shall be amended or modified only by written agreement signed by all three parties hereto. 19 23. Notices. All notices and other communications under this Agreement shall be in writing and deemed properly served if delivered by hand to the party addressed or, if mailed,when received by the United States Postal Service in registered or certified mail, postage prepaid, or, if sent by a national overnight service, when received by the carrier service in a prepaid mailer, return receipt requested, addressed as follows: BNSF: Mr. Jerome M. Johnson Assistant Vice President Shortline Development The Burlington Northern and Santa Fe Railway Company 2600 Lou Menk Drive Fort Worth, Texas 76131 City: Ms. Shelly Badger City Administrator, City of Yelm 105 Yelm Avenue West P.O. Box 479 Yelm, Washington 98597 Either party hereto may change its address or addressee to which notices are to be given by providing written notice of the change to the other party. 24. Confidentiality. Except to the extent that the terms of this Agreement are required to be disclosed by the STB, by order of any court of competent jurisdiction or any governmental agency, or by laws or regulations applicable to the City entering into this transaction, each party to this Agreement shall 20 not disclose the contents of this Agreement to any other party,without the prior written consent of the other parties to this Agreement. Any party who learns of any of the terms of this Agreement shall be required by the party to this Agreement who is disclosing the information not to disclose those terms to any other party without the prior written consent of both parties to this Agreement. 25. Entire Agreement; Integration of Agreement. This document, together with all Exhibits attached hereto, constitutes the entire agreement between City, BNSF and Railway relating to this transaction. Any other prior or contemporaneous agreements,understandings,representations or statements,whether oral or written, relating to this transaction are merged herein. The headings and titles to provisions in this Agreement are for convenience only,and shall not be deemed to modify or affect the rights or duties of City or BNSF. All rights and obligations of City and BNSF set forth in this Agreement, or in any Exhibit attached hereto,are integral parts of this Agreement. The parties agree that the terms herein have been arrived at by mutual negotiation and that no terms herein shall be presumptively construed against either party regardless of who drafted it in the first instance. 21 IN WITNESS WHEREOF,authorized representatives of City and BNSF have executed this Agreement as of this gr , qday of November, 2000. THE BURLINGTON NORTHERN AND CITY OF YELM SANTA FE RAILWAY COMPANY By: By: 6� Peter J. Rickershauser r Q Vice President MQA JQ' Network Development N:Vaw.mkg\dww\contracts\yelm donation4 22 EXHIBIT A QUITCLAIM DEED THE BURLINGTON NORTHERN AND SANTA FE RAILWAY COMPANY,a Delaware corporation, Grantor, hereby donates, conveys and quitclaims to Grantee, CITY OF YELM, a municipality in the State of Washington,without any covenants of warranty whatsoever and without recourse to Grantor, its successors or assignees, all of Grantor's rights,title and interest, if any, in real estate and improvements constituting Grantor's rail corridor between Milepost 20.99, in Roy, Washington,and the southwestern end of this rail line corridor at or near Milepost 25.26, in Yelm, Washington, which real estate and improvements are situated in Pierce and Thurston Counties, Washington, the boundaries of which are more particularly described in Attachment 1, attached hereto (hereinafter"Premises"). SUBJECT,however,to all existing interests in the Premises, including but not limited to all reservations, easements and other encumbrances, of record or otherwise. EXCEPTING AND RESERVING unto Grantor, its successors and assignees, a license for 99 years (or until any earlier date on which all rail service is abandoned on the rail line on the Premises), to operate over such portion of track on the Premises at or near Roy, Washington as is necessary or convenient to interchange rail traffic between Grantor and Grantee, or Grantee's successor or assignee. IN WITNESS WHEREOF,Grantor has caused this instrument to be signed by its authorized representative, and its corporate seal to be affixed hereto, on the day of November, 2000. -1- THE BURLINGTON NORTHERN AND SANTA FE RAILWAY COMPANY By: Peter J. Rickershauser Vice President-Network Development ATTEST: By: Assistant Secretary N:lawmkg\dww\contracts\yelm quitclaim deed -2- STATE OF TEXAS ) ss. COUNTY OF TARRANT ) On this day of November, 2000,before me,the undersigned,a Notary Public in and for the State of Texas, duly commissioned and sworn, personally appeared Peter J. Rickershauser, Vice President, Network Development, and an Assistant Secretary, respectively, of The Burlington Northern and Santa Fe Railway Company,the corporation that executed the foregoing instrument, and acknowledged the execution thereof to be the free and voluntary act and deed of such officer and the voluntary act and deed of said corporation, for the uses and purposes therein mentioned, and on oath stated that they are authorized to execute the foregoing instrument and that the seal affixed in the corporate seal of said corporation. Witness my hand and official seal affixed the day and year first above written. Notary Public My commission expires: -3- a ATTACHEMENT 1 THE REAL ESTATE AND IMPROVEMENTS THAT CONSTITUTES THAT PORTION OF THAT CERTAIN LINE OF RAILROAD DESIGNATED IN THE RECORDS OF THE BURLINGTON NORTHERN AND SANTA FE RAILWAY COMPANY'S (FORMERLY NORTHERN PACIFIC RAILWAY COMPANY) AS THE LAKE VIEW SUBDIVISION, CONNECTING ROY (NEAR MILE POST 20.99) TO YELM (NEAR MILE POST 25.56), WASHINGTON, THE REAL ESTATE VARYING IN WIDTH ON EACH SIDE OF SAID RAILWAY COMPANY'S MAIN TRACK CENTERLINE, AS ORIGINALLY LOCATED AND CONSTRUCTED UPON, OVER AND ACROSS SECTIONS 4, 9 AND 16, ALL IN TOWNSHIP 17 NORTH, RANGE 2 EAST OF THE WILLAMETTE MERIDIAN, PIERCE COUNTY, WASHINGTON, AND SECTIONS 16, 17, 19 AND 20, ALL IN TOWNSHIP 17 NORTH, RANGE 2 EAST, W. M., THURSTON COUNTY, WASHINGTON, MORE PARTICULARLY DESCRIBED AS FOLLOWS, TO-WIT: PIERCE COUNTY ALL THAT PORTION OF SAID RAILWAY COMPANY'S 100.0 FOOT WIDE BRANCH LINE RIGHT OF WAY, BEING 50.0 FEET WIDE ON EACH SIDE OF SAID MAIN TRACK CENTERLINE UPON, OVER AND ACROSS THE SEI/4NEI/a AND THE SEI/a OF SAID SECTION 4, THE NEIANWIANE1/a OF SAID SECTION 9, AND THE WESTERLY THREE-FOURTHS OF THE ISAAC BASTIAN DONATION LAND CLAIM NO. 39, IN SAID SECTION 9, BOUNDED ON THE NORTH BY THE NORTH LINE OF SAID SEI/4NE1/a, AND BOUNDED ON THE SOUTH BY THE SOUTHWESTERLY BOUNDARY OF SAID ISAAC BASTIAN DONATION LAND CLAIM NO. 39;ALSO, AN ADDITIONAL STRIP 30 FEET IN WIDTH ON EACH SIDE OF, PARALLEL WITH AND ADJACENT TO THE SOUTHERLY 1400 FEET OF THE HEREINABOVE DESCRIBED 100.0 FOOT WIDE BRANCH LINE RIGHT OF WAY, BEING THE SAME PROPERTY DESCRIBED IN WARRANTY DEED FROM HENRY MURRAY, ET UX TO THE NORTHERN PACIFIC RAILWAY COMPANY FILED FOR RECORD SEPTEMBER 6, 1902 IN BOOK 186 OF DEEDS, PAGE 571 IN AND FOR SAID COUNTY;ALSO, ALL THAT PORTION OF SAID RAILWAY COMPANY'S 400.0 FOOT WIDE BRANCH LINE RIGHT OF WAY, BEING 200.0 FEET WIDE ON EACH SIDE OF SAID RAILWAY COMPANY'S MAIN TRACK CENTERLINE, AS ORIGINALLY LOCATED AND CONSTRUCTED UPON, OVER AND ACROSS GOVERNMENT LOTS 1 AND 2 OF SAID SECTION 9, AND THE NV2 OF SAID SECTION 16, BOUNDED ON THE NORTHEAST BY THE SOUTHWESTERLY BOUNDARY OF SAID ISAAC BASTIAN DONATION LAND CLAIM NO. 39, IN SAID SECTION 9, AND BOUNDED ON THE SOUTHWEST BY THE CENTER OF NISQUALLY RIVER, ALSO BEING THE SOUTHERLY BOUNDARY OF PIERCE COUNTY. e F THURSTON COUNTY ALL THAT PORTION OF SAID RAILWAY COMPANY'S 400.0 FOOT WIDE BRANCH LINE RIGHT OF WAY, BEING 200.0 FEET WIDE ON EACH SIDE OF SAID RAILWAY COMPANY'S MAIN TRACK CENTERLINE, AS ORIGINALLY LOCATED AND CONSTRUCTED UPON, OVER AND ACROSS GOVERNMENT LOT 1 OF SAID SECTION 16, BOUNDED ON THE NORTHEAST BY THE CENTER OF NISQUALLY RIVER, ALSO BEING THE NORTHERLY BOUNDARY OF THURSTON COUNTY, AND BOUNDED ON THE SOUTHWEST BY THE WEST LINE OF SAID SECTION 16;ALSO, ALL THAT PORTION OF SAID RAILWAY COMPANY'S 200.0 FOOT WIDE BRANCH LINE RIGHT OF WAY, BEING 100.0 FEET WIDE ON EACH SIDE OF SAID RAILWAY COMPANY'S MAIN TRACK CENTERLINE, AS ORIGINALLY LOCATED AND -CONSTRUCTED UPON, OVER AND ACROSS GOVERNMENT LOTS 4 AND 9 AND THE SWI/4NEI/s OF SAID SECTION 17, BOUNDED ON THE NORTHEAST BY THE EAST LINE OF SAID SECTION 17, AND BOUNDED ON THE SOUTHWEST BY THE SOUTH LINE OF SAID SWI/4NE1/a;ALSO, ALL THAT PORTION OF SAID RAILWAY COMPANY'S 100.0 FOOT WIDE BRANCH LINE RIGHT OF WAY, BEING 50.0 FEET WIDE ON EACH SIDE OF SAID MAIN TRACK CENTERLINE UPON, OVER AND ACROSS THE NWI/4SEV4 AND THE SWI/a OF SAID SECTION 17, THE NWI/4NWV4 OF SAID SECTION 20, AND THE NEI/a AND THE SEI/4SE1/4NW1/a OF SAID SECTION 19, BOUNDED ON THE NORTHEAST BY THE NORTH LINE OF SAID NWI/4SE1/a OF SECTION 17, AND BOUNDED ON THE SOUTHWEST BY THE SOUTH LINE OF SAID SEI/4SE1/4NW1/a OF SAID SECTION 19;ALSO, A 30.0 FOOT WIDE CORRIDOR, BEING 15.0 FEET WIDE ON EACH SIDE OF SAID MAIN TRACK CENTERLINE UPON, OVER AND ACROSS THE SWIA OF SAID SECTION 19, BOUNDED ON THE NORTHEAST BY THE NORTH LINE OF SAID SWI/a, AND BOUNDED ON THE SOUTHWEST BY THE SOUTHWESTERLY BOUNDARY OF THE PLATTED PORTION OF YELM, WASHINGTON, SAID SOUTHWESTERLY BOUNDARY ALSO BEING THE NORTHEASTERLY BOUNDARY OF THAT PORTION OF SAID RAILWAY COMPANY'S YELM TO TENINO, WASHINGTON BRANCH LINE RIGHT OF WAY CONVEYED TO THURSTON COUNTY, WASHINGTON BY QUITCLAIM DEED DATED AUGUST 14, 1996. EXHIBIT "A" THAT PORTION OF THE BURLINGTON NORTHERN AND SANTA FE RAILWAY COMPANY'S (FORMERLY NORTHERN PACIFIC RAILWAY COMPANY) 100.0 FOOT WIDE ROY TO YELM, WASHINGTON BRANCH LINE RIGHT OF WAY, NOW DISCONTINUED, BEING 50.0 FEET WIDE ON EACH SIDE OF SAID RAILWAY COMPANY'S MAIN TRACK CENTERLINE, AS ORIGINALLY LOCATED AND CONSTRUCTED UPON, OVER AND ACROSS THE SWIA OF SECTION 19, TOWNSHIP 17 NORTH, RANGE 2 EAST OF THE WILLAMETTE MERIDIAN, THURSTON COUNTY, WASHINGTON, BOUNDED ON THE NORTHEAST BY THE NORTH LINE OF SAID SWIA, AND BOUNDED ON THE SOUTHWEST BY THE SOUTHWESTERLY BOUNDARY OF THE PLATTED PORTION OF YELM, WASHINGTON, SAID SOUTHWESTERLY BOUNDARY ALSO BEING THE NORTHEASTERLY BOUNDARY OF THAT PORTION OF SAID RAILWAY COMPANY'S YELM-TO TENINO, WASHINGTON BRANCH LINE RIGHT OF WAY CONVEYED TO THURSTON COUNTY, WASHINGTON BY QUITCLAIM DEED DATED AUGUST 14, 1996, EXCEPTING THEREFROM, A 30.0 FOOT WIDE CORRIDOR, BEING 15.0 FEET WIDE ON EACH SIDE OF SAID MAIN TRACK CENTERLINE UPON, OVER AND ACROSS THE SWIA OF SAID SECTION 19. EXHIBIT B BILL OF SALE THE BURLINGTON NORTHERN AND SANTA FE RAILWAY COMPANY(`BNSF") hereby donates and conveys to CITY OF YELM all of BNSF's rights, title and interest to the following unaffixed personal property located on BNSF's rail corridor between Milepost 20.99 in Roy, Washington and the end of this rail line at or near Milepost 25.26, in Yelm, Washington. BNSF HEREBY DISCLAIMS ANY REPRESENTATION OR WARRANTY, WHETHER EXPRESS OF IMPLIED,AS TO-THE DESIGN OR CONDITION OF ANY SUCH PERSONAL PROPERTY HEREBY CONVEYED, ITS MERCHANTABILITY, OR ITS FITNESS FOR ANY PARTICULAR PURPOSE. BNSF SHALL NOT BE LIABLE TO CITY OF YELM FOR ANY INCIDENTAL OR CONSEQUENTIAL DAMAGES WITH RESPECT TO THE DESIGN, CONDITION, QUALITY, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF ANY OF THE PERSONAL PROPERTY CONVEYED HEREBY. IN WITNESS WHEREOF, BNSF has caused this Bill of Sale to be executed by its duly authorized representative this day of November, 2000. THE BURLINGTON NORTHERN AND SANTA FE RAILWAY COMPANY By: Peter J. Rickershauser Vice President-Network Development NAlaw.mkg\dww\contractc\yelm bill of sale EXHIBIT C Agreements Assigned to City of Yelm In Whole or In Part Page 1 EXHIBIT C Date: 11/01/2000 Agreements Assigned in Full or in Part To the City of Yelm,Washington Contract Cancellation Contract Contract No. Contractor(s)/Description Date Date Location Type Code BF 00010856.00 PUGET SOUND ENERGY, INC. 06/15/1999 WA, YELM PR-PW/BNSF ELECTRIC WIRE LINE, LS. 52, MP. 23 -CAT-NO.: 501101 BN 00002044.00 WASHINGTON, STATE OF 06/16/1972 WA,YELM GV-XSBNRR IMPROVE CROSSING SIGNALS, MP. 25+2973 BN 00003302.00 MCLINS, INC. 06/11/1973 WA,YELM ID-IT/BNRR CMO&O INDUSTRIAL TRACK&CROSSING, MP. 25+723 BN 00007218.00 HARSCO CORP. 12/30/1976 WA, YELM ID-IT/BNRR M&O INDUSTRIAL SPUR TRACK, MP. 24+4010 CX 85016001.00 SILVASEED CO. 03/20/1985 WA, ROY PR-PC/BNRR PRIVATE ROAD CROSSING, MP. 21+150 CX 86016044.00 PAISLEY, PATRICIA ANN & MARKUS, LEWIS H. 06/16/1986 WA,YELM PR-PC/BNRR M&O ROAD CROSSING UNDER RR. BRIDGE NO. 22.1 CX 90016022.00 DROBOT, STEVE& DOROTHY M.AND 12/03/1993 WA, ROY PR-PC/BNRR REEDER, RICHARD& LINDA L. PRIVATE ROAD CROSSING; LS.400, MP.21.03 LC 00210734.00 YELM TELEPHONE CO. 06/01/1973 WA,YELM PR-PW/BNRR OHD TELEPHONE WIRE CROSSING, MP. 25+854 LC 00216559.00 STRINGHAM, H. R. 12/16/1974 WA, ROY PR-PC/BNRR PRIVATE CROSSING, MP.21+150 LC 00221899.00 YELM, CITY OF 06/16/1976 WA,YELM PR-PUBNRR WATER PIPELINE CROSSING, MP. 25+917 LC 00238157.00 CABLE TV PUDGET SOUND, INC. 07/01/1981 WA,YELM PR-PW/BNRR ASSIGNED TO VIACOM CABLEVISION, INC. OHD TV CABLE CROSSING, MP. 25+3002 NP 00007349.00 CENTRALIA, CITY OF 06/23/1929 WA,YELM GV-GN/BNRR PERMANENT SIPHON UNDERCROSSING, MP.24+716 -LAW-NO.: 15024 Page 2 EXHIBIT C Date: 11/01/2000 Agreements Assigned in Full or in Part To the City of Yelm,Washington Contract Cancellation Contrail Contract No. Contractor(s)/Description Date Date Location Type Code NP 00013981.00 MURRAY, NELSON 07/22/1904 WA, ROY PR-PUBNRR 3/4 INCH WATER PIPELINE NP 00019290.00 PACIFIC TELEPHONE &TELEGRAPH CO. 06/15/1914 SYSTEM PR-PW/BNRR ASSIGNED TO PACIFIC NORTHWEST BELL TELEPHONE CO. ASSIGNED TO US WEST COMMUNICATIONS, INC. MASTER GENERAL CROSSING AGMT., SUPPLEMENT NO. 660, OHD TELEPHONE WIRE LINE CROSSING, MP.21+548 -LAW-NO.: 27737 NP 00038623.00 AVERY, G.A. 05/05/1922 WA, ROY PR-PW/BNRR ELECTRIC WIRE LINE CROSSING NP 00040855.00 THURSTON COUNTY UTILITIES CO. 12/20/1923 WA,YELM PR-PW/BNRR OHD ELECTRIC WIRE LINE CROSSING, MP. 25+900 NP 00066454.00 PUGET SOUND POWER & LIGHT CO. 11/15/1946 WA,YELM PR-PW/BNRR ELECTRIC WIRE LINE, MP. 25+1705 NP 00095881.00 OLYMPIC PIPELINE CO. 05/01/1965 WA, ROY PR-PUBNRR PETROLEUM PIPELINE CROSSING, MP. 21+607 NP 00095882.00 OLYMPIC PIPELINE CO. 05/01/1965 WA,YELM PR-PUBNRR LONGITUDINAL PETROLEUM PIPELINE NP 00096020.00 PUGET SOUND POWER& LIGHT CO. 07/01/1965 WA, ROY PR-PW/BNRR OHD ELECTRIC WIRE LINE CROSSING, MP.21+548 NP 00097220.00 YELM, TOWN OF 06/01/1966 WA, YELM PR-PUBNRR 2 WATER PIPELINE CROSSINGS, MP. 25+917&MP. 25+3965 NP 00097261.00 WASHINGTON NATURAL GAS CO. 07/01/1966 WA,YELM PR-PUBNRR NATURAL GAS PIPELINE CROSSING, MP. 25+875 NP 00098040.00 PUGET SOUND POWER& LIGHT CO. 01/15/1967 WA, YELM PR-PW/BNRR OHD ELECTRIC WIRE LINE CROSSING, 25+178 Page 3 EXHIBIT C Date: 11/01/2000 Agreements Assigned in Full or in Part To the City of Yelm,Washington Contract Cancellation Contrail Contract No. Contractor(s)/Description Date Date Location Type Code PX 85016048.00 YELM TELEPHONE CO. 07/08/1985 WA,YELM PR-PW/BNRR UGD LONGITUDINAL TELEPHONE CABLE, MP.24+4235& MP. 25+743 PX 92016225.00 YELM, CITY OF 12/01/1992 WA,YELM PR-PUBNRR PIPELINE CROSSING, LS.400, MP. 24.14 PX 92016226.00 YELM, CITY OF 12/01/1992 WA,YELM PR-PUBNRR SEWER PIPELINE CROSSING, LS.400, MP.25.16 PX 93016233.00 PUGET SOUND POWER& LIGHT 11/16/1993 WA,YELM PR-PW/BNRR OHD ELECTRIC WIRE LINE, LS.400, MP. 24.97 PX 94020688.00 YELM TELEPHONE CO. 12/23/1994 WA, YELM PR-PW/BNRR UGD CABLE CROSSING, LS. 400, MP.24.98 PX 95021190.00 VIACOM CABLE 11/08/1995 WA,YELM PR-PW/BNRR UGD WIRE LINE CROSSING, LS.400, MP. 25.15 THE BURLINGTON NORTHERN AND SANTA FE RAILWAY COMPANY REAL ESTATE PURCHASE AND SALE AGREEMENT Property Management P.O.Box 961050 Fort Worth,Texas 76161-0050 October 30,2000 BUYER'S OFFER 1. The undersigned, hereinafter called "Buyer", offers to purchase from, The Burlington Northern and Santa Fe Railway Company herein after called "Seller", all of Seller's right, title and interest in and to that parcel of land situated in or near the city of Yelm, County of Thurston and State of Washington, shown hatched black on map marked Exhibit "A", dated October 27, 2000, attached hereto and made a part hereof(said parcel of land being hereinafter called "the Property") at the price and upon the terms and conditions as follows. PURCHASE PRICE AND PAYMENT 2. Seller may approve or disapprove this Agreement for any reason whatsoever, in Seller's sole and absolute discretion, whether reasonable or unreasonable or whether arbitrary or capricious, subject to the approval of this Agreement by Seller, Buyer agrees to pay to Seller the purchase price of THREE HUNDRED THOUSAND AND NO HUNDRETHS ($300,000.00) for Property, of which the amount of NONE hereinafter called the "deposit", is paid to Seller, or Seller's assignee, to be applied on the purchase price. Said deposit shall be refunded to Buyer if this offer is not accepted by Seller within forty five (45) days from the date of said offer. The balance of said purchase price shall be paid in cash or by certified check to Seller or wire transfer to Seller's account as designated by Seller at the time Seller's deed to said property is delivered to Buyer. Notwithstanding anything set forth herein to the contrary, the balance of the purchase price shall be due ten (10) days from notice that Seller's deed is ready for delivery. Delivery of said deed shall be made at Seller's above stated office TAX-DEFERRED EXCHANGE 3. Seller reserves the right to assign this Agreement to Apex Property & Track Exchange, Inc. ("Apex"). Apex is a qualified intermediary within the meaning of Section 1031 of the Internal Revenue Code of 1986, as amended, and Treas. Reg. § 1.1031(k)-1(g), for the purpose of completing a tax-deferred exchange under said Section 1031. Seller shall bear all expenses associated with the use of Apex, or necessary to qualify this 1 transaction as a tax-deferred exchange, and, except as otherwise provided herein, shall protect, reimburse, indemnify and hold harmless Buyer from and against any and all reasonable and necessary additional costs, expenses, including, attorneys fees, and liabilities which Buyer may incur as a result of Seller's use of Apex or the qualification of this transaction as a tax-deferred transaction pursuant to Section 1031. Buyer shall cooperate with Seller with respect to this tax-deferred exchange, and upon Seller's request, shall execute such documents as may be required to effect this tax-deferred exchange. CONVEYANCE 4. Seller shall convey or caused to be conveyed, all of Seller's right, title and interest in the premises, if any, to Buyer by Quitclaim Deed subject to the exceptions and reservations, whether or not of record and in accordance with the other terms conditions and reservations contained herein. Buyer shall, as soon as possible after acceptance of this offer, advise the Seller of Buyer's intent to have the premises surveyed. In the event the Seller's description of the premises used in the Deed and the use of an Exhibit map for reference in the Deed is not acceptable to the Buyer, the Buyer shall so advise the Seller of their objections of said description and within 15 days thereof, the Buyer shall, at their expense, arrange for a survey of the premises to be furnished to the Seller. ACCEPTANCE CONSTITUTES AGREEMENT 5. This offer of the Buyer to purchase the premises when duly accepted and signed by the Seller shall constitute the entire agreement between the parties for the sale and purchase of the premises and shall bind and inure to the benefit of the Seller,the Buyer, and their heirs, executors, administrators, successors and assigns. LIQUIDATED DAMAGES AND SPECIFIC PERFORMANCE 6. Time is of the essence of this contract. If the Buyer shall fail to perform this contract within the time limits herein specified, Seller may retain the deposit as liquidated damages, not as a penalty or forfeiture, and declare this contract terminated, or Seller may proceed to have this contract specifically enforced. SUCCESSORS IN INTEREST 7. Wherever referred to herein, the term Buyer shall imply, mean and apply to the Buyer, its successors, assigns, heirs, executors, administrators, or designees, who shall be severally and collectively liable for any and all performance hereunder. Wherever referred to herein the term Seller shall imply, mean and apply to the Seller, its successors, assigns, heirs, executors, administrators, or designees, who shall be severally and collectively liable for any and all performance hereunder. OTHER TERMS AND CONDITIONS 8. Real Estate Commissions--If any real estate broker or agent can establish a valid claim for commission or other compensation as a result of Buyer having used their services in connection with the purchase of the Property, all such commission or other compensation shall be paid by Buyer. Seller shall not be liable for any real estate commissions or finders fees to any party with respect to the sale of the Property, except a commission 2 to Catellus Management Corporation ("Broker") pursuant to a separate agreement. On and prior to the Date of this Agreement, Broker has advised, and hereby advises, Buyer, by this writing and by other means, and Buyer hereby acknowledges that Buyer has been so advised, that the Broker is acting as the agent of the Seller, with the duty to represent Seller's interest, and Broker is not the agent of the Buyer. If a policy of title insurance is to be obtained, Buyer should obtain a commitment for title insurance which should be examined prior to closing by an attorney of Buyer's choice. Prior to the execution of this Agreement, Broker has advised and hereby advises the principals of this transaction, that this Agreement is binding on them, and the principals hereby acknowledge that they have been so advised. 9. Liens of Seller's Mortgages--Seller shall deliver to Buyer, who shall place of record, good and sufficient releases of the liens of Seller's mortgages, where required under the terms of any mortgage on the Property, within one hundred eighty (180) days after the first meeting of Seller's Board of Directors held after the conveyance contemplated herein. In the event Seller shall be unable to obtain said releases for any reason, Seller shall have the right to terminate this Agreement upon serving written notice of termination upon Buyer within fifteen (15) days thereafter, and both parties shall thereupon be released and discharged from all liabilities and obligations hereunder, except that Seller shall repay to Buyer any and all sums therefore paid by Buyer to Seller upon a reconveyance of title to the Property to Seller free and clear of defects or objections to the same extent as if no conveyance had been made to Buyer hereunder. 10. Other Liens--Any judgment against Seller which may appear of record as a lien against the Property shall be settled and satisfied by Seller if and when it is judicially determined to be valid, and Seller hereby indemnifies the Buyer for all loss arising out of Seller's failure to have a judgment lien so settled and satisfied. All outstanding assessments levied or due in the year the deed is delivered shall be paid by Buyer. 11. Transfer Taxes--Buyer agrees to purchase, affix and cancel any and all documentary stamps in the amount prescribed by statute, and to pay any and all required transfer taxes, excise taxes and any and all fees incidental to recordation of the conveyance instrument. In the event of Buyer's failure to do so, if the Seller shall be obligated so to do, the Buyer shall be liable for all costs, expenses and judgments to or against the Seller, including all of Seller's legal fees and expenses and same shall constitute a lien against the Property to be conveyed until paid by the Buyer. 12. Notices and Demands--All notices, demands,payments and other instruments required or permitted to be given or served by either party shall be in writing and deemed to have been given or served by either party if sent by registered or certified mail, addressed to the other party at the address shown herein. 13. Governmental Approval--If the approval of any governmental agency is required for the sale of the Property, it is understood and agreed that this Agreement is subject thereto and that both parties shall use their best efforts to obtain such approval. The closing date shall be extended for such period as may be required to obtain such approval. In the event said approval cannot be obtained, either party may terminate this Agreement without liability to the other, except that Seller shall return the deposit to Buyer. In the event a city, county, or other governing authority wherein said Property is located requires a survey or plat or has a subdivision ordinance, the Buyer shall obtain such survey or plat, all at Buyer's sole cost and expense. The survey or plat shall be submitted by Buyer to Seller for review and approval prior to recording and within a period of forty five (45) days after the date of Seller's acceptance of this offer. 3 14. Deposit Authorization--Buyer hereby authorizes Seller to cash any checks that may be delivered to Seller as a deposit or option payment, and to take the amount of any such deposit or option payment into its accounts, with the understanding that it will not constitute acceptance of this offer; provided, however, that such authorization is given with the understanding that in the event the offer is not accepted the Seller agrees to refund the amount of any deposit in full. 15. Rail Service--Nothing in this Agreement shall prevent Seller from discontinuing service over any railroad line or lines by which rail service may be provided to the Property. 16. Proration—Prepaid rentals, utilities, and other income or fees attributable to the Property interests to be transferred by Seller to Buyer, under the terms of this Agreement shall be prorated between Seller and Buyer in such manner as to allocate to Buyer all income and expenses attributable to the Property that has been received, or for which bills have been received, on or prior to the date of Closing; and to allocate to Buyer all income and expenses attributable to the Property that is received, or for which bills are received, after the dated of Closing. Seller shall be responsible for all real estate taxes applicable to the Property through the date of Closing. Buyer shall be responsible for any taxes applicable to Buyer as owner of the Property after the date of Closing. 17. Assignments— Seller hereby assigns to Buyer, effective on the date of Closing, subject to all terms and conditions set forth in this Agreement, and/or any agreement assigned by Seller to Buyer by the terms of this Agreement, all assignable rights and obligations of Seller to the extent such rights and obligations are effective after Closing, to the extent that they are related to the Property and are set forth in any agreement identified on Exhibit B attached hereto and made a part hereof. Buyer hereby accepts the assignment of all such rights and obligations of Seller, effective on the date Closing, in accordance with the terms of each applicable agreement and the terms of this Agreement. Seller, and not Buyer shall be responsible for performing all of Seller's duties in assigned agreements which are required to be performed on or before the date of Closing. Buyer, and Seller, shall be responsible for performing all assigned duties in assigned agreements which are required to be performed after the date of Closing. Buyer acknowledges that Seller reserves, and Buyer does not acquire, all rights and obligations set forth in any agreement identified in Exhibit B to the extent those rights or obligations are related to property owned by Seller after Closing. If any contract is related to the Property and is intended to be assigned by Seller to Buyer, in whole or in part, but inadvertently is not identified in Exhibit B, Seller promptly shall provided to Buyer a copy of any such contract immediately upon locating it, and Buyer, as of the date of its receipt of such copy, shall assume the rights and obligations in such contract to the extent they are related to the Property. Seller believes that Exhibit B is a complete or nearly complete list of all contracts related to the Property that are intended to be assigned by Seller to Buyer. Buyer shall make no claim against Seller arising out of any failure to obtain a consent to assignment from any party to any agreement assigned by Seller to Buyer, in whole or in part. Seller does not believe that any consents to such assignments are necessary. 18. Complete Agreement -- This Agreement contains the entire Agreement between Seller and Buyer with respect to the Property and, except as set forth in this Agreement, neither Seller, nor Seller's agents or employees, have made any agreements, covenants, warranties or representations of any kind or character, express or implied, oral or written,with respect to the Property. 4 ADDENDUM PROVISIONS 19. This Agreement relates only to land. Unless otherwise herein provided, any conveyance shall exclude Seller's railroad tracks and appurtenances thereto, Seller's buildings and any other improvements on the Property, all of which may be removed by Seller within 90 days following conveyance of the Property. and if not removed, shall be deemed abandoned by the Seller without obligation on the Seller's part and shall thereafter be and become the Property of the Buyer in place. 20. Seller is not a foreign person as the term is used and defined in Section 1445 of the Internal Revenue Code of 1954, as amended and the regulations promulgated thereunder. Seller shall, upon request of Buyer, complete an affidavit to this effect and deliver it to Buyer on or before closing of said sale. 21. It is specifically agreed and understood by the parties hereto that the Buyer shall, before November 15, 2000, accept and sign this Real Estate Purchase and Sale Agreement and return same together with the $NONE deposit named herein to Seller. Failure of the Buyer to perform within the time restrictions will render this Agreement null and void in its entirety. 22. Buyer has been allowed to make an inspection of the property and has knowledge as to the past use of the property. Based upon this inspection and knowledge, Buyer is/are aware of the condition of the property and BUYER IS AWARE THAT BUYER IS PURCHASING THE PROPERTY ON AN "AS IS WITH ALL FAULTS" BASIS WITH ANY AND ALL PATENT AND LATENT DEFECTS, INCLUDING THOSE RELATING TO THE ENVIRONMENTAL CONDITION OF THE PROPERTY, AND THAT BUYER IS/ARE NOT RELYING ON ANY REPRESENTATION OR WARRANTIES, EXPRESS OR IMPLIED, OF ANY KIND WHATSOEVER FROM SELLER AS TO ANY MATTERS CONCERNING THE PROPERTY, including the physical condition of the property and any defects thereof, the presence of any hazardous substances, wastes or contaminants in, on or under the property,the condition or existence of any of the above ground or underground structures or improvements in, of or under the property, the condition of title to the property, and the leases, easements or other agreements affecting the property. Buyer is aware of the risk that hazardous substances and contaminants may be present on the property, and indemnifies, holds harmless and hereby waives, releases and discharges forever Seller from any and all present or future claims or demands, and any and all damages, loss, injury, liability, claims or costs, including fines, penalties and judgments, and attorney's fees, arising from or in any way related to the condition of the property or alleged presence, use, storage, generation, manufacture, transport, release, leak, spill, disposal or other handling of any hazardous substances or contaminants in, on or under the property. Losses shall include without limitation (a) the cost of any investigation, removal, remedial or other response action that is required by any Environmental Law, that is required by judicial order or by order of or agreement with any governmental authority, or that is necessary or otherwise is reasonable under the circumstances, (b) capital expenditures necessary to cause the Seller remaining property or the operations or business of the Seller on its remaining property to be in compliance with the requirements of any Environmental Law, (c) Losses for injury or death of any person, and (d) Losses arising under any Environmental Law enacted after transfer. The rights of Seller under this section shall be in addition to and not in lieu of any other rights or remedies to which it may be entitled under this document or otherwise. This indemnity specifically includes the obligation of Buyer to remove, close, remediate, reimburse or take other actions requested or required by any governmental agency concerning any hazardous substances or contaminants on the property. This section shall survive closing. 5 The term "Environmental Law" means any federal, state or local statute, regulation, code, rule, ordinance, order,judgment, decree, injunction or common law pertaining in any way to the protection of human health or the environment, including without limitation, the Resource Conservation and Recovery Act, the Comprehensive Environmental Response, Compensation and Liability Act, the Toxic Substances Control Act, and any similar or comparable state or local law. The term "Hazardous Substance" means any hazardous, toxic, radioactive or infectious substance, material or waste as defined, listed or regulated under any Environmental Law, and includes without limitation petroleum oil and any of its fractions. 23. Sale of the premises shall include any and all of Seller's buildings on the Property in an "AS-IS" condition. Buyer has fully examined and inspected the said building(s) and has in all respects accepted and approved the same and any and all parts and appurtenances thereof and thereto and understands that Seller has made no representations or warranties respecting the nature or condition of said building(s) or any of its parts and appurtenances, Buyer agrees to assume all obligations thereto, including dismantling costs if the Buyer decides to remove said structure. 24. The parties hereto acknowledge the possible existence of asbestos or lead material in the cooler room and ceiling and floor tile and plumbing and paint on interior or exterior walls. The parties further acknowledge the possibility that asbestos or lead material may exist in other portions or locations in the building structures located on the subject Property. Buyer does hereby covenant and agree to purchase the subject building structures and premises in "AS IS" condition and specifically subject to the possible existence or presence of asbestos or lead material as referred to herein. Buyer specifically covenant and agree that Seller shall not be responsible or liable for the existence of any asbestos or lead material or removal of such material from the building structures or premises to be covered herein. Buyer specifically acknowledge and agree that they shall not make any claim or assert any cause of action against Seller as a result of the existence or presence of asbestos or lead material. Buyer does hereby release Seller from and against any claim, liability, cause of action or otherwise arising out of or in any manner connected with the presence or existence of asbestos or lead material located anywhere within the subject building structures or premises to be conveyed herein including, but not limited to, any costs incurred by Buyer in the removal of such asbestos or lead material. 25. Notwithstanding, anything herein, this sale shall close no later than November 16, 2000. Seller shall have the right to extend the closing, at Seller's sole judgment. 26. The parties agree the terms, conditions, and addendum provisions of this agreement shall survive closing. BUYER MUST CLEARLY SET FORTH FULL AND CORRECT NAMES OR PARTY OR PARTIES TO WHOM TITLE WILL BE CONVEYED, THEIR ADDRESS, THEIR RELATIONSHIP, IF ANY, AND WHETHER CONVEYANCE IS TO BE IN JOINT TENANCY OR OTHERWISE, AND IF A COMPANY, WHETHER IT IS A PARTNERSHIP, TRUST, TRUSTEE OR CORPORATION, ADDRESS OF PRINCIPAL OFFICE AND STATE OF INCORPORATION. 6 This offer consisting of 8 pages, and by said Exhibit "A" and Exhibit B attached hereto, is made a part hereof, has been made, signed and sealed in duplicate by the Buyer this day of , 2000. Buyer's name as it is to appear on deed: CITY OF YELM (PRINTED/TYPED) BY Vl T X NftAME(PRIM D/TYPED) GNA RE 6K- Washington TITLE(OR 2ND SIGNATURE IF PARTNERSHIP) STATE OF INCORPORATION 105 Yelm Avenue West P. O. Box 479 Yelm, Washington 98597 3 bt-U% !) L/4 ADDRESS OF BUYER CITY, STATE AND ZIP CODE TELEPHONE NO. (INCLUDING AREA CODE) The foregoing offer is Accepted by Seller The Burlington Northern and Santa Fe Railway this day of , 2000. Company BY TITLE 7 Exhibit "A" f 10/27/2000 11tv 4v / rr.s-.wi71"v Q � \ / p O / arc �\ �•..ko.n is \ YYIV M.1 N� \ VON \ lS I i J h I � AMt ANw� S / / / 7• IH / � I PAGE: 1 KEYWORD SEARCH RESULTS REPORT Exhibit "B„ DATE: 10/30/00 SRESULT.FMT BURLINGTON NORTHERN & SANTA FE RWY. CO. TIME: 09:43125 EXPIRATION OR CONTRACT TERMINATION TYPE CONTRACT NO. CONTRACTOR / DESCRIPTION DATE DATE LOCATION CODE NP 00007349.00 CENTRALIA, CITY OF 06/23/1929 11A, YELM GV-GN/BNRR PERMANENT SIPHON UNDERCROSSING, MP. 24+716; ASSIGNED TO THE CITY OF YELM, WA; -LAN-NO.: #15024 BN 00002044.00 WASHINGTON, STATE OF 06/16/1972 WA, YELM GV-XS/BNRR IMPROVE CROSSING SIGNALS, MP. 25+2973; ASSIGNED TO THE CITY OF YELM, WA; BN 00002358.00 WASHINGTON, STATE OF 08/28/1972 WA, YELM GV-XS/BNRR INTERTIE HWY. TRAFFIC SIGNALS; BN 00003302.00 MCLINS, INC. 06/11/1973 WA, YELM ID-IT/BNRR CMO&O INDUSTRIAL TRACK & CROSSING, MP. 25+723; ASSIGNED TO THE CITY OF YELM, WA; BN 00007218.00 HARSCO CORP. 12/30/1976 WA, YELM ID-IT/BNRR M&O INDUSTRIAL SPUR TRACK, MP. 24+4010; ASSIGNED TO THE CITY OF YELM, WA; NP 00017167.00 WESTERN FARMERS ASSOC 11/28/1962 WA, YELM ID-IT/BNRR -LAW-NO.: #24496 NP 00095877.00 OLYMPIC PIPELINE CO. WA, YELM PM-LO/BNRR NP 00095879.00 OLYMPIC PIPELINE CO. WA, YELM PM-LO/BNRR BN 00043187.00 RAILS TO TRAILS CONSERVANCY 02/11/1994 WA, VARIOUS PM-PS/BNRR SALE OF ALL RAIL, ETC., INCLUDING ALL TRACK MATERIALS, BRIDGES, CULVERTS & APPURTENANCES ALONG THE ROW; S 00001496.00 WASHINGTON STATE OF 07/07/1972 WA, YELM PM-PS/BNRR EASEMENT FOR ROADWAY CX 86016044.00 PAISLEY, PATRICIA ANN & MARKUS, LEWIS H. 06/16/1986 WA, YELM PR-PC/BNRR M&0 ROAD CROSSING UNDER RR. BRIDGE NO. 22.1, CANCELS LC #205343; ASSIGNED TO THE CITY OF YELM, WA; CX 89016010.00 BOSEOUETT JERRY L 04/14/1989 WA, YELM PR-PC/BNRR M&O PRIVATE ROAD CROSSING, SURVEY STATION 1445+10, MP. 27.38 LC 00219556.00 NORTHWEST EGG SALES INC 11/01/1975 WA, YELM PR-PC/BNRR PRVT GRD XING STA 476+10 LC 00221899.00 YELM, CITY OF 06/16/1976 WA, YELM PR-PL/BNRR WATER PIPELINE CROSSING, MP. 25+917; ASSIGNED TO THE CITY OF YELM, WA; NP 00095882.00 OLYMPIC PIPELINE CO. 05/01/1965 WA, YELM PR-PL/BNRR LONGITUDINAL PETROLEUM PIPELINE; PAGE: 1 KEYWORD SEARCH RESULTS REPORT Exhibit „B„ DATE: 10/30/00 SRESULT.FMT BURLINGTON NORTHERN & SANTA FE RWY. CO. TIME: 09:55;49 EXPIRATION OR CONTRACT TERMINATION TYPE CONTRACT NO. CONTRACTOR / DESCRIPTION DATE DATE LOCATION CODE NP 00097220.00 YELM, TOWN OF 06/01/1966 WA, YELM PR-PL/BNRR 2 WATER PIPELINE CROSSINGS, MP. 25+917 & MP. 25+3965; ASSIGNED TO THE CITY OF YELM, WA; NP 00097261.00 WASHINGTON NATURAL GAS CO. 07/01/1966 WA, YELM PR-PL/BNRR NATURAL GAS PIPELINE CROSSING, MP. 25+875; ASSIGNED TO THE CITY OF YELM, WA; PX 90016037.00 SLOPAK JAMES L 02/01/1990 WA, YELM PR-PL/BNRR EXISTING 140 FEET LONGITUDINAL SEWER PIPELINE, SURVEY STATION 1353+91 TO 1355+31, MP. 25.65 TO 25.68, LINE SEGMENT 0400 PX 92016225.00 YELM, CITY OF 12/01/1992 WA, YELM PR-PL/BNRR PIPELINE CROSSING, LS. 400, MP. 24.14; ASSIGNED TO THE CITY OF YELM, WA; PX 92016226.00 YELM, CITY OF 12/01/1992 WA, YELM PR-PL/BNRR SEWER PIPELINE CROSSING, LS. 400, MP. 25.16; ASSIGNED TO THE CITY OF YELM, WA; LC 00210734.00 YELM TELEPHONE CO. 06/01/1973 WA, YELM PR-PW/BNRR OHO TELEPHONE WIRE CROSSING, MP. 25+854; ASSIGNED TO THE CITY OF YELM, WA; LC 00214860.00 YELM TELEPHONE CO 08/01/1974 WA, YELM PR-PW/BNRR PHONE CABLE XING MP 25+3303 FT LC 00238157.00 CABLE TV PUDGET SOUND, INC.; 07/01/1981 WA, YELM PR-PW/BNRR ASSIGNED TO VIACOM CABLEVISION, INC.; OHD TV CABLE CROSSING, MP. 25+3002; ASSIGNED TO THE CITY OF YELM, WA; NP 00040855.00 THURSTON COUNTY UTILITIES CO. 12/20/1923 WA, YELM PR-PW/BNRR OHD ELECTRIC WIRE LINE CROSSING, MP. 25+900; ASSIGNED TO THE CITY OF YELM, WA; NP 00066454.00 PUGET SOUND POWER & LIGHT CO. 11/15/1946 WA, YELM PR-PW/BNRR ELECTRIC WIRE LINE, MP. 25+1705; ASSIGNED TO THE CITY OF YELM, WA; NP 00098040.00 PUGET SOUND POWER & LIGHT CO. 01/15/1967 WA, YELM PR-PW/BNRR OHD ELECTRIC WIRE LINE CROSSING, 25+178; ASSIGNED TO THE CITY OF YELM, WA; PX 85016048.00 YELM TELEPHONE CO. 07/08/1985 WA, YELM PR-PW/BNRR UGD LONGITUDINAL TELEPHONE CABLE, MP. 24+4235 & MP. 25+743; PARTIAL ASSIGNMENT TO THE CITY OF YELM, WA; PX 88016117.00 PUGET SOUND POWER & LIGHT CO 09/30/1988 WA, YELM PR-PW/BNRR WIRE LINE CROSSING, SURVEY STATION 1444+90, MP. 27.38 Exhibit "B" PAGE: 2 KEYWORD SEARCH RESULTS REPORT DATE: 10/30700 SRESULT.FMT BURLINGTON NORTHERN & SANTA FE RWY. CO. TIME: 09:55:50 EXPIRATION OR CONTRACT TERMINATION TYPE CONTRACT NO. CONTRACTOR / DESCRIPTION DATE DATE LOCATION CODE PX 89016004.00 YELM TELEPHONE CO 01/15/1989 WA, YELM PR-PW/BNRR OVERHEAD COMMUNICATION (TELEPHONE) WIRE CROSSING, SURVEY STATION 1786+70, MP. 33.85 PX 92016125.00 PUGET SOUND POWER & LIGHT CO 08/17/1992 WA, YELM PR-PW/BNRR TWO WIRE LINES, SURVEY STATION 1779+80, MP. 33, LINE SEGMENT 0400 PX 93016233.00 PUGET SOUND POWER & LIGHT 11/16/1993 WA, YELM PR-PW/BNRR OHD ELECTRIC WIRE LINE, LS. 400, MP. 24.97; CANCELS PX #93016150; ASSIGNED TO THE CITY OF YELM, WA; PX 94020688.00 YELM TELEPHONE CO. 12/23/1994 WA, YELM PR-PW/BNRR UGD CABLE CROSSING, LS. 400, MP. 24.98; ASSIGNED TO THE CITY OF YELM, WA; PX 94022121.00 YELM TELEPHONE 12/23/1994 WA, YELM PR-PW/BNRR UNDERGROUND CABLE PX 95021190.00 VIACOM CABLE 11/08/1995 WA, YELM PR-PW/BNRR UGD WIRE LINE CROSSING, LS. 400, MP. 25.15; ASSIGNED TO THE CITY OF YELM, WA; BF 00010856.00 PUGET SOUND ENERGY, INC. 06/15/1999 WA, YELM PR-PW/$NSF ELECTRIC WIRE LINE, LS. 52, MP. 23; ASSIGNED TO THE CITY OF YELM, WA; -CAT-NO.: 501101 QUITCLAIM DEED THE BURLINGTON NORTHERN AND SANTA FE RAILWAY COMPANY, a Delaware corporation, Grantor, hereby donates, conveys and quitclaims to Grantee, CITY OF YELM, a municipality in the State of Washington,without any covenants of warranty whatsoever and without recourse to Grantor, its successors or assignees, all of Grantor's rights, title and interest, if any, in real estate and improvements constituting Grantor's rail corridor between Milepost 20.99, in Roy, Washington, and the southwestern end of this rail line corridor at or near Milepost 25.26, in Yelm, Washington, which real estate and improvements are situated in Pierce and Thurston Counties, Washington, the boundaries of which are more particularly described in Attachment 1, attached hereto (hereinafter"Premises"). - SUBJECT,however,to all existing interests in the Premises,including but not limited to all reservations, easements and other encumbrances,of record or otherwise. EXCEPTING AND RESERVING unto Grantor,its successors and assignees, a license for 99 years (or until any earlier date on which all rail service is abandoned on the rail line on the Premises),to operate over such portion of track on the Premises at or near Roy, Washington as is necessary or convenient to interchange rail traffic between Grantor and Grantee, or Grantee's successor or assignee. x THE BURLINGTON NORTHERN AND SANTA FE RAILWAY COMPANY By: 4D Peter,0'Rickershauser Vice President-Network Development MD ```\,\,\ttliNlllrilr4ff'ff4 cs TF':�.ATTEST: : `SEA ..: By: �.� . Assistant SecretaO �'�d '•�E(AyVAQ�.••'•QQ N:Uaw.mk&ww14wtmc0yelm quitclaim deed STATE OF TEXAS } ss. COUNTY OF TARRANT ) On this 40L day of November,2000,before me,the undersigned,a Notary Public in and for the State of Texas,duly commissioned and sworn,personally appeared Peter I Rickershauser,Vice President, Network Development, and an Assistant Secretary, respectively, of The Burlington Northern and Santa Fe Railway Company, the corporation that executed the foregoing instrument, and acknowledged the execution thereof to be the free and voluntary act and deed of such officer and the voluntary act and deed of said corporation,for the uses and purposes therein mentioned,and on oath stated that they are authorized to execute the foregoing instrument and that the seal axed in the corporate seal of said corporation. Witness my hand and official seal affixed the day and year first above written. SHARON E; :;gSSIEF, Notary Public 1r�Yt P Note" * k S,k-M OF TfDLAS 0-9/15/2001 My commission expires: /S D -3- fe a ATTACHEMENT I THE REAL ESTATE AND IMPROVEMENTS THAT CONSTITUTES THAT PORTION OF THAT CERTAIN LINE OF RAILROAD DESIGNATED IN THE RECORDS OF THE BURLINGTON NORTHERN AND SANTA FE RAILWAY COMPANY'S (FORMERLY NORTHERN PACIFIC RAILWAY COMPANY) AS THE LAKE VIEW SUBDIVISION, CONNECTING ROY (NEAR MILE POST 20.99) TO YELM (NEAR MILE POST 25.56), WASHINGTON, THE REAL ESTATE VARYING IN WIDTH ON EACH SIDE OF SAID RAILWAY COMPANY'S MAIN TRACK CENTERLINE, AS ORIGINALLY LOCATED AND CONSTRUCTED UPON, OVER AND ACROSS SECTIONS 4, 9 AND 16, ALL IN TOWNSHIP 17 NORTH, RANGE 2 EAST OF THE WILLAMETTE MERIDIAN, PIERCE COUNTY, WASHINGTON, AND SECTIONS 16, 17, 19 AND 20, ALL IN TOWNSHIP 17 NORTH, RANGE 2 EAST, W. M., THURSTON COUNTY, WASHINGTON, MORE PARTICULARLY DESCRIBED AS FOLLOWS,TO-WIT: PIERCE COUNTY ALL THAT PORTION OF SAID RAILWAY COMPANY'S 100.0 FOOT WIDE BRANCH LINE RIGHT OF WAY, BEING 50.0 FEET WIDE ON EACH SIDE OF SAID MAIN TRACK CENTERLINE UPON, OVER AND ACROSS THE SEI/4NEI/< AND THE SEI/a OF SAID SECTION 4, THE NEI/4NW1/4NE1/a OF SAID SECTION 9, AND THE WESTERLY THREE-FOURTHS OF THE ISAAC BASTIAN DONATION LAND CLAIM NO. 39, IN SAID SECTION 9, BOUNDED ON THE NORTH BY THE NORTH LINE OF SAID SEI/.NEI/<, AND BOUNDED ON THE SOUTH BY THE SOUTHWESTERLY BOUNDARY OF SAID ISAAC BASTIAN DONATION LAND CLAIM NO. 39;ALSO, AN ADDITIONAL STRIP 30 FEET IN WIDTH ON EACH SIDE OF, PARALLEL FL WITH AND ADJACENT TO THE SOUTHERLY 1400 FEET OF THE HEREINABOVE DESCRIBED 100.0 FOOT WIDE BRANCH LINE RIGHT OF WAY, BEING THE SAME PROPERTY DESCRIBED IN WARRANTY DEED FROM HENRY MURRAY, ET UX TO THE NORTHERN PACIFIC RAILWAY COMPANY FILED FOR RECORD SEPTEMBER 6, 1902 IN BOOK 186 OF DEEDS,PAGE 571 IN AND FOR SAID COUNTY;ALSO, ALL THAT PORTION OF SAID RAILWAY COMPANY'S 400.0 FOOT WIDE BRANCH LINE RIGHT OF WAY, BEING 200.0 FEET WIDE ON EACH SIDE OF SAID RAILWAY COMPANY'S MAIN TRACK CENTERLINE, AS ORIGINALLY LOCATED AND CONSTRUCTED UPON, OVER AND ACROSS GOVERNMENT LOTS 1 AND 2 OF SAID SECTION 9, AND THE N% OF SAID SECTION 16, BOUNDED ON THE NORTHEAST BY THE SOUTHWESTERLY BOUNDARY OF SAID ISAAC BASTIAN DONATION LAND CLAIM NO. 39, IN SAID SECTION 9, AND BOUNDED ON THE SOUTHWEST BY THE CENTER OF NISQUALLY RIVER,ALSO BEING THE SOUTHERLY BOUNDARY OF PIERCE COUNTY. e i THURSTON COUNTY ALL THAT PORTION OF SAID RAILWAY COMPANY'S 400.0. FOOT WIDE BRANCH LINE RIGHT OF WAY, BEING 200.0 FEET WIDE ON EACH SIDE OF SAID RAILWAY COMPANY'S MAIN TRACK CENTERLINE, AS ORIGINALLY LOCATED AND CONSTRUCTED UPON, OVER AND ACROSS GOVERNMENT . LOT I OF SAID SECTION 16,BOUNDED ON THE NORTHEAST BY THE CENTER OF NISQUALLY RIVER, ALSO BEING THE NORTHERLY BOUNDARY OF THURSTON COUNTY, AND BOUNDED ON THE SOUTHWEST BY THE WEST LINE OF SAID SECTION 16; ALSO, ALL THAT PORTION OF SAID RAILWAY COMPANY'S 200.0 FOOT WIDE BRANCH LINE RIGHT OF WAY, BEING 100.0 FEET WIDE ON EACH SIDE OF SAID RAILWAY COMPANY'S MAIN TRACK CENTERLINE, AS ORIGINALLY LOCATED AND CONSTRUCTED UPON, OVER AND ACROSS GOVERNMENT LOTS 4 AND 9 AND THE SWI/4NEI/a OF SAID SECTION 17, BOUNDED ON THE NORTHEAST BY THE EAST LINE OF SAID SECTION 17, AND BOUNDED ON THE SOUTHWEST BY THE SOUTH LINE OF SAID SWI/4NE1/a; ALSO, ALL THAT PORTION OF SAID RAILWAY COMPANY'S 100.0 FOOT WIDE BRANCH LINE RIGHT OF WAY, BEING 50.0 FEET WIDE ON EACH SIDE OF SAID MAIN TRACK CENTERLINE UPON, OVER AND ACROSS THE NWI/4SE1/4 AND THE SWI/a OF SAID SECTION 17, THE NWI/4NWI/a OF SAID SECTION 20, AND THE NEI/4 AND THE SEI/4SEI/4NWV4 OF SAID SECTION 19, BOUNDED ON THE NORTHEAST BY THE NORTH LINE OF SAID NWI/4SEV4 OF SECTION 17, AND BOUNDED ON THE SOUTHWEST BY THE SOUTH - LINE OF SAID SEI/4SEI/4NWI/4 OF SAID SECTION 19;ALSO, A 30.0 FOOT WIDE CORRIDOR, BEING 15.0 FEET WIDE ON EACH SIDE OF SAID MAIN TRACK CENTERLINE UPON, OVER AND ACROSS THE SWI/4 OF SAID SECTION 19, BOUNDED ON THE NORTHEAST BY THE NORTH LINE OF SAID SWI/4, AND BOUNDED ON THE SOUTHWEST BY THE SOUTHWESTERLY BOUNDARY OF THE PLATTED PORTION OF YELM, WASHINGTON, SAID SOUTHWESTERLY BOUNDARY ALSO BEING THE NORTHEASTERLY BOUNDARY OF THAT PORTION OF SAID RAILWAY COMPANY'S YELM TO TENINO, WASHINGTON BRANCH LINE RIGHT OF WAY CONVEYED TO THURSTON COUNTY, WASHINGTON BY QUITCLAIM DEED DATED AUGUST 14, 1996. EXHIBIT B BILL OF SALE THE BURLINGTON NORTHERN AND SANTA FE RAILWAY COMPANY (`BNSF") hereby donates and conveys to CITY OF YELM all of BNSF's rights, title and interest to the following unaffixed personal property located on BNSF's rail corridor between Milepost 20.99 in Roy, Washington and the end of this rail line at or near Milepost 25.26, in Yelm, Washington. BNSF HEREBY DISCLAIMS ANY REPRESENTATION OR WARRANTY, WHETHER EXPRESS OF IMPLIED, AS TO THE DESIGN OR CONDITION OF ANY SUCH PERSONAL PROPERTY HEREBY CONVEYED, ITS MERCHANTABILITY, OR ITS FITNESS FOR ANY PARTICULAR PURPOSE. BNSF SHALL NOT BE LIABLE TO CITY OF YELM FOR ANY INCIDENTAL OR CONSEQUENTIAL DAMAGES WITH RESPECT TO THE DESIGN, CONDITION, QUALITY, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF ANY OF THE PERSONAL PROPERTY CONVEYED HEREBY. IN WITNESS WHEREOF, BNSF has caused this Bill of Sale to be executed by its duly authorized representative this 16ykday of November, 2000. THE BURLINGTON NORTHERN AND SANTA FE RAILWAY COMPANY By: 1�2'- Peter J. 'ckershauser Vice President-Network Development NAlaw.mkg\dww\contracts\yelm bill of sale a , ATTACHEMENT 1 THE REAL ESTATE AND IMPROVEMENTS THAT CONSTITUTES THAT PORTION OF THAT CERTAIN LINE OF RAILROAD DESIGNATED IN THE RECORDS OF THE BURLINGTON NORTHERN AND SANTA FE RAILWAY COMPANY'S (FORMERLY NORTHERN PACIFIC RAILWAY COMPANY) AS THE LAKE VIEW SUBDIVISION, CONNECTING ROY (NEAR MILE POST 20.99) TO YELM (NEAR MILE POST 25.56), WASHINGTON, THE REAL ESTATE VARYING IN WIDTH ON EACH SIDE OF SAID RAILWAY COMPANY'S MAIN TRACK CENTERLINE, AS ORIGINALLY LOCATED AND CONSTRUCTED UPON, OVER AND ACROSS SECTIONS 4, 9 AND 16, ALL IN TOWNSHIP 17 NORTH, RANGE 2 EAST OF THE WILLAMETTE MERIDIAN, PIERCE COUNTY, WASHINGTON, AND SECTIONS 16, 17, 19 AND 20, ALL IN TOWNSHIP 17 NORTH, RANGE 2 EAST, W. M., THURSTON COUNTY, WASHINGTON, MORE PARTICULARLY DESCRIBED AS FOLLOWS, TO-WIT: PIERCE COUNTY ALL THAT PORTION OF SAID RAILWAY COMPANY'S 100.0 FOOT WIDE BRANCH LINE RIGHT OF WAY, BEING 50.0 FEET WIDE ON EACH SIDE OF SAID MAIN TRACK CENTERLINE UPON, OVER AND ACROSS THE SEI/4NEI/a AND THE SEI/a OF SAID SECTION 4, THE NEI/4NWI/4NE1/a OF SAID SECTION 9, AND THE WESTERLY THREE-FOURTHS OF THE ISAAC BASTIAN DONATION LAND CLAIM NO. 39, IN SAID SECTION 9, BOUNDED ON THE NORTH BY THE NORTH LINE OF SAID SEI/4NEI/a, AND BOUNDED ON THE SOUTH BY THE SOUTHWESTERLY BOUNDARY OF SAID ISAAC BASTIAN DONATION LAND CLAIM NO. 39; ALSO, AN ADDITIONAL STRIP 30 FEET IN WIDTH ON EACH SIDE OF, PARALLEL WITH AND ADJACENT TO THE SOUTHERLY 1400 FEET OF THE HEREINABOVE DESCRIBED 100.0 FOOT WIDE BRANCH LINE RIGHT OF WAY, BEING THE SAME PROPERTY DESCRIBED IN WARRANTY DEED FROM HENRY MURRAY, ET UX TO THE NORTHERN PACIFIC RAILWAY COMPANY FILED FOR RECORD SEPTEMBER 6, 1902 IN BOOK 186 OF DEEDS, PAGE 571 IN AND FOR SAID COUNTY;ALSO, ALL THAT PORTION OF SAID RAILWAY COMPANY'S 400.0 FOOT WIDE BRANCH LINE RIGHT OF WAY, BEING 200.0 FEET WIDE ON EACH SIDE OF SAID RAILWAY COMPANY'S MAIN TRACK CENTERLINE, AS ORIGINALLY LOCATED AND CONSTRUCTED UPON, OVER AND ACROSS GOVERNMENT LOTS 1 AND 2 OF SAID SECTION 9, AND THE Nlh OF SAID SECTION 16, BOUNDED ON THE NORTHEAST BY THE SOUTHWESTERLY BOUNDARY OF SAID ISAAC BASTIAN DONATION LAND CLAIM NO. 39, IN SAID SECTION 9, AND BOUNDED ON THE SOUTHWEST BY THE CENTER OF NISQUALLY RIVER, ALSO BEING THE SOUTHERLY BOUNDARY OF PIERCE COUNTY. THURSTON COUNTY ALL THAT PORTION OF SAID RAILWAY COMPANY'S 400.0 FOOT WIDE BRANCH LINE RIGHT OF WAY, BEING 200.0 FEET WIDE ON EACH SIDE OF SAID RAILWAY COMPANY'S MAIN TRACK CENTERLINE, AS ORIGINALLY LOCATED AND CONSTRUCTED UPON, OVER AND ACROSS GOVERNMENT LOT 1 OF SAID SECTION 16, BOUNDED ON THE NORTHEAST BY THE CENTER OF NISQUALLY RIVER, ALSO BEING THE NORTHERLY BOUNDARY OF THURSTON COUNTY, AND BOUNDED ON THE SOUTHWEST BY THE WEST LINE OF SAID SECTION 16;ALSO, ALL THAT PORTION OF SAID RAILWAY COMPANY'S 200.0 FOOT WIDE BRANCH LINE RIGHT OF WAY, BEING 100.0 FEET WIDE ON EACH SIDE OF SAID RAILWAY COMPANY'S MAIN TRACK CENTERLINE, AS ORIGINALLY LOCATED AND CONSTRUCTED UPON, OVER AND ACROSS GOVERNMENT LOTS 4 AND 9 AND THE SWi/4NEl/a OF SAID SECTION 17, BOUNDED ON THE NORTHEAST BY THE EAST LINE OF SAID SECTION 17, AND BOUNDED ON THE SOUTHWEST BY THE SOUTH LINE OF SAID SWI/4NEI/a; ALSO, ALL THAT PORTION OF SAID RAILWAY COMPANY'S 100.0 FOOT WIDE BRANCH LINE RIGHT OF WAY, BEING 50.0 FEET WIDE ON EACH SIDE OF SAID MAIN TRACK CENTERLINE UPON, OVER AND ACROSS THE NWI/aSEI/a AND THE SWI/a OF SAID SECTION 17, THE NWI/4NWI/a OF SAID SECTION 20, AND THE NEI/a AND THE SEI/aSEI/4NWI/a OF SAID SECTION 19, BOUNDED ON THE NORTHEAST BY THE NORTH LINE OF SAID NWI/aSEI/a OF SECTION 17, AND BOUNDED ON THE SOUTHWEST BY THE SOUTH LINE OF SAID SEI/aSEI/4NWI/a OF SAID SECTION 19; ALSO, A 30.0 FOOT WIDE CORRIDOR, BEING 15.0 FEET WIDE ON EACH SIDE OF SAID MAIN TRACK CENTERLINE UPON, OVER AND ACROSS THE SWI/4 OF SAID SECTION 19, BOUNDED ON THE NORTHEAST BY THE NORTH LINE OF SAID SWI/a, AND BOUNDED ON THE SOUTHWEST BY THE SOUTHWESTERLY BOUNDARY OF THE PLATTED PORTION OF YELM, WASHINGTON, SAID SOUTHWESTERLY BOUNDARY ALSO BEING THE NORTHEASTERLY BOUNDARY OF THAT PORTION OF SAID RAILWAY COMPANY'S YELM TO TENINO, WASHINGTON BRANCH LINE RIGHT OF WAY CONVEYED TO THURSTON COUNTY, WASHINGTON BY QUITCLAIM DEED DATED AUGUST 14, 1996. EXHIBIT C Agreements Assigned to City of Yelm In Whole or In Part Page 1 EXHIBIT C Date: 11/01/2000 Agreements Assigned in Full or in Part To the City of Yelm,Washington Contract Cancellation Contract Contract No. Contractor(s)/Description Date Date Location Type Code BF 00010856.00 PUGET SOUND ENERGY, INC. 06/15/1999 WA, YELM PR-PW/BNSF ELECTRIC WIRE LINE, LS. 52, MP. 23 -CAT-NO.: 501101 BN 00002044.00 WASHINGTON, STATE OF 06/16/1972 WA, YELM GV-XS/BNRR IMPROVE CROSSING SIGNALS, MP. 25+2973 BN 00003302.00 MCLINS, INC. 06/11/1973 WA, YELM ID-IT/BNRR CMO&O INDUSTRIAL TRACK&CROSSING, MP.25+723 BN 00007218.00 HARSCO CORP. 12/30/1976 WA, YELM ID-IT/BNRR M&O INDUSTRIAL SPUR TRACK, MP. 24+4010 CX 85016001.00 SILVASEED CO. 03/20/1985 WA, ROY PR-PC/BNRR PRIVATE ROAD CROSSING, MP. 21+150 CX 86016044.00 PAISLEY, PATRICIA ANN & MARKUS, LEWIS H. 06/16/1986 WA, YELM PR-PC/BNRR M&O ROAD CROSSING UNDER RR. BRIDGE NO. 22.1 CX 90016022.00 DROBOT, STEVE& DOROTHY M.AND 12/03/1993 WA, ROY PR-PC/BNRR REEDER, RICHARD& LINDA L. PRIVATE ROAD CROSSING; LS. 400, MP.21.03 LC 00210734.00 YELM TELEPHONE CO. 06/01/1973 WA, YELM PR-PW/BNRR OHD TELEPHONE WIRE CROSSING, MP.25+854 LC 00216559.00 STRINGHAM, H. R. 12/16/1974 WA, ROY PR-PC/BNRR PRIVATE CROSSING, MP. 21+150 LC 00221899.00 YELM, CITY OF 06/16/1976 WA, YELM PR-PL/BNRR WATER PIPELINE CROSSING, MP. 25+917 LC 00238157.00 CABLE TV PUDGET SOUND, INC. 07/01/1981 WA, YELM PR-PW/BNRR ASSIGNED TO VIACOM CABLEVISION, INC. OHD TV CABLE CROSSING, MP. 25+3002 NP 00007349.00 CENTRALIA, CITY OF 06/23/1929 WA,YELM GV-GN/BNRR PERMANENT SIPHON UNDERCROSSING, MP. 24+716 -LAW-NO.: 15024 Page 2 EXHIBIT C Date: 11/01/2000 Agreements Assigned in Full or in Part To the City of Yelm,Washington Contract Cancellation Contract Contract No. Contractor(s)/Description Date Date Location Type Code NP 00013981.00 MURRAY, NELSON 07/22/1904 WA, ROY PR-PUBNRR 3/4 INCH WATER PIPELINE NP 00019290.00 PACIFIC TELEPHONE&TELEGRAPH CO. 06/15/1914 SYSTEM PR-PW/BNRR ASSIGNED TO PACIFIC NORTHWEST BELL TELEPHONE CO. ASSIGNED TO US WEST COMMUNICATIONS, INC. MASTER GENERAL CROSSING AGMT., SUPPLEMENT NO. 660, CHID TELEPHONE WIRE LINE CROSSING, MP.21+548 -LAW-NO.:27737 NP 00038623.00 AVERY, G.A. 05/05/1922 WA, ROY PR-PW/BNRR ELECTRIC WIRE LINE CROSSING NP 00040855.00 THURSTON COUNTY UTILITIES CO. 12/20/1923 WA,YELM PR-PW/BNRR OHD ELECTRIC WIRE LINE CROSSING, MP. 25+900 NP 00066454.00 PUGET SOUND POWER& LIGHT CO. 11/15/1946 WA,YELM PR-PW/BNRR ELECTRIC WIRE LINE, MP. 25+1705 NP 00095881.00 OLYMPIC PIPELINE CO. 05/01/1965 WA, ROY PR-PUBNRR PETROLEUM PIPELINE CROSSING, MP. 21+607 NP 00095882.00 OLYMPIC PIPELINE CO. 05/01/1965 WA, YELM PR-PUBNRR LONGITUDINAL PETROLEUM PIPELINE NP 00096020.00 PUGET SOUND POWER& LIGHT CO. 07/01/1965 WA, ROY PR-PW/BNRR CHID ELECTRIC WIRE LINE CROSSING, MP. 21+548 NP 00097220.00 YELM,TOWN OF 06/01/1966 WA, YELM PR-PUBNRR 2 WATER PIPELINE CROSSINGS, MP. 25+917& MP. 25+3965 NP 00097261.00 WASHINGTON NATURAL GAS CO. 07/01/1966 WA, YELM PR-PUBNRR NATURAL GAS PIPELINE CROSSING, MP. 25+875 NP 00098040.00 PUGET SOUND POWER &LIGHT CO. 01/15/1967 WA, YELM PR-PW/BNRR CHID ELECTRIC WIRE LINE CROSSING, 25+178 Page 3 EXHIBIT C Date: 11/01/2000 Agreements Assigned in Full or in Part To the City of Yelm,Washington Contract Cancellation Contract Contract No. Contractor(s)/Description Date Date Location Type Code PX 85016048.00 YELM TELEPHONE CO. 07/08/1985 WA, YELM PR-PW/BNRR UGD LONGITUDINAL TELEPHONE CABLE, MP. 24+4235&MP. 25+743 PX 92016225.00 YELM, CITY OF 12/01/1992 WA, YELM PR-PUBNRR PIPELINE CROSSING, LS.400, MP. 24.14 PX 92016226.00 YELM, CITY OF 12/01/1992 WA, YELM PR-PUBNRR SEWER PIPELINE CROSSING, LS.400, MP.25.16 PX 93016233.00 PUGET SOUND POWER& LIGHT 11/16/1993 WA,YELM PR-PW/BNRR OHD ELECTRIC WIRE LINE, LS.400, MP. 24.97 PX 94020688.00 YELM TELEPHONE CO. 12/23/1994 WA,YELM PR-PW/BNRR UGD CABLE CROSSING, LS. 400, MP. 24.98 PX 95021190.00 VIACOM CABLE 11/08/1995 WA,YELM PR-PW/BNRR UGD WIRE LINE CROSSING, LS.400, MP. 25.15 �- Page I of I Shelly Badger From: Shelly Badger Sent: Friday, March 17, 2006 3:16 PM To: Dana Spivey; Stephanie Ray Subject: FW: Rail Line Issues Hi, I had heard from Taro on 2-22 and finally connected with him on the phone on 2-27. From our conversation he was in the process of making contact with BN and working with a title company to get tax parcel Ws. There are some additional "potential" hurdles that may come up during the recording, but we are hopeful they do not. So basically, we are in a holding pattern until he has a status report, however, I did make him aware of the importance of recording due to the Stevens W. project. Sorry I did not update either of you after my telephone conversation with him. See ya! Shelly Shelly Badger, Yelm City Administrator City of Yelm P.O. Box 479 Yelm,WA 98597 360-458-8405 360-458-4348 fax shellyb@ci.yelm.wa.us From: Taro Kusunose [mailto:kusunose@lasher.com] Sent: Wednesday, February 22, 2006 2:07 PM To: Shelly Badger Subject: Rail Line Issues Shelly, I am going to start the process of getting the deeds recorded. I will need to obtain some signatures from BN, so I will be contacting them. I also need the tax parcel numbers for both the donation property and the sales property. I can engage a title company for it, but if you know what they are, that would be the best. Please let me know if the city has tax parcel numbers for one or both of the properties. Thank you. Taro Taro Kusunose, Esq. Lasher Holzapfel Sperry& Ebberson, PLLC (206)332-7551 Direct Dial kusunose(a lashe-.r.com Notice: This is a privileged and confidential electronic transmission intended only for the individual/entity named. If you received this transmission in error,please notify the sender by reply e-mail or by calling(206)332-7551,and then delete the transmission without copying it. I hank N t. 3/17/2006 Shelly Badger From: Taro Kusunose [kusunose@lasher.com] Sent: Thursday, March 02, 2006 3:48 PM To: Shelly Badger Subject: RE: BN/City of Yelm Shelly, no problem. I should be here until around 6 pm tomorrow. Thank you for the update. Taro Taro Kusunose, Esq. Lasher Holzapfel Sperry & Ebberson, PLLC (206) 332-7551 Direct Dial kusunose@lasher.com Notice: This is a privileged and confidential electronic transmission intended only for the individual/entity named. If you received this transmission in error, please notify the sender by reply e-mail or by calling (206) 332-7551, and then delete the transmission without copying it. Thank you. -----Original Message----- From: Shelly Badger [mailto:shellyb@ci.yelm.wa.us] Sent: Thursday, March 02, 2006 3:47 PM To: Taro Kusunose Subject: RE: BN/City of Yelm Taro, sorry I have been slow in getting back to you. I am working on a grant deadline in between meetings today and tomorrow morning. 1 will give you a call as soon as I get it finished. Are you in tomorrow afternoon, say 3:00 PM or after? Thank you for all your help in this regard! Shelly Shelly Badger, Yelm City Administrator City of Yelm P.O. Box 479 Yelm, WA 98597 360-458-8405 360-458-4348 fax shellyb@ci.yelm.wa.us -----Original Message----- From: Taro Kusunose [mailto:kusunose@lasher.com] Sent: Tuesday, February 28, 2006 9:04 AM To: Shelly Badger Cc: Rebekah Grant Subject: FW: BN/City of Yelm Shelly, we will be forwarding draft Real Estate Excise Tax Affidavits to BN for review. Please let me know if you have any questions or concerns. Please also call me when you have a moment to discuss this matter further. Thank you. Taro 1 Taro Kusunose, Esq. Lasher Holzapfel Sperry & Ebberson, PLLC (206) 332-7551 Direct Dial kusunose@lasher.com Notice: This is a privileged and confidential electronic transmission intended only for the individual/entity named. If you received this transmission in error, please notify the sender by reply e-mail or by calling (206) 332-7551, and then delete the transmission without copying it. Thank you. -----Original Message----- From: Wintermute, Dalen [ma iIto:Dalen.Wintermute@BNSF.com] Sent: Tuesday, February 28, 2006 8:45 AM To: Taro Kusunose Cc: Long, Carl J Subject: RE: BN/City of Yelm Please send the REETA's to me. I may be able to sign, but if not, I will forward to Dave Schneider for signature. Thanks. Dalen E. Wintermute Manager, Land Revenue Management BNSF Railway Company 2500 Lou Menk Drive, AOB-3 Ft. Worth, TX 76131-2828 Phone: (817) 352-6870 Fax: (817) 352-7797 >CONFIDENTIALITY NOTICE - >This message is intended only for the use of the individual or entity to which it is addressed and may contain information that is privileged, confidential and exempt from disclosure under applicable law. If the reader of this message is not the intended recipient, or the employee or agent responsible for delivering the message to the intended recipient, you are hereby notified that any dissemination, distribution or copying of this communication is strictly prohibited. If you have received this message in error, please delete this message from all computers and notify me immediately by return e-mail and/or phone (817)352-6458. Thank you. -----Original Message----- From: Taro Kusunose [mailto:kusunose@lasher.com] Sent: Monday, February 27, 2006 4:10 PM To: Wintermute, Dalen Subject: BN/City of Yelm Re-sent with a subject line. Taro -----Original Message----- z From: Taro Kusunose Sent: Monday, February 27, 2006 2:09 PM To: 'dalen.wintermute@bnsf.com' Subject: Mr. Wintermute: This follows my voicemail to you of earlier today. This law firm represents the City of Yelm, Washington. In 2000, BN donated some real estate to the City, and also sold some real estate to the City. The transfers were by quit claim deed. Copies of the two quit claim deeds (the originals of which we hold) are attached to this email in .pdf format for your reference. The fact that the quit claim deeds were not recorded came to light recently when we were asked by the IRS to answer a few questions as part of an IRS audit of BN being handled by Carl Long of BN. In order to record a deed in Washington, we need to file a document called a Real Estate Excise Tax Affidavit (REETA). The REETA will require original signatures of both transferor and transferee, so we will need someone over at BN to sign the REETAs. We will get draft REETAs to BN for review shortly. Back in 2000, Rich Batie was our primary BN contact. I recently spoke to Rich, who indicated that Dave Schneider would likely be the person to sign the REETAs. (In fact, Dave Schneider was the BN individual who signed one of the two deeds in 2000). Therefore, Rich suggested that I contact you about this. Could you let me know if Dave Schneider would still be the person to sign. If not, who the right person would be. Could you also let me know Carl Long's email address, as Rich has asked that I keep Carl in the loop on this, and I think email will end up being the best way to go. Please let me know if you have any questions or concerns. I look forward to hearing from you. Thank you. Taro Kusunose Taro Kusunose, Esq. Lasher Holzapfel Sperry & Ebberson, PLLC 2600 Two Union Square 601 Union Street Seattle, Washington 98101-4000 USA (206) 332-7551 Direct Dial (206) 624-1230 Switchboard (206) 340-2563 Fax kusunose@lasher.com Notice: This is a privileged and confidential electronic transmission intended only for the individual/entity named. If you received this transmission in error, please notify the sender by reply e-mail or by calling (206) 332-7551, and then delete the transmission without copying it. Thank you. 3 Page 1 of 2 Shelly Badger From: Shelly Badger Sent: Friday, February 17, 2006 3:49 PM To: Stephanie Ray Cc: Dana Spivey Subject: RE: Stevens NW Meeting - Brent Let's try to keep the street project separate from the RR deed recording project (we can only try....). So with that, I think that Brent could review the deeds and answer just that question. DANA LOU, could you get copies of both the purchase and donation paperwork of which each has a legal associated with it to Stephanie. The danger of this approach is IF the piece associated with the street project is NOT incorporated on the legal descriptions that Taro is working on getting recorded. If that is the case, I say, pay 2 attorneys to hook up and figure this thing out, so we can all be done with it! I will still ask Brent to contact Taro on his concerns with recent case law and RR deeds. Thanks, Shelly From: Stephanie Ray Sent: Friday, February 17, 2006 3:36 PM To: Shelly Badger Subject: RE: Stevens NW Meeting - Brent Ok, sounds good! I think the biggest question now is whether or not the quit claim deeds include this parcel? That would be a direct question we would need answered by an attorney? Do you want me to ask Brent this or should we ask Tarro? S From: Shelly Badger Sent: Friday, February 17, 2006 3:23 PM To: Stephanie Ray Cc: Dana Spivey Subject: RE: Stevens NW Meeting - Brent Dana has been working with Taro and he can take care of the recording for us, so she is gathering the original paperwork (quit claim deeds, she found the last one needed!) and sending them to Taro. He is "dialed in" with BNSF people and will know how to handle the whole penalty issue for them not being recorded at the time of purchase. I agree, Taro and Brent need to work on this issue together, so Brent can share his concerns with Taro. From Brent's voice mail to me this afternoon, I will send Brent an e-mail asking that he call Taro. ....Dana, could you let Taro know that our City Attorney may be contacting him with some questions related to the deeds? From: Stephanie Ray Sent: Friday, February 17, 2006 3:04 PM To: Shelly Badger 2/17/2006 Page 2 of 2 Subject: Stevens NW Meeting — Brent Shelly, I have reviewed the Stevens West project with Brent. He retained the maps, plans, etc. and will bring them to the meeting on Wed. I also spent some time at the courthouse, searching for deeds for the Lewis property and for the BN piece that shows it is still under BN ownership vs. City ownership. I did find two deeds for the Lewis property. Brent is going to look those over. As far as the BN piece, there is a 'legal description' sheet that is recorded that shows record of ownership going from Burlington Northern (1982) to Wood Fabricators, Inc. (1984) back to Burlington Northern (1988). However, we could not find any legal recordings further supporting this. Brent is going to look into this as well. The title report on the Lewis property will not be available for another week so we won't be able to compare anything with the title report for a few more days. Brent wondered what kind of deeds we were recording related to the railroad? Quit claim? Or Statutory? I was not sure. I mentioned to Brent that at the executive session we will want to give a broad over view of what is going on...knowing we will not have enough information for details. I asked him to give a legal opinion related to the building permit that was issued by the City and what implications this may have. I also said we would want to talk some about the encroachment issues as well as the access issues (for the storage building since it is all on railroad row). As you know I have requested G&O complete a fully survey. This will not be complete by next week either. When I asked Brent if an appraiser could even appraise something like this...he said it was a good point and he wasn't sure. We (you & 1) will have to strategize what to do next once the entire survey is complete. This afternoon, Tim & I looked at the railroad right of way map and this little parcel does appear to be a separate parcel maybe in fee simple ownership? It will be interesting to see if it comes up as part of the railroad purchase in our purchase agreement with BN? As far as Brent's comments in the v/m, I am not sure. We did not talk about this. Do you think it would be a good idea to have Brent work with Tarro? Your thoughts? s Stephanie Ray City of Yelm Project Manager PO Box 479 901 Rhoton Road Yelm,WA 98597 phone:(360)458-8414 fax:(360)458-8417 email: stephanier@ci.yelm.wa.us 2/17/2006 Shelly Badger Full Name: Taro Kusunose Last Name: Kusunose First Name: Taro Company: Lasher Holzapfel Sperry & Ebberson, P.L.L.C. Business Address: 2600 Two Union Square 601 Union Street Seattle, WA 98101-4000 Business: (206) 332-7551 Business Fax: (206) 340-2563 E-mail: kusunose@lasher.com E-mail Display As: Taro Kusunose (kusunose@lasher.com) Web Page: http://www.lasher.com 1 8F THE P�I� FAX TRANSMISSION CITY OF YELM PO BOX 479 - 105 YELM AVE W YELM YELM WA 98597 WASHINGTON 360-458-3244 FAX: 360-458-4348 To: Dater Fax#• ��? Pages: including this cover sheet. From: V Subject: CONBMNTS: k �l d l,C� . r � � l , 0 ' 5 w I � e , )/ ** If you d not receive all copies or any copy is not legible,please call (360)458-3244 as soon as possible. ds/c:\office\forms\fax.3 TRANSMISSION VERIFICATION REPORT TIME 11/16/2000 16:55 DATE DIME 11116 16:54 FAX NO./NAME 18173527938 DURATION 00:01:08 PAGE{S} 04 RESULT OK MODE STANDARD ECM BNSF RICHARD A. BATIE Burlington Northern Santa Fe Manager, Shortline Development 2600 Lou Menk Drive Fort Worth,Texas 76131 Phone 817-352-6432 FAX 817-352-7938 November 16, 2000 Shelly Badger, City Administrator �Q 5 City of Yelm 5 105 Yelm Avenue West Yelm, Washington 98597 r 01-V Dear Shelly, Enclosed are two copies of the "Assignment of Rights Under Contract to Real Estate" covering the transfer of the real estate portion of the line sale to the City of Yelm. Please sign the two copies of the "Assignment" and return them to myself by overnight mail. BNSF looks forward to working with the City of Yelm and the Prarie Line. If you have any questions or comments concerning this transaction or future use of the Prarie Line, please contact myself Thank you for your cooperation and mutual interest in this transaction. Sincerely, Richard A. Batie File: Roy — Yelm, Washington Cc: J. M. Johnson D. P. Schneider BNSFlh l.sty 16 N OF THE City of Yelm a M 105 Yelm Avenue West P.O. Box 479 YELM Yelm, Washington 98597 WA6HINOT�N (360) 458-3244 VIA USPS EXPRESS MAIL November 15, 2000 Mr. Richard A. Batie Manager, Shortline Development Burlington Northern Santa Fe 2650 Lou Menk Drive, Flr 3 Fort Worth,Texas 76131-2830 RE: Roy-Yelm, Washington Rail Corridor Closing Dear . Batie: tL� Enclosed you will find a check in the amount of$300,000.00 for the purchase of a parcel of land shown as Exhibit A in the Real Estate Purchase and Sale Agreement signed by the City of Yelm November 8, 2000. I understand that the signed agreement and deed was mailed late on Tuesday, November 14, 2000, so it will not be received by Steve Day, Betts Patterson & Mines,until Thursday,November 16. Please hold this check in escrow until we receive the signed agreement and deed. I will call you as soon as I am notified by Steve Day's office that the documents have arrived. Thank you once again for your support of this transaction. Please contact me at 360-458-8405 if you have any questions. Sincerely: Shelly A. dger Yelm City Administrator cc: Dennis W. Wilson, Attorney for the BNSF Steve Day, Betts Patterson & Mines Mayor Kathryn M. Wolf Joe Williams, Chair, Yelm Rail Advisory Committee l � KEY BANK OF WASHINGTON 013872 Of Ttlt pA \� v��,u�,mb YELM OFFICE 150 .e CITY OF YELM KeyBank YE19-571250591 n a P.O.BOX 479 No. YELM,WA 98597 (360)458-3244 CLAIMS FUND YELM 'REE HUNDRED THOUSAND DOLLARS & }iy CENTS PAY TO THE ORDER OF DATE CHECK NO. AMOUNT 11/08/1010 113872 APEX PROPER'l-Y n TRACK EXCHANGE n� CITY CLERK TREASURER Y, ) , En-MAYCIR 11'0 L 38 7 211' I: L 2 5000 S 741: 00 50600 7 17110 SF.CURFv FEnTURE�z 1.acHn t'HINI 10P K RnTiOne ROMDi pcHE,cATTERN-ARTIFICIAL WATERMARK ON PEV: RSE SIDE MISSING FFATURE INDICATES A COPY DATE INVOICE ACCOUNT NUMBER NET INVOICE AMOUNT DESCRIPTION . 1/oB/00 11/2/iii} ;i)ia, i)lii?. :ic? CITY OF YELM,P.O.BOX 479,YELM,WA 98597 REMITTANCE ADVICE DIVJ� f"LIVU 1JJ Chf" (0 O 1 ( JJJ C I JV I I/ 10/VV 1,f.C7 Ly U.:)/U-) IVV..)CO ASSIGNMENT OF RIGHTS UNDER CONTRACT TO REAL ESTATE APEX PROPERTY & TRACK EXCHANGE, INC., a Massachusetts corporation, of 2036 Washington Street, Hanover, Massachusetts 02339, (hereinafter called "Assignee"), THE BURLINGTON NORTHERN AND SANTA FE RAILWAY COMPANY, a Delaware corporation, (hereinafter called "Exchangor'), CITY OF YELM, a municipal corporation of the State of Washington. Whereas, Exchangor and Buyer heretofore entered into an Agreement dated October 30, 2000, (the "Contract"), wherein Exchangor agrees to assign the rights to the Contract, but not the obligations and warranties over to Assignee, as it pertains to the following described Relinquished Property: "See attached Exhibit"A"attached hereto and made a part hereof for all purposes". Now, Therefore, Exchangor hereby assigns to Assignee all of the Exchangor's rights under the Contract, as contemplated by Treasury Regulations Section. 1.1031 (k)-1(g)(4)(v), including all deposits received prior to issuing a Deed transferring legal title. Exchangor's obligations and warranties under the Contract remain with the Exchangor, including the authority to issue a Deed transferring legal title to the Relinquished Property over to the Buyer. Assignee previously represented, warranted and covenanted to Exchangor, under the Master Exchange Agreement dated January 1, 1997, that it will not transfer, assign, mortgage or hypothecate the rights that it is receiving from the Exchangor and that Assignee shall not amend, terminate, modify, supplement or otherwise alter any term, condition or other provision of the Contract. At the same time the Deed goes into effect transferring legal title to the Buyer, rights received under this Assignment of Rights are transferred to the Buyer. Assignee is participating in this transaction only as a Qualified Intermediary and that for purposes of any dispute regarding the Relinquished Property, Exchangor and Buyer shall look solely to each other with respect to resolving any such dispute and neither one shall look to the Assignee. This shall be binding upon and shall inure to the respective heirs, successors and assigns of Exchangor and Buyer. .. .... . �i.v - -..i 1 .1 i 1 - i-1- Lf -.- This instrument may be executed in any number of counterparts, each of which, when duly executed, shall constitute an original hereof. In Witness Whereof, the parties hereto have executed this Assignment of Rights Under Contract. Exchangor: THE BURLINGTON NORTHERN AND SANTA FE RAILWAY COMPANY, a Delaware corporation By: Date: �ft—es J. ei Vice Presi ent n ustriafDevelopment & Support Assignee: APEX PROPERTY & TRACK EXCHANGE,INC., a Massachusetts corporation By: Date: Print name: Its: Buyer: CITY OF YELM a municipal corporation of the State of Washington By DI Date: Print ame: j hZIL&L i' Its: - 2 Vl.vl I Llv iJJ L/ I ® V 11 VVV L IJV I I/ IV/VV I'Y.L/ Ly .VJ/VJ I\V.JLV EXHIBIT"A" THAT PORTION OF THE BURLINGTON NORTHERN AND SANTA FE RAILWAY COMPANY'S (FORMERLY NORTHERN PACIFIC RAILWAY COMPANY) 100.0 FOOT WIDE ROY TO YELM, WASHINGTON BRANCH LINE RIGHT OF WAY, NOW DISCONTINUED, BEING 50.0 FEET WIDE ON EACH SIDE OF SAID RAILWAY COMPANY'S MAIN TRACK CENTERLINE, AS ORIGINALLY LOCATED AND CONSTRUCTED UPON, OVER AND ACROSS THE SWI/4 OF SECTION 19, TOWNSHIP 17 NORTH, RANGE 2 EAST OF THE WILLAMETTE MERIDIAN, THURSTON COUNTY, WASHINGTON, BOUNDED ON THE NORTHEAST BY THE NORTH LINE OF SAND SWV4, AND BOUNDED ON THE SOUTHWEST BY THE SOUTHWESTERLY BOUNDARY OF THE PLATTED PORTION OF YELM, WASHINGTON, SAID SOUTHWESTERLY BOUNDARY ALSO BEING THE NORTHEASTERLY BOUNDARY OF THAT PORTION OF SAID RAILWAY COMPANY'S YELM TO TENINO, WASHINGTON BRANCH LINE RIGHT OF WAY CONVEYED TO THURSTON COUNTY, WASHINGTON BY QUITCLAIM DEED DATED AUGUST 14, 1996, EXCEPTING THEREFROM, A 30.0 FOOT WIDE CORRIDOR, BEING 15.0 FEET WIDE ON EACH SIDE OF SAID MAIN TRACK CENTERLINE UPON, OVER AND ACROSS THE SWI/4 OF SAID SECTION 19. BNSF PLNG ISS EAP 817 333 2130 11/16/00 14:29 5 :01/05 N0:526 FAX MESSAGE BURLINGTON NORTHERN SANTA FE FROM RICH BATIE, SHORTLINE DEV 2600 LOU MENK DRIVE, 2N° FLOOR FORT WORTH, TEXAS 76131 PHONE 817-3624432 FAX 817-3152-7938 T0. DATE: LOCATION: M Q PHONE: foo • 456 w '3 Z 44 FAX: S (oc * 45% • "46 `" Ls "mSUBJECT: � A PAGE 1 OF PAGES Page 1 of 1 Shelly Badger From: "Shelly Badger" <shellyb@ci.yelm.wa.us> To: "Carver, Shelley" <CarverS@wsdot.wa.gov> Cc: "Stephanie Conners" <stephaniec@ci.yelm.wa.us> Sent: Monday, March 29, 2004 1:40 PM Attach: DiaryofRRinfopriortopurchase.doc Subject: BNSF RR purchase diary Shelley, attached is the diary of correspondence and action leading up to the City's purchase of the Yelm-Roy Prairie Line from BNSF. Let me know if you need anything else related to this document. My understanding is that this is the last piece of information you need to certify the ROW. Thanks, Shelly Shelly Badger Yelm City Administrator P.O. Box 479, Yelm, WA 98597 360-458-8405 shellybCa�_ci.uelm,_w_a.us 3/29/2004 Page IofI Shelly Badger From: "Taro Kusunose" <tkusunose@bpmlaw.com> To: "'Shelly Badger"' <shelly@yelmtel.com> Sent: Monday, September 16, 2002 10:29 AM Subject: RE: Mailing address Notice: This is a confidential communication;it may also be privileged If you are not the intended recipient,please advise the sender at(206)268-8646 and then immediately delete this communication,including any attachments,without reading or disclosing its contents. Thank you. Hi Shelly, we moved a while ago. Our address is 701 Pike Street #1400 Seattle. WA 98101. I had been wondering if the Miles project fell through. Just let me know what you need, if you need something before we see the packet. Sorry about the mix-up. Taro Kusunose Attorney Betts,Patterson&Mines,P.S. Seattle,Washington USA (206)268-8646[direct-dial] For additional information,please visit: www.bpmlaw.com -----Original Message----- From: Shelly Badger[mailto:shelly@yehntel.com] Sent: Monday, September 16,2002 10:26 AM To: Taro Kusunose Subject: Mailing address Taro, I had the packet that I mailed (Miles)to you returned to me stating No Forward Order on File? Is there a new address for Betts Patterson & Mines that I missed somehow? I mailed to 800 Financial Center, 1215 Fourth Ave., Seattle, 98161. Thanks, Shelly 9/18/2002 BNSF BRUCE JAY BUTLER,CPA The Burlington Northern Assistant Manager of Taxes and Santa Fe Railway Company 2500 Lou Menk Drive n r� � In Fort Worth,Texas 76161 L./ 817-352-3433 APA 2 3 2001 Fax 817-352-3434 E-mail bruce.buder@bnsf.com April 19,2001 CERTIFIED MAIL RETURN RECEIPT REQUESTED 7000 1670 0007 9039 3183 City of Yelm 105 Yelm Avenue West P. O.Box 479 Yelm,Washington 98597 RE: Charitable Contribution Receipt: Substantiation for Charitable Donations of$250 or More and Form 8283 Noncash Charitable Contribution Ms. Shelly Badger. Enclosed is the Federal Form 8283 Noncash Charitable Contribution and the Charitable Contribution Receipt for the tax year ended December 31,2000. These forms are needed for BNSF to claim a contribution deduction on its Federal Income Tax Return. Please fill out Part IV of Form 8283 and all of the Charitable Contribution Receipt form and return by July 15,2001. c42r�ifo 1 If you have any questions,please contact me at(817)352-3433. Sincerely, Bruce J.Butler,CPA Assistant Manager of Taxes BNSAhtdot Form 8283 Noncash Charitable Contributions OMB No.1545-0908 (Rev.October 1998) lo. Attach to your tax return if you claimed a total deduction Department of the Treasury of over$500 for all contributed property. Attachment Internal Revenue Service lip. See separate instructions. Sequence No.55 Name(s)shown on your income tax returnIdentifying number Jjit .Bk -Ef�� Ste, - 6 03YVao Note: Figure the amount of your contribution deduction before completing this form. See your tax return instructions. Section A—List in this section only items (or groups of similar items) for which you claimed a deduction of$5,000 or less. Also, list certain publicly traded securities even if the deduction is over $5,000 (see instructions). EM Information on Donated Property—If you need mores ace, attach a statement. (a)Name and address of the 1 donee organization (b)Description of donated property A B C D E Note: If the amount you claimed as a deduction for an item is$500 or less,you do not have to corn tete columns(d), (e), and (c)Date of the (d)Date acquired (e)How acquired (f)Donor's cost (h)Method used to determine the fair 11 contribution by donor(mo.,yr.) by donor or adjusted basis (g)Fair market value market value A B C D E Other Information—Complete line 2 if you gave less than an entire interest in property listed in Part I. Complete line 3 if conditions were attached to a contribution listed in Part I. 2 If, during the year, you contributed less than the entire interest in the property, complete lines a-e. a Enter the letter from Part I that identifies the property ► . If Part II applies to more than one property, attach a separate statement. b Total amount claimed as a deduction for the property listed in Part I: (1) For this tax year ► (2) For any prior tax years Bi- c c Name and address of each organization to which any such contribution was made in a prior year (complete only if different from the donee organization above): Name of charitable organization(donee) Address(number,street,and room or suite no.) City or town,state,and ZIP code d For tangible property, enter the place where the property is located or kept lo- * e Name of any person, other than the donee organization, having actual possession of the property It, 3 If conditions were attached to any contribution listed in Part I, answer questions a -c and attach the required statement (see instructions). a Is there a restriction, either temporary or permanent, on the donee's right to use or dispose of the donated Yes No property?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . b Did you give to anyone(other than the donee organization or another organization participating with the donee organization in cooperative fundraising)the right to the income from the donated property or to the possession MRv of the property, including the right to vote donated securities, to acquire the property by purchase or otherwise, or to designate the person having such income, possession, or right to acquire? . . . . . . . . . . c Is there a restriction limiting the donated property fora particular use? For Paperwork Reduction Act Notice,see page 4 of separate instructions. Cat.No.62299) Form 8283 (Rev. 10-98) f _ti Form 8283(Rev. 10-98) Pae 2 Name(s)shown on your income tax return Identifying number UG STfi fF A 1-603#00o Section B—Appraisal Summary—List in this section only items (or groups of imilar items) for which you claimed a deduction of more than $5,000 per item or group. Exception. Report contributions of certain publicly traded securities only in Section A. If you donated art, you may have to attach the complete appraisal. See the Note in Part I below. Information on Donated Property—To be completed by the taxpayer and/or appraiser. 4 Check type of property: ❑ Art' (contribution of$20,000 or more) Real Estate ❑ Gems/Jewelry ❑ Stamp Collections ❑ Art' (contribution of less than $20,000) ❑ Coin Collections ❑ Books ❑ Other 'Art includes paintings, sculptures, watercolors, prints, drawings, ceramics, antique furniture, decorative arts, textiles, carpets, silver, rare manuscripts, historical memorabilia, and other similar objects. Note: If your total art contribution deduction was$20,000 or more,you must attach a complete copy of the signed appraisal. See instructions. 5 (a)Description of donated property(if you need (b)If tangible property was donated,give a brief summary of the overall (c)Appraised fair more space,attach a separate statement) physical condition at the time of the gift market value A 5 °Q v�� 9 0 0 B C Gvu '4_5 D (d)Date acquired (e)How acquired (f)Donor's cost or (g)For bargain sales,enter See instructions by donor(mo.,yr.) by donor adjusted basis amount received (h)Amount claimed as a i Average trading price deduction of securities A 41,70 o00 Of) B C D M Am Taxpayer (Donor) Statement—List each item included in Part I above that the appraisal identifies as having a value of$500 or less. See instructions. I declare that the following item(s)included in Part 1 above has to the best of my knowledge and belief an appraised value of not more than $500 (per item). Enter identifying letter from Part I and describe the specific item. See instructions. Do- Signature Signature of taxpayer(donor) ► Date ► Declaration of Appraiser I declare that I am not the donor, the donee, a party to the transaction in which the donor acquired the property, employed by, or related to any of the foregoing persons, or married to any person who is related to any of the foregoing persons.And, if regularly used by the donor, donee, or party to the transaction, I performed the majority of my appraisals during my tax year for other persons. Also, I declare that I hold myself out to the public as an appraiser or perform appraisals on a regular basis; and that because of my qualifications as described in the appraisal, I am qualified to make appraisals of the type of property being valued.I certify that the appraisal fees were not based on a percentage of the appraised property value. Furthermore, I understand that a false or fraudulent overstatement of the property value as described in the qualified appraisal or this appraisal summary may subject me to the penalty under section 6701(a) (aiding and abetting the understatement of tax liability). I affirm that I have not been barred from presenting evidence or testimony by the Director of Practice. Sign Here I Signature ► Title to. Date of appraisal ► Business address(including room or suite no.) Identifying number City or town,state,and ZIP code ETRIFIF—Donee Acknowledgment—To be completed by the charitable organization. This charitable organization acknowledges that it is a qualified organization un/der s ction 170(c) and that it received the donated property as described in Section B, Part I, above on IN- Nnkfzkni)-?✓ 4� 2coo (Date) Furthermore,this organization affirms that in the event it sells,exchanges,or otherwise disposes of the property described in Section B, Part I (or any portion thereof) within 2 years after the date of receipt, it will file Form 8282, Donee Information Return, with the IRS and give the donor a copy of that form.This acknowledgment does not represent agreement with the claimed fair market value. Does the organization intend to use the property for an unrelated use? . . ► ❑ Yes No Name of charitable organization(donee) Employer identification number I-� Imo" Addr s(nu ,street,and r m or suite no.) City or town,state,and ZIP code c i i AutPoriied s' nature r/� Titlel Date X`J t CHARITABLE CONTRIBUTION RECEIPT Substantiation for Charitable Donations of$250 or More The Omnibus Budget Reconciliation Act of 1993, Sec. 13172 (a), requires that the recipient (donee) of any single charitable gift of$250 or more give the donor written confirmation of the receipt of such a gift, including a description and a good faith estimate of the value of any goods and services provided by the donee in exchange for making the gift. In order to comply with this Act, C 1)±:y of YO M hereby certifies that we received a contribution from Burlington f4orthern Santa Fe Corporation: Cash or check in the amount of. $ or Property consistin of: - �;56 w�?lg. riwlnf--d Wev ski uiRr'* 1DCAj% �'N ` rs�'� _ Ceunf{��. Date contribution received: DV C ( i aow Were any goods and/or services provided to Burlington Northern Santa Fe Corporation in return for this contribution? (meals, entertainment, gifts, etc.) Yes No— Y__1 If yes, a description of those goods and services is provided below with a statement of monetary value: Value: $ Net Contribution: $ (Contribution less the value of any goods or services received) Organizatio ame: C l2 `�-{of Address: a ' Telephone/Fax: - 3 Organization Tax ID#: L zcjt5��Z Signature:/"I///--A. A4rAj_,1 Date: a5 0/ Name: l Title: 044V h:office\donation.doc Page 1 of 2 From: Taro Kusunose <tusunose@bpmlaw.com> To: 'Shelly Badger' <shelly@yelmtel.com> Cc: Steve Day <sday@bpmlaw.com> Date: Monday, November 06, 2000 2:23 PM Subject: RE: real estate agreement/closing Shelly, [My apologies for the previous premature email. I was attempting to type a"section"symbol; apparently ALT+S on the keyboard (which is the section symbol in MS Word) is the command for"send"in this email program.] In a separate email that follows, I will be sending you the Notice of Exemption to be filed with the Surface Transportation Board (STB)by us on behalf of the City. We will be able to file this Notice because of the nature of the transaction, as well as the size of the projected revenues expected from the City's acquisition of the line. Please review the Notice for its accuracy. (I have requested from Mr. Charlie Burnham, the map referenced to in the Notice; I should get that soon.) If upon review the document is acceptable, please sign the Certificate in Accordance with 49 C.F.R. Section 1150.33(g)(the"Certificate')on page 6, and the Verification on page 7. As noted above, one of the reasons we are able to file this particular document with the STB on behalf of the City is the size of the City's projected revenues from the acquired line. By signing the Certificate, the City is certifying that it will not qualify as either a Class II carrier or a Class I. 1 believe that the threshold for being classified as a Class II carrier is an annual revenue of at least$20 million; $250 million for Class I. Since we will need to file the copies with your original signatures soon, please overnight the signed Certificate and Verification to me as soon as possible. Also, as soon as you have had the opportunity to review the document, could you please let me know via email whether it is acceptable. Mr. Wilson has requested that we fax him a copy before we file the Notice with the STB on Wednesday or Thursday. FYI: The Notice states that the City will be announcing a Request for Proposal (an "RFP")for third party operators of the City's line. This is something that the City will have to do in the somewhat near future. Steve has given me a list of local operators that the City could contact, and we can try to set something up for the City if you like, BUT this is something that I just wanted to give you a heads-up on right now. It can and probably should wait until after the transaction is complete. More closing information. The check to A ex should be nt t Rirh RatiP nn thyoualready Mr. Wilson asks that the executed copies of both the Agreement an repsa be sent to Rich Batie, but as note, it would probably be good to cc at least Mr. Wilson. I personally am not familiar with Ms. Doran, Mr. Detjen or Mr. Roper, but the City's relationship with them is such that you feel it would be good to send them a copy, that should be fine. There is no requirement that you do so, however. The Agreement and the repsa. T go. I have sent the map which came with the repsa to Mr. Burnham for review so that he can verify its accuracy. I should be hearing back from Mr. Burnham soon, but please hot ver thin until I et that verification. W-Just have to make sure that all of the_signed con racks I�avP the�iy via nvernjgJ� mail on T y[ P thl because r. i son wro e m is e e �C�iv� t at'BNSF would like to receive two executed copies of each agreement... no later than November 10, 2000." I apologize for the long letter. It is OUR pleasure working with you. Please let me know if you have any questions or concerns. Taro -----Original Message----- From: Shelly Badger[mailto:shelly@yelmtel.com] Sent: Friday, November 03, 2000 3:35 PM To: Taro Kusunose Subject: Re: real estate agreement/closing 11/06/2000 Page 2 of 2 Taro, received your e-mail and YES the City did receive the latest version with Sections 8, 9 and 23 deleted. I was delighted to see BNSF be so agreeable, they must really want the deal closed by year end! I had the opportunity to meet with Mayor Wolf today, so I obtained her signatures on both the repsa and the Donation Agreement which includes Exhibit C which was received under seperate cover. Also, I have ordered the$300,000 check from our Treasurer's office to Apex which we will get approval from Council on 11-8 and then it will await the go-ahead to send. I did not get an address for Apex? Thru Rich Batie? As soon as I get the final thumbs up from you folks on the final agreements, I believe the next step is to overnite them to Rich Batie as per Mr. Wilson's 11-2 letter which forwarded the new respa with deletions (probably Monday 11-6?) Is this correct? Should I also be sending copies of the respa and donation agreement to the others on the cc list including Mr. Wilson, Mr. Detjen, Jerry Johnson, Mary Nan Doran? Thanks Taro and Steve, your assistance in this matter, has been very thoughtful, professional and efficient, we greatly appreciate it, this is a big transaction for a small community and I/we are thankful to be working with a quality firm such as yours and with quality people such as yourselves. Have a great weekend! Shelly -----Original Message----- From: Taro Kusunose<tkusunose@bpmlaw.com> To: 'shelly@yelmtel.com'<shelly@yelmtel.com> Cc: Steve Day<sday@bpmlaw.com> Date: Friday, November 03, 2000 11:25 AM Subject: real estate agreement/closing Hi Shelly: I hope this email finds you doing well. You have probably received the revised Real Estate Purchase and Sales Agreement(repsa)from Mr. Wilson by now, as Steve and I received one this morning as well. Mr. Wilson has deleted sections 8, 9, and 23 from the former draft to come up with this revised repsa. We feel that this was a most gracious act on the part of Mr. Wilson, since the deletion/insertion of language similar to that in former sections 8 and 23 has traditionally been an issue of contention, and a source of headache and delay, in previous railcarrier related real estate transactions. Steve will eye through the revised repsa one more time, but we both agree that it is generally looking good. Two notes on the closing. In a departure from previous information I received from D.Wilson, Mr. Wilson's office is now indicating that the check and any documents related to the transaction should be sent to Rich Batie in Forth Worth, not Dave Detjen in Fort Worth. I am in the process of confirming this change. Mr. Wilson told me this morning that the final $300,000 check from the City should be written out to be payable to the order of Apex Property_& Track_Exchap_ge Inc. Apex is the entity that BN is assigning the rights to this transaction to, under section 3 of the revised repsa. Please feel free to call me or to write, if you have any questions or concerns. We're almost there! Taro I 11/06/2000 iiiuziuu rttu 15:44 r:as 10002 Dennis W. Voism P. O_ Box 6039 Wilmette, IL 60091-6039 At hN I my at Law (847)86440366 Phone (847)864-0389 Fax November 2, 2000 VIA OVERNIGHT MAIL. Taro Kusunose,Esq. Betts, Patterson& Mines, PS 800 Financial Center 1214 Fourth Avenue Seattle, WA 98161-1090 RE: BNSF Parcel Sale to City of Yelm Dear Taro- As i indicated to you by telephone,BNSF can agree to your request to drop its request for retained easements and mineral rights on this parcel and to delete Sections 8 and 23 from the prior draft Real Estate Purchase and Sale;Agreement_ Enclosed is a revised contract with these Sections deleted. By copy of this letter,two copies of the revised contract are forwarded to Shelly Badger of the City of Yelm for her signature and return to Rich Batie of BNSF. Very truly yours, 'Pox,v'� 41'11; Dennis W. Wilson Attorney for The Burlington Northern and Santa Fe Railway Company DWW/jbs Enclosure Cc: Ms_ Shelly Badger, City of Yelm(2 copies via overnight mail) Mr. David Detjen(via fax, w/enclosure) Mr. Rich Batie(via fax, w/enclosure) Ms_ Mary Nan Doran(via fax, w/enclosure) N:Uaw.mkb\dww\t2k1ewer\1102 kzwsunose 11/01/00 WED 16:55 F.a1 Z003 Ekmnis W. Vftsw P_ O. Box 6039 e��,..��,., Wilmette, IL 60091-6039 Aftw R7 att.e� w (847)8640366 Phone (847)8640389 Fax VIA OVERNIGHT MAIL November 1,2000 Ms. Shelly Badger Yeim City Administrator City of Yehn 105 Yelm Avenue West P.O.Box 479 Yelrn, WA 98597 RE: Roy-Yelm Rail Corridor Donation Dear Ms. Badger: Enclosed herewith are two copies of an updated Exhibit C to the BNSF-City of Yelm Rail Corridor Donation Contract_ Plcase insert these copies into each contract, following the Exhibit C title page, before executing the contracts and forwarding them to Rich Batie in Fort Worth_ Very truly yours, Jewilso�,��J Attorney for The Burlington Northern and Santa Fe Railway Company DWW/jbs Enclosures cc: Mr. Steve Day (via overnight mail) Mr. Rich Batie (via fax) Mx. Michael Roper (via fax) N:\1aw,rnkg\dww\}2k1etL=r 1101badger 10/31/00 TUE 16:54 F.Aa Z002 Dentfm W. Wilson P. O_ Box 6039 Wilmette, IL 60091-6039 AM=Y1y at Law (847)8640366 Phone (647)86x0389 Fax VIA OVERNIGHT MAIL October 31, 2000 Ms. Shelly Badger Yelm City Administrator City of Yelm 105 Yelm Avenue West P.O, Box 479 Yelm, WA 98597 RE; BNSF Parcel Sale to City of Yelm,Washington Dear Ms. Badger: Enclosed herewith are two copies of the contract for sale to the City of Yelm of BNSF's ownership i � w THE BURLINGTON NORTHERN AND SANTA FE RAILWAY COMPANY REAL ESTATE PURCHASE AND SALE AGREEMENT Property Management P. O.Box 961050 Fort Worth,Texas 76161-0050 October 30, 2000 BUYER'S OFFER 1. The undersigned, hereinafter called "Buyer", offers to purchase from, The Burlington Northern and Santa Fe Railway Company herein after called "Seller", all of Seller's right, title and interest in and to that parcel of land situated in or near the city of Yelm, County of Thurston and State of Washington, shown hatched black on map marked Exhibit "A", dated October 27, 2000, attached hereto and made a part hereof(said parcel of land being hereinafter called "the Property") at the price and upon the terms and conditions as follows. PURCHASE PRICE AND PAYMENT 2. Seller may approve or disapprove this Agreement for any reason whatsoever, in Seller's sole and absolute discretion, whether reasonable or unreasonable or whether arbitrary or capricious, subject to the approval of this Agreement by Seller, Buyer agrees to pay to Seller the purchase price of THREE HUNDRED THOUSAND AND NO HUNDRETHS ($300,000.00) for Property, of which the amount of NONE hereinafter called the "deposit", is paid to Seller, or Seller's assignee, to be applied on the purchase price. Said deposit shall be refunded to Buyer if this offer is not accepted by Seller within forty five (45) days from the date of said offer. The balance of said purchase price shall be paid in cash or by certified check to Seller or wire transfer to Seller's account as designated by Seller at the time Seller's deed to said property is delivered to Buyer. Notwithstanding anything set forth herein to the contrary, the balance of the purchase price shall be due ten (10) days from notice that Seller's deed is ready for delivery. Delivery of said deed shall be made at Seller's above stated office TAX-DEFERRED EXCHANGE 3. Seller reserves the right to assign this Agreement to Apex Property & Track Exchange, Inc. ("Apex"). Apex is a qualified intermediary within the meaning of Section 1031 of the Internal Revenue Code of 1986, as amended, and Treas. Reg. § 1.1031(k)-1(g), for the purpose of completing a tax-deferred exchange under said Section 1031. Seller shall bear all expenses associated with the use of Apex, or necessary to qualify this 1 f transaction as a tax-deferred exchange, and, except as otherwise provided herein, shall protect, reimburse, indemnify and hold harmless Buyer from and against any and all reasonable and necessary additional costs, expenses, including, attorneys fees, and liabilities which Buyer may incur as a result of Seller's use of Apex or the qualification of this transaction as a tax-deferred transaction pursuant to Section 1031. Buyer shall cooperate with Seller with respect to this tax-deferred exchange, and upon Seller's request, shall execute such documents as may be required to effect this tax-deferred exchange. CONVEYANCE 4. Seller shall convey or caused to be conveyed, all of Seller's right, title and interest in the premises, if any, to Buyer by Quitclaim Deed subject to the exceptions and reservations, whether or not of record and in accordance with the other terms conditions and reservations contained herein. Buyer shall, as soon as possible after acceptance of this offer, advise the Seller of Buyer's intent to have the premises surveyed. In the event the Seller's description of the premises used in the Deed and the use of an Exhibit map for reference in the Deed is not acceptable to the Buyer, the Buyer shall so advise the Seller of their objections of said description and within 15 days thereof, the Buyer shall, at their expense, arrange for a survey of the premises to be furnished to the Seller. ACCEPTANCE CONSTITUTES AGREEMENT 5. This offer of the Buyer to purchase the premises when duly accepted and signed by the Seller shall constitute the entire agreement between the parties for the sale and purchase of the premises and shall bind and inure to the benefit of the Seller, the Buyer, and their heirs, executors, administrators, successors and assigns. LIQUIDATED DAMAGES AND SPECIFIC PERFORMANCE 6. Time is of the essence of this contract. If the Buyer shall fail to perform this contract within the time limits herein specified, Seller may retain the deposit as liquidated damages, not as a penalty or forfeiture, and declare this contract terminated, or Seller may proceed to have this contract specifically enforced. SUCCESSORS IN INTEREST 7. Wherever referred to herein, the term Buyer shall imply, mean and apply to the Buyer, its successors, assigns, heirs, executors, administrators, or designees, who shall be severally and collectively liable for any and all performance hereunder. Wherever referred to herein the term Seller shall imply, mean and apply to the Seller, its successors, assigns, heirs, executors, administrators, or designees, who shall be severally and collectively liable for any and all performance hereunder. THIS OFFER IS AND THE CONVEYANCE OF THE PROPERTY SHALL BE SUBJECT TO THE FOLLOWING TERMS, CONDITIONS AND RESERVATIONS. 8. Easements--A reservation of the necessary right of way, to be determined by Seller, for the continued maintenance, operation and use of all existing driveways, roads, utilities, tracks, wires and easements of any kind whatsoever on the Property whether owned, operated, used or maintained by the Seller, Seller's Licensees or 2 other third parties and whether or not of record, and for the installation, construction and situation of facilities necessary to or beneficial for, the operation of Seller's railroad, with reasonable right of entry for the repair, reconstruction and replacement thereof, without limitation as a result of any further enumeration herein. In addition, reservation of a non-exclusive easement for the construction, maintenance and operation of one or more pipelines or fiber optic lines and any and all communications facilities as presently located or may be located in the future on Property. OTHER TERMS AND CONDITIONS 9. Title Defects--If, within the ten (10) day period following Seller's notice to Buyer that Seller's deed is ready for delivery, Buyer notifies Seller that Buyer has requested evidence of title to the Property, Buyer shall furnish to Seller at Buyer's expense such evidence of title within thirty (30) days of said notice from Buyer in the form of an abstract of title or a title commitment, and a written statement specifying the matters or defects other than said permitted exceptions and reservations and other than such usual exceptions contained in Owner's policies and the matters to which this sale is subject by the terms hereof, the time of payment of the balance of the purchase price shall be extended for a period of sixty (60) days after the receipt of said evidence of title and statement. If Seller is unable or unwilling to cure such matter or defects within said sixty (60) day period, and Buyer is unwilling to accept the deed subject to such matter or defects then either party may terminate this Agreement by serving written notice of termination upon the other party within fifteen (15) days thereafter and all further rights and liabilities under this Agreement shall cease and terminate except that Seller shall return the deposit to Buyer and Seller shall reimburse Buyer for the actual amount paid by Buyer, if any, to an abstractor for an abstract of title or to a title company for a title report (but not for title insurance), provided that said abstract or title report shall be delivered and assigned to Seller. Otherwise, Buyer shall remit to Seller, or Seller's assignee, the purchase price within ten(10) days or at closing, whichever is earlier. 10. Real Estate Commissions--If any real estate broker or agent can establish a valid claim for commission or other compensation as a result of Buyer having used their services in connection with the purchase of the Property, all such commission or other compensation shall be paid by Buyer. Seller shall not be liable for any real estate commissions or finders fees to any party with respect to the sale of the Property, except a commission to Catellus Management Corporation ("Broker") pursuant to a separate agreement. On and prior to the Date of this Agreement, Broker has advised, and hereby advises, Buyer, by this writing and by other means, and Buyer hereby acknowledges that Buyer has been so advised, that the Broker is acting as the agent of the Seller, with the duty to represent Seller's interest, and Broker is not the agent of the Buyer. If a policy of title insurance is to be obtained, Buyer should obtain a commitment for title insurance which should be examined prior to closing by an attorney of Buyer's choice. Prior to the execution of this Agreement, Broker has advised and hereby advises the principals of this transaction, that this Agreement is binding on them, and the principals hereby acknowledge that they have been so advised. 11. Liens of Seller's Mortgages--Seller shall deliver to Buyer, who shall place of record, good and sufficient releases of the liens of Seller's mortgages, where required under the terms of any mortgage on the Property, within one hundred eighty (180) days after the first meeting of Seller's Board of Directors held after the conveyance contemplated herein. In the event Seller shall be unable to obtain said releases for any reason, Seller shall have the right to terminate this Agreement upon serving written notice of termination upon Buyer within fifteen (15) days thereafter, and both parties shall thereupon be released and discharged from all liabilities and obligations hereunder, except that Seller shall repay to Buyer any and all sums therefore paid by Buyer to Seller 3 upon a reconveyance of title to the Property to Seller free and clear of defects or objections to the same extent as if no conveyance had been made to Buyer hereunder. 12. Other Liens--Any judgment against Seller which may appear of record as alien against the Property shall be settled and satisfied by Seller if and when it is judicially determined to be valid, and Seller hereby indemnifies the Buyer for all loss arising out of Seller's failure to have a judgment lien so settled and satisfied. All outstanding assessments levied or due in the year the deed is delivered shall be paid by Buyer. 13. Transfer Taxes--Buyer agrees to purchase, affix and cancel any and all documentary stamps in the amount prescribed by statute, and to pay any and all required transfer taxes, excise taxes and any and all fees incidental to recordation of the conveyance instrument. In the event of Buyer's failure to do so, if the Seller shall be obligated so to do, the Buyer shall be liable for all costs, expenses and judgments to or against the Seller, including all of Seller's legal fees and expenses and same shall constitute alien against the Property to be conveyed until paid by the Buyer. 14. Notices and Demands--All notices, demands, payments and other instruments required or permitted to be given or served by either party shall be in writing and deemed to have been given or served by either party if sent by registered or certified mail, addressed to the other party at the address shown herein. 15. Governmental Approval--If the approval of any governmental agency is required for the sale of the Property, it is understood and agreed that this Agreement is subject thereto and that both parties shall use their best efforts to obtain such approval. The closing date shall be extended for such period as may be required to obtain such approval. In the event said approval cannot be obtained, either party may terminate this Agreement without liability to the other, except that Seller shall return the deposit to Buyer. In the event a city, county, or other governing authority wherein said Property is located requires a survey or plat or has a subdivision ordinance, the Buyer shall obtain such survey or plat, all at Buyer's sole cost and expense. The survey or plat shall be submitted by Buyer to Seller for review and approval prior to recording and within a period of forty five (45) days after the date of Seller's acceptance of this offer. 16. Deposit Authorization--Buyer hereby authorizes Seller to cash any checks that may be delivered to Seller as a deposit or option payment, and to take the amount of any such deposit or option payment into its accounts, with the understanding that it will not constitute acceptance of this offer; provided, however, that such authorization is given with the understanding that in the event the offer is not accepted the Seller agrees to refund the amount of any deposit in full. 17. Rail Service--Nothing in this Agreement shall prevent Seller from discontinuing service over any railroad line or lines by which rail service may be provided to the Property. 18. Proration —Prepaid rentals, utilities, and other income or fees attributable to the Property interests to be transferred by Seller to Buyer, under the terms of this Agreement shall be prorated between Seller and Buyer in such manner as to allocate to Buyer all income and expenses attributable to the Property that has been received, or for which bills have been received, on or prior to the date of Closing; and to allocate to Buyer all income and expenses attributable to the Property that is received, or for which bills are received, after the dated of Closing. 4 Seller shall be responsible for all real estate taxes applicable to the Property through the date of Closing. Buyer shall be responsible for any taxes applicable to Buyer as owner of the Property after the date of Closing. 20. Assignments — Seller hereby assigns to Buyer, effective on the date of Closing, subject to all terms and conditions set forth in this Agreement, and/or any agreement assigned by Seller to Buyer by the terms of this Agreement, all assignable rights and obligations of Seller to the extent such rights and obligations are effective after Closing, to the extent that they are related to the Property and are set forth in any agreement identified on Exhibit B attached hereto and made a part hereof. Buyer hereby accepts the assignment of all such rights and obligations of Seller, effective on the date Closing, in accordance with the terms of each applicable agreement and the terms of this Agreement. Seller, and not Buyer shall be responsible for performing all of Seller's duties in assigned agreements which are required to be performed on or before the date of Closing. Buyer, and Seller, shall be responsible for performing all assigned duties in assigned agreements which are required to be performed after the date of Closing. Buyer acknowledges that Seller reserves, and Buyer does not acquire, all rights and obligations set forth in any agreement identified in Exhibit B to the extent those rights or obligations are related to property owned by Seller after Closing. If any contract is related to the Property and is intended to be assigned by Seller to Buyer, in whole or in part, but inadvertently is not identified in Exhibit B, Seller promptly shall provided to Buyer a copy of any such contract immediately upon locating it, and Buyer, as of the date of its receipt of such copy, shall assume the rights and obligations in such contract to the extent they are related to the Property. Seller believes that Exhibit B is a complete or nearly complete list of all contracts related to the Property that are intended to be assigned by Seller to Buyer. Buyer shall make no claim against Seller arising out of any failure to obtain a consent to assignment from any party to any agreement assigned by Seller to Buyer, in whole or in part. Seller does not believe that any consents to such assignments are necessary. 21. Complete Agreement -- This Agreement contains the entire Agreement between Seller and Buyer with respect to the Property and, except as set forth in this Agreement, neither Seller, nor Seller's agents or employees, have made any agreements, covenants, warranties or representations of any kind or character, express or implied, oral or written, with respect to the Property. ADDENDUM PROVISIONS 22. This Agreement relates only to land. Unless otherwise herein provided, any conveyance shall exclude Seller's railroad tracks and appurtenances thereto, Seller's buildings and any other improvements on the Property, all of which may be removed by Seller within 90 days following conveyance of the Property. and if not removed, shall be deemed abandoned by the Seller without obligation on the Seller's part and shall thereafter be and become the Property of the Buyer in place. 23. A reservation to Seller of all coal, oil, gas, casing-head gas and all ores and minerals of every kind and nature including sand and gravel underlying the surface of the Property, together with the full right, privilege and license at any and all times to explore, or drill for and to protect, conserve, mine, take, remove and market any and all such products in any manner which will not damage structures on the surface of the Property, together with the right of access at all times to exercise said rights. 5 24. Seller is not a foreign person as the term is used and defined in Section 1445 of the Internal Revenue Code of 1954, as amended and the regulations promulgated thereunder. Seller shall, upon request of Buyer, complete an affidavit to this effect and deliver it to Buyer on or before closing of said sale. 25. It is specifically agreed and understood by the parties hereto that the Buyer shall, before November 15, 2000, accept and sign this Real Estate Purchase and Sale Agreement and return same together with the $ NO deposit named herein to Seller. Failure of the Buyer to perform within the time restrictions will render this Agreement null and void in its entirety. 26. Buyer has been allowed to make an inspection of the property and has knowledge as to the past use of the property. Based upon this inspection and knowledge, Buyer is/are aware of the condition of the property and BUYER IS AWARE THAT BUYER IS PURCHASING THE PROPERTY ON AN "AS IS WITH ALL FAULTS" BASIS WITH ANY AND ALL PATENT AND LATENT DEFECTS, INCLUDING THOSE RELATING TO THE ENVIRONMENTAL CONDITION OF THE PROPERTY, AND THAT BUYER IS/ARE NOT RELYING ON ANY REPRESENTATION OR WARRANTIES, EXPRESS OR IMPLIED, OF ANY KIND WHATSOEVER FROM SELLER AS TO ANY MATTERS CONCERNING THE PROPERTY, including the physical condition of the property and any defects thereof, the presence of any hazardous substances, wastes or contaminants in, on or under the property, the condition or existence of any of the above ground or underground structures or improvements in, of or under the property, the condition of title to the property, and the leases, easements or other agreements affecting the property. Buyer is aware of the risk that hazardous substances and contaminants may be present on the property, and indemnifies, holds harmless and hereby waives, releases and discharges forever Seller from any and all present or future claims or demands, and any and all damages, loss, injury, liability, claims or costs, including fines, penalties and judgments, and attorney's fees, arising from or in any way related to the condition of the property or alleged presence, use, storage, generation, manufacture, transport, release, leak, spill, disposal or other handling of any hazardous substances or contaminants in, on or under the property. Losses shall include without limitation (a) the cost of any investigation, removal, remedial or other response action that is required by any Environmental Law, that is required by judicial order or by order of or agreement with any governmental authority, or that is necessary or otherwise is reasonable under the circumstances, (b) capital expenditures necessary to cause the Seller remaining property or the operations or business of the Seller on its remaining property to be in compliance with the requirements of any Environmental Law, (c) Losses for injury or death of any person, and (d) Losses arising under any Environmental Law enacted after transfer. The rights of Seller under this section shall be in addition to and not in lieu of any other rights or remedies to which it may be entitled under this document or otherwise. This indemnity specifically includes the obligation of Buyer to remove, close, remediate, reimburse or take other actions requested or required by any governmental agency concerning any hazardous substances or contaminants on the property. This section shall survive closing. The term "Environmental Law" means any federal, state or local statute, regulation, code, rule, ordinance, order, judgment, decree, injunction or common law pertaining in any way to the protection of human health or the environment, including without limitation, the Resource Conservation and Recovery Act, the Comprehensive Environmental Response, Compensation and Liability Act, the Toxic Substances Control Act, and any similar or comparable state or local law. 6 The term "Hazardous Substance" means any hazardous, toxic, radioactive or infectious substance, material or waste as defined, listed or regulated under any Environmental Law, and includes without limitation petroleum oil and any of its fractions. 27. Sale of the premises shall include any and all of Seller's buildings on the Property in an "AS-IS" condition. Buyer has fully examined and inspected the said building(s) and has in all respects accepted and approved the same and any and all parts and appurtenances thereof and thereto and understands that Seller has made no representations or warranties respecting the nature or condition of said building(s) or any of its parts and appurtenances, Buyer agrees to assume all obligations thereto, including dismantling costs if the Buyer decides to remove said structure. 28. The parties hereto acknowledge the possible existence of asbestos or lead material in the cooler room and ceiling and floor tile and plumbing and paint on interior or exterior walls. The parties further acknowledge the possibility that asbestos or lead material may exist in other portions or locations in the building structures located on the subject Property. Buyer does hereby covenant and agree to purchase the subject building structures and premises in "AS IS" condition and specifically subject to the possible existence or presence of asbestos or lead material as referred to herein. Buyer specifically covenant and agree that Seller shall not be responsible or liable for the existence of any asbestos or lead material or removal of such material from the building structures or premises to be covered herein. Buyer specifically acknowledge and agree that they shall not make any claim or assert any cause of action against Seller as a result of the existence or presence of asbestos or lead material. Buyer does hereby release Seller from and against any claim, liability, cause of action or otherwise arising out of or in any manner connected with the presence or existence of asbestos or lead material located anywhere within the subject building structures or premises to be conveyed herein including, but not limited to, any costs incurred by Buyer in the removal of such asbestos or lead material. 29. Notwithstanding, anything herein, this sale shall close no later than November 16, 2000. Seller shall have the right to extend the closing, at Seller's sole judgment. 30. The parties agree the terms, conditions, and addendum provisions of this agreement shall survive closing. 7 BUYER MUST CLEARLY SET FORTH FULL AND CORRECT NAMES OR PARTY OR PARTIES TO WHOM TITLE WILL BE CONVEYED, THEIR ADDRESS, THEIR RELATIONSHIP, IF ANY, AND WHETHER CONVEYANCE IS TO BE IN JOINT TENANCY OR OTHERWISE, AND IF A COMPANY, WHETHER IT IS A PARTNERSHIP, TRUST, TRUSTEE OR CORPORATION, ADDRESS OF PRINCIPAL OFFICE AND STATE OF INCORPORATION. This offer consisting of 8 pages, and by said Exhibit "A" and Exhibit B attached hereto, is made a part hereof, has been made, signed and sealed in duplicate by the Buyer this day of , 2000. Buyer's name as it is to appear on deed: CITY OF YELM (PRINTED/TYPED) BY X NAME(PRINTED/TYPED) SIGNATURE Washington TITLE (OR 2ND SIGNATURE IF PARTNERSHIP) STATE OF INCORPORATION 105 Yelm Avenue West P. O. Box 479 Yelm, Washington 98597 ADDRESS OF BUYER CITY, STATE AND ZIP CODE TELEPHONE NO. (INCLUDING AREA CODE) The foregoing offer is Accepted by Seller The Burlington Northern and Santa Fe Railway this day of , 2000. Company BY TITLE 8 Exhibit "A" 10/27/2000 YrAI' q / p ❑ sY$ yM' 7M / arc �Nbr 1 \\ !M-F"YX \\ we`.N0.2m 15 dMt�L a wovr� rrr\` VAIV is \ Wq J.t dN�f/ .r rs•.v rr.� a�sr 1N / E PAGE: 1 KEYWORD SEARCH RESULTS REPORT Exhibit "B„ DATE: 10/30/00 SRESULT.FMT BURLINGTON NORTHERN & SANTA FE RWY. CO. TIME• 09:43:25 EXPIRATION OR CONTRACT TERMINATION TYPE CONTRACT NO. CONTRACTOR / DESCRIPTION DATE DATE LOCATION CODE NP 00007349.00 CENTRALIA, CITY OF 06/23/1929 WA, YELM GV-GN/BNRR PERMANENT SIPHON UNDERCROSSING, MP. 24+716; ASSIGNED TO THE CITY OF YELM, WA; -LAW-NO.: #15024 BN 00002044.00 WASHINGTON, STATE OF 06/16/1972 WA, YELM GV-XS/BNRR IMPROVE CROSSING SIGNALS, MP. 25+2973; ASSIGNED TO THE CITY OF YELM, WA; BN 00002358.00 WASHINGTON, STATE OF 08/28/1972 WA, YELM GV-XS/BNRR INTERTIE HWY. TRAFFIC SIGNALS; BN 00003302.00 MCLINS, INC. 06/11/1973 WA, YELM ID-IT/BNRR CMO&O INDUSTRIAL TRACK & CROSSING, MP. 25+723; ASSIGNED TO THE CITY OF YELM, WA; BN 00007218.00 HARSCO CORP. 12/30/1976 WA, YELM ID-IT/BNRR M&O INDUSTRIAL SPUR TRACK, MP. 24+4010; ASSIGNED TO THE CITY OF YELM, WA; NP 00017167.00 WESTERN FARMERS ASSOC 11/28/1962 WA, YELM ID-IT/BNRR -LAW-NO.: #24496 NP 00095877.00 OLYMPIC PIPELINE CO. WA, YELM PM-LO/BNRR NP 00095879.00 OLYMPIC PIPELINE CO. WA, YELM PM-LO/BNRR BN 00043187.00 RAILS TO TRAILS CONSERVANCY 02/11/1994 WA, VARIOUS PM-PS/BNRR SALE OF ALL RAIL, ETC., INCLUDING ALL TRACK MATERIALS, BRIDGES, CULVERTS & APPURTENANCES ALONG THE ROW; S 00001496.00 WASHINGTON STATE OF 07/07/1972 WA, YELM PM-PS/BNRR EASEMENT FOR ROADWAY CX 86016044.00 PAISLEY, PATRICIA ANN & MARKUS, LEWIS H. 06/16/1986 WA, YELM PR-PC/BNRR M&O ROAD CROSSING UNDER RR. BRIDGE NO. 22.1, CANCELS LC #205343; ASSIGNED TO THE CITY OF YELM, WA; CX 89016010.00 BOSEQUETT JERRY L 04/14/1989 WA, YELM PR-PC/BNRR M&O PRIVATE ROAD CROSSING, SURVEY STATION 1445+10, MP. 27.38 LC 00219556.00 NORTHWEST EGG SALES INC 11/01/1975 WA, YELM PR-PC/BNRR PRVT GRD XING STA 476+10 LC 00221899.00 YELM, CITY OF 06/16/1976 WA, YELM PR-PL/BNRR WATER PIPELINE CROSSING, MP. 25+917; ASSIGNED TO THE CITY OF YELM, WA; NP 00095882.00 OLYMPIC PIPELINE CO. 05/01/1965 WA, YELM PR-PL/BNRR LONGITUDINAL PETROLEUM PIPELINE; PAGE: 1 KEYWORD SEARCH RESULTS REPORT Exhibit 'B" DATE: 10/30/00 SRESULT.FMT BURLINGTON NORTHERN & SANTA FE RWY. CO. TIME: 09:55:49 EXPIRATION OR - CONTRACT TERMINATION TYPE CONTRACT NO. CONTRACTOR / DESCRIPTION DATE DATE LOCATION CODE NP 00097220.00 YELM, TOWN OF 06/01/1966 WA, YELM PR-PL/BNRR 2 WATER PIPELINE CROSSINGS, MP. 25+917 & MP. 25+3965; ASSIGNED TO THE CITY OF YELM, WA; NP 00097261.00 WASHINGTON NATURAL GAS CO. 07/01/1966 WA, YELM PR-PL/BNRR NATURAL GAS PIPELINE CROSSING, MP. 25+875; ASSIGNED TO THE CITY OF YELM, WA; PX 90016037.00 SLOPAK JAMES L 02/01/1990 WA, YELM PR-PL/BNRR EXISTING 140 FEET LONGITUDINAL SEWER PIPELINE, SURVEY STATION 1353+91 TO 1355+31, MP. 25.65 TO 25.68, LINE SEGMENT 0400 PX 92016225.00 YELM, CITY OF 12/01/1992 WA, YELM PR-PL/BNRR PIPELINE CROSSING, LS. 400, MP. 24.14; ASSIGNED TO THE CITY OF YELM, WA; PX 92016226.00 YELM, CITY OF 12/01/1992 WA, YELM PR-PL/BNRR SEWER PIPELINE CROSSING, LS. 400, MP. 25.16; ASSIGNED TO THE CITY OF YELM, WA; LC 00210734.00 YELM TELEPHONE CO. 06/01/1973 WA, YELM PR-PW/BNRR OHD TELEPHONE WIRE CROSSING, MP. 25+854; ASSIGNED TO THE CITY OF YELM, WA; LC 00214860.00 YELM TELEPHONE CO 08/01/1974 WA, YELM PR-PW/BNRR PHONE CABLE XING MP 25+3303 FT LC 00238157.00 CABLE TV PUDGET SOUND, INC.; 07/01/1981 WA, YELM PR-PW/BNRR ASSIGNED TO VIACOM CABLEVISION, INC.; OHD TV CABLE CROSSING, MP. 25+3002; ASSIGNED TO THE CITY OF YELM, WA; NP 00040855.00 THURSTON COUNTY UTILITIES CO. 12/20/1923 WA, YELM PR-PW/BNRR OHD ELECTRIC WIRE LINE CROSSING, MP. 25+900; ASSIGNED TO THE CITY OF YELM, WA; NP 00066454.00 PUGET SOUND POWER & LIGHT CO. 11/15/1946 WA, YELM PR-PW/BNRR ELECTRIC WIRE LINE, MP. 25+1705; ASSIGNED TO THE CITY OF YELM, WA; NP 00098040.00 PUGET SOUND POWER & LIGHT CO. 01/15/1967 WA, YELM PR-PW/BNRR OHD ELECTRIC WIRE LINE CROSSING, 25+178; ASSIGNED TO THE CITY OF YELM, WA; PX 85016048.00 YELM TELEPHONE CO. 07/08/1985 WA, YELM PR-PW/BNRR UGD LONGITUDINAL TELEPHONE CABLE, MP. 24+4235 & MP. 25+743; PARTIAL ASSIGNMENT TO THE CITY OF YELM, WA; PX 88016117.00 PUGET SOUND POWER & LIGHT CO 09/30/1988 WA, YELM PR-PW/BNRR WIRE LINE CROSSING, SURVEY STATION 1444+90, MP. 27.38 Exhibit "B" PAGE: 2 KEYWORD SEARCH RESULTS REPORT DATE: 10/30/00 SRESULT.FMT BURLINGTON NORTHERN & SANTA FE RWY. CO. TIME: 09:55:50 EXPIRATION OR CONTRACT TERMINATION TYPE CONTRACT NO. CONTRACTOR / DESCRIPTION DATE DATE LOCATION CODE PX 89016004.00 YELM TELEPHONE CO 01/15/1989 WA, YELM PR-PW/BNRR OVERHEAD COMMUNICATION (TELEPHONE) WIRE CROSSING, SURVEY STATION 1786+70, MP. 33.85 PX 92016125.00 PUGET SOUND POWER & LIGHT CO 08/17/1992 WA, YELM PR-PW/BNRR TWO WIRE LINES, SURVEY STATION 1779+80, MP. 33, LINE SEGMENT 0400 PX 93016233.00 PUGET SOUND POWER & LIGHT 11/16/1993 WA, YELM PR-PW/BNRR OHD ELECTRIC WIRE LINE, LS. 400, MP. 24.97; CANCELS PX #93016150; ASSIGNED TO THE CITY OF YELM, WA; PX 94020688.00 YELM TELEPHONE CO. 12/23/1994 WA, YELM PR-PW/BNRR UGD CABLE CROSSING, LS. 400, MP. 24.98; ASSIGNED TO THE CITY OF YELM, WA; PX 94022121.00 YELM TELEPHONE 12/23/1994 WA, YELM PR-PW/BNRR UNDERGROUND CABLE PX 95021190.00 VIACOM CABLE 11/08/1995 WA, YELM PR-PW/BNRR UGD WIRE LINE CROSSING, LS. 400, MP. 25.15; ASSIGNED TO THE CITY OF YELM, WA; BF 00010856.00 PUGET SOUND ENERGY, INC. 06/15/1999 WA, YELM PR-PW/BNSF ELECTRIC WIRE LINE, LS. 52, MP. 23; ASSIGNED TO THE CITY OF YELM, WA; -CAT-NO.: 501101 w P w THE BURLINGTON NORTHERN AND SANTA FE RAILWAY COMPANY i REAL ESTATE PURCHASE AND SALE AGREEMENT yy Property Management P. O. Box 961050 Fort Worth,Texas 76161-0050 October 30, 2000 BUYER'S OFFER 1. The undersigned, hereinafter called "Buyer", offers to purchase from, The Burlington Northern and Santa Fe Railway Company herein after called "Seller", all of Seller's right, title and interest in and to that parcel of land situated in or near the city of Yelm, County of Thurston and State of Washington, shown hatched black on map marked Exhibit "A", dated October 27, 2000, attached hereto and made a part hereof(said parcel of land being hereinafter called "the Property") at the price and upon the terms and conditions as follows. PURCHASE PRICE AND PAYMENT 2. Seller may approve or disapprove this Agreement for any reason whatsoever, in Seller's sole and absolute discretion, whether reasonable or unreasonable or whether arbitrary or capricious, subject to the approval of this Agreement by Seller, Buyer agrees to pay to Seller the purchase price of THREE HUNDRED THOUSAND AND NO HUNDRETHS ($300,000.00) for Property, of which the amount of NONE hereinafter called the "deposit", is paid to Seller, or Seller's assignee, to be applied on the purchase price. Said deposit shall be refunded to Buyer if this offer is not accepted by Seller within forty five (45) days from the date of said offer. The balance of said purchase price shall be paid in cash or by certified check to Seller or wire transfer to Seller's account as designated by Seller at the time Seller's deed to said property is delivered to Buyer. Notwithstanding anything set forth herein to the contrary, the balance of the purchase price shall be due ten (10) days from notice that Seller's deed is ready for delivery. Delivery of said deed shall be made at Seller's above stated office TAX-DEFERRED EXCHANGE 3. Seller reserves the right to assign this Agreement to Apex Property & Track Exchange, Inc. ("Apex"). Apex is a qualified intermediary within the meaning of Section 1031 of the Internal Revenue Code of 1986, as amended, and Treas. Reg. § 1.1031(k)-1(g), for the purpose of completing a tax-deferred exchange under said Section 1031. Seller shall bear all expenses associated with the use of Apex, or necessary to qualify this 1 transaction as a tax-deferred exchange, and, except as otherwise provided herein, shall protect, reimburse, indemnify and hold harmless Buyer from and against any and all reasonable and necessary additional costs, expenses, including, attorneys fees, and liabilities which Buyer may incur as a result of Seller's use of Apex or the qualification of this transaction as a tax-deferred transaction pursuant to Section 1031. Buyer shall cooperate with Seller with respect to this tax-deferred exchange, and upon Seller's request, shall execute such documents as may be required to effect this tax-deferred exchange. CONVEYANCE 4. Seller shall convey or caused to be conveyed, all of Seller's right, title and interest in the premises, if any, to Buyer by Quitclaim Deed subject to the exceptions and reservations, whether or not of record and in accordance with the other terms conditions and reservations contained herein. Buyer shall, as soon as possible after acceptance of this offer, advise the Seller of Buyer's intent to have the premises surveyed. In the event the Seller's description of the premises used in the Deed and the use of an Exhibit map for reference in the Deed is not acceptable to the Buyer, the Buyer shall so advise the Seller of their objections of said description and within 15 days thereof, the Buyer shall, at their expense, arrange for a survey of the premises to be furnished to the Seller. ACCEPTANCE CONSTITUTES AGREEMENT 5. This offer of the Buyer to purchase the premises when duly accepted and signed by the Seller shall constitute the entire agreement between the parties for the sale and purchase of the premises and shall bind and inure to the benefit of the Seller, the Buyer, and their heirs, executors, administrators, successors and assigns. LIQUIDATED DAMAGES AND SPECIFIC PERFORMANCE 6. Time is of the essence of this contract. If the Buyer shall fail to perform this contract within the time limits herein specified, Seller may retain the deposit as liquidated damages, not as a penalty or forfeiture, and declare this contract terminated, or Seller may proceed to have this contract specifically enforced. SUCCESSORS IN INTEREST 7. Wherever referred to herein, the term Buyer shall imply, mean and apply to the Buyer, its successors, assigns, heirs, executors, administrators, or designees, who shall be severally and collectively liable for any and all performance hereunder. Wherever referred to herein the term Seller shall imply, mean and apply to the Seller, its successors, assigns, heirs, executors, administrators, or designees, who shall be severally and collectively liable for any and all performance hereunder. THIS OFFER IS AND THE CONVEYANCE OF THE PROPERTY SHALL BE SUBJECT TO THE FOLLOWING TERMS, CONDITIONS AND RESERVATIONS. 8. Easements--A reservation of the necessary right of way, to be determined by Seller, for the continued maintenance, operation and use of all existing driveways, roads, utilities, tracks, wires and easements of any kind whatsoever on the Property whether owned, operated, used or maintained by the Seller, Seller's Licensees or 2 other third parties and whether or not of record, and for the installation, construction and situation of facilities necessary to or beneficial for, the operation of Seller's railroad, with reasonable right of entry for the repair, reconstruction and replacement thereof, without limitation as a result of any further enumeration herein. In addition, reservation of a non-exclusive easement for the construction, maintenance and operation of one or more pipelines or fiber optic lines and any and all communications facilities as presently located or may be located in the future on Property. OTHER TERMS AND CONDITIONS 9. Title Defects--If, within the ten (10) day period following Seller's notice to Buyer that Seller's deed is ready for delivery, Buyer notifies Seller that Buyer has requested evidence of title to the Property, Buyer shall furnish to Seller at Buyer's expense such evidence of title within thirty (30) days of said notice from Buyer in the form of an abstract of title or a title commitment, and a written statement specifying the matters or defects other than said permitted exceptions and reservations and other than such usual exceptions contained in Owner's policies and the matters to which this sale is subject by the terms hereof, the time of payment of the balance of the purchase price shall be extended for a period of sixty (60) days after the receipt of said evidence of title and statement. If Seller is unable or unwilling to cure such matter or defects within said sixty (60) day period, and Buyer is unwilling to accept the deed subject to such matter or defects then either party may terminate this Agreement by serving written notice of termination upon the other party within fifteen (15) days thereafter and all further rights and liabilities under this Agreement shall cease and terminate except that Seller shall return the deposit to Buyer and Seller shall reimburse Buyer for the actual amount paid by Buyer, if any, to an abstractor for an abstract of title or to a title company for a title report (but not for title insurance), provided that said abstract or title report shall be delivered and assigned to Seller. Otherwise, Buyer shall remit to Seller, or Seller's assignee, the purchase price within ten (10) days or at closing, whichever is earlier. 10. Real Estate Commissions--If any real estate broker or agent can establish a valid claim for commission or other compensation as a result of Buyer having used their services in connection with the purchase of the Property, all such commission or other compensation shall be paid by Buyer. Seller shall not be liable for any real estate commissions or finders fees to any party with respect to the sale of the Property, except a commission to Catellus Management Corporation ("Broker") pursuant to a separate agreement. On and prior to the Date of this Agreement, Broker has advised, and hereby advises, Buyer, by this writing and by other means, and Buyer hereby acknowledges that Buyer has been so advised, that the Broker is acting as the agent of the Seller, with the duty to represent Seller's interest, and Broker is not the agent of the Buyer. If a policy of title insurance is to be obtained, Buyer should obtain a commitment for title insurance which should be examined prior to closing by an attorney of Buyer's choice. Prior to the execution of this Agreement, Broker has advised and hereby advises the principals of this transaction, that this Agreement is binding on them, and the principals hereby acknowledge that they have been so advised. 11. Liens of Seller's Mortgages--Seller shall deliver to Buyer, who shall place of record, good and sufficient releases of the liens of Seller's mortgages, where required under the terms of any mortgage on the Property, within one hundred eighty (180) days after the first meeting of Seller's Board of Directors held after the conveyance contemplated herein. In the event Seller shall be unable to obtain said releases for any reason, Seller shall have the right to terminate this Agreement upon serving written notice of termination upon Buyer within fifteen (15) days thereafter, and both parties shall thereupon be released and discharged from all liabilities and obligations hereunder, except that Seller shall repay to Buyer any and all sums therefore paid by Buyer to Seller 3 pCIIUU U1 WILY 11VG l'Y✓f uayO ----1....__-.. -_ ___ 16. Deposit Authorization--Buyer hereby authorizes Seller to cash any checks that may be delivered to Seller � • � ._ a city of Yelm a � 105 Yelm Avenue West YLM P.O. Box 479 WA�MINOTON Yelm, Washington 98597 (360) 458-3244 VIA USPS EXPRESS MAIL October 31, 2000 Mr. Dennis W. Wilson, Esq. P.O. Box 6039 Wilmette, Illinois 60091-6039 RE: Roy-Yelm, Washington Rail Corridor Donation Contract Dear Mr. Wilson: Enclosed you will find a fully executed"Agreement for Donation of Certain Assets, Rights and Obligations of The Burlington Northern and Santa Fe Railway Company to The City of Yelm". My understanding is that the City will receive the purchase and sale agreement soon via overnight mail, with a planned closing date of November 16, 2000. Steve Day, Betts Patterson& Mines, P.S. will take care of filing the Surface Transportation Board documents on behalf of the City of Yelm. We thank you for your continued support of this transaction. Please contact me at 360-458-8405 if you have any further questions. Sincerely: dy" Shell�A. dger City Administrator cc: Rich Batie, BNSF (via USPS Express Mail) Jerry Johnson, BNSF Mike Roper, BNSF Mayor Kathryn M. Wolf Joe Williams, Chair,Yelm Rail Advisory Committee Steve Day, Betts Patterson& Mines, P.S. (via USPS Express Mail) AAA V i•e.ea rAA 19 002 DennisK yajsm P. O. Box 6039 Atbx Wilmette, IL 60091-6039 �W (841)864-0366 Phone (841)864-0389 Fax October 1.9,2000 VIA OVERNIGHT MAIL Ms. Shelly Badger Yelm City Administrator City of Yelm 105 Yelm Avenue West P.O. Box 479 Yelm, WA 98597 RE: Roy-Yelm, Washington Rail Corridor Donation Contract Dear Ms_ Badger: This responds to your letter received yesterday. The enclosed revised contract corrects the two typos that you pointed out in Sections 9 and 6 (dx5). BNSF cannot agree to allow any party a right of first refusal to acquire the Roy to Lakewood, Washington rail line. This could limit BNSF's options and the value of the rail corridor should BNSF decide to sell it some time in the f n:ue. Rich Batie directed me to tell you that if BNSF decides to sell this rail corridor in the future it will keep in mind the City of Yelm's interest in purchasing the corridor. Very truly yours, Dennis W. Wilson Attorney for The Burlington Northern and Santa Fe Railway Company DWW/jbs Enclosures cc: Mr. Steve Day(via overnight mail w/enclosure) Mr. Jerry Johnson (via a-mail,w/enclosures) Mr. Rich Batie LL Mr. Mike Roper N:Uaw,mkgldww\y2kieuerr\I 019badga governea Dy MIS Agreement. A and binding obligations of BNSF which are enforceable against BNSF in accordance with their terms, except to the extent enforcement may be limited by bankruptcy, insolvency or reorganization law; (5) There is no provision in the Certificate of Incorporation or By-Laws of BNSF which prohibits the execution of this Agreement or consummation of the transactions covered by this Agreement; and (6) No representation or warranty by BNSF in this Agreement contains any untrue statement of a material fact, nor omits any material fact that is necessary to make any representation or warranty not materially misleading. (b) City hereby represents and warrants to BNSF, and all successors and assignees of BNSF, the following facts, as of the date of this Agreement and as of the date of Closing, except where specifically noted to be as of the date of Closing only: (1) City is municipality duly organized, validly existing and in good standing under the laws of the State of Washington; (2) City is a qualified donee within the meaning of Section 170(c)(1) of the Internal Revenue Code of 1986, as amended; (3) City has all requisite business authority to purchase BNSF's rights and properties which are conveyed to City by this Agreement; to enter into this Agreement; to conduct rail freight transportation business on the Rail Line (as of the date of Closing only); and to perform all of City's obligations under this Agreement; (4) The execution of this Agreement and consummation of the transactions which 6 are a part of this Agreement have been duly authorized and approved by all necessary actions by City, and immediately upon execution of this Agreement by City's authorized representative, all of City's obligations set forth in or referenced in this Agreement shall constitute legal, valid and binding obligations of City, or City's successors or assignees, which obligations are enforceable against City in accordance with their terms, except to the extent enforcement may be limited by applicable bankruptcy, insolvency, reorganization or other laws affecting the enforcement of creditors' rights generally and the application of general principles of equity; (5) There is no provision in the Charter of City, or any applicable law,ordinance or regulation, that prohibits the City's execution of this Agreement or it's consummation of the transactions covered by this Agreement; (6) As of the date of Closing only, City shall have obtained all legal authority which is necessary to enable City lawfully to conduct rail freight transportation operations over the Rail Line as a common carrier, commencing at 12:01 a.m. on the day following the date of Closing; and (7) No representation or warranty by City in this Agreement contains any untrue statement of a material fact, nor omits any material fact that is necessary to make any representation or warranty not materially misleading. 5. Inspection and Condition of the Rail Line. (a) By signing this Agreement, City acknowledges that City has inspected the 7 Rail Line, including all improvements and structures on the Rail Line, and all land to be conveyed as part of this transaction. City further acknowledges that: (i) except as set forth in this Agreement, no representation has been made by BNSF to City concerning the state or condition of the Rail Line, or the age of any improvements on the Rail Line; (ii) City has not relied upon any statement or declaration of BNSF,oral or in writing, as an inducement to entering into this Agreement, other than as stated in this Agreement; and (iii) all terms of this transaction are set forth in this Agreement. (b) BNSF HEREBY DISCLAIMS ANY REPRESENTATION OR WARRANTY, WHETHER EXPRESS OR IMPLIED, AS TO THE DESIGN OR CONDITION OF THE RAIL LINE, ITS MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE, THE QUALITY OF THE MATERIAL OR WORKMANSHIP OF THE RAIL LINE, OR THE CONFORMITY OF THE RAIL LINE TO ITS INTENDED USES. BNSF SHALL NOT BE LIABLE TO CITY FOR ANY INCIDENTAL OR CONSEQUENTIAL DAMAGES (INCLUDING STRICT LIABILITY IN TORT) WITH RESPECT TO THE DESIGN, CONDITION, QUALITY, SAFETY, MERCHANTABILITY,OR FITNESS FOR ANY PARTICULAR PURPOSE, OF THE RAIL LINE, OR THE CONFORMITY OF THE RAIL LINE TO ITS INTENDED USES. BNSF DONATES AND CONVEYS, AND CITY ACCEPTS, THE RAIL LINE IN "AS IS, WHERE IS" AND "WITH ALL FAULTS" CONDITION, AND SUBJECT TO ALL LIMITATIONS ON THE RIGHTS, INTEREST AND TITLE OF BNSF TO THE PROPERTY COMPRISING THE RAIL LINE. 6. Liability and Indemnity. (a) Cooperation in Defense. City and BNSF agree that, following the date of Closing, 8 containing any untrue or materially misleading statement of a material fact, or omitting any material fact that is necessary to prevent that representation or warranty from being materially misleading, City shall be responsible for, and shall indemnify, defend and hold harmless BNSF fully against, regardless of any negligence of BNSF, all Losses which: (i) arise out of City's ownership or operation of the Rail Line after 12:01 a.m. on the day following the date of Closing; (ii) result from any breach by City of any of its representations or warranties set forth in Paragraph 4(b) of this Agreement, or any failure by City to perform any of its obligations under this Agreement; (iii) result from claims of third parties caused by City's nonperformance or required performance under any contract, lease, permit, license, easement or commitment relating to the Rail Line, if that contract, lease,permit, license, easement or commitment is identified in Exhibit C, or City has notice by BNSF of it and such contract, lease, permit, license, easement or commitment was intended to be assigned to, and assumed by, City at Closing; and (iv) are proximately caused, to any extent, by the activities, operations or presence of City or any of its agents, contractors, representatives,permittees or invitees, or any of their employees, who are on or near the Rail Line. (d) Environmental Liability and Indemnity. (1) City's Acknowledgments with Respect to the Rail Line. City acknowledges that BNSF has provided City with full access to inspect the Rail Line. 10 (2) BNSF's Environmental Liability and Indemnity. Notwithstanding any other liability or indemnification provision in this Agreement, BNSF shall be responsible for, and shall indemnify, defend and hold harmless City (including its successors and assignees)fully against, Losses incurred due to any claim, demand or litigation, to the extent it is based on any violation or requirement of any applicable environmental statute, ordinance, rule, regulation, order or decision (collectively, "Environmental Laws"), and the Losses arise from: (i) any chemical, material or substance that is now, or at the time in question is, regulated or governed by any law, the release of which creates any liability under any applicable law; or(ii)any other material which, when released, would cause ecological damage in violation of any applicable Environmental Laws (items described by (i) or (ii) above are referenced hereinafter as "Hazardous Materials")located on,under or near the Rail Line,to the extent that such Losses: (A) were caused by one or more acts or omissions of BNSF that occurred prior to the date of Closing, and that could not have been discovered by City in a reasonable inspection of the Rail Line; and (B) result from any written claim made by a party other than City, ("Claims") that is delivered to BNSF within one year following the date of Closing; and (C) exceed$10,000 in the aggregate in that year. (3) City's Environmental Liability and Indemnity. As a condition of BNSF's 11 donation of the Rail Line, and notwithstanding the liability and indemnity provisions set forth in Paragraph 6(c) of this Agreement, City shall be responsible for, and shall indemnify, defend, and hold harmless BNSF fully against, regardless of any negligence of BNSF, Losses incurred due to any claim, demand or litigation, to the extent it is based on any violation or requirement of any applicable environmental statute, ordinance, rule, regulation, order or decision, and the Losses arise from any Hazardous Materials located on, under or near the Rail Line, to the extent that such Losses either: (A) resulted from any cause or causes that were not the result of one or more acts of BNSF that occurred prior to the date of Closing which could not have been discovered by City in a reasonable inspection of the Rail Line; or (B) were caused by one or more acts of BNSF that occurred prior to the date of Closing which could not have been discovered by City in a reasonable inspection of the Rail Line, and result from a Claim delivered to BNSF within one year following the date of Closing, but only up to $10,000 in the aggregate in that year; or (C) do not result from a Claim that is delivered to BNSF within one year following the date of Closing. (4) Arbitration of Allocation of Liability Between City and BNSF. Any dispute between City and BNSF as to allocation between them of Losses for which 12 both City and BNSF are responsible under the terms of this Paragraph 6 shall be settled by binding arbitration in accordance with the rules of the American Arbitration Association, or with the rules of such other alternative dispute resolution service as BNSF and City may agree. (5) City To Comply With Hazardous Materials Laws. City agrees to comply with all applicable federal, state and local laws, regulations and rules concerning handling and disposal of Hazardous Materials in connection with City's ownership of, and activities on and near, the Rail Line. (6) Liability Remedies and Obligations Are Exclusive. City and BNSF agree that the remedies and obligations set forth in this Paragraph 6 shall be exclusive remedies and obligations of each one to the other with respect to any Losses relating to the release or existence of Hazardous Materials on or near the Rail Line. (e) BNSF to Deliver Certain Property Records to City. BNSF shall make good faith efforts to deliver to City, at or before the date of Closing, originals or copies of whatever records, prints, archival information, or other evidence that BNSF locates in a reasonable search of BNSF's records,which bears upon the use of,maintenance, or title to the real estate comprising the Rail Line. If, at any time after Closing, BNSF locates any other documents which bear upon the use of, maintenance, or title to any such real estate, BNSF promptly shall provide originals or copies of those documents to City. BNSF shall indemnify and hold harmless City against any and all Losses that City incurs that result from BNSF not having delivered any relevant and necessary documents which bear upon the use of, maintenance, or title to any such real estate at or before Closing. 13 7. Assignment. Any assignee,including any successor in interest, of City's rights under or property acquired by this Agreement, must first assume in writing delivered to BNSF all of City's continuing and existing, or thereafter arising, obligations under this Agreement, and under any then effective contract assigned by BNSF to City, in whole or in part, in accordance with the terms of this Agreement. 8. Obligations are Continuing. The representations,warranties and obligations of BNSF and City in this Agreement are continuing and survive the Closing and delivery of the Quitclaim Deed. Terms of continuing obligations in this Agreement are subject to amendment only by a written contract signed by City and BNSF, or their respective successors or assignees. 9. Liens and Encumbrances. BNSF represents and warrants that,to BNSF's knowledge, BNSF has not caused or suffered, and will not cause or suffer prior to the date of Closing, any liens or encumbrances to secure the payment of a debt of BNSF to be filed against the Rail Line which would materially adversely affect City. BNSF represents and warrants that,to BNSF's knowledge, except for: (i)the lien of BNSF's General Lien Mortgage, dated November 10, 1896, between BNSF's predecessor, Northern Pacific Railway, and the Mercantile Trust Company, as supplemented, and(ii)the lien of BNSF's Consolidated Mortgage, dated March 3, 1970, between BNSF's predecessor, Burlington 14 Northern,Inc., and Morgan Guaranty Trust Company of New York, as supplemented (collectively, "Mortgages"), BNSF has not caused or suffered any lien or encumbrance to secure the payment of a debt of BNSF to be filed against BNSF's ownership interest in the Rail Line, and BNSF warrants that the liens of the Mortgages will not materially adversely affect City. BNSF will deliver to City, within a year following Closing, an executed release of BNSF's ownership interest in the Rail Line from the liens of the Mortgages. Until such releases are delivered to City, BNSF shall indemnify City against any Losses that City incurs after Closing that result from BNSF not having delivered such executed releases to City. City agrees to take title to the Rail Line assets and ownership interests conveyed by the terms of this Agreement subject to all liens and encumbrances on those assets and ownership interests. 10. Pending Public Works Projects. BNSF has no knowledge of any pending government funded public works projects on the Rail Line. 11. City to Offer to Hire BNSF's Qualified Employees. City shall consider for initial employment in operating and maintaining the Rail Line any of BNSF's employees who are eligible to work on the Rail Line,on the date of this Agreement. City shall give priority hiring consideration for any such positions to such employees of BNSF who are represented by the Brotherhood of Maintenance of Way Employees. City shall offer to hire for any such positions at salary levels and other terms and conditions of employment that are determined by City to be appropriate, all of those employees who City, in its sole discretion, determines to be 15 best qualified and needed. City promptly shall notify BNSF of the name of each of BNSF's current employees who City offers to hire, and also the name of each of these employees who City actually hires. City shall assume a neutral stance in any Brotherhood of Maintenance of Way Employees union organizing effort. 12. Closing. (1 W,kI jW Ib dow (a) The closing ("Closing") of this transaction shall occur on Ju , or '1)A another date mutually agreed by the parties in writing. (b) At Closing, BNSF shall deliver to City the following documents: (1) An original executed, attested and notarized Quitclaim Deed to the Rail Line in exact form as the Quitclaim Deed attached hereto as Exhibit A; and (2) An executed Bill of Sale in exact form as the Bill of Sale attached hereto as Exhibit B. (c) At or before Closing, Shortline shall deliver to BNSF copy of City's City Code, and any applicable Sections from the Revised Code of Washington, as adopted by reference by the City in the City Code. 13. Proration. Prepaid rentals, utilities, and other income or fees attributable to the Rail Line interests to be transferred by BNSF to City, under the terms of this Agreement shall be prorated between BNSF and City in such manner as to allocate to BNSF all income and expenses attributable 16 to the Rail Line that has been received, or for which bills have been received, on or prior to the date of Closing; and to allocate to City all income and expenses attributable to the Rail Line that is received, or for which bills are received, after the date of Closing. BNSF shall be responsible for all real estate taxes applicable to the Rail Line through the date of Closing. City shall be responsible for any taxes applicable to City as owner of the Rail Line after the date of Closing. 14. Interchange. (a) City and Railway may interchange rail freight traffic, cars and locomotives to and from each other on tracks on the northeastern end of the Rail Line, at Roy, Washington. The track or tracks used for this interchange shall be known as the"Interchange Track." (b) Cars and their contents that are delivered by one party to the other on the Interchange Track shall be deemed to be in the possession of the receiving party as of the time they are placed on the Interchange Track and uncoupled from the delivering party's train or engine,except that if any such car is rejected by the receiving party under the Interchange Rules of the Association of American Railroads ("AAR") or any successor rules,the refused car shall be deemed to remain in the possession of the delivering party until that car is accepted by the receiving party. 15. Car Hire Costs. The party in possession of any car shall be responsible for all car hire costs,per diem expenses and mileage allowances payable with respect to such car, for any per diem charges for trailers or containers carried by such car, or for any equipment use charges applicable to any RoadRailer equipment or similar carless intermodal technology. 17 16. City and BNSF to Publish Combination Rates to and From Roy, Washington. BNSF may establish combination rates to and/or from Roy, Washington, as appropriate,to handle rail freight traffic interchanged between BNSF and City at Roy, Washington. City may establish combination rates to and/or from Roy, Washington, as appropriate,to handle the rail freight traffic that originates or terminates on the Rail Line. 17. Time is of the Essence. Time is of the essence in this Agreement. 18. Transfer of Operations. All responsibility and authority for conducting rail operations on the Rail Line shall be transferred from BNSF to City at 12:01 a.m. on the day following the date of Closing. 19. Transfer of Liabilities; Payment of Charges. For the period before and including the day of Closing, BNSF shall be responsible for: (a)all common carrier rail operations, including car supply, on the Rail Line; (b)any freight loss and damage claims attributable to rail operations over the Rail Line; and (c)all car accounting and all car hire and car mileage allowance payments relating to rail operations over the Rail Line. At and after 12:01 a.m. on the day following the date of Closing, City shall be responsible for: (d) all common carrier rail operations, including car supply, on the Rail Line; (e) any freight loss and damage claims attributable to rail operations over the Rail Line; and (f) all car accounting and all 18 car hire and car mileage allowance payments relating to rail operations over the Rail Line. 20. Electronic Data Interchange. Within six months following the month in which City and BNSF interchange any freight cars at Roy, Washington, City must have the ability to send and receive electronically waybills, advanced consists, and bills of lading; as well as Train II reports and passing/placement reportings for performance purposes. Transaction reporting should be at industry standard levels or one level behind. 21. Applicable Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Texas. 22. Effect of Waiver. Any waiver by any party to this Agreement, or failure by any such party to insist upon full and complete performance by any other party to this Agreement of its obligations set forth in this Agreement, shall not constitute a waiver or release of such party's right to insist upon full and complete performance of any other obligations in this Agreement, or a waiver or release of such party's right to insist upon full and complete performance of the obligations that were waived or not enforced for periods prior to, or following, the waiver or failure to insist upon full and complete performance. This Agreement shall be amended or modified only by written agreement signed by all three parties hereto. 19 not disclose the contents of this Agreement to any other party, without the prior written consent of the other parties to this Agreement. Any party who learns of any of the terms of this Agreement shall be required by the party to this Agreement who is disclosing the information not to disclose those terms to any other party without the prior written consent of both parties to this Agreement. 25. Entire Agreement; Integration of Agreement. This document, together with all Exhibits attached hereto, constitutes the entire agreement between City, BNSF and Railway relating to this transaction. Any other prior or contemporaneous agreements,understandings,representations or statements,whether oral or written, relating to this transaction are merged herein. The headings and titles to provisions in this Agreement are for convenience only,and shall not be deemed to modify or affect the rights or duties of City or BNSF. All rights and obligations of City and BNSF set forth in this Agreement,or in any Exhibit attached hereto, are integral parts of this Agreement. The parties agree that the terms herein have been arrived at by mutual negotiation and that no terms herein shall be presumptively construed against either party regardless of who drafted it in the first instance. 21 IN WITNESS WHEREOF, authorized representatives of City and BNSF have executed this Agreement as of this ' day of October, 2000. THE BURLINGTON NORTHERN AND CITY OF YELM SANTA FE RAILWAY COMPANY By: By: Peter J. Rickershauser Vice President cr L e I Network Development N:\law.mkg\dww\contracts\yelm donation3 22 Page 1 of 1 From: Taro Kusunose <tusunose@bpmlaw.com> To: 'Shelly@yelmtel.com' <Shelly@yeimtel.com> Cc: Steve Day <sday@bpmlaw.com> Date: Monday, October 30, 2000 5:04 PM Subject: Addendum closing information Ms. Badger: I had the opportunity to speak to Mr.Wilson of BN today. I am able to report just a little more information. Mr. Wilson states that the purchase price on the real estate sale will be$300,000; the real estate purchase and sales agreement will arrive to the City within the next day or two; payment at time of closing will be to Mr. Dave Detjen, Manager-Real Estate, 2500 Lou Menk Drive AOB-3, Fort Worth, TX 76131. He states that this is all information that should arrive with the purchase and sales agreement as well. As this information was told to me by Mr. Wilson by phone, IF there is any discrepancy between what I wrote above and the agreement itself, please assume that the agreement terms supercede the terms noted in this email. As a quick reminder, please make sure to execute the rail line donation Agreement so that it arrives at Mr. Wilson's office by November 1, 2000, at the latest. Taro 10/31/2000 Page 1 of 1 From: Taro Kusunose <tusunose@bpmlaw.com> To: 'Shelly Badger' <shelly@yelmtel.com> Cc: Steve Day <sday@bpmlaw.com> Date: Friday, October 27, 2000 4:35 PM Subject: RE: Draft letter to BNSF counsel Shelly: I just received a voicemail message from BN's Dennis Wilson. He states that the closings for both the donation and real estate sale,will occur by mail. The arrangement that Mr.Wilson envisions is that BN will overnight-mail the deeds(and in the case of the donation, a bill of sale)for the property and rail line on the 15th of November; the documents arriving to Steve Day(who will hold them in trust for all parties)on the 16th of November. Assuming proper receipt by Steve of said documents, on the 16th, the City will overnight-mail the check in the proper amount to BNSF's'Dave Detchin(sp?)"in Fort Worth. When the check arrives in Fort Worth on the 17th, the transaction will be closed. (Please let me know if you are unclear as to the identity and address of the gentleman in Fort Worth--I will make sure to get this information from Mr. Wilson.) It appears that the arrangement set forth above allows the City as much time as possible for securing any funds, and allows Steve and me the time for filing the STB documents. If you foresee any problems with this arrangement, however, or if you would like it changed; or if you have any questions generally, please let me know. Steve and I feel that the Agreement as last revised by D. Wilson is ready to be executed. Execution of the document will consist of signing it and mailing (UPS, FED EX or some other trackable/speedy delivery) it to BN. It is advisable that the City make multiple copies of the executed Agreement. When sending the executed original to D. Wilson, the City may want to send a courtesy copy to Rich Batie as well. Please forward a copy to me and Steve too. As always please feel free to contact me with any questions or concerns. Very truly yours, Taro -----Original Message----- From: Shelly Badger[mailto:shelly@yelmtel.com] Sent: Thursday,October 26,2000 3:32 PM To: Taro Kusunose Subject: Re: Draft letter to BNSF counsel Taro, last nite at our Yelm City Council meeting, the Council authorized Mayor Wolf to sign all necessary documents for the purchase of the rail line, so we are good to go there. As far as the$300,000 that I must obtain from DOT,we are making that request tomorrow on Friday and should have the$ by the end of next week or 11-3. 1 am assuming that if we sign contract docs by 11-1 (which we are authorized and able to do), then the$transfer would not occur until closing on the estimated date of 11-16, is this correct? If so, that works with our timing for request of the monies. We are not going to fight the first right of refusal language that BNSF is not willing to put into the contract, we made our request known and they declined it and we do not want to hold up the transaction because of this. So if you and Steve confirm that all the requested changes have been made to your satisfaction, then we can begin the signature process. I will look to you and Steve to stay in the lead to guide us thru this thing, as it is very new to us and I feel like the City is in good 'legal"hands with you all helping us. Let me know the next step after you hear back from Mr. Wilson. Thanks, Shelly 10/31/2000 Pagel of 2 From: Shelly Badger <shelly@yelmtel.com> To: Taro Kusunose <tkusunose@bpmlaw.com> Date: Thursday, October 26, 2000 3:31 PM Subject: Re: Draft letter to BNSF counsel Taro, last nite at our Yelm City Council meeting, the Council authorized Mayor Wolf to sign all necessary documents for the purchase of the rail line, so we are good to go there. As far as the$300,000 that I must obtain from DOT, we are making that request tomorrow on Friday and should have the$by the end of next week or 11- 3. 1 am assuming that if we sign contract docs by 11-1 (which we are authorized and able to do), then the$ transfer would not occur until closing on the estimated date of 11-16, is this correct? If so, that works with our timing for request of the monies. We are not going to fight the first right of refusal language that BNSF is not willing to put into the contract,we made our request known and they declined it and we do not want to hold up the transaction because of this. So if you and Steve confirm that all the requested changes have been made to your satisfaction, then we can begin the signature process. I will look to you and Steve to stay in the lead to guide us thru this thing, as it is very new to us and I feel like the City is in good 'legal"hands with you all helping us. Let me know the next step after you hear back from Mr. Wilson. Thanks, Shelly -----Original Message----- From: Taro Kusunose<tkusunose@bpmlaw.com> To: 'Shelly Badger'<she[ly@yelmtel.com> Cc: Steve Day<sday@bpmlaw.com> Date: Wednesday, October 25, 2000 12:59 PM Subject: RE: Draft letter to BNSF counsel Shelly: I have reviewed our file for possible documentation of the"nuts and bolts"of the closing, and of the transfer of funds. There was not much in the file in the form of relevant information, so yesterday I left a message with BN's attorney, Dennis Wilson, asking him to call me back so that we could discuss this issue further. If I do not get a call back within a few days, I will more assertively seek Mr. Wilson's attention. As for the timing of the execution of the Agreement and the closing of the transaction, Mr. Wilson's October 9th letter to the City states that'BNSF would like to execute this contract, and the related real estate sales contract, in October, and to close both transactions on November 16." A June 15, 2000 letter from Rich Batie to the City reads in pertinent part: 'The contract allows for a donation of the line to the city following a sale of a parcel of property at Yelm for$300,000." From these statements, it appears that BN's intention is to execute the Prairie Line transaction either concurrently, or immediately after the execution of the related real estate sales contract. Either way, the Agreement should be executed (accepted) by November 1__2.000, since that is the day BN extended the acceptance period to, in Rich Batie's letter of August 30, 2000, The Agreement in our transaction, as last sent to us from Mr. Wilson on October 19, 2000, appears satisfactory from our perspective, and I believe it is now in a form that the City can and should execute. I STB filing. Steve and I will prepare an STB filing and/or exemption. When I speak to Mr. Wilson, I will keep in mind both the 7 day requirement for the STB filing/exemption, and your need for some lead time for seeking funds through the DOT grant. I will seek from Mr. Wilson, some flexibility regarding the closing date on the transaction. Because Mr. Wilson has already affirmatively stated, however, that BN would like to close this deal by November 16,we should shoot for a target date of the 16th. Please write back with any questions or concerns. 10/26/2000 Page 1 of 1 From: Shelly Badger<shelly@yelmtel.com> To: Taro Kusunose <tkusunose@bpmlaw.com> Date: Thursday, October 19, 2000 2:58 PM Subject: Re: Draft letter to BNSF counsel Taro, a?for you and Steve.....How does the money actually change hands between the City of Yelm and BNSF, nowhere in any of the documents that we have been negotiating back and forth, is there any mention of$? Could you and Steve look into this. Feel free on Yelm's behalf to contact Mr. Wilson, BNSF attorney to discuss the details of this and then let me know. I need a little lead time to request the funds from our grant thru DOT. Also, in Rich Batie's original letter transmitting the draft contract(6-15-00)he mentioned that the City needs to file with the STB in WA DC 7 days prior to closing. Is this something that you folks can do for us? He mentioned in his letter an attorney in DC, but if this is something you can do, then we would prefer it. Thanks for your always prompt attention to our rail project, it is greatly appreciated! Shelly PS: The letter was sent via FAX to Mr.Wilson yesterday(10-18)and overnite, with copies to the others including Steve via regular mail. Joe Williams did contact Jerry Johnson, Asst VP, BNSF re: the first right of refusal issue and didn't have good success with that, so I am thinking that they may not go for it. Between us, if they do not,we are ok and do not want to hold up the deal because of that issue,just was worth asking for in the original contract! -----Original Message----- From: Taro Kusunose<tkusunose@bpmlaw.com> To: 'Shelly@yelmtel.com'<Shelly@yelmtel.com> Cc: Steve Day<sday@bpmlaw.com> Date: Monday, October 16, 2000 4:07 PM Subject: Draft letter to BNSF counsel <<Itr to d wilson re BNSF's Oct. 9 response.DOC>> Shelly, attached please find a draft letter to BNSF's counsel. It is being emailed so that you can ultimately print it out on Yelm letterhead. Please contact me if you have any problems with the attachment. Taro 10/19/2000 Cityo Yel m 105 Yelm Avenue West YELM P.O. Box 479 WASHINGTON Yelm, Washington 98597 (360) 458-3244 October 18, 2000 VIA FACSIMILE AND POST Mr. Dennis W. Wilson, Esq. P.O. Box 6039 Wilmette, Illinois 60091-6039 (Fax) 847-864-0389 Re: Roy-Yelm, Washington Rail Corridor Donation Contract Dear Mr. Wilson: Thank you for your response of October 9, 2000. We are generally pleased with the changes made in the Agreement and truly appreciate your cooperation. We look to the Roy-Yelm line transfer with great anticipation. As almost all of our substantive concerns have already been addressed in your response,this letter is written to raise three issues of relatively minor significance, and only one substantive issue. First, in our letter of September 22, 2000, we requested a slight change to Section 6(d)(5) of the agreement whereby the word"applicable"would be inserted before the words"federal, state, and local laws. . .." In your cover letter for the transmittal of the October 9, 2000 Draft of the Agreement("Agreement"), you indicated that the requested change would be made. Unfortunately, the Agreement does not appear to reflect this change. Second, it appears that a similar oversight may have occurred with regard to our requested change in Section 9. The Agreement as it currently stands,reads under Section 9, that". . .BNSF warrants that the liens. . . will materially adversely affect City." We believe that this probably should read`BNSF warrants that the liens. . . will NOT materially adversely affect City." Please let us know if we are misinformed. Lastly, my address, as listed at the top of the October 9, 2000 cover letter should include the words"P.O. Box 479,"before"Yelm, WA 98597." This is rather insignificant, as it is not even a part of the Agreement and the cover letter arrived properly. I simply thought I might point this out so we can minimize the possibility of misdirected correspondence. Mr. Dennis W. Wilson, Esq. October 18, 2000 Page 2 In terms of our one substantive issue, we are wondering what BNSF's response is to our request in our September 22 letter, for the possible inclusion in the Agreement of the provision granting the City of Yelm a right of first refusal for the remaining Roy to Lakewood portion of the line. From my reading of the Agreement, there is no reference to our proposed provision. Your cover letter to the Agreement,however, also did not note one way or the other as to whether BNSF has accepted or rejected our proposal. We are hoping that this uncertainty indicates that you are still investigating the possibility, or that you have forwarded this issue to someone else for review. We are still very interested in having the opportunity to acquire the Roy to Lakewood line, were the opportunity to ever arise. Please let us know how BNSF stands on this matter. As can be seen, most of the issues are of a clerical nature. We are thrilled about the possibility of the fruition of the transfer. Once again, I thank you for your cooperation. If you have any questions or concerns, please do not hesitate to contact me immediately. I can be reached at the address printed above or at 360-458-8405. Sincerely: ' a 0 Shelly Badger Yelm City Administrator cc: Mayor Kathryn M. Wolf Joe Williams, Chair, Yelm Rail Advisory Committee Steve Day, Betts Patterson & Mines, P.S. Rich Batie, BNSF Jerry Johnson, BNSF Mike Roper, BNSF ��OF THE FAX TRANSMISSION CITY OF YELM PO BOX 479 - 105 YELM AVE W YELM YELM WA 98597 WASHINGTON 360-458-3244 FAX: 360-458-4348 �► In 1, To: U v�S wbT u 1Lei— Date: '1,F) "(90 Fax#: _ 03Y9 Pages: J including this cover sheet. � (�� e From:'� U� �C�� (ATIM 1n1+/WSf M-h�r Subject: 4r� ** If you do not receive all copies or any copy is not legible, please call(360)458-3244 as soon as possible. ds/c:bffice\forms\fax.3 TRANSMISSION VERIFICATION REPORT TIME : 10/18/2000 12:00 DATE DIME 10118 11:59 FAX NO./NAME 18478640389 DURATION 00:00:50 PAGE(S) 03 RESULT OK MODE STANDARD ECM Law Offices __ B -� rte' � BETTS D PATTERSON OCT 17 2M & MINES, P s. 800 Financial Center 1215 Fourth Avenue Seattle,Washington 98161-1090 Fax: 206-343-7053 Taro Kusunose Phone: 206-292-9988 tkusunose@bpmlaw.com October 16, 2000 Ms. Shelly A. Badger City Administrator 105 Yelm Ave. W. P.O. Box 479 Yelm, WA 98597 Re: Comments on BNSF's October 9th Response. Dear Shelly: As noted in my earlier email to you, Steve and I have now had the opportunity to review BNSF's most recent response. We feel that BNSF's response to the City's letter was very positive. Almost all of the City's requests sought substantive changes to the Agreement that, if agreed to, would better protect the City's interests. Of those requests,most were agreed to by BNSF. Steve and I had anticipated that BNSF would not find several of the City's requests agreeable. We also believe however,that in general, BNSF's counsel appears to be very cooperative, and relatively generous with the City. In what follows, I have reprinted the City's request as it was presented to BNSF by the City in your letter dated September 22, 2000. Steve's and my comments to BNSF's response to these requests are bolded and underlined to facilitate reading. 1) Section 1(d): (p. 3): "If any contract is related to the Rail Line and is intended to be assigned by BNSF to City, in whole or in part,but inadvertently is not identified in Exhibit C, BNSF promptly shall provide to City a copy of any such contract immediately upon locating it, and City, as of the date of its receipt of such copy, shall assume the rights and obligations in such contract to the extent they are related to Rail Line. City shall make no claim against BNSF arising out of any failure to obtain a consent to assignment from any party to any agreement assigned by BNSF to City, in whole or in part." 95220/101600 1606/57820001 Ms. Shelly A. Badger October 16, 2000 Page 2 Comments: (1) Would it be possible to have Section I(d) amended to include language to the effect that "Exhibit C is a complete list of all contracts related to the Rail Line intended to be assigned by BNSF to City," [BNSF states that because of the (unlikely) possibility of a good faith omission of a contract by BNSF,the strongest statement that it feels it can make is that `BNSF believes that Exhibit C is a complete or nearly complete list of all contracts." Steve and I are satisfied with the inclusion of this statement.land that`BNSF will obtain any and all necessary consents for assignments to City from any party to any agreement with BNSF"? [BNSF states that while it is unlikely that any of the parties to the contracts in Exhibit C can either give or withhold consent to an assignment, the strongest statement BNSF feels it can make is that "BNSF does not believe that any consents to such assignments are necessary." Steve and I are satisfied with the inclusion of this statement.) (2) I am also particularly interested in finding out about any fiber optic rights in the rail right-of-way. It would be our preference for BNSF to assign such fiber optic easement rights to the City. [BNSF states that there are no fiber optic rights contracts on this rail corridor. 2) Section 2(a): (12.4) "(a) City accepts all transferred real property and personal property `AS IS, WHERE IS" and "with all faults." City acknowledges that certain track materials are missing from Rail Line and it cannot support train operations until certain repairs are made." Comments: Could you possibly obtain from your local maintenance of way staff a list of the materials missing from the Rail Line and provide us a rough estimate of the cost to replace the missing materials? IBNSF states that although BNSF has not kept an inventory of the missing items, they authorize the City to inspect the Rail Line and make its own inventory. If the City remains interested in determining the potential repair costs, Steve and I recommend that the City contact Charlie Burnham of David Evans and Associates, to do an inventory.] 3) Section 4(b)(2): (12.6): "(b) City hereby represents and warrants to BNSF, and all successors and assignees of BNSF, the following facts. . .: (2) City is a qualified donee within the meaning of Section 501(c)(3) of the Internal Revenue Code of 1986, as amended;" 95220/101600 1606/57820001 2 Ms. Shelly A. Badger October 16, 2000 Page 3 Comments: It appears that the City of Yelm cannot be a section 501(c)(3) organization. However, my understanding is that a donation to Yehn will still be tax exempt because the city is listed under 170(c)(1)of the Tax Code as a political subdivision of a State. Section 170,under subsection(a)(1) states that"a deduction is allowed for any charitable contribution(as defined in subsection(c))." It appears that"501(c)(3)"will need to be changed to"170(c)(1)." [Requested change made.l 4) Section 6(c)(1): (12.9): "(1) BNSF's General Liability and Indemniy, Except as provided in Paragraph 6(d) of this Agreement, BNSF shall be responsible for, and shall indemnify, defend and hold harmless City fully against, [regardless of any negligence of City,] all Losses which: (i) arise out of BNSF's ownership or operation of the Rail Line,prior to the date of Closing; or(ii)result from any breach by BNSF of any representations or warranties that are set forth in [paragraph 4(b) of] this Agreement, or any failure by BNSF to perform any obligations of BNSF under this Agreement." Comments: Would it be possible to have the two bolded insertions, above,be made in Section 6(c)(1), so that BNSF's General Liability and Indemnity section more closely mirrors City's General Liability and Indemnity section(Section 6(c)(2))? [The first request was fairly, sig considering the particularities of this transaction, and we are not surprised that BNSF did not want to include it. BNSF notes that we may not want to include the language in the second request; upon further review/research-9f this issue.we will not challenge BNSF's recommendation.[ 5) Section 6(c)(2); (12.9-10): "(2) City's General Liability and Indemnity= . . .City shall be responsible for, . . .all losses which: . . .(iii)result from claims of third parties caused by City's non performance or required performance under any contract, lease,permit, license, easement or commitment relating to the Rail Line, where [if] that contract, lease,permit, license, easement or commitment is identified in Exhibit C, or City has specific knowledge [Notice by BNSF] of it and such contract, lease,permit, license, easement or commitment was intended to be assigned to, and assumed by, City at Closing. . .." Comments: Would it be possible to have the bolded"where,"above,replaced with"if' for clarification, and the words"specific knowledge"replaced with"Notice by BNSF." This latter change would better follow our requested change in Section 1(d),which would 95220/101600 1606/57820001 3 Ms. Shelly A. Badger October 16, 2000 Page 4 read"Exhibit C is a complete list of all contracts related to the Rail Line intended to be assigned by BNSF to City." [Requested changes made. The first change clarifies the Agreement, and the second change shifts some burden away from the City, and onto BNSFJ 6) Section 6(d)(4): (12.12-13k "(4) Arbitration of Allocation of Liability Between City and BNSF. Any dispute between City and BNSF as to allocation between them of Losses for which both City and BNSF are responsible under the terms of this Paragraph 6 shall be settled by binding arbitration in accordance with the rules of the American Arbitration Association." Comments: Would it be possible to have Section 6(d)(4) amended so that the arbitration service is not yet limited to one service such as the American Arbitration Association? Perhaps the following language can be inserted after the words "American Arbitration Association": ",or with the rules of such other alternative dispute resolution service as BNSF and City agree to at a later date." [Requested change made. This gives the Q significantly greater flexibility should the need for an arbitrator later arise.[ 7) Section 6(d)(5): (n.13): "(5) City to Comply With Hazardous Materials Laws. City agrees to comply with all [applicable] federal, state and local laws, regulations and rules. . .." Comments: Please insert the word"applicable,"bolded above, for clarification. [BNSF states that the requested change was made. However,the Agreement as revised DOES NOT INCLUDE THE CHANGE. In my draft response, I will request that BNSF make the appropriate edit in the Agreement.[ 8) Section 6(e)g (12.13): "(e) BNSF to Deliver Certain Proper Records to City. BNSF shall make good faith efforts to deliver to City,within 30 days following the date of Closing, originals or copies of whatever records,prints, archival information,or other evidence that BNSF locates in a reasonable search of BNSF's records,which bears upon the use of, or title to the real estate comprising the Rail Line. If, at any time after Closing,BNSF locates any other documents which bear upon the use of,maintenance,or title to any such real estate, BNSF promptly shall provide originals or copies of those documents to City." 95220/101600 1606/57820001 4 Ms. Shelly A. Badger October 16, 2000 Page 5 Comments: We are hoping that Section 6(e) can be amended to read that BNSF shall make good faith efforts to deliver to City,at or before the date of Closing, the documents referred to above; instead of within 30 days following. I recognize that given the timing of this deal,this might not be feasible. In the alternative,would it be possible to have inserted into this Section,the following language: "BNSF indemnifies City against any and all losses that City incurs that result from BNSF not having delivered any relevant and necessary documents which bear upon the use of, maintenance, or title to any such real estate, before Closing."? [Both requests were substantially complied with by BNSF. This should better protect the City.] 9) Section 9;(p.14-5): "9. Liens and Encumbrances. . . .. BNSF represents and warrants that, to BNSF's knowledge, except for: (i) [Lien 1], and(ii) [Lien 2], BNSF has not caused or suffered any lien or encumbrance to secure the payment of a debt of BNSF to be filed against BNSF's ownership interest in the Rail Line, and BNSF does not believe the liens of the Mortgages will materially adversely affect City." Comments: Could the bolded line of Section 9, above, be revised to read"BNSF warrants that the liens of the Mortgages will not materially adversely affect City"? In the alternative,would it be possible to have BNSF issue us a formal opinion to that effect? [BNSF states that the requested change was made. However, the Agreement as revised DOES NOT PROPERLY REFLECT THE CHANGE. In my draft response, I will request that BNSF make the appropriate edit in the Agreement.[ 10) Section l 1;(p. 5): "11. City to Offer to Hire BNSF's Qualified Employees. City shall consider for initial employment in operating and maintaining the Rail Line any of BNSF's employees who are eligible to work on the Rail Line on the date of this Agreement. City shall give priority hiring consideration for any such positions to such employees of BNSF who are represented by the Brotherhood Maintenance of Way Employees. . . .." Comments: I need some background clarification on this section. I am speculating that BNSF has a contractual obligation to establish priority hiring consideration for its union 95220/101600 1606/57820001 5 Ms. Shelly A. Badger October 16, 2000 Page 6 workers. If the section cannot be eliminated, we would appreciate it if BNSF disclosed the identities of all known BNSF employees benefiting from this obligation. [BNSF confirmed Steve's speculation that this is a required clause. As such,it must be included. Nevertheless, as a result of the City's request, Rich Batie has requested for the City, a list of BNSF employees benefiting from this requirement. Furthermore, BNSF states that it is unlikely that any current BNSF employee will apply for employment with the City_[ 11) Section 12(c) (p.16)@ "(c) At or before Closing, Shortline shall deliver to BNSF copy of City's City Charter." Comments: Since Yelm is a non-charter code city, it does not have a charter. We have adopted Washington State's optional municipal code, however. As such, it appears that this Section would need rephrasing. The word"Charter"might be replaced with the following: "Code, and any applicable sections from the Revised Code of Washington, as adopted by reference by the City in the City Code." [Requested change made.[ 12) Section 13- (-12.16-17): "13. Proration. Prepaid rentals,utilities, and other income or fees attributable to the Rail Line interests to be transferred by BNSF to City,under the terms of this Agreement shall be prorated between BNSF and City in such a manner as to allocate to BNSF all income and expenses attributable to the Rail Line that has been received, or for which bills have been received, on or prior to the date of Closing; and to allocate to City all income and expenses [after Closing]. . . .." Comments: While this section is acceptable,we would appreciate a run-down on all income and expenses attributable to the Rail Line, as discussed in the section. [BNSF states that the City is in possession of a document listing income attributable to property greements on the Rail Line. As it appears that Steve and I do not have a copy of this document, the City may want to verify that such document has been transmitted to the City by BNSF.[ 13) Section 14(a); (p.17): 952201101600 1657820001 6 Ms. Shelly A. Badger October 16, 2000 Page 7 "(a) City and Railway;ill [may] interchange rail freight traffic, cars and locomotives to and from each other on tracks on the northeastern end of the Rail Line, at Roy, Washington. . . .." Comments: Would it be possible to have the word"shall" in the first sentence of Section 14(a) changed to the word"may"? It seems that use of the word"shall"would require that the City interchange rail traffic at that location. [Requested changes made.[ 14) Section 16: (p.17-18): "16. City and BNSF to Publish Combination Rates to and From Roy, Washington. BNSF shall[may] establish combination rates to and/or from Roy, Washington, as appropriate, to handle rail freight traffic interchanged between BNSF and City at Roy, Washington. City shall [may] establish combination rates to and/or from Roy, Washington, as appropriate, to handle the rail freight traffic that originates or terminates on the Rail Line." Comments: This is a similar request to that directly above this one. Again, if it's possible,we would like to keep the provision permissive, not mandatory. [Requested changes made.l 15) Section 19, (p.18): "19. Transfer of Liabilities; Payment of Charges. For the period before and including the day of Closing, BNSF shall be responsible for[liabilities,payment of charges relating to rail operations over the Rail Line]. At and after 12:01 a.m. on the day following the date of Closing,City shall be responsible for[liabilities,payment of charges relating to rail operations over the Rail Line]." Comments: Could you let me know if there are any current users of the Rail Line who might encounter service disruption as a result of the transfer. It would be useful to know who last moved cars on this line, and when. [BNSF states that there are no current users of the Rail Line.l 16) Section 209 (D.18-19): "20. Electronic Data Interchange. 95220/101600 1609/57820001 7 Ms. Shelly A. Badger October 16, 2000 Page 8 Within six months [one year] following the month in which City and BNSF interchange any freight cars at Roy, Washington, City must have the ability to send and receive electronically waybills, advanced consists, and bills of lading. . .." Comments: Could"six months"be replaced by the words "one year" in Section 20? This would allow us sufficient opportunity to retain an operator, or acquire the software and training necessary to comply with this Section. [BNSF refuses the City's request on the ground that this is a standard requirement. However, BNSF also notes that BNSF is willing to assist the City in getting the required system operating within six months. Notably. Steve has been informed that although BNSF is requiring the inclusion of the six month language in the Agreement, de facto, BNSF has not been enforcing the requirement on other shortlines This may indicate some flexibility on this issue.] 17) Section 23: (-12.19-20): "Ms. Shelly Badger City Administrator, City of Yelm 105 Yelm Avenue West P.O. Box 479 Yelm, Washington 98597" Comments: In Section 23, "Shelly"is spelled with one"e,"and please insert"P.O. Box 479"into the address. [Requested change made in the Agreement, but the P.O. Box change was not made at the ton of the letter from BNSF counsel to City. I will remind BNSF counsel of the address issue in order to minimize the possibility of problems later arising.l 18) Exhibit A: ". . .which real estate and improvements are situated in [Pierce and Thurston] Counties, Washington, the boundaries of which are more particularly described in Comments: Please insert the words"Pierce and Thurston," and replace the word "County"with"Counties,"identifying the location of the Rail Line in the quitclaim deed in Exhibit A. [Requested changes made.l 95220/101600 1606/57820001 8 Ms. Shelly A. Badger October 16, 2000 Page 9 19) Finally,the City of Yelm,would be very interested in the future acquisition of the remaining Roy to Lakewood portion of this line, or any portion of that line,were the opportunity to arise. As such,we propose for your consideration,the possibility of adding the following language to the Agreement: Right of First Refusal-Roy to Lakewood Line. If in the future, BNSF ever wishes to abandon or to seek to in any way voluntarily dispose of any or all of its interest in the rail line between the City of Roy and Lakewood or any portion thereof("Roy to Lakewood Line"), BNSF shall first offer in writing to sell the Roy to Lakewood Line, or any portion thereof,to the City of Yelm at a price to be mutually agreed upon by BNSF and the City of Yelm. [BNSF did not insert this language into the Agreement. BNSF also, however, did not explicitly state in its coverletter to the Agreement that BNSF refuses to do so. In the draft letter to BNSF's counsel, I have asked BNSF to review this issue. Steve advises that in the meanwhile, the City should have Mr. Joe Williams of the Rail Advisou Committee, raise this issue with Mr. Jerry Johnson (Assistant Vice President of BNSF). Steve feels that this particular request may be more effective if made at a businessperson-to-businessperson level.l Thus, as can be seen above, most of the City's requests to BNSF have been accepted. Please feel free to contact me with your feelings on the matter, any other issues you believe should be raised in the draft letter to BNSF counsel, or with any questions or concerns. Very truly yours, Taro Kusunose TK:tk 95220/101600 1609/57820001 9 OCT. 16. 2000 4:42PM BETTS PATTERSON N0. 4234 P. 1 LowOfficcs ' BETTS FAX MESSAGE PATTERSON & MINES, P.S. goo Fio.;iitdial Center Fax: (206) 343-7053 1215 Fourth Avdnuc .S'cullle,Washingon 48161-1090 Fax: (206)343-7053 Date: 10/16100 PhnPhone: (2011)'!929$$ To: Ms, Shelly Badger Fax#: (360)4584348 (Include area code for ALL numbers.) Company: City of Yelm From: Taro Kusunose File#: 5782,0001 Re: Cornmots on BNSF's RespQnselQraft Letter to b Wilson Number of pages: 13 ! NOTICE: Information contained in this communication is ! (including this cover sheet) privileged and/or confidential, intended only for the ! individual/entity named above. If reader of this cover page is i not the intended recipient, you are hereby notified that any i Please call Taro Kusunose dissemination, distribution, or copying of this information is at(206)292-9988, ext.346 ' strictly prohibited. If you have received this fax in error;please ! if you do not receive any of these pages or if I immediately notify us by phone(206)292-9938 and return this there is a problem. fax to above address via U.S. Mail. Thank you. NOTES: Shelly: This fax follows my email of these same documents to you, earlier today. Plcase let me know if you have any questions or concerns. Very truly yours, Taro Kusunose URGENT! ! DELIVER IMMEDIATELY 95371,1016W 16207,40Mt 10/09/00 MON 15:24 FAX 2002 Demmis W. WV11 P. O. Box 6039 Wilmelte.IL 60091-6039 AftwrW at Law (847)864-0366 Phone (847)864-0389 Fax October 9,2000 VIA OVERNIGHT MAH, Ms. Shelly Badger Yelm City Administrator City of Yelm 105 Yelm Avenue West Yclm, WA 98597 RE: Roy-Yelm,Washington Rail Corridor Donation Contract Dear Ms. Badger. Rick Batie and I reviewed your September 22 letter concerning this contract,and have the following responses to the questions that you raised Also, we have made various changes to the contract in light of your questions and comments, and a new blacklined draft contract is enclosed for your review. BNSF would like to execute this contract, and the related real estate sale contract, in October, and to close both transactions on November 16. Please let me know if you have further questions or suggested contract changes, or if you would prefer a different closing date. BNSF°s responses to your specific questions and comments are as follows: 1_ Enclosed herewith is a list of contracts on the Roy-Yelm rail corridor, as of June 13, 2000. This list is being updated and reformatted to become Exhibit C to the contract and will be forwarded to you when this process is completed There are no fiber optic contracts on this rail corridor. Rick Batie has asked BNSF's real estate manager, Catellus Management Corporation, for a printout of all contracts on this rail corridor,and will receive an updated list of contracts that we will include as Exhibit C. This list should be complete, but whether this is so depends on whether all real estate contracts on this line have been entered into the contract database kept by Catellus, whether their location has been correctly identified, and whether the Catellus program to prepare this list correctly flagged all of the contracts on the line. In the past this process has worked fairly well, with occasional omissions of contracts near the connection of the rail corridor being conveyed and BNSF's retained rail lines, m this case near Milepost 20.99 in Roy, Washington. This is why the contract includes language about what happens if a contract is omitted from Exhibit C. Because of these circumstances, all BNSF can do is insert in Section l(d); "SNSF believes that Exhibit C is a complete or nearly N_Uaw.mkg\dww\y21-lct=11009badger 10/09/00 MO:N 15:25 FAX 000 complete list of all contracts related to the Rail Line that arc intended to be assigned by BNSF to City." This sentence has been added in the enclosed draft. The BNSF contracts listed on Exhibit C appear to be typical BNSF real estate contracts,none of which give other parties the right to consent, or not,to the assignment of their agreements from BNSF to the City_ BNSF has not reviewed these agreements, but is agreeable to adding to Section 1(d): `BNSF does not believe that any consents to such assignments are necessary." This, too, has been added in the enclosed draft. 2. BNSF does not have a list of track materials missing from the Rail Line, The City is free to inspect the Rail Line and make its own inventory. 3. The City's requested change has been made. 4. BNSF does not agree to add the phrase`regardless of any negligence of City"in the liability paragraph_ If the City's negligence causes loss or damage, BNSF does not agree to be responsible for it, or to indemnify the City. The second insert limits BNSF's warranties and is not as good for the City as the wording in the contract now. In fact, since Paragraph 4(b) has no BNSF warranties,this insert would nullify item (ii). BNSF makes representations and warranties in Paragraph 1(d), 4(a), 9 and 10, and perhaps in other Paragraphs_ I think the City is better off without an insert in item (ii)_ S_ The City's requested changes have been made_ 6. The City's requested change has been reworded slightly and has been made. 7. The City's requested change has been made. 8. The City's requested changes have been made. The second requested insert has been reworded slightly. 9_ The City's requested change has been made. This is a concession that BNSF does not normally make,but we want to conclude these negotiations and close these transactions promptly. 10. These provisions are required to be included in all BNSF rail line conveyances by the terms of BNSF's collective bargaining agreement with its Brotherhood of Maintenance of Way Employes. Rich Batie has requested a list of all BNSF MWE employees who have seniority to work on the Roy to Yelm rail corridor. We believe all of these employees are N_Vaw.mbg\dww\y2kleU r\1009badger 10/09/00 MON 15:25 FAX 0 004 currently working for BNSF, and consequently, probably would not apply to the City for employment on this rail line. 11. The City's requested change has been made. 12. Rich Batie reports that the City already has a printout showing rental income attributable to property agreements on the Roy-Xelm rail corridor. 13. The City's requested change has been made. 14_ The City's requested changes have been made. 15. There are no current users of the Rail Line_ 16. BNSF does not agree to the City's requested change. HDI information exchange is the norm for BNSF, and all BNSF shortlines are required to have this capability soon after start up. We cannot make an exception for the City. However, BNSF can help the City to get a required system operating within six months of the date rail car interchanges between BSNF and the shortline begin. Very truly yours, Dennis W. Wilson Attorney for The Burlington Northern and Santa Fe Railway Company DWWljbs Enclosures Cc: Mr. Steve Day(via overnight mail w/enclosures) Mr. Rich Batie (all via fax, w/enclosures) Mr_ Jerry Johnson " Mr. Mike Roper " N:Jaw.inkg\dww\y2U,,ttcrrl1009badger October 9, 2000 Draft Blacklined to show changes to June 12, 2000 Draft AGREEMENT FOR DONATION OF CERTAIN ASSETS, RIGHTS AND OBLIGATIONS OF THE BURLINGTON NORTHERN AND SANTA FE RAILWAY COMPANY TO CITY OF YELM AGREEMENT FOR DONATION OF CERTAIN ASSETS, RIGHTS AND OBLIGATIONS OF THE BURLINGTON NORTHERN AND SANTA FE RAILWAY COMPANY TO CITY OF YELM THIS AGREEMENT("Agreement") is entered into as of this day of JuaQ,October, 2000, between THE BURLINGTON NORTHERN AND SANTA FE RAILWAY COMPANY, a Delaware corporation ("BNSF"), and The City of Yelm, a municipality in the the State of Washington("City"). WHEREAS, BNSF desires to donate and convey to City, on the terms and conditions set forth in this Agreement, BNSF's rail line and rail corridor ownership interests in its rail line segment between Milepost 20.99 in Roy, Washington,and Milepost 25.56 in Yelm,Washington(collectively, "Rail Line"), together with BNSF's rights to conduct rail freight transportation business on the Rail Line, and certain other rights and obligations as specified in this Agreement; and WHEREAS, City desires to accept this donation from BNSF, and to acquire the Rail Line, BNSF's rights to conduct rail freight transportation business on the Rail Line, and certain other rights and obligations as specified in this Agreement, pursuant to the terms and conditions set forth in this Agreement; 1 NOW, THEREFORE, City and, BNSF agree as follows: 1. Donation Conveyances and Assignments. (a) BNSF shall donate and convey to City, on the date of Closing (as defined later herein), by Quitclaim Deed delivered by BNSF to City on that date, all of BNSF's ownership interest in BNSF's Rail Line (except a retained license to operate over such portion of the track at and near Roy, Washington as is necessary or convenient to interchange rail traffic between City and BNSF at Roy, Washington), which shall include all rail corridor land between the endpoint Mileposts of the Rail Line and all improvements that are located thereon. The Rail Line is described specifically in Attachment 1 to the Quitclaim Deed set forth as Exhibit A attached hereto, and made a part hereof. BNSF and City acknowledge that the Rail Line does not include the parcel of land in Yelm, Washington that is being conveyed by BNSF to City in a separate transaction following the date of this Agreement. (b) BNSF shall convey to City, effective on the date of Closing, BNSF's right to conduct rail transportation business on the Rail Line, subject to the terms and conditions set forth in this Agreement, the Quitclaim Deed,the Bill of Sale and/or any agreement assigned by BNSF to City by the terms of this Agreement. (c) BNSF shall convey to City, on the date of Closing, by delivering to City on the date of Closing a Bill of Sale identical in form to the Bill of Sale set forth as Exhibit B attached hereto, and made a part hereof, all of BNSF's ownership interest in all personal property that, on the date of the Closing, does not constitute improvements on the Rail Line, but which then are present on the real property comprising the Rail Line. This conveyance shall be subject to the terms and conditions set forth in this Agreement, the Bill of Sale, the Quitclaim Deed and/or any agreement 2 assigned by BNSF to City by the terms of this Agreement. (d) BNSF hereby assigns to City, effective on the date of Closing, subject to all terms and conditions set forth in this Agreement, the Quitclaim Deed, the Bill of Sale and/or any agreement assigned by BNSF to City by the terms of this Agreement, all assignable rights and obligations of BNSF to the extent such rights and obligations are effective after Closing, to the extent that they are related to the Rail Line and are set forth in any agreement identified on Exhibit C attached hereto and made a part hereof. City hereby accepts the assignment of all such rights and obligations of BNSF, effective on the date of Closing, in accordance with the terms of each applicable agreement and the terms of this Agreement. BNSF, and not City, shall be responsible for performing all of BNSF's duties in assigned agreements which are required to be performed on or before the date of Closing. City, and not BNSF, shall be responsible for performing all assigned duties in assigned agreements which are required to be performed after the date of Closing. City acknowledges that BNSF reserves, and City does not acquire, all rights and obligations set forth in any agreement identified in Exhibit C to the extent those rights or obligations are related to property owned by BNSF after Closing. If any contract is related to the Rail Line and is intended to be assigned by BNSF to City, in whole or in part, but inadvertently is not identified in Exhibit C, BNSF promptly shall provide to City a copy of any such contract immediately upon locating it, and City, as of the date of its receipt of such copy, shall assume the rights and obligations in such contract to the extent they are related to the Rail Line. BNSF believes that Exhibit C is a complete or nearly complete list of all contracts related to the Rail Line that are intended to be assigned by BNSF to City. City shall make no claim against BNSF arising out of any failure to obtain a consent to assignment from any party to any agreement assigned by BNSF to City, in whole or in part. BNSF 3 does not believe that any consents to such assignments are necessary. 2. Conditions of Donation. City hereby accepts the following conditions to BNSF's donation of the Rail Line, and it's conveyance and assignment to City of other rights and obligations as described in Paragraph 1: (a) City accepts all transferred real property and personal property "AS IS, WHERE IS" and "with all faults." City acknowledges that certain track materials are missing from the Rail Line and that it cannot support train operations until certain repairs are made. (b) Commencing at 12:01 a.m. on the date following Closing, and continuing thereafter, City shall assume all common carrier obligations related to the Rail Line. (c) City shall take all actions and execute all documents that may be necessary or helpful in connection with BNSF's charitable donation tax deduction for donation of the Rail Line, including City executing the Donee Acknowledgment section of Internal Revenue Service Form 8283. (d) City shall pay all costs of Closing (except BNSF's cost of preparation of documents to be delivered at Closing), including, but not limited to, any escrow and service fees,real estate transfer taxes, excise taxes,recording fees and sales taxes associated with this Agreement or any of the conveyances governed by this Agreement. 4 3. Government Approval. City, at its sole expense, shall prepare and file such documents as may be required to secure approval, or exemption from approval, of this transaction by the federal Surface Transportation Board ("STB"). City shall make all reasonable efforts to obtain this approval or exemption in time for this transaction to close on July_,November 16, 2000. City shall permit BNSF to review prior to filing all documents proposed by City to be filed with the STB or any court to secure legal approval or exemption of this transaction. 4. Representations and Warranties. (a) BNSF hereby represents and warrants to City, and City's successors and assignees, the following facts, as of the date of this Agreement and as of the date of Closing: (1) BNSF is a corporation duly organized, validly existing, and in good standing under the laws of the State of Delaware, and is qualified to do business as a foreign corporation in the State of Washington. (2) BNSF has the corporate power and authority to enter into this Agreement and carry out its obligations under this Agreement; (3) The execution, delivery and performance of this Agreement have been duly authorized and approved by all necessary corporate actions of BNSF, and no further corporate proceedings of BNSF are required to complete the transactions covered by this Agreement; (4) All of BNSF's obligations set forth in this Agreement constitute legal, valid 5 and binding obligations of BNSF which are enforceable against BNSF in accordance with their terms, except to the extent enforcement may be limited by bankruptcy, insolvency or reorganization law; (5) There is no provision in the Certificate of Incorporation or By-Laws of BNSF which prohibits the execution of this Agreement or consummation of the transactions covered by this Agreement; and (6) No representation or warranty by BNSF in this Agreement contains any untrue statement of a material fact, nor omits any material fact that is necessary to make any representation or warranty not materially misleading. (b) City hereby represents and warrants to BNSF, and all successors and assignees of BNSF, the following facts, as of the date of this Agreement and as of the date of Closing, except where specifically noted to be as of the date of Closing only: (1) City is municipality duly organized, validly existing and in good standing under the laws of the State of Washington; (2) City is a qualified donee within the meaning of Section 5Q (c}(}170(c)(1) of the Internal Revenue Code of 1986, as amended; (3) City has all requisite business authority to purchase BNSF's rights and properties which are conveyed to City by this Agreement; to enter into this Agreement; to conduct rail freight transportation business on the Rail Line (as of the date of Closing only); and to perform all of City's obligations under this Agreement; (4) The execution of this Agreement and consummation of the transactions which 6 are a part of this Agreement have been duly authorized and approved by all necessary actions by City, and immediately upon execution of this Agreement by City's authorized representative, all of City's obligations set forth in or referenced in this Agreement shall constitute legal, valid and binding obligations of City, or City's successors or assignees, which obligations are enforceable against City in accordance with their terms, except to the extent enforcement may be limited by applicable bankruptcy, insolvency, reorganization or other laws affecting the enforcement of creditors' rights generally and the application of general principles of equity; (5) There is no provision in the Charter of City, or any applicable law, ordinance or regulation, that prohibits the City's execution of this Agreement or it's consummation of the transactions covered by this Agreement; (6) As of the date of Closing only, City shall have obtained all legal authority which is necessary to enable City lawfully to conduct rail freight transportation operations over the Rail Line as a common carrier, commencing at 12:01 a.m. on the day following the date of Closing; and (7) No representation or warranty by City in this Agreement contains any untrue statement of a material fact, nor omits any material fact that is necessary to make any representation or warranty not materially misleading. 5. Inspection and Condition of the Rail Line. (a) By signing this Agreement, City acknowledges that City has inspected the 7 Rail Line, including all improvements and structures on the Rail Line, and all land to be conveyed as part of this transaction. City further acknowledges that: (i) except as set forth in this Agreement, no representation has been made by BNSF to City concerning the state or condition of the Rail Line, or the age of any improvements on the Rail Line; (ii) City has not relied upon any statement or declaration of BNSF,oral or in writing, as an inducement to entering into this Agreement, other than as stated in this Agreement; and (iii) all terms of this transaction are set forth in this Agreement. (b) BNSF HEREBY DISCLAIMS ANY REPRESENTATION OR WARRANTY, WHETHER EXPRESS OR IMPLIED, AS TO THE DESIGN OR CONDITION OF THE RAIL LINE, ITS MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE, THE QUALITY OF THE MATERIAL OR WORKMANSHIP OF THE RAIL LINE, OR THE CONFORMITY OF THE RAIL LINE TO ITS INTENDED USES. BNSF SHALL NOT BE LIABLE TO CITY FOR ANY INCIDENTAL OR CONSEQUENTIAL DAMAGES (INCLUDING STRICT LIABILITY IN TORT) WITH RESPECT TO THE DESIGN, CONDITION, QUALITY, SAFETY,MERCHANTABILITY, OR FITNESS FOR ANY PARTICULAR PURPOSE, OF THE RAIL LINE, OR THE CONFORMITY OF THE RAIL LINE TO ITS INTENDED USES. BNSF DONATES AND CONVEYS,AND CITY ACCEPTS,THE RAIL LINE IN "AS IS, WHERE IS" AND "WITH ALL FAULTS" CONDITION,AND SUBJECT TO ALL LIMITATIONS ON THE RIGHTS, INTEREST AND TITLE OF BNSF TO THE PROPERTY COMPRISING THE RAIL LINE. 6. Liability and Indemnity. (a) Cooperation in Defense. City and BNSF agree that, following the date of Closing, 8 they will cooperate as necessary in defense of any claim, demand, investigation or litigation arising out of the ownership or operation of the Rail Line. (b) Definition of Losses. In this Agreement, the term "Losses" shall include all costs, expenses, fees or liabilities of, or in any way related to: (i) any violation of law or regulation, (ii) any damage to property,the environment or natural resources, (iii) any bodily injury or death of any person, or (iv) the breach of any contract, including this Agreement to the extent set forth in this Agreement. "Losses" shall include,but not be limited to, all costs of claims, activities in response to enforcement,costs of investigation and remediation,damages,judgments, awards,orders,decrees, payments, fines,penalties,assessments,court costs, and attorney,consultant and expert witness fees, and shall include cost recovery or contribution claims made pursuant to CERCLA or similar federal or state laws. (c) General Liability and Indemnity. (1) BNSF's General Liability and Indemnity. Except as provided in Paragraph 6(d) of this Agreement, BNSF shall be responsible for, and shall indemnify, defend and hold harmless City fully against, all Losses which: (i) arise out of BNSF's ownership or operation of the Rail Line, prior to the date of Closing; or (ii) result from any breach by BNSF of any representations or warranties of BNSF that are set forth in this Agreement, or any failure by BNSF to perform any obligations of BNSF under this Agreement. (2) City's General Liability and Indemnity. Except as provided in Paragraph 6(d) of this Agreement, and further except for Losses resulting from one or more representations or warranties of BNSF as set forth in this Agreement 9 containing any untrue or materially misleading statement of a material fact, or omitting any material fact that is necessary to prevent that representation or warranty from being materially misleading, City shall be responsible for, and shall indemnify, defend and hold harmless BNSF fully against, regardless of any negligence of BNSF, all Losses which: (i) arise out of City's ownership or operation of the Rail Line after 12:01 a.m. on the day following the date of Closing; (ii) result from any breach by City of any of its representations or warranties set forth in Paragraph 4(b) of this Agreement,or any failure by City to perform any of its obligations under this Agreement; (iii) result from claims of third parties caused by City's nonperformance or required performance under any contract, lease, permit, license, easement or commitment relating to the Rail Line, cif that contract, lease, permit, license, easement or commitment is identified in Exhibit C, or City has spec notice by BNSF of it and such contract, lease,permit, license, easement or commitment was intended to be assigned to, and assumed by, City at Closing; and (iv) are proximately caused,to any extent,by the activities, operations or presence of City or any of its agents, contractors, representatives, permittees or invitees, or any of their employees, who are on or near the Rail Line. (d) Environmental Liability and Indemnity. (1) City's Acknowledgments with Respect to the Rail Line. City acknowledges that BNSF has provided City with full access to inspect the Rail Line. 10 (2) BNSF's Environmental Liability and Indemnity. Notwithstanding any other liability or indemnification provision in this Agreement, BNSF shall be responsible for, and shall indemnify, defend and hold harmless City (including its successors and assignees)fully against, Losses incurred due to any claim, demand or litigation, to the extent it is based on any violation or requirement of any applicable environmental statute, ordinance, rule, regulation, order or decision (collectively, "Environmental Laws"), and the Losses arise from: (i) any chemical, material or substance that is now, or at the time in question is, regulated or governed by any law, the release of which creates any liability under any applicable law; or(ii)any other material which, when released, would cause ecological damage in violation of any applicable Environmental Laws (items described by (i) or (ii) above are referenced hereinafter as "Hazardous Materials")located on,under or near the Rail Line, to the extent that such Losses: (A) were caused by one or more acts or omissions of BNSF that occurred prior to the date of Closing, and that could not have been discovered by City in a reasonable inspection of the Rail Line; and (B) result from any written claim made by a party other than City, ("Claims") that is delivered to BNSF within one year following the date of Closing; and (C) exceed $10,000 in the aggregate in that year. (3) City's Environmental Liability and Indemnity. As a condition of BNSF's 11 donation of the Rail Line, and notwithstanding the liability and indemnity provisions set forth in Paragraph 6(c) of this Agreement, City shall be responsible for, and shall indemnify, defend, and hold harmless BNSF fully against, regardless of any negligence of BNSF, Losses incurred due to any claim, demand or litigation, to the extent it is based on any violation or requirement of any applicable environmental statute, ordinance, rule, regulation, order or decision, and the Losses arise from any Hazardous Materials located on, under or near the Rail Line, to the extent that such Losses either: (A) resulted from any cause or causes that were not the result of one or more acts of BNSF that occurred prior to the date of Closing which could not have been discovered by City in a reasonable inspection of the Rail Line; or (B) were caused by one or more acts of BNSF that occurred prior to the date of Closing which could not have been discovered by City in a reasonable inspection of the Rail Line, and result from a Claim delivered to BNSF within one year following the date of Closing,but only up to $10,000 in the aggregate in that year; or (C) do not result from a Claim that is delivered to BNSF within one year following the date of Closing. (4) Arbitration of Allocation of Liability Between City and BNSF. Any dispute between City and BNSF as to allocation between them of Losses for which 12 both City and BNSF are responsible under the terms of this Paragraph 6 shall be settled by binding arbitration in accordance with the rules of the American Arbitration Association,or with the rules of such other alternative dispute resolution service as BNSF and City may agree. (5) City To Comply With Hazardous Materials Laws. City agrees to comply with all federal, state and local laws, regulations and rules concerning handling and disposal of Hazardous Materials in connection with City's ownership of, and activities on and near, the Rail Line. (6) Liability Remedies and Obligations Are Exclusive. City and BNSF agree that the remedies and obligations set forth in this Paragraph 6 shall be exclusive remedies and obligations of each one to the other with respect to any Losses relating to the release or existence of Hazardous Materials on or near the Rail Line. (e) BNSF to Deliver Certain Property Records to City. BNSF shall make good faith efforts to deliver to City, ;;,ithi, 30 do�ro f„llowi gat or before the date of Closing, originals or copies of whatever records, prints, archival information, or other evidence that BNSF locates in a reasonable search of BNSF's records, which bears upon the use of,maintenance, or title to the real estate comprising the Rail Line. If, at any time after Closing, BNSF locates any other documents which bear upon the use of, maintenance, or title to any such real estate, BNSF promptly shall provide originals or copies of those documents to Q4�4 City. BNSF shall indemnify and hold harmless City against any and all Losses that City incurs that result from BNSF not having delivered any relevant and necessary documents 13 which bear upon the use of, maintenance, or title to any such real estate at or before Closing. 7. Assignment. Any assignee, including any successor in interest, of City's rights under or property acquired by this Agreement, must first assume in writing delivered to BNSF all of City's continuing and existing, or thereafter arising, obligations under this Agreement, and under any then effective contract assigned by BNSF to City, in whole or in part, in accordance with the terms of this Agreement. 8. Obligations are Continuing. The representations,warranties and obligations of BNSF and City in this Agreement are continuing and survive the Closing and delivery of the Quitclaim Deed. Terms of continuing obligations in this Agreement are subject to amendment only by a written contract signed by City and BNSF, or their respective successors or assignees. 9. Liens and Encumbrances. BNSF represents and warrants that,to BNSF's knowledge,BNSF has not caused or suffered, and will not cause or suffer prior to the date of Closing, any liens or encumbrances to secure the payment of a debt of BNSF to be filed against the Rail Line which would materially adversely affect City. BNSF represents and warrants that, to BNSF's knowledge, except for: (i)the lien of BNSF's General Lien Mortgage, dated November 10, 1896, between BNSF's predecessor, Northern Pacific Railway, and the Mercantile Trust Company, as supplemented, and(ii)the lien of 14 BNSF's Consolidated Mortgage, dated March 3, 1970, between BNSF's predecessor, Burlington Northern,Inc., and Morgan Guaranty Trust Company of New York, as supplemented(collectively, "Mortgages"),BNSF has not caused or suffered any lien or encumbrance to secure the payment of a debt of BNSF to be filed against BNSF's ownership interest in the Rail Line, and BNSF does ootivarrants that the liens of the Mortgages will materially adversely affect City. BNSF will deliver to City, within a year following Closing, an executed release of BNSF's ownership interest in the Rail Line from the liens of the Mortgages. Until such releases are delivered to City, BNSF shall indemnify City against any Losses that City incurs after Closing that result from BNSF not having delivered such executed releases to City. City agrees to take title to the Rail Line assets and ownership interests conveyed by the terms of this Agreement subject to all liens and encumbrances on those assets and ownership interests. 10. Pending Public Works Projects. BNSF has no knowledge of any pending government funded public works projects on the Rail Line. 11. City to Offer to Hire BNSF's Qualified Employees. City shall consider for initial employment in operating and maintaining the Rail Line any of BNSF's employees who are eligible to work on the Rail Line on the date of this Agreement. City shall give priority hiring consideration for any such positions to such employees of BNSF who are represented by the Brotherhood of Maintenance of Way Employees. City shall offer to hire for any such positions at salary levels and other terms and conditions of employment that are determined 15 by City to be appropriate, all of those employees who City, in its sole discretion, determines to be best qualified and needed. City promptly shall notify BNSF of the name of each of BNSF's current employees who City offers to hire, and also the name of each of these employees who City actually hires. City shall assume a neutral stance in any Brotherhood of Maintenance of Way Employees union organizing effort. 12. Closing. (a) The closing ("Closing") of this transaction shall occur on July_, 2000, or another date mutually agreed by the parties in writing. (b) At Closing, BNSF shall deliver to City the following documents: (1) An original executed, attested and notarized Quitclaim Deed to the Rail Line in exact form as the Quitclaim Deed attached hereto as Exhibit A; and (2) An executed Bill of Sale in exact form as the Bill of Sale attached hereto as Exhibit B. (c) At or before Closing, Shortline shall deliver,to BNSF copy of City's City Code, and any applicable Sections from the Revised Code of Washington, as adopted by reference by the City in the City Code. 13. Proration. Prepaid rentals, utilities, and other income or fees attributable to the Rail Line interests to be transferred by BNSF to City, under the terms of this Agreement shall be prorated 16 between BNSF and City in such manner as to allocate to BNSF all income and expenses attributable to the Rail Line that has been received, or for which bills have been received, on or prior to the date of Closing; and to allocate to City all income and expenses attributable to the Rail Line that is received, or for which bills are received, after the date of Closing. BNSF shall be responsible for all real estate taxes applicable to the Rail Line through the date of Closing. City shall be responsible for any taxes applicable to City as owner of the Rail Line after the date of Closing. 14. Interchange. (a) City and Railway &haUmay interchange rail freight traffic, cars and locomotives to and from each other on tracks on the northeastern end of the Rail Line, at Roy, Washington. The track or tracks used for this interchange shall be known as the "Interchange Track." (b) Cars and their contents that are delivered by one party to the other on the Interchange Track shall be deemed to be in the possession of the receiving party as of the time they are placed on the Interchange Track and uncoupled from the delivering party's train or engine, except that if any such car is rejected by the receiving party under the Interchange Rules of the Association of American Railroads ("AAR") or any successor rules,the refused car shall be deemed to remain in the possession of the delivering party until that car is accepted by the receiving party. 15. Car Hire Costs. The party in possession of any car shall be responsible for all car hire costs,per diem expenses and mileage allowances payable with respect to such car, for any per diem charges for 17 trailers or containers carried by such car, or for any equipment use charges applicable to any RoadRailer equipment or similar carless intermodal technology. 16. City and BNSF to Publish Combination Rates to and From Roy, Washington. BNSF &haUmay establish combination rates to and/or from Roy, Washington, as appropriate,to handle rail freight traffic interchanged between BNSF and City at Roy, Washington. City &hallmay establish combination rates to and/or from Roy, Washington, as appropriate, to handle the rail freight traffic that originates or terminates on the Rail Line. 17. Time is of the Essence. Time is of the essence in this Agreement. 18. Transfer of Operations. All responsibility and authority for conducting rail operations on the Rail Line shall be transferred from BNSF to City at 12:01 a.m. on the day following the date of Closing. 19. Transfer of Liabilities; Payment of Charges. For the period before and including the day of Closing, BNSF shall be responsible for: (a) all common carrier rail operations, including car supply,on the Rail Line; (b)any freight loss and damage claims attributable to rail operations over the Rail Line; and (c) all car accounting and all car hire and car mileage allowance payments relating to rail operations over the Rail Line. At and after 12:01 a.m. on the day following the date of Closing, City shall be responsible for: (d) all 18 common carrier rail operations, including car supply, on the Rail Line; (e) any freight loss and damage claims attributable to rail operations over the Rail Line; and (f) all car accounting and all car hire and car mileage allowance payments relating to rail operations over the Rail Line. 20. Electronic Data Interchange. Within six months following the month in which City and BNSF interchange any freight cars at Roy, Washington, City must have the ability to send and receive electronically waybills, advanced consists, and bills of lading; as well as Train II reports and passing/placement reportings for performance purposes. Transaction reporting should be at industry standard levels or one level behind. 21. Applicable Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Texas. 22. Effect of Waiver. Any waiver by any party to this Agreement, or failure by any such party to insist upon full and complete performance by any other party to this Agreement of its obligations set forth in this Agreement, shall not constitute a waiver or release of such party's right to insist upon full and complete performance of any other obligations in this Agreement, or a waiver or release of such party's right to insist upon full and complete performance of the obligations that were waived or not enforced for periods prior to, or following, the waiver or failure to insist upon full and complete 19 performance. This Agreement shall be amended or modified only by written agreement signed by all three parties hereto. 23. Notices. All notices and other communications under this Agreement shall be in writing and deemed properly served if delivered by hand to the party addressed or, if mailed,when received by the United States Postal Service in registered or certified mail, postage prepaid, or, if sent by a national overnight service, when received by the carrier service in a prepaid mailer, return receipt requested, addressed as follows: BNSF: Mr. Jerome M. Johnson Assistant Vice President Shortline Development The Burlington Northern and Santa Fe Railway Company 2600 Lou Menk Drive Fort Worth, Texas 76131 City: Ms. Shelley Badger City Administrator, City of Yelm 105 Yelm Avenue West P.O. Box 479 Yelm, Washington 98597 Either party hereto may change its address or addressee to which notices are to be given by providing written notice of the change to the other party. 24. Confidentiality. Except to the extent that the terms of this Agreement are required to be disclosed by 20 the STB, by order of any court of competent jurisdiction or any governmental agency, or by laws or regulations applicable to the City entering into this transaction,each party to this Agreement shall not disclose the contents of this Agreement to any other party, without the prior written consent of the other parties to this Agreement. Any party who learns of any of the terms of this Agreement shall be required by the party to this Agreement who is disclosing the information not to disclose those terms to any other party without the prior written consent of both parties to this Agreement. 25. Entire Agreement; Integration of Agreement. This document, together with all Exhibits attached hereto, constitutes the entire agreement between City, BNSF and Railway relating to this transaction. Any other prior or contemporaneous agreements,understandings,representations or statements,whether oral or written, relating to this transaction are merged herein. The headings and titles to provisions in this Agreement are for convenience only, and shall not be deemed to modify or affect the rights or duties of City or BNSF. All rights and obligations of City and BNSF set forth in this Agreement, or in any Exhibit attached hereto, are integral parts of this Agreement. The parties agree that the terms herein have been arrived at by mutual negotiation and that no terms herein shall be presumptively construed against either party regardless of who drafted it in the first instance. 21 IN WITNESS WHEREOF, authorized representatives of City and BNSF have executed this Agreement as of this day of JwwyOctober, 2000. THE BURLINGTON NORTHERN AND CITY OF YELM SANTA FE RAILWAY COMPANY By: By: Peter J. Rickershauser Vice President Network Development NA1aw.mkg\dww\contracts\ye1m dona6awWonation2 22 October 9, 2000 Draft AGREEMENT FOR DONATION OF CERTAIN ASSETS, RIGHTS AND OBLIGATIONS OF THE BURLINGTON NORTHERN AND SANTA FE RAILWAY COMPANY TO CITY OF YELM AGREEMENT FOR DONATION OF CERTAIN ASSETS, RIGHTS AND OBLIGATIONS OF THE BURLINGTON NORTHERN AND SANTA FE RAILWAY COMPANY TO CITY OF YELM,WASHINGTON TABLE OF CONTENTS PARAGRAPH I -DONATION CONVEYANCES AND ASSIGNMENTS 2 PARAGRAPH 2-CONDITIONS OF DONATION 4 PARAGRAPH 3 - GOVERNMENT APPROVAL 5 PARAGRAPH 4-REPRESENTATIONS AND WARRANTIES 5 PARAGRAPH 5-INSPECTION AND CONDITION OF RAIL LINE 7 PARAGRAPH 6-LIABILITY AND INDEMNITY 8 PARAGRAPH 7-ASSIGNMENT 14 PARAGRAPH 8-OBLIGATIONS ARE CONTINUING 14 PARAGRAPH 9-LIENS AND ENCUMBRANCES 14 PARAGRAPH 10-PENDING PUBLIC WORKS PROJECTS 15 PARAGRAPH 11 -CITY TO OFFER TO HIRE BNSF'S QUALIFIED EMPLOYEES 15 PARAGRAPH 12 -CLOSING 16 PARAGRAPH 13-PRORATION 16 PARAGRAPH 14-INTERCHANGE 17 PARAGRAPH 15-CAR HIRE COSTS 17 N:\law.mkg\dww\contracts\yelm toc i PARAGRAPH 16—CITY AND BNSF TO PUBLISH COMBINATION RATES TO AND FROM ROY,WASHINGTON 18 PARAGRAPH 17—TIME IS OF THE ESSENCE 18 PARAGRAPH 18—TRANSFER OF OPERATIONS 18 PARAGRAPH 19—TRANSFER OF LIABILITIES; PAYMENT OF CHARGES 18 PARAGRAPH 20—ELECTRONIC DATA INTERCHANGE 19 PARAGRAPH 21 —APPLICABLE LAW 19 PARAGRAPH 22—,EFFECT OF WAIVER 19 PARAGRAPH 23—NOTICES 20 PARAGRAPH 24—CONFIDENTIALITY 20 PARAGRAPH 25—ENTIRE AGREEMENT; INTEGRATION OF AGREEMENT 21 EXHIBIT A - Quitclaim Deed EXHIBIT B - Bill of Sale EXHIBIT C - Agreements Assigned to City of Yelm in Whole or in Part N:\1aw.mkg\dww\contracts\ye1m toc 11 AGREEMENT FOR DONATION OF CERTAIN ASSETS, RIGHTS AND OBLIGATIONS OF THE BURLINGTON NORTHERN AND SANTA FE RAILWAY COMPANY TO CITY OF YELM THIS AGREEMENT("Agreement") is entered into as of this day of October, 2000, between THE BURLINGTON NORTHERN AND SANTA FE RAILWAY COMPANY, a Delaware corporation ("BNSF"), and The City of Yelm, a municipality in the the State of Washington("City"). WHEREAS, BNSF desires to donate and convey to City, on the terms and conditions set forth in this Agreement,BNSF's rail line and rail corridor ownership interests in its rail line segment between Milepost 20.99 in Roy,Washington,and Milepost 25.56 in Yelm,Washington(collectively, "Rail Line"),together with BNSF's rights to conduct rail freight transportation business on the Rail Line, and certain other rights and obligations as specified in this Agreement; and WHEREAS, City desires to accept this donation from BNSF, and to acquire the Rail Line, BNSF's rights to conduct rail freight transportation business on the Rail Line, and certain other rights and obligations as specified in this Agreement, pursuant to the terms and conditions set forth in this Agreement; 1 NOW, THEREFORE, City and, BNSF agree as follows: 1. Donation Conveyances and Assignments. (a) BNSF shall donate and convey to City, on the date of Closing (as defined later herein), by Quitclaim Deed delivered by BNSF to City on that date, all of BNSF's ownership interest in BNSF's Rail Line (except a retained license to operate over such portion of the track at and near Roy, Washington as is necessary or convenient to interchange rail traffic between City and BNSF at Roy, Washington), which shall include all rail corridor land between the endpoint Mileposts of the Rail Line and all improvements that are located thereon. The Rail Line is described specifically in Attachment 1 to the Quitclaim Deed set forth as Exhibit A attached hereto, and made a part hereof. BNSF and City acknowledge that the Rail Line does not include the parcel of land in Yelm, Washington that is being conveyed by BNSF to City in a separate transaction following the date of this Agreement. (b) BNSF shall convey to City, effective on the date of Closing, BNSF's right to conduct rail transportation business on the Rail Line, subject to the terms and conditions set forth in this Agreement,the Quitclaim Deed, the Bill of Sale and/or any agreement assigned by BNSF to City by the terms of this Agreement. (c) BNSF shall convey to City, on the date of Closing,by delivering to City on the date of Closing a Bill of Sale identical in form to the Bill of Sale set forth as Exhibit B attached hereto, and made a part hereof,all of BNSF's ownership interest in all personal property that, on the date of the Closing, does not constitute improvements on the Rail Line, but which then are present on the real property comprising the Rail Line. This conveyance shall be subject to the terms and conditions set forth in this Agreement, the Bill of Sale, the Quitclaim Deed and/or any agreement 2 assigned by BNSF to City by the terms of this Agreement. (d) BNSF hereby assigns to City, effective on the date of Closing, subject to all terms and conditions set forth in this Agreement, the Quitclaim Deed, the Bill of Sale and/or any agreement assigned by BNSF to City by the terms of this Agreement, all assignable rights and obligations of BNSF to the extent such rights and obligations are effective after Closing, to the extent that they are related to the Rail Line and are set forth in any agreement identified on Exhibit C attached hereto and made a part hereof. City hereby accepts the assignment of all such rights and obligations of BNSF, effective on the date of Closing, in accordance with the terms of each applicable agreement and the terms of this Agreement. BNSF,and not City, shall be responsible for performing all of BNSF's duties in assigned agreements which are required to be performed on or before the date of Closing. City, and not BNSF, shall be responsible for performing all assigned duties in assigned agreements which are required to be performed after the date of Closing. City acknowledges that BNSF reserves, and City does not acquire, all rights and obligations set forth in any agreement identified in Exhibit C to the extent those rights or obligations are related to property owned by BNSF after Closing. If any contract is related to the Rail Line and is intended to be assigned by BNSF to City,in whole or in part, but inadvertently is not identified in Exhibit C, BNSF promptly shall provide to City a copy of any such contract immediately upon locating it, and City, as of the date of its receipt of such copy, shall assume the rights and obligations in such contract to the extent they are related to the Rail Line. BNSF believes that Exhibit C is a complete or nearly complete list of all contracts related to the Rail Line that are intended to be assigned by BNSF to City. City shall make no claim against BNSF arising out of any failure to obtain a consent to assignment from any party to any agreement assigned by BNSF to City, in whole or in part. BNSF 3 does not believe that any consents to such assignments are necessary. 2. Conditions of Donation. City hereby accepts the following conditions to BNSF's donation of the Rail Line, and it's conveyance and assignment to City of other rights and obligations as described in Paragraph 1: (a) City accepts all transferred real property and personal property "AS IS, WHERE IS" and "with all faults." City acknowledges that certain track materials are missing from the Rail Line and that it cannot support train operations until certain repairs are made. (b) Commencing at 12:01 a.m. on the date following Closing, and continuing thereafter, City shall assume all common carrier obligations related to the Rail Line. (c) City shall take all actions and execute all documents that may be necessary or helpful in connection with BNSF's charitable donation tax deduction for donation of the Rail Line, including City executing the Donee Acknowledgment section of Internal Revenue Service Form 8283. (d) City shall pay all costs of Closing (except BNSF's cost of preparation of documents to be delivered at Closing), including, but not limited to, any escrow and service fees,real estate transfer taxes, excise taxes,recording fees and sales taxes associated with this Agreement or any of the conveyances governed by this Agreement. 4 3. Government Approval. City, at its sole expense, shall prepare and file such documents as may be required to secure approval, or exemption from approval, of this transaction by the federal Surface Transportation Board ("STB"). City shall make all reasonable efforts to obtain this approval or exemption in time for this transaction to close on November 16, 2000. City shall permit BNSF to review prior to filing all documents proposed by City to be filed with the STB or any court to secure legal approval or exemption of this transaction. 4. Representations and Warranties. (a) BNSF hereby represents and warrants to City, and City's successors and assignees, the following facts, as of the date of this Agreement and as of the date of Closing: (1) BNSF is a corporation duly organized,validly existing,and in good standing under the laws of the State of Delaware, and is qualified to do business as a foreign corporation in the State of Washington. (2) BNSF has the corporate power and authority to enter into this Agreement and carry out its obligations under this Agreement; (3) The execution, delivery and performance of this Agreement have been duly authorized and approved by all necessary corporate actions of BNSF, and no further corporate proceedings of BNSF are required to complete the transactions covered by this Agreement; (4) All of BNSF's obligations set forth in this Agreement constitute legal, valid 5 and binding obligations of BNSF which are enforceable against BNSF in accordance with their terms,except to the extent enforcement may be limited by bankruptcy, insolvency or reorganization law; (5) There is no provision in the Certificate of Incorporation or By-Laws of BNSF which prohibits the execution of this Agreement or consummation of the transactions covered by this Agreement; and (6) No representation or warranty by BNSF in this Agreement contains any untrue statement of a material fact, nor omits any material fact that is necessary to make any representation or warranty not materially misleading. (b) City hereby represents and warrants to BNSF, and all successors and assignees of BNSF, the following facts, as of the date of this Agreement and as of the date of Closing, except where specifically noted to be as of the date of Closing only: (1) City is municipality duly organized, validly existing and in good standing under the laws of the State of Washington; (2) City is a qualified donee within the meaning of Section 170(c)(1) of the Internal Revenue Code of 1986, as amended; (3) City has all requisite business authority to purchase BNSF's rights and properties which are conveyed to City by this Agreement; to enter into this Agreement; to conduct rail freight transportation business on the Rail Line (as of the date of Closing only); and to perform all of City's obligations under this Agreement; (4) The execution of this Agreement and consummation of the transactions which 6 are a part of this Agreement have been duly authorized and approved by all necessary actions by City, and immediately upon execution of this Agreement by City's authorized representative, all of City's obligations set forth in or referenced in this Agreement shall constitute legal, valid and binding obligations of City, or City's successors or assignees, which obligations are enforceable against City in accordance with their terms, except to the extent enforcement may be limited by applicable bankruptcy, insolvency, reorganization or other laws affecting the enforcement of creditors' rights generally and the application of general principles of equity; (5) There is no provision in the Charter of City, or any applicable law, ordinance or regulation, that prohibits the City's execution of this Agreement or it's consummation of the transactions covered by this Agreement; (6) As of the date of Closing only, City shall have obtained all legal authority which is necessary to enable City lawfully to conduct rail freight transportation operations over the Rail Line as a common carrier, commencing at 12:01 a.m. on the day following the date of Closing; and (7) No representation or warranty by City in this Agreement contains any untrue statement of a material fact, nor omits any material fact that is necessary to make any representation or warranty not materially misleading. 5. Inspection and Condition of the Rail Line. (a) By signing this Agreement, City acknowledges that City has inspected the 7 Rail Line, including all improvements and structures on the Rail Line, and all land to be conveyed as part of this transaction. City further acknowledges that: (i) except as set forth in this Agreement, no representation has been made by BNSF to City concerning the state or condition of the Rail Line, or the age of any improvements on the Rail Line; (ii) City has not relied upon any statement or declaration of BNSF,oral or in writing, as an inducement to entering into this Agreement, other than as stated in this Agreement; and (iii) all terms of this transaction are set forth in this Agreement. (b) BNSF HEREBY DISCLAIMS ANY REPRESENTATION OR WARRANTY, WHETHER EXPRESS OR IMPLIED, AS TO THE DESIGN OR CONDITION OF THE RAIL LINE, ITS MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE, THE QUALITY OF THE MATERIAL OR WORKMANSHIP OF THE RAIL LINE, OR THE CONFORMITY OF THE RAIL LINE TO ITS INTENDED USES. BNSF SHALL NOT BE LIABLE TO CITY FOR ANY INCIDENTAL OR CONSEQUENTIAL DAMAGES (INCLUDING STRICT LIABILITY IN TORT)WITH RESPECT TO THE DESIGN, CONDITION, QUALITY, SAFETY, MERCHANTABILITY, OR FITNESS FOR ANY PARTICULAR PURPOSE, OF THE RAIL LINE, OR THE CONFORMITY OF THE RAIL LINE TO ITS INTENDED USES. BNSF DONATES AND CONVEYS, AND CITY ACCEPTS,THE RAIL LINE IN "AS IS, WHERE IS" AND "WITH ALL FAULTS" CONDITION,AND SUBJECT TO ALL LIMITATIONS ON THE RIGHTS, INTEREST AND TITLE OF BNSF TO THE PROPERTY COMPRISING THE RAIL LINE. 6. Liability and Indemnity. (a) Cooperation in Defense. City and BNSF agree that, following the date of Closing, 8 they will cooperate as necessary in defense of any claim, demand, investigation or litigation arising out of the ownership or operation of the Rail Line. (b) Definition of Losses. In this Agreement, the term "Losses" shall include all costs, expenses, fees or liabilities of, or in any way related to: (i) any violation of law or regulation, (ii) any damage to property,the environment or natural resources, (iii)any bodily injury or death of any person, or (iv) the breach of any contract, including this Agreement to the extent set forth in this Agreement. "Losses" shall include,but not be limited to, all costs of claims, activities in response to enforcement,costs of investigation and remediation,damages,judgments, awards,orders,decrees, payments,fines,penalties,assessments,court costs, and attorney,consultant and expert witness fees, and shall include cost recovery or contribution claims made pursuant to CERCLA or similar federal or state laws. (c) General Liability and Indemnity. (1) BNSF's General Liability and Indemnity. Except as provided in Paragraph 6(d) of this Agreement, BNSF shall be responsible for, and shall indemnify, defend and hold harmless City fully against, all Losses which: (i) arise out of BNSF's ownership or operation of the Rail Line, prior to the date of Closing; or (ii) result from any breach by BNSF of any representations or warranties of BNSF that are set forth in this Agreement, or any failure by BNSF to perform any obligations of BNSF under this Agreement. (2) City's General Liability and Indemnity. Except as provided in Paragraph 6(d) of this Agreement, and further except for Losses resulting from one or more representations or warranties of BNSF as set forth in this Agreement 9 containing any untrue or materially misleading statement of a material fact, or omitting any material fact that is necessary to prevent that representation or warranty from being materially misleading, City shall be responsible for, and shall indemnify, defend and hold harmless BNSF fully against, regardless of any negligence of BNSF, all Losses which: (i) arise out of City's ownership or operation of the Rail Line after 12:01 a.m. on the day following the date of Closing; (ii) result from any breach by City of any of its representations or warranties set forth in Paragraph 4(b) of this Agreement, or any failure by City to perform any of its obligations under this Agreement; (iii) result from claims of third parties caused by City's nonperformance or required performance under any contract, lease, permit, license, easement or commitment relating to the Rail Line, if that contract, lease,permit, license, easement or commitment is identified in Exhibit C, or City has notice by BNSF of it and such contract, lease, permit, license, easement or commitment was intended to be assigned to, and assumed by, City at Closing; and (iv) are proximately caused, to any extent, by the activities, operations or presence of City or any of its agents, contractors, representatives,permittees or invitees, or any of their employees,who are on or near the Rail Line. (d) Environmental Liability and Indemnity. (1) City's Acknowledgments with Respect to the Rail Line. City acknowledges that BNSF has provided City with full access to inspect the Rail Line. 10 (2) BNSF's Environmental Liability and Indemnity. Notwithstanding any other liability or indemnification provision in this Agreement, BNSF shall be responsible for, and shall indemnify, defend and hold harmless City (including its successors and assignees)fully against, Losses incurred due to any claim, demand or litigation,to the extent it is based on any violation or requirement of any applicable environmental statute, ordinance, rule, regulation, order or decision(collectively, "Environmental Laws"), and the Losses arise from: (i) any chemical, material or substance that is now, or at the time in question is, regulated or governed by any law, the release of which creates any liability under any applicable law; or(ii)any other material which, when released, would cause ecological damage in violation of any applicable Environmental Laws (items described by (i) or (ii) above are referenced hereinafter as "Hazardous Materials")located on,under or near the Rail Line, to the extent that such Losses: (A) were caused by one or more acts or omissions of BNSF that occurred prior to the date of Closing, and that could not have been discovered by City in a reasonable inspection of the Rail Line; and (B) result from any written claim made by a party other than City, ("Claims") that is delivered to BNSF within one year following the date of Closing; and (C) exceed $10,000 in the aggregate in that year. (3) City's Environmental Liability and Indemnity. As a condition of BNSF's 11 donation of the Rail Line, and notwithstanding the liability and indemnity provisions set forth in Paragraph 6(c) of this Agreement, City shall be responsible for, and shall indemnify, defend, and hold harmless BNSF fully against, regardless of any negligence of BNSF, Losses incurred due to any claim, demand or litigation, to the extent it is based on any violation or requirement of any applicable environmental statute, ordinance, rule, regulation, order or decision, and the Losses arise from any Hazardous Materials located on, under or near the Rail Line, to the extent that such Losses either: (A) resulted from any cause or causes that were not the result of one or more acts of BNSF that occurred prior to the date of Closing which could not have been discovered by City in a reasonable inspection of the Rail Line; or (B) were caused by one or more acts of BNSF that occurred prior to the date of Closing which could not have been discovered by City in a reasonable inspection of the Rail Line, and result from a Claim delivered to BNSF within one year following the date of Closing,but only up to $10,000 in the aggregate in that year; or (C) do not result from a Claim that is delivered to BNSF within one year following the date of Closing. (4) Arbitration of Allocation of Liability Between City and BNSF. Any dispute between City and BNSF as to allocation between them of Losses for which 12 both City and BNSF are responsible under the terms of this Paragraph 6 shall be settled by binding arbitration in accordance with the rules of the American Arbitration Association, or with the rules of such other alternative dispute resolution service as BNSF and City may agree. (5) City To Comply With Hazardous Materials Laws. City agrees to comply with all federal, state and local laws, regulations and rules concerning handling and disposal of Hazardous Materials in connection with City's ownership of, and activities on and near,the Rail Line. (6) Liability Remedies and Obligations Are Exclusive. City and BNSF agree that the remedies and obligations set forth in this Paragraph 6 shall be exclusive remedies and obligations of each one to the other with respect to any Losses relating to the release or existence of Hazardous Materials on or near the Rail Line. (e) BNSF to Deliver Certain Property Records to City. BNSF shall make good faith efforts to deliver to City, at or before the date of Closing, originals or copies of whatever records, prints, archival information, or other evidence that BNSF locates in a reasonable search of BNSF's records,which bears upon the use of,maintenance,or title to the real estate comprising the Rail Line. If, at any time after Closing, BNSF locates any other documents which bear upon the use of, maintenance, or title to any such real estate, BNSF promptly shall provide originals or copies of those documents to City. BNSF shall indemnify and hold harmless City against any and all Losses that City incurs that result from BNSF not having delivered any relevant and necessary documents which bear upon the use of, maintenance, or title to any such real estate at or before Closing. 13 7. Assignment. Any assignee, including any successor in interest, of City's rights under or property acquired by this Agreement, must first assume in-writing delivered to BNSF all of City's continuing and existing, or thereafter arising, obligations under this Agreement, and under any then effective contract assigned by BNSF to City, in whole or in part, in accordance with the terms of this Agreement. 8. Obligations are Continuing. The representations,warranties and obligations of BNSF and City in this Agreement are continuing and survive the Closing and delivery of the Quitclaim Deed. Terms of continuing obligations in this Agreement are subject to amendment only by a written contract signed by City and BNSF, or their respective successors or assignees. 9. Liens and Encumbrances. BNSF represents and warrants that,to BNSF's knowledge,BNSF has not caused or suffered, and will not cause or suffer prior to the date of Closing, any liens or encumbrances to secure the payment of a debt of BNSF to be filed against the Rail Line which would materially adversely affect City. BNSF represents and warrants that, to BNSF's knowledge, except for: (i)the lien of BNSF's General Lien Mortgage, dated November 10, 1896, between BNSF's predecessor, Northern Pacific Railway, and the Mercantile Trust Company, as supplemented, and(ii)the lien of BNSF's Consolidated Mortgage, dated March 3, 1970, between BNSF's predecessor, Burlington 14 Northern,Inc., and Morgan Guaranty Trust Company of New York, as supplemented (collectively, "Mortgages"), BNSF has not caused or suffered any lien or encumbrance to secure the payment of a debt of BNSF to be filed against BNSF's ownership interest in the Rail Line, and BNSF warrants that the liens of the Mortgages will materially adversely affect City. BNSF will deliver to City, within a year following Closing, an executed release of BNSF's ownership interest in the Rail Line from the liens of the Mortgages. Until such releases are delivered to City, BNSF shall indemnify City against any Losses that City incurs after Closing that result from BNSF not having delivered such executed releases to City. City agrees to take title to the Rail Line assets and ownership interests conveyed by the terms of this Agreement subject to all liens and encumbrances on those assets and ownership interests. 10. Pending Public Works Projects. BNSF has no knowledge of any pending government funded public works projects on the Rail Line. 11. City to Offer to Hire BNSF's Qualified Employees. City shall consider for initial employment in operating and maintaining the Rail Line any of BNSF's employees who are eligible to work on the Rail Line on the date of this Agreement. City shall give priority hiring consideration for any such positions to such employees of BNSF who are represented by the Brotherhood of Maintenance of Way Employees. City shall offer to hire for any such positions at salary levels and other terms and conditions of employment that are determined by City to be appropriate, all of those employees who City, in its sole discretion, determines to be 15 best qualified and needed. City promptly shall notify BNSF of the name of each of BNSF's current employees who City offers to hire, and also the name of each of these employees who City actually hires. City shall assume a neutral stance in any Brotherhood of Maintenance of Way Employees union organizing effort. 12. Closing. (a) The closing ("Closing") of this transaction shall occur on July_, 2000, or another date mutually agreed by the parties in writing. (b) At Closing, BNSF shall deliver to City the following documents: (1) An original executed, attested and notarized Quitclaim Deed to the Rail Line in exact form as the Quitclaim Deed attached hereto as Exhibit A; and (2) An executed Bill of Sale in exact form as the Bill of Sale attached hereto as Exhibit B. (c) At or before Closing, Shortline shall deliver to BNSF copy of City's City Code, and any applicable Sections from the Revised Code of Washington, as adopted by reference by the City in the City Code. 13. Proration. Prepaid rentals, utilities, and other income or fees attributable to the Rail Line interests to be transferred by BNSF to City, under the terms of this Agreement shall be prorated between BNSF and City in such manner as to allocate to BNSF all income and expenses attributable 16 to the Rail Line that has been received, or for which bills have been received,on or prior to the date of Closing; and to allocate to City all income and expenses attributable to the Rail Line that is received, or for which bills are received, after the date of Closing. BNSF shall be responsible for all real estate taxes applicable to the Rail Line through the date of Closing. City shall be responsible for any taxes applicable to City as owner of the Rail Line after the date of Closing. 14. Interchange. (a) City and Railway may interchange rail freight traffic, cars and locomotives to and from each other on tracks on the northeastern end of the Rail Line, at Roy, Washington. The track or tracks used for this interchange shall be known as the"Interchange Track." (b) Cars and their contents that are delivered by one party to the other on the Interchange Track shall be deemed to be in the possession of the receiving party as of the time they are placed on the Interchange Track and uncoupled from the delivering party's train or engine,except that if any such car is rejected by the receiving party under the Interchange Rules of the Association of American Railroads ("AAR") or any successor rules,the refused car shall be deemed to remain in the possession of the delivering party until that car is accepted by the receiving party. 15. Car Hire Costs. The party in possession of any car shall be responsible for all car hire costs,per diem expenses and mileage allowances payable with respect to such car, for any per diem charges for trailers or containers carried by such car, or for any equipment use charges applicable to any RoadRailer equipment or similar carless intermodal technology. 17 16. City and BNSF to Publish Combination Rates to and From Roy, Washington. BNSF may establish combination rates to and/or from Roy, Washington, as appropriate,to handle rail freight traffic interchanged between BNSF and City at Roy, Washington. City may establish combination rates to and/or from Roy, Washington, as appropriate,to handle the rail freight traffic that originates or terminates on the Rail Line. 17. Time is of the Essence. Time is of the essence in this Agreement. 18. Transfer of Operations. All responsibility and authority for conducting rail operations on the Rail Line shall be transferred from BNSF to City at 12:01 a.m. on the day following the date of Closing. 19. Transfer of Liabilities; Payment of Charges. For the period before and including the day of Closing, BNSF shall be responsible for: (a)all common carrier rail operations, including car supply,on the Rail Line; (b)any freight loss and damage claims attributable to rail operations over the Rail Line; and (c)all car accounting and all car hire and car mileage allowance payments relating to rail operations over the Rail Line. At and after 12:01 a.m. on the day following the date of Closing, City shall be responsible for: (d) all common carrier rail operations, including car supply, on the Rail Line; (e) any freight loss and damage claims attributable to rail operations over the Rail Line; and (f) all car accounting and all 18 car hire and car mileage allowance payments relating to rail operations over the Rail Line. 20. Electronic Data Interchange. Within six months following the month in which City and BNSF interchange any freight cars at Roy, Washington, City must have the ability to send and receive electronically waybills, advanced consists, and bills of lading; as well as Train II reports and passing/placement reportings for performance purposes. Transaction reporting should be at industry standard levels or one level behind. 21. Applicable Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Texas. 22. Effect of Waiver. Any waiver by any party to this Agreement, or failure by any such party to insist upon full and complete performance by any other party to this Agreement of its obligations set forth in this Agreement, shall not constitute a waiver or release of such party's right to insist upon full and complete performance of any other obligations in this Agreement, or a waiver or release of such party's right to insist upon full and complete performance of the obligations that were waived or not enforced for periods prior to, or following, the waiver or failure to_insist upon full and complete performance. This Agreement shall be amended or modified only by written agreement signed by all three parties hereto. 19 23. Notices. All notices and other communications under this Agreement shall be in writing and deemed properly served if delivered by hand to the party addressed or, if mailed, when received by the United States Postal Service in registered or certified mail, postage prepaid, or, if sent by a national overnight service, when received by the carrier service in a prepaid mailer, return receipt requested, addressed as follows: BNSF: Mr. Jerome M. Johnson Assistant Vice President Shortline Development The Burlington Northern and Santa Fe Railway Company 2600 Lou Menk Drive Fort Worth, Texas 76131 City: Ms. Shelly Badger City Administrator, City of Yelm 105 Yelm Avenue West P.O. Box 479 Yelm, Washington 98597 Either party hereto may change its address or addressee to which notices are to be given by providing written notice of the change to the other party. 24. Confidentiality. Except to the extent that the terms of this Agreement are required to be disclosed by the STB, by order of any court of competent jurisdiction or any governmental agency, or by laws or regulations applicable to the City entering into this transaction, each party to this Agreement shall 20 not disclose the contents of this Agreement to any other party, without the prior written consent of the other parties to this Agreement. Any party who learns of any of the terms of this Agreement shall be required by the party to this Agreement who is disclosing the information not to disclose those terms to any other party without the prior written consent of both parties to this Agreement. 25. Entire Agreement; Integration of Agreement. This document, together with all Exhibits attached hereto, constitutes the entire agreement between City, BNSF and Railway relating to this transaction. Any other prior or contemporaneous agreements,understandings,representations or statements,whether oral or written, relating to this transaction are merged herein. The headings and titles to provisions in this Agreement are for convenience only, and shall not be deemed to modify or affect the rights or duties of City or BNSF. All rights and obligations of City and BNSF set forth in this Agreement, or in any Exhibit attached hereto, are integral parts of this Agreement. The parties agree that the terms herein have been arrived at by mutual negotiation and that no terms herein shall be presumptively construed against either party regardless of who drafted it in the first instance. 21 IN WITNESS WHEREOF,authorized representatives of City and BNSF have executed this Agreement as of this day of October, 2000. THE BURLINGTON NORTHERN AND CITY OF YELM SANTA FE RAILWAY COMPANY By: By: Peter J. Rickershauser Vice President Network Development NA1aw.mkg\dww\contracts\ye1m donation2 22 EXHIBIT A QUITCLAIM DEED THE BURLINGTON NORTHERN AND SANTA FE RAILWAY COMPANY,a Delaware corporation, Grantor, hereby donates, conveys and quitclaims to Grantee, CITY OF YELM, a municipality in the State of Washington,without any covenants of warranty whatsoever and without recourse to Grantor, its successors or assignees, all of Grantor's rights, title and interest, if any, in real estate and improvements constituting Grantor's rail corridor between Milepost 20.99, in Roy, Washington, and the southwestern end of this rail line corridor at or.near Milepost 25.26, in Yelm, Washington, which real estate and improvements are situated in Pierce and Thurston Counties, Washington, the boundaries of which are more particularly described in Attachment 1, attached hereto (hereinafter"Premises"). SUBJECT,however,to all existing interests in the Premises, including but not limited to all reservations, easements and other encumbrances, of record or otherwise. EXCEPTING AND RESERVING unto Grantor, its successors and assignees, a license for 99 years (or until any earlier date on which all rail service is abandoned on the rail line on the Premises), to operate over such portion of track on the Premises at or near Roy, Washington as is necessary or convenient to interchange rail traffic between Grantor and Grantee, or Grantee's successor or assignee. IN WITNESS WHEREOF, Grantor has caused this instrument to be signed by its authorized representative, and its corporate seal to be affixed hereto, on the day of November, 2000. _1_ THE BURLINGTON NORTHERN AND SANTA FE RAILWAY COMPANY By: Peter J. Rickershauser Vice President-Network Development ATTEST: By: Assistant Secretary N:\law.mkg\dww\contracts\yelm quitclaim deed —2— STATE OF TEXAS ) ss. COUNTY OF TARRANT ) On this day of November, 2000,before me,the undersigned, a Notary Public in and for the State of Texas,duly commissioned and sworn,personally appeared Peter J. Rickershauser, Vice President, Network Development, and an Assistant Secretary, respectively, of The Burlington Northern and Santa Fe Railway Company,the corporation that executed the foregoing instrument, and acknowledged the execution thereof to be the free and voluntary act and deed of such officer and the voluntary act and deed of said corporation, for the uses and purposes therein mentioned, and on oath stated that they are authorized to execute the foregoing instrument and that the seal affixed in the corporate seal of said corporation. Witness my hand and official seal affixed the day and year first above written. Notary Public My commission expires: -3- EXHIBIT B BILL OF SALE THE BURLINGTON NORTHERN AND SANTA FE RAILWAY COMPANY(`BNSF") hereby donates and conveys to CITY OF YELM all of BNSF's rights, title and interest to the following unaffixed personal property located on BNSF's rail corridor between Milepost 20.99 in Roy, Washington and the end of this rail line at or near Milepost 25.26, in Yelm, Washington. BNSF HEREBY DISCLAIMS ANY REPRESENTATION OR WARRANTY, WHETHER EXPRESS OF IMPLIED, AS TO THE DESIGN OR CONDITION OF ANY SUCH PERSONAL PROPERTY HEREBY CONVEYED, ITS MERCHANTABILITY, OR ITS FITNESS FOR ANY PARTICULAR PURPOSE. BNSF SHALL NOT BE LIABLE TO CITY OF YELM FOR ANY INCIDENTAL OR CONSEQUENTIAL DAMAGES WITH RESPECT TO THE DESIGN, CONDITION, QUALITY, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF ANY OF THE PERSONAL PROPERTY CONVEYED HEREBY. IN WITNESS WHEREOF, BNSF has caused this Bill of Sale to be executed by its duly authorized representative this day of November, 2000. THE BURLINGTON NORTHERN AND SANTA FE RAILWAY COMPANY By: Peter J. Rickershauser Vice President-Network Development N:law.mkg\dww\contracts\yelm bill of sale EXHIBIT C Agreements Assigned to City of Yelm In Whole or In Part o PAGE: 1 KEYWORD SEARCH RESULTS REPORT GATE: 06/13/00 SREtULT.Fkl BURLINGTON NORTHERN 8 SANTA FE RVY. CO. TIME: 12:30:24 EXPIRATION OR CONTRACT TERMINATION TYPE CONTRACT NO. CONTRACTOR / DESCRIPTION DATE DATE LOCATION CODE BF 00010856.00 PUGET SOUND ENERGY, INC. 06/15/1999 WA, YELH PR-PW/BNSF ELECTRIC WIRE LINE, LS. 52, MP. 23; ASSIGNED TO THE CITY OF YELM, NA; -CAT-NO.: 501101 ON 00002044.00 WASHINGTON, STATE OF 06/16/1972 WA, YELM GV-XS/BNRR IMPROVE CROSSING SIGNALS, HP. 25+2973; ASSIGNED TO THE CITY OF YELM, WA; ON OD003302.00 MCLINS, INC. 06/11/1973 WA, YELM ID-IT/BNRR CMO&O INDUSTRIAL TRACK $ CROSSING, MP. 25+723; ASSIGNED TO THE CITY OF YELM, WA; BN 00007218.OD HARSCO CORP. 12/30/1976 WA, YELM ID-I1/5NRR MID INDUSTRIAL SPUR TRACK, MP. 24+4010; ASSIGNED TO THE CITY OF YELM, WA; Cx 85016001.00 SILVASEED CO. 03/20/1985 WA, ROY PR-PC/BNRR PRIVATE ROAD CROSSING, MP. 21+150; ASSIGNED TO THE CITY OF YELM, UA; Cx 86016044.00 PAISLEY, PATRICIA ANN 8 MARKUS, LEWIS H. 06/16/1986 WA, YELM PR-PC/BNRR MBO ROAD CROSSING UNDER RR. BRIDGE NO. 22.1, CANCELS LC #205343; ASSIGNED TO THE CITY OF YELM, WA; CX 90016022.00 DROSOT, STEVE L DOROTHY M.; REEDER, RICHARD 8 LINDA L. 12/03/1993 WA, ROY PR-PC/BNRR PRIVATE ROAD CROSSING; I.S. 40D, NP. 21.03; CANCELS LC #237576; ASSIGNED TO THE CITY OF YELM, WA; LC 00210734.00 YELM TELEPHONE CO. 06/DT/1973 WA, YELM PR-PW/BNRR ORD TELEPHONE WIRE CROSSING, HP. 25+854; ASSIGNED TO THE CITY OF VELN, WA; LC 00216559.00 STRINGI(AM, H. R. 12/16/1974 WA, ROY PR-PC/BNRR PRIVATE CROSSING, MP. 21+150; ASSIGNED TO THE CITY OF YELM, WA; LC 00221899.00 YELM, CITY OF 06/16/1976 WA, YELM PR-PL/BOR WATER PIPELINE CRCSSINO, MP. 25+917; ASSIGNED TO THE CITY OF YELM, WA; w w LC 00238157.00 CABLE TV PUDGEI SOUND, INC.; 07/01/1981 WA, YELM PR-PW/BNRR ASSIGNED 10 VIACOM CABLEVISION, INC.; o OHD TV CABLE CROSSING, MP. 250002; ASSIGNED TO THE CITY OF YELM, WA; z � NP 00007349.00 CENTRALIA. CITY OF 06/23/1929 WA, YELM GV-GN/BNRR PERMANENT SIPHON UNDERCROSSING, NP. 24+716; o ASSIGNED TO THE CITY OF YELM, WA; C) -LAW-NO.: #15024 w 0 0 CD DATE: 06/13/OD IJAGE: 2 KEYWORD SEARCH RESULTS REPORT [SP SRESULT.FMT BURLINGTON NORTHERN & SANTA FE RWY. CO. TINE: 12:30:26 EXPIRATION OR CONTRACT TERMINATION TYPE CONTRACT NO. CONTRACTOR / DESCRIPTION DATE DATE LOCATION CODE NP 00013981.00 MURRAY, NELSON 07/22/1904 WA, RPY PR-PL/BNRR 3/4 INCH WATER PIPELINE; + ASSIGNED TO THE CITY OF YELM, WA; NP 00019Z90.00 PACIFIC TELEPHONE & TELEGRAPH CO.; 06/15/1914 SYSTEM PR-PW/BNRR ASSIGNED TO PACIFIC NORTHWEST BELL TELEPHONE CO.; ASSIGNED TO US WEST COfWUNICATIONS, INC.; MASTER GENERAL CROSSING AGNT., SUPPLEMENT NO. 660, OHD TELEPHONE WIRE LINE CROSSING, MP. 21+548; ASSIGNED TO THE CITY OF YELM, WA; -LAW-NO.: 027737 NP 00038623.00 AVERY, G. A. 05/05/1922 WA, ROY PR-PW/BNRR ELECTRIC WIRE LINE CROSSING; ASSIGNED TO THE CITY OF YELM, kA; NP 00040855.00 THURSTON COUNTY UTILITIES CO. 12/20/1923 WA, YELN PA-PW/BNRR OHD ELECTRIC WIRE LINE CROSSING, MP. 25+900; ASSIGNED TO THE CITY OF YELM, WA; NP 00066454.00 PUGET SOUND POWER & LIGHT CO. 11/15/1946 WA, YELM PR-PW/BNRR ELECTRIC WIRE LINE, MP. 254-1705; ASSIGNED TO THE CITY OF YELM, WA; NP 00095981.00 OLYMPIC PIPELINE CO. 05/01/1965 WA, ROY PR-PL/BNRR PETROLEUM PIPELINE CROSSING, MP. 21+6+07; ASSIGNED TO THE CITY OF YELM, WA; NP 00095882.00 OLYMPIC PIPELINE CO. 05/01/1965 WA, YELM PR-PL/BNRR LONGITUDINAL PETROLEUM PIPELINE; PARTITAL ASSIGNMENT TO THE CITY OF YELM, WA; NP 00096020.00 PUGET SOUND POWER & LIGHT CO. 07/01/1965 WA, ROY PR-PW/BNRR 011D ELECTRIC WIRE LINE CROSSING, MP. 214-548; ASSIGNED TO THE CITY OF YELM, WA; NP 00097220.00 YEL.N, TOWN OF D6/01/1966 WA, YELM PR-PL/BNRR 2 WATER PIPELINE CROSSINGS, MP. 254-917 & MP. 25+3965; ti ASSIGNED TO THE CITY OF YELM, UA; C` N NP 00097261.00 WASHINGTON NATURAL GAS CO. 07/01/1966 NA, YELM PR-PL/BNRR �. NATURAL GAS PIPELINE CROSSING, MP. 25+875; o ASSIGNED TO THE CITY OF YELM, WA; NP OOD98040.00 PUGET SOUND POWER & LIGHT 00. 01/15/1967 WA, YELM PR-PW/BNRR OHO ELECTRIC WIRE LINE CROSSING, 25+178; ASSIGNED TO THE CITY OF YELM, WA; o 0 0 0 .I c o , 0 Isp PAGE: 3 KEYWORD SEARCH RESULTS REPORT SRESULT.FNT BURLINGTON NORTHERN B SANTA FE RWY. CO. DATE: 06/13/0071ME: 12:10:29 EXPIRATION OR CONTRACT NO. CONTRACTOR / DESCRIPTION CONTRACT TERMINATION TYPE DATE DATE LOCATION CODE PX 65016048.00 YELM TELEPHONE CO. 07/08/1985 W1, YELM PR-PW/BNRR UGD LONGITUDINAL TELEPHONE CABLE, MP. 244235 8 MP. 251743; PARTIAL ASSIGNMENT TO THE CITY OF YELM, W1; PX 92016225.00 YELM, CITY OF 12/01/1992 WA, YELM PR Pl/BNRR PIPELINE CROSSING, LS. 400, MP. 24.14; ASSIGNED TO THE CITY OF YELM, TTA; PX 92016226.00 YELM, CITY OF 12/01/1992 VA, YELM PR PL/BNRR SEVER PIPELINE CROSSING, I.S. 400, MP. 25.16; ASSIGNED TO THE CITY OF YELM, WA; PX 93016233.00 PUGET SOUND POWER 6 LIGHT 11/16/1993 WA, YELM PR-PW/BNRR OHD ELECTRIC WIRE LINE, LS. 400, MP. 24.97; CANCELS PX #93016150; ASSIGNED TO THE CITY OF YELM, VA; PX 94020688.00 YELM TELEPHONE CO. 12/23/1994 WA, YELM PR-PV/BNRR UGD CABLE CROSSING, I.S. 400, W. 24.98; ASSIGNED 70 THE CITY OF YELM, WA; PX 95021190.00 VIACOM CA9LE 11/08/1995 W1, YELM PR-PW/BNRR UGO WIRE LIKE CROSSING, LS. 400, MP. 25.15; ASSIGNED TO THE CITY OF YELM, TTA; i A CF TfIF A�� Cl o Yelm a. M �� 105 Yelm Avenue West YELM P.O. Boz 479 WASHINGTON Yelm, Washington 98597 (360) 458-3244 September 22, 2000 Mr. Richard A. Batie Manager, Shortline Development Burlington Northern Santa Fe 2650 Lou Menk Drive, Flr 3 Fort Worth, Texas 76131-2830 Re: Draft Agreement For The Transfer of The Roy to Yelm. Washington Line from BNSF to City of Yelm. 2,G�- Dear Mt.Battie: Thank you once again for providing us the opportunity to review and comment on your Draft Agreement. We have reviewed the Draft Agreement and have come up with the following areas where we require clarification, or are requesting a possible change in the wording of the section. I) Section 1(d),(p. 3): "If any contract is related to the Rail Line and is intended to be assigned by BNSF to City, in whole or in part, but inadvertently is not identified in Exhibit C, BNSF promptly shall provide to City a copy of any such contract immediately upon locating it, and City, as of the date of its receipt of such copy, shall assume the rights and obligations in such contract to the extent they are related to Rail Line. City shall make no claim against BNSF arising out of any failure to obtain a consent to assignment from any party to any agreement assigned by BNSF to City, in whole or in part." Comments: (1) Would it be possible to have Section 1(d) amended to include language to the effect that"Exhibit C is a complete list of all contracts related to the Rail Line intended to be assigned by BNSF to City," and that "BNSF will obtain any and all necessary consents for assignments to City from any party to any agreement with BNSF"? (2) I am also particularly interested in finding out about any fiber optic rights in the rail right-of-way. It would be our preference for BNSF to assign such fiber optic easement rights to the City. Mr. Richard A. Batie September 22, 2000 Page 2 2) Section 2(a), (p.4): "(a) City accepts all transferred real property and personal property `AS IS, WHERE IS" and"with all faults." City acknowledges that certain track materials are missing from Rail Line and it cannot support train operations until certain repairs are made." Comments: Could you possibly obtain from your local maintenance of way staff a list of the materials missing from the Rail Line and provide us a rough estimate of the cost to replace the missing materials? 3) Section 40(2): (12.6): "(b) City hereby represents and warrants to BNSF, and all successors and assignees of BNSF, the following facts. . .: (2) City is a qualified donee within the meaning of Section 501(c)(3) of the Internal Revenue Code of 1986, as amended;" Comments: It appears that the City of Yelm cannot be a section 501(c)(3) organization. However, my understanding is that a donation to Yelm will still be tax exempt because the city is listed under 170(c)(1) of the Tax Code as a political subdivision of a State. Section 170, under subsection(a)(1) states that"a deduction is allowed for any charitable contribution(as defined in subsection (c))." It appears that"501(c)(3)"will need to be changed to "I 70(c)(1)." 4) Section 6(c)(1). (12.9): "(1) BNSF's General Liability and Indemnity_. Except as provided in Paragraph 6(d) of this Agreement, BNSF shall be responsible for, and shall indemnify, defend and hold harmless City fully against, [regardless of any negligence of City,] all Losses which: (i) arise out of BNSF's ownership or operation of the Rail Line, prior to the date of Closing; or(ii)result from any breach by BNSF of any representations or warranties that are set forth in [paragraph 4(b) of] this Agreement, or any failure by BNSF to perform any obligations of BNSF under this Agreement." 2 Mr. Richard A. Batie September 22, 2000 Page 3 Comments: Would it be possible to have the two bolded insertions, above,be made in Section 6(c)(1), so that BNSF's General Liability and Indemnity section more closely mirrors City's General Liability and Indemnity section (Section 6(c)(2))? 5) Section 6(c)(2). (p.9-10): "(2) City's General Liability and Indemnity. . . .City shall be responsible for, . . .all losses which: . . .(iii)result from claims of third parties caused by City's non performance or required performance under any contract, lease, permit, license, easement or commitment relating to the Rail Line, where [if] that contract, lease, permit, license, easement or commitment is identified in Exhibit C, or City has specific knowledge [Notice by BNSF] of it and such contract, lease,permit, license, easement or commitment was intended to be assigned to, and assumed by, City at Closing. . .." Comments: Would it be possible to have the bolded "where,"above, replaced with "if' for clarification, and the words"specific knowledge"replaced with"Notice by BNSF." This latter change would better follow our requested change in Section 1(d), which would read"Exhibit C is a complete list of all contracts related to the Rail Line intended to be assigned by BNSF to City." 6) Section 6(d)(4): (,p.12-131 "(4) Arbitration of Allocation of Liability Between City and BNSF. Any dispute between City and BNSF as to allocation between them of Losses for which both City and BNSF are responsible under the terms of this Paragraph 6 shall be settled by binding arbitration in accordance with the rules of the American Arbitration Association." Comments: Would it be possible to have Section 6(d)(4) amended so that the arbitration service is not yet limited to one service such as the American Arbitration Association? Perhaps the following language can be inserted after the words "American Arbitration Association": ",or with the rules of such other alternative dispute resolution service as BNSF and City agree to at a later date." 7) Section 6(d)(5): (p.13): "(5) City to Comply With Hazardous Materials Laws. City agrees to comply with all [applicable] federal, state and local laws,regulations and rules. . .." 3 Mr. Richard A. Batie September 22, 2000 Page 4 Comments: Please insert the word"applicable,"bolded above, for clarification. 8) Section 6(e),(12.13): "(e) BNSF to Deliver Certain Property Records to City. BNSF shall make good faith efforts to deliver to City,within 30 days following the date of Closing, originals or copies of whatever records, prints, archival information, or other evidence that BNSF locates in a reasonable search of BNSF's records, which bears upon the use of, or title to the real estate comprising the Rail Line. If, at any time after Closing, BNSF locates any other documents which bear upon the use of, maintenance, or title to any such real estate, BNSF promptly shall provide originals or copies of those documents to City." Comments: We are hoping that Section 6(e) can be amended to read that BNSF shall make good faith efforts to deliver to City, at or before the date of Closing, the documents referred to above; instead of within 30 days following. I recognize that given the timing of this deal, this might not be feasible. In the alternative, would it be possible to have inserted into this Section,the following language: "BNSF indemnifies City against any and all losses that City incurs that result from BNSF not having delivered any relevant and necessary documents which bear upon the use of, maintenance, or title to any such real estate, before Closing."? 9) Section 9. (12.14-5): 44 9. Liens and Encumbrances. . . .. BNSF represents and warrants that, to BNSF's knowledge, except for: (i) [Lien I], and (ii) [Lien 2], BNSF has not caused or suffered any lien or encumbrance to secure the payment of a debt of BNSF to be filed against BNSF's ownership interest in the Rail Line, and BNSF does not believe the liens of the Mortgages will materially adversely affect City." Comments: Could the bolded line of Section 9, above, be revised to read `BNSF warrants that the liens of the Mortgages will not materially adversely affect City"? In the alternative, would it be possible to have BNSF issue us a formal opinion to that effect? 10) Section 11: (p.15): "11. City to Offer to Hire BNSF's Qualified Employees. 4 Mr. Richard A. Batie September 22, 2000 Page 5 City shall consider for initial employment in operating and maintaining the Rail Line any of BNSF's employees who are eligible to work on the Rail Line on the date of this Agreement. City shall give priority hiring consideration for any such positions to such employees of BNSF who are represented by the Brotherhood Maintenance of Way Employees. . . .." Comments: I need some background clarification on this section. I am speculating that BNSF has a contractual obligation to establish priority-hiring consideration for its union workers. If the section cannot be eliminated, we would appreciate it if BNSF disclosed the identities of all known BNSF employees benefiting from this obligation. 11) Section 12(c) (12.16): "(c) At or before Closing, Shortline shall deliver to BNSF copy of City's City Charter. Comments: Since Yelm is a non-charter code city, it does not have a charter. We have adopted Washington State's optional municipal code, however. As such, it appears that this Section would need rephrasing. The word "Charter"might be replaced with the following: "Code, and any applicable sections from the Revised Code of Washington, as adopted by reference by the City in the City Code." 12) Section 13;(12.16-17): "13. Proration. Prepaid rentals, utilities, and other income or fees attributable to the Rail Line interests to be transferred by BNSF to City, under the terms of this Agreement shall be prorated between BNSF and City in such a manner as to allocate to BNSF all income and expenses attributable to the Rail Line that has been received, or for which bills have been received, on or prior to the date of Closing; and to allocate to City all income and expenses [after Closing]. . . .." Comments: While this section is acceptable, we would appreciate a run-down on all income and expenses attributable to the Rail Line, as discussed in the section. 13) Section 14(a): (p.17): "(a) City and Railway shall [may] interchange rail freight traffic, cars and locomotives to and from each other on tracks on the northeastern end of the Rail Line, at Roy, Washington. . . .." 5 Mr. Richard A. Batie September 22, 2000 Page 6 Comments: Would it be possible to have the word "shall"in the first sentence of Section 14(a) changed to the word "may"? It seems that use of the word"shall"would require that the City interchange rail traffic at that location. 14) Section 16, (12.17-18): "16. City and BNSF to Publish Combination Rates to and From Roy, Washinaton. BNSF shall [may] establish combination rates to and/or from Roy, Washington, as appropriate,to handle rail freight traffic interchanged between BNSF and City at Roy, Washington. City shall [may] establish combination rates to and/or from Roy, Washington, as appropriate, to handle the rail freight traffic that originates or terminates on the Rail Line." Comments: This is a similar request to that directly above this one. Again, if it's possible, we would like to keep the provision permissive, not mandatory. 15) Section 19, (p.18): "19. Transfer of Liabilities: Payment of Charges. For the period before and including the day of Closing, BNSF shall be responsible for [liabilities, payment of charges relating to rail operations over the Rail Line]. At and after 12:01 a.m. on the day following the date of Closing, City shall be responsible for [liabilities, payment of charges relating to rail operations over the Rail Line]." Comments: Could you let me know if there are any current users of the Rail Line who might encounter service disruption as a result of the transfer. It would be useful to know who last moved cars on this line, and when. 16) Section 20: (p.18-19): "20. Electronic Data Interchange. Within six months [one year] following the month in which City and BNSF interchange any freight cars at Roy, Washington, City must have the ability to send and receive electronically waybills, advanced consists, and bills of lading. . .." 6 Mr. Richard A. Batie September 22, 2000 Page 7 Comments: Could"six months"be replaced by the words "one year"in Section 20? This would allow us sufficient opportunity to retain an operator, or acquire the software and training necessary to comply with this Section. 17) Section 23, (p.19-20): "Ms. Shelly Badger City Administrator, City of Yelm 105 Yelm Avenue West P.O. Box 479 Yelm, Washington 98597" Comments: In Section 23, "Shelly" is spelled with one"e," and please insert"P.O. Box 479" into the address. 18) Exhibit A: ". . .which real estate and improvements are situated in [Pierce and Thurston] Counties, Washington, the boundaries of which are more particularly described in Comments: Please insert the words "Pierce and Thurston,"and replace the word "County"with"Counties," identifying the location of the Rail Line in the quitclaim deed in Exhibit A. 19) Finally, the City of Yelm, would be very interested in the future acquisition of the remaining Roy to Lakewood portion of this line, or any portion of that line, were the opportunity to arise. As such, we propose for your consideration, the possibility of adding the following language to the Agreement: Right of First Refusal - Roy to Lakewood Line. If in the future, BNSF ever wishes to abandon or to seek or to in any way voluntarily dispose of any or all of its interest in the rail line between the City of Roy and Lakewood or any portion thereof("Roy to Lakewood Line"), BNSF shall first offer in writing to sell the Roy to Lakewood Line, or any portion thereof, to 7 Mr. Richard A. Batie September 22, 2000 Page 8 the City of Yelm at a price to be mutually agreed upon by BNSF and the City of Yelm. Please feel free to contact me at 360-458-8405 if you have any questions or concerns. Sincerely: Shelly Badger, Yelm City Administrator cc: Kathryn M. Wolf, Mayor, City of Yelm Joe Williams, Chair, Rail Advisory Committee Steve Day, Betts Patterson& Mines, P.S. 8 BNSF RICHARD A. BATIE Burlington Northern Santa Fe Manager, Shortline Development 2600 Lou Menk Drive Fort Worth,Texas 76131 Phone 817-352-6432 FAX 817-352-7938 August 30, 2000 3 1 ?A� Shelly Badger Yelm City Administrator City of Yelm 105 Yelm Avenue West Yelm, Washington 98597 Dear Shelly, This responds to your letter of August 28, 2000 concerning the transfer of the Roy to Yelm, Washington line in which you are requesting an extension of 60 days to complete the transaction. BNSF grants the extension until November 1 , 2000 to the City of Yelm to accomplish the transfer of the line and the sale of the property involved. Sincerely, Richard A. Batie File: Roy — Yelm, Washington BNSFIh l.sty TtIE p•Q� Ci o Y ejM 105 Yelm Avenue West P.O. Box 479 "YEEMaTpN Yelm, Washington 98597 (360) 458-3244 August 28,2000 Mr.Richard A.Batie Manager,Shortline Development Burlington Northern Santa Fe 2600 Lou Menk Drive Fort Worth,Texas 76131 Re: BNSF-Cily of Yelm Transfer of Roy to Yelm Washington Line l� Dear Mr5l This confirms our telephone conversation of earlier today,August 28,2000. On behalf of the City of Yelm and the Prairie Line Rail Advisory Committee,I am formally requesting a sixty(60)day extension of the time for the City of Yelm to negotiate with BNSF regarding,and to make a final acceptance of,the offer for the transfer of the BNSF Roy to Yelm Line under the terms and conditions set forth in the June 12,2000 draft of the Agreement For Donation Of Certain Assets,Rights And Obligations Of The Burlington Northern And Santa Fe Railway Company To City of Yelm(the"Draft Agreement"),and under any other terms and conditions the parties may agree to during the above negotiations regarding the Draft Agreement. In your June 15,2000 offer to the City of Yelm(the"Offer"),which was accompanied by the Draft Agreement,you wrote that the Offer would expire on September 1,2000. With the sixty(60)day extension that the City of Yelm is requesting,the Offer would be re-set to expire on October 31,2000. As you are aware,this extension would most likely give the City of Yelm adequate time to examine and discuss with BNSF,individual sections of the Draft Agreement. As you are also aware,we are all very excited about the proposed transfer,and would be deeply disappointed to see the transaction not occur for any reason. Please accept this request for a sixty(60)day extension in writing as soon as possible,but in any event,before the expiration of the original Offer on September 1,2000. Thank you for your consideration of this offer. Sincerely �ArA' & J� Shelly A.Badger Yelm City Administrator cc: Mayor Kathy M. Wolf Joe Williams ,Chair,City of Yelm Rail Advisory Committee Steve Day,Betts Patterson&Mines,P.S. TRANSMISSION VERIFICATION REPORT TIME : 08/28/2000 13:44 DATE DIME 08/28 13:43 FAX N0./NAME 18173527938 DURATION 00:00:35 PAGE{S} 02 RESULT OK MODE STANDARD ECM .,............... ... ....... ...... ... Attu. 24. 2000 12: 03PM BETTS PATTERSON N0, 3095 P. 1/3 L�W-01(ices BETTS MESSAGE PATTERSON & MINES, P.S. J21 FourtialComb: Fax: (206) 343-7053 1215 Fourth Av(:nua Seattle,WushinFtorl 98.im-1000 FQx.. (206)343-7053 l'11011C (206)"92-99hX ®ate: 8/24/00 To: Shelly A, Badger Fax#: (360)458-4348 Company; City of 1'elm (Include area code for ALL numbers,) From: Taro Kusunuse File It. 5782._0001 Re: )f3NS1+'-Ycl�n Trunsaetion Number of Pages; 3 ! NOTICE: Information contained in this communication is (including this cover sheet) Privileged and/or confidential, intended only for the individual/entity named above, If reader of this cover page is Please call Taro Kusunose i not the intended recipient, you are hereby notified that any at(206)2.92-9988, ext, 346 dissemination, distribution, or copying of this information Is i if you do not receive any of these pages or if strictly prohibited.. If you have received this fax in error, please ! there is a problem. i immediately notify us by phone(206)292-9988 and return this fax to above address via US, Mail. Thank you. She]l y: Pursuant to your voicemail message of yesterday (Wednesday, 8/23/00) evening, I have drafted 1br Joe Williams' signature, a written request for a 60 day extension of the City of Yelm's time for accepting BNSF's of er. If I have in any way misunderstood y�►ur message, please ]et me know_ The two dates which have been left blank can either be filled in by hand, or if you let me know these dates, I can fill them in here, and then re- fax you a copy of the letter. As the clock is winding down, time is of the essence here_ If you have any questions or concerns regarding the warding of the letter., please give me a call. i will be in all of today, but unfortunately will be required.to leave my desk tomorrow fbr a deposition in Tacoma, Very truly yours, Taro KusunQse 006P0N2400 113X 57Hzotlgl AUG, 24. X000 12:03PM BETTS PATTERSON N0, 3095 P, 2/3 701 Prairie Par• ane, Suite J P. _ Box 52 Yelm, Wa 4 ington 597 (360) -8533 August ,2000 Mr. Richard A. Batie Manager, Shortline Development Burlington Not'them Santa Fe 2600 Lou Menk Drive Fort Worth, Texas 76131 Re: BNSF-City of Um Transfer g Roy tQ Yelm. Wase irt�t � Linc near Rich: This confirms our recent telephone cor►versation of August ._, 2000, Wittri" rullaut oriza ion rom c .y a ger w & behal f of the City of Yelm and the Prairie Line Hail Advisory Committee, 1 am formally requesting a sixty(60) day extcrt.4ion of the time for the City of Yelm to negotiate with BNSF regarding, and to make a final acceptance of, the offer-for the transfer of the BNSF Roy to Yelra Line under the terms and conditions set forth in the June 12,2000 draft of the Agreement For Donation Of Certain Assets, Rights And Obligations Of The Burlington Northern And Santa Fc Railway Company To City of Yelm (the."]haft Agreement"), and under any other terms and conditions the parties may agree to during the above negotiations regarding the Draft Agreement, 1n your June 15,2000 offer to the City of Yelm(the"Offer"),which was accompanied by the Draft Agreement,you wrote that the offer would expire on September 1,2000. With the sixty(60)day extension that the City of Yelm is requesting, the Offer would be re-sci to expire on October 31, 20001 As you are aware,this extension would most likely givo the City of Yelm adequate time to Pass through some.govcrn�-.Pem administrative hoops that have arisen,and then to examine and discuss with BNSI;, individual sections of the Draft Agreement_ As you are also aware, we are.all very excited about the proposed transfer, and would be deeply disappointed to see the transaction not occur for any reason. Please accept this AUG, 24. c000 12; 04PM BETTS PATTERSON N0, 3095 P. 3/3 request f or a.sixty(60)day extension in writing as soon as possible, but in any event, before the expiration of the oribinal offer on September 1, 2000. T truly apprcclAlc this, Very truly yours, Joe Williams Committee Chair, City of Yelm Rail Advisory Committee - 2 - 8F THE P�I� FAx TRANSMISSION CITY OF YELM PO BOX 479 - 105 YELM AVE W YELM YELM WA 98597 WAS FIIN GTON 360-458-3244 FAX: 360-458-4348 To: V V l �� C�� / Date: Fax#: p-� Pages: including this cover sheet. o From: Subject: CONMENTs: �� Je lt-e� s � ** If you do not receive all copies or any copy is not legible, please call(360)458-3244 as soon as possible. ds/c:bffice\forms\fax.3 AUG, 23. 2000 5: 07PM BETTS PATTERSON N0, 3086 P. 2/2 Law Offices BETTS PATTERSON & MMS, P.S. 800 Financial Center 1215 Fourth Avenue Seattle,Washington 98161-1090 Taro Kusunose Fax: 206-343-7053 tkusunose@Jbpm law,corn Phone 206-292-9988 August 23, 2000 VIA FAICSIMILE Ms. Shelly Badger 105 Yelm Avenue West P.O. Box 479 Yelm, WA 98597 Re: BNSF-YELM Transaction Dear Ms. Badger: As you may be aware, BNSF's offer to transfer the Roy to Yelm line under the conditions set forth in the Agreement accompanying Rich Batie's ,lune 15, 2000 letter to you, is set to expire on September 1, 2000. The City of Yelm should seek an extension on the offer with Rich Batie. I can draft such an extension for your signature; seeking either a 90-day extension, an extension until the environmental matters are resolved, or under any scenario you require. Please let me know your thoughts on this matter as soon as possible. Very truly yours, I�- 1 Taro Kusunose TK:tk Enc. cc: Steve Day 88943/082300 1034/57820001 AUG, 23, 2000 5: 07PM BETTS PATTERSON N0, 3086 P. 1/2 Law Offices BET-Ts FAX MESSAGE PATTERSON & MINES, P.S. Fax: (206) 343-7053 800 Financial Center 1215 Fourth Avenue Seattle,Washington 98161.1090 Date: 8123100 Fax: (206)343-7053 Phone; (206)292-9988 To: Shelly A. Badger Fax#: (360) 458-4348 (Include area code for ALL numbers.) Company: City of Yelm From: Taro Kusunose He#: 5782.0001 Ne: BNSF-Yelm Transaction ------------------------------------------------- Number of Pages: 2 ' NOTICE: Information contained in this communication is (including this cover sheet) privileged and/or confidential, intended only for the individual/entity named above. If reader of this cover page is i not the intended recipient, you are hereby notified that any i Please call Taro Kusunose i dissemination, distribution, or copying of this information is i at(206)292-9988, ext. 346 ! strictly prohibited. If you have received this fax in error, please ' if you do not receive any of these pages or if immediately notify us by phone (206) 292-9988 and return this there is a problem. i fax to above address via-U.S. Mail. Thank you_ _ _ 88989.'032300 162W-57820001 JUL. 10. 2000 10; 16AM HNTS PATTERSON N0. 1933 P. 1/9 raw ot��s BETTS FAX MESSAGE PATTERSON & MINES, P.S. 800 Financial Ccuer Fax: (206) 343-7053 1215 Fuurth Avcnuc Scottic.Washington 99161-1090 Mu `24)0)343-7053 (206)292-99 Date: 7/10/00 I'hunc: (206)292-996$ To: Ms. Shelly A_ Badger, City Administrator Fax#: (360)458-4348 (Include area code for ALL numbers.) Company; City OFYelm From: Taro Kusunose File#: 57820001 Re: Draft Yelm to BNSF letter regarding Draft Agreement Number of Pages: 9 ! NOTICE: Information contained in this communication is (including this cover sheet) privileged and/or confidential, intended only for the individual/entity named above. If reader of this cover page is not the intended recipient, you are hereby notified that any i Please call Taro i dissemination,distribution, or copying of this information is at(206)292.9988,,eextxt,. 346 ! strictly prohibited. If you have received this fax in error, please if you do not receive any of these pages or if ' immediately notify us by phone(206) 292-9988 and return this ! there is a problem. ; fax to above address via U.S. Mail, Thank you. NOTES: Dear Shelly: Please find attached for your review and approval, a draft letter from the City of Yelrn to BNSF containing comments on the Draft Agreement. Please fax the draft letter back to us with changes or comments, if you have any. If no changes need to be made, please give me a call at(206) 292-9988 or email me at tkusunose@,bpmlaw.com. When you are satisfied with the letter, and we have made all necessary changes, I will email the final draft of the letter to you, so that it can be printed out by you on City of Yelm letterhead to be sent to Rich Batie. BTW. On Wednesday, July 5, T spoke to Charlie Burnham again regarding the state of the Rail Line, specifically about the missing rail parts. He stated that although he has not been out to the track to do a full inventory or the missing parts, lie is aware that at least the following items are missing: turnoff components, switch parts, frogs, tic plates, and joint bars. Again, Charlic stays with his original estimate of about S 10,000 to replace the missing parts. URGENTH DELIVER IMMEDIATELY X11 901071000 M 1/57K20o01 JUL. 10. 2000 10: 16AM BETTS PATTERSON N0. 1933 P. 2/9 If you have any questions or concerns, as always please feel free to contact me. Very truly yours, Taro Kusunosc - 2 - 631IM10710 0 0951MR-MMI JUL. 10. 2000 1O: 16AM BETTS PATTERSON N0. 1933 P. 3/9 July 10, 2000 Mr. Richard A. Batie Manager, Shortline Development Burlington Northern Santa Fe 2600 Lou Menk Drive Fort Worth, Texas 76131 Re: Draft Agreemcnt For The Transfer orTheeR,y to Yelm Washington Line from BNSF to City of Yelm. Dear Richard: Thank you once again for providing us the opportunity to review and comment on your Draft Agreement. We have reviewed the Draft Agreement and have come up with the following areas where we require clarification, or are requesting a possible change in the wording of the section. I) fiction I d);lp. 31, "!f any contract is related to the Rail Line and is intended to be assigned by BNSF to City, in whole or in part, but inadvertently is not identified in Exhibit C, BNSF promptly shall provide to City a copy of any such contract immediately upon locating it, and City, as of the date of its receipt of such copy, shall assume the rights and obligations in such contract to the extent they are related to Rail Line. City shall make no claire against BNSF arising out of any failure to obtain a consent to assignment from any party to any agreement assigned by BNSF to City, in whole or in part." Comments: (1) Would it be possible to have Section l(d) amended to include language to the effect that"Exhibit C is a complete list of all contracts related to the Rail Line intended to be assigned by BNSF to City," and that"BNSF will obtain any and all necessary consents for assignments to City from any party to any agreement with BNSF"? (2) I am also particularly interested in finding out about any fiber optic rights in the rail right-of-way. It would be our preference for BNSF to assign such fiber optic easement rights to the City. JUL. 10. 2000 10: 17AM BETTS PATTERSON N0. 1933 P. 4/9 Mr. Richard A. Batic July 10, 2000 Page 2 2) Section.2(a) ,12,4.): -(a) City accepts all transferred real property and personal property `AS IS, WHERE IS" and"with all faults_" City acknowledges that certain track materials are missing from Rail Linc and it cannot support train operations until certain repairs are made." Comments: Could you possibly obtain from your local maintenance of way staff a list of the materials missing from the Rail Line and provide us a rough estimate of the cost to replace the missing materials? 3) lection 4(b)(2);( .6): "(b) City hereby represents and warrants to BNSF, and all successors and assignees of BNSF, the following facts. . .: (2) City is a qualified donee within the meaning of Section 501(c)(3) of the Internal Revenue Code of 1986, as amended;" Comments- it appears that the City of Yelm cannot be a section 501(c)(3) organization. However, my understanding is that a donation to Yelm will still be tax exempt because the city is listed under 170(c)(I) of the Tax Code as a political subdivision of a State. Section 170, under subsection (a)(1) states that"a deduction is allowed for any charitable contribution(as defined in subsection(c))." It appears that"501(c)(3)"will need to be changed to "170(c)(1)." 4) Src.Wn 6(.cc.)M(2.91: "(1) BNSF's Central Liability and Indemnity- Except as provided in Paragraph 6(d) of this Agreement, BNSF shall be responsible for, and shall indemnify, defend and hold harmless City fiilly against, Iregardless of any negligence of City, all Losses which: (i) arise out of BNSF's ownership or operation of the Rail Line, prior to the date of Closing; or(ii)result from any breach by BNSF of any representations or warranties that are set forth in [paragraph 4(b) of I this Agreement, or any failure by BNSF to perform any obligations of BNSF under this Agreement." 2 JUL. 10. 2000 1O: 17AM BETTS PATTERSON N0. 1933 P. 5/9 Mr. Richard A. Batie July 10, 2000 Page 3 mens _ 'Would it be possible to have the two bolded insertions, above, be made in Section 6(e)(1), so that BNSF's General Liability and Indemnity section more closely mirrors City's General Liability and Indemnity section (Section 6(c)(2))? 5) Section 2 (.p.9-1 01 "(2) Cji<y's General iability air d Indemnity: . _ .City shall be responsible for, . . .all losses which: . _ _(iii)result from claims of third parties caused by City's non performance or required performance under any contract, lease, permit, license, easement or commitment relating to the Rail Line, where [if] that contract, lease,permit, license, easement or commitment is identified in Exhibit C, or City has specifk knowledge [Notice by BNSF] of it and such contract, lease, permit, license, easement or commitment was intended to be assigned to, and assumed by, City at Closing. . .." »n n : Would it be possible to have the bolded"where," above, replaced with "if' for clarification, and the Words "specific knowledge"replaced with "Notice by BNSF." This latter change would better follow our requested change in Section 1(d), which would read "Exhibit C is a complete list of all contracts related to the Rail Line intended to be assigned by BNSF to City." 6) Section 60,1(4): (11p,12-13): "(4) Arbitration of Allocation of Liability Between City and BNSF. Any dispute between City and BNSF as to allocation between them of Losses for which both City and BNSF are responsible under the terms of this Paragraph 6 shall be settled by binding arbitration in accordance with the rules of the American Arbitration Association," Cmmmmta,• Would it be possible to have Section 6(d)(4) amended so that the arbitration service is not yet limited to one service such as the American Arbitration Association? Perhaps the following language can be inserted after the words "American Arbitration Association": ",or with the rules of such other alternative dispute resolution service as BNSF and City agree to at a later date." ?) Sc=jn ,W)lj"p-_1,3,L' "(5) Uly to Comply-Wjth Haz rial• aw5_ City agrees to comply with all [applicable] federal, state and local laws, regulations and rules. . 3 JUL. 10. 2000 10: 17AM BETTS PATTERSON N0. 1933 P. 6/9 Mr. Richard A. Batic July 10, 2000 Page 4 -Gommentse Please insert the word"applicable,"bolded above, for clarification. $} Sectione "(e) BNSF to Deliver CertaPro r y Rev nrd to itv. BNSF shall make good faith efforts to deliver to City, within 30 days following the date of Closing, originals or copies of whatever records, prints, archival information, or other evidence that BNSF locates in a reasonable search of BNSF's records, which bears upon the use of, or title to the real estate comprising the Rail Line. If, at any time after Closing, BNSF locates any other documents which bear upon the use of, maintenance,or title to any such real estate,BNSF promptly shall provide originals or copies of those documents to City," m n • We are hoping that Section 6(e) can be amended to read that 13NSF shall make good faith efforts to deliver to City, at!2r bCfore the date of Closing, the documents referred to above; instead of within 30 days following. I recognize that given the timing of this deal, this might not be feasible. In the alternative, would it be possible to have inserted into this Section, the following language: "BNSF indemnifies City against any and all losses that City incurs that result from BNSF not having delivered any relevant and necessary documents which bear upon the use of, maintenance, or title to any such real estate, before Closing-7 9) Section 9; p.14-51 119• Licns and Encumbrances. BNSF represents and warrants that, to BNSF's knowledge, except for: (i) [Lien I], and (ii) [Lien 2], BNSF has not caused or suffered any lien or encumbrance to secure the payment of a debt of BNSF to be filed against BNSF's ownership interest in the Rail Linc, and BNSF does not believe the liens of the Mortgages will materially adversely affect City." m t • Could the bolded line of Section 9, above, be revised to read"BNSF warrants that the liens of the Mortgages will not materially adversely affect City"? In the alternative,would it be possible to have BNSF issue us a formal opinion to that effect? 10) fiction 11: (1L5): "1 l- City to Offer o Hire BNSF', �ied EmgWys s. 4 JUL. 10. 2000 10: 17AM BETTS PATTERSON N0. 1933 P. 7/9 Mr. Richard A. Batie July 10, 2000 Page 5 City shall consider for initial employment in operating and maintaining the Rail Line any of BNSF's employees who are eligible to work on the Rail Line on the date of this Agreement. City shall give priority hiring consideration for any such positions to such employees of BNSF who are represented by the Brotherhood Maintenance of Way Employees. . . .." Comments- I need some background clarification on this section. I am speculating that BNSF has a contractual obligation to establish priority hiring consideration for its union workers. If the section cannot be eliminated, we would appreciate it if BNSF disclosed the identities of all known BNSF employees benefiting from this obligation. 11) Secton 12 .1 ft "(c) At or before Closing, Shortline shall deliver to BNSF copy of City's City Charter." CQmm n. • Since Yelm is a non-charter code city, it does not have a charter_ We have adopted Washington State's optional municipal code, however. As such, it appears that this Section would need rephrasing. The word "Charter"might be replaced with the following: "Code, and any applicable sections From the Revised Code of Washington, as adopted by reference by the City in the City Code." 12) Section 13, l 1� 6-17� "13. Pror,'ttion. Prepaid rentals, utilities, and other income or fees attributable to the Rail Line interests to be transferred by BNSF to City, under the terms of this Agreement shall be prorated between BNSF and City in such a manner as to allocate to BNSF all income and expenses attributable to the Rail Line that has been received, or for which bills have been received, on or prior to the date of Closing; and to allocate to City all income and expenses [after Closing). _ . ..'4 CaM.D11911115, While this section is acceptable, we would appreciate a run-down on all income and expenses attributable to the Rail Line, as discussed in the section. 13) Section 14(a)i(p,17); "(a) City and Railway shall [may) interchange rail freight traffic, cars and Iocomotives to and from each other on tracks on the northeastern end of the Rail Line, at Roy, Washington. 5 JUL. 10. 2000 10: 18AM BETTS PATTERSON N0. 1933 P. 8/9 Mr. Richard A. Batic July 10, 2000 Page 6 C_Qmmen •• Would it be possible to have the word "shall" in the first sentence of Section 14(a) changed to the word"may"? 1t seems that use of the word"shall"would require that the City interchange rail traffic at that location. 14) cin 16; -1R "16. Cit3�and BNSF to Publish Combinabon Ratrs o and From i�iy, in BNSF hal [may] establish combination rates to and/or from Roy, Washington, as appropriate, to handle rail freight traffic interchanged between BNSF and City at Roy, Washington. City$hall [may) establish combination rates to and/or from Roy, Washington, as appropriate, to handle the rail freight traffic that originates or terminates on the Rail Line_" CD—mn ts: This is a similar request to that directly above this one. Again, if it's possible,we would like to keep the provision permissive, not mandatory_ 15) .mon 19- 1 . "19. Trans' f harzes. For the period before and including the day of Closing, BNSF shall be responsible for [liabilities,payment of charges relating to rail operations over the flail Line]_ At and after 12:01 a.m. on the day following the date of Closing, City shall be responsible for[liabilities,payment of charges relating to rail operations over the Rail Line]." Comments: Could you let me know if there are any current users of the Rail Line who might encounter service disruption as a result of the transfer. It would be useful to know who last moved cars on this line, and when. 16) Section 2 1S-191: "20. Electronic Data Interchange_ Within ai months [one year] following the month in which City and BNSF interchange any freight cars at Roy, Washington, City must have the ability to send and receive electronically waybills, advanced consists, and bills of lading. . .." 6 JUL. 10, 2000 10: 18AM BETTS PATTERSON N0. 1933 P. 9/9 Mr. Richard A. Batic July 10, 2000 Page 7 mm Could"six months"be replaced by the words "one year" in Section 209 This would allow us sufficient opportunity to retain an operator,or acquire the software and training necessary to comply with this Section. 17) SegAion 23; .19-20)• "Ms. Shelly Badger City Administrator, City of Yclm 105 Yelm Avenue West P.O. Box 479 Yclm, Washington 98597" Come_ In Section 23, "Shelly"is spelled with one"c,"and please insert "P.O. Box 479" into the address. 18) Exhibit A• ". . .which real estate and improvements are situated in (Pierce and Thurston) Counties, Washington, the boundaries of which arc more Particularly described in mm t.: Please insert the words "Pierce and Thurston," and replace the word "County"with "Counties,"identifying the location of the hail Line in the quitclaim deed in Exhibit A_ Please feel free to contact me if you have any questions or concerns. Very truly yours, Shelly Badger 7 JUN. 28. 2000 5:23PM BETTS PATTERSON N0. 1706 P. 1 $Errs FAX MESSAGE AGE & MINES, R S. 1100 Fin' Center 121 S Fourth Avenuc Fax: (206) 343-7053 Scatde.Washington 98161.1090 rax: (206)3a3-7053 Phunc: (206)292-9988 Date: 6/28/00 To: Ms. Shelly Badger Fax (360)458-4348 Company: City of yelln (Include area code for ALL numbers.) From: Taro Kusunosc File#: 5782.0001 Re; m e is n NF's graft A�reCIE e MLRe: Donation o R 1 i �n . —gig Number of Pages: 15 -- ------- (including this cover sheet) NOTICE: Information contained in this communication is �! Privileged and/or confidential, intended only for the ! individual/entity named above. If reader of this cover page is Please call Taro Kusunose i not the intended recipient,you are hereby notified that any at(206)292-9988, ext. 346 ! dissemination, distribution, or copying of this information is if you do not receive any of these pages or if i strictly prohibited. If you have received this fax in error, please ! there is a problem. i immediately notify us by phone (206)292-9988 and return this ! fax to above address via U.S, Mail. Thank you. NOTES: Dear Shelly: Thank you very much for calling today. Here are our corrunents on BNSF's draft agreement. make sure to contact us if you have any questions or concerns, As we discussed over the phone Please and! will draft the letter from City to BNSF on your behalf, after you have reviews P e today, Steve coznmcnts- dour suggestions and Very truly yours, Taro Kusunose URGENTH DELIVER IMMED IA1'ELY 824001062800 1703157820001 JUN. 28. 2000 5:23PM BETTS PATTERSON NO. 1706 P. 2 Law Offic(n BETTS PATTERSON & MINES, P.S. 800 Finaiwial Crater 1215 Fourth Avenue Stattle, Washingtun 98161-1090 Taro Kusanose Fax: 206-343-7053 tkusunosc@bpmlaw,com Phone: 206-292-9988 .lune 28, 2000 Ms. Shelly A. Badger City Administrator 105 Yelm Ave. W_ P.O_ Box 479 Yelm, WA 98597 Re: f-omments on Draft AgEeement Fir" nster of Roy to YOM. Washington Line from BNSF to City of Yelm. Dear Ms. Badger: The following letter incorporates our responses to specific questions or comments you had regarding the June 12, 2000 draft Agreement("Agreement"); our comments on particular provisions of the Agreement; as well as research on specific issues. Wherever possible, we have drafted language that can be used without revision in a letter, from City to BNSF. As we discussed over the phone today, Steve and 1 will be drafting said letter from City to BNSF on your behalf, after you review the following. 1) Section 1 ,d);(p.31_ "Tf any contract is related to the Rail Line and is intended to be assigned by BNSF to City, in whole or in part, but inadvertently is not identified in Exhibit C, BNSF promptly shall provide to City a copy of any such contract immediately upon locating it, and City, as of the date of'its receipt of such copy, shall assume the rights and obligations in such contract to the extent they are related to Rail Line. City shall make no claim against BNSF arising out of any failure to obtain a consent to assignment from any party to any agreement assigned by BNSF to City, in whole or in part." CQmmens. We suggest the following language in a letter to 13NSF: "Cityrespectfully requests that BNSF disclose all contracts related to the Rail Line intended to be assigned by BNSF to City, as relates to Section 1(d) of the Agreement. City further respectfully requests that BNSF include in Section I(d) of the Agreement, language to the effect that 81754!062 RO()1712/57820001 JUN, 28. 2000 5:33PM BETTS PATTERSON N0. 1710 P. 3 Ms. Shelly A. Badger j June 28, 2000 i Page 2 BNSF will obtain any and all necessary consents for assignments from any party to any agreement with BNSF." 2) Section 2(a); (p.4); "(a) City accepts all transferred real property and personal property `AS IS, WHERE IS" and"with all faults." City acknowledges that certain track materials are missing from Rail Line and it cannot support train operations until certain repairs are made." Commentz This is clearly troublesome. I spoke to Charlie Burnham on Monday, June 26 regarding this issue. Charlie indicates that this provision was most likely inserted into the Agreement because the City had balked at BNSF's recent"cannibalization" of certain parts of the track. Apparently, BNS)~ workers have removed some rail and switches from the Rail Line_ Charlie estimates repair costs to be less than $10,000. This amount should be budgeted(possibly funded by DOT essential rail services) for early completion of such repairs. 3) ti 2(dl:(12.41; "(d) City shall pay all costs of Closing(except BNSF's cost of preparation of documents to be delivered at Closing), including,but not limited to, any escrow and service fees, real estate transfer taxes, excise taxes, recording fees and sales taxes associated with this Agreement or any of the conveyances governed by this Agreement." Comments; Washington has a Real Estate Excise Tax (RCW 82.45.010; WAC 45 8-61- 410(1)). However, this applies only to sales,not gifts. Sales taxes would only apply to a sale,or to a transfer of tangible personal property. Henec, it appears it would not apply to this donation of real property. 4) "3. Government Anntct City, at its sole expense, shall prepare and rile such documents as may be required to secure approval, or exemption from approval, of this transaction by the federal Surface 'Transportation Board ("STB"). City shall make all reasonable efforts to obtain this approval or exemption in time for this transaction to close on July_, 2000. City shall permit BNSF to review prior to filing all A195Vu62MW l'lIJ57A2W0� 7 I JUN. 28. 2000 5:33PM BETTS PATTERSON N0. 1710 P. 4 Ms. Shelly A_ Badger June 28, 2000 Page 3 documents proposed by City to be filed with the STB or any court to secure legal approval or exemption of this transaction." i Comments St6ve and I are capable of add willing to fild said documents with the STB on the City's behalf. You indicated concern about the "prior review" aspect of this provision, but allowing BNSF to review all such documents before fling should pose no problem. 5) Section 4(b)(2): (p,6): "(b) City hereby represents and warrants to BNSF, and all successors and assignees of BNSF,the following facts. . .: l (2) City is a qualified donee within the meaning of Section 501(c)(3) of the Internal Revenue Code of 1486, as amended;" Comments: We suggest the following language in a letter to BNSF: "It appears that the City of Yelm cannot be, and is not a section 501(c)(3) organization, since that is an Internal Revenue Code section for private charitable organizations. However, a donation to the City will be tax exempt because the city is listed under IRC section 170(c)(1), as any political subdivision of a State. IRC section 170(a)(1)states the general rule that"a deduction is allowed for any charitable contribution (as defined in subsection(c)). City respectfully requests that BNSF replace '501(c)(3)' of Section 4(b)(2) of the Agreement, with '170(c)(1)."' 6) Section 4(b)(3): ( "(3) City has all requisite business authority to purchase BNSF's rights and properties which are conveyed to City by this Agreement; to enter into this Agreement; to conduct rail freight transportation business on the Rail Line (as of date of Closing only); and to perform all of City's obligations under this Agreement;" Comments: a) You indicated concern as to whether the City would have the authozity to conduct rail freight transportation business on the Rail Line, under the STB. The answer is YES. b) Also, in your email to Steve Day (June 20, 2000), you had a question as to whether Yelm, as a non-charter Code City, had the requisite statutory authority to acquire a rail line. The answer to that is also YES. In Section 1.02.040 of the City of Yelm Municipal Code ("Adoption by reference of optional municipal code"), the City adopts by reference chapter 35A.I 1 of the Revised Code of Washington("RCW"). RCW 35A.1 I ("Laws governing non-charter code cities and charter code cities—powers"), holds: I K1754o6'8001710/57820001 3 JUN. 28, 2000 5:34PM BETTS PATTERSON NO. 1710 P. 5 Ms_ Shelly A_ Badger June 28, 2000 Page 4 35A.11.010. Rights, powers and privileges Each city governed under this optional municipal code, whether charter or noncharter, shall be entitled"City of. . . . .." (naming it), and by such name shall have perpetual succession; may sue and be sued in all courts and proceedings; use a corporate seal approved by its legislative body, such municipality may contract and be contracted_with.may purchase. lease. receive, or otherwise acquire real and personal proper of every kind,and us . cpjoy.hold. lease, control,convey, or hgrwisP dispose of it for thQ commo , bgDQfit. 7) Section 4(b)(4): (12,6: "(4) The execution of this Agreement and consummation of the transactions which are a part of this Agreement have been duly authorized and approved by all necessary actions by City, and immediately upon execution of this Agreement by City's authorized representative, all of City's obligations set forth in or referenced in this Agreement shall constitute legal, valid and binding obligations of City. . .." Comments: The Yelm City Council approved a Resolution drafted by Steve which held in Section 1: "The Council endorses the following guiding principles in acquisition, operation, and development of the BNSP Yelm Branch Line(formerly known as the Northern Pacific's Prairie Line): . . .Yelm Branch Line, should be acquired by the City of Yelm and after such acquisition the line of.railroad shall be referred to as "The Prairie Line." I 8) Section 4(b)(,6): (�7). "(6) As of the date of Closing only, City shall have obtained all legal authority which is necessary to enable City lawfully to conduct rail freight transportation operations over the Rail Line as a common carrier, commelicing at 12:01 a.m. on the day following the date of Closing_ _ __" Comments: After STB approval, the City should file an"embargo" with the Association of American Railroads ("AAR")_ The filing of the embargo, in effect, gives carriers notice that rail service is currently unavailable over this line and that carriers should not accept deliveries Over it at this time. This should be filed immediately. We suggest that the City contact Freight Services, Tnc_, which is experienced in the filing of such I embargoes. Fred Hamlin of Freight Services, lnc. can be contacted at: I Fred E. Hamlin I 81754/062)00 171(1/.$792(X))1 i JUN. 28. 2000 5:34PM BETTS PATTERSON N0. 1710 P. 6 Ms. Shelly A_ Badger June 28, 2000 Page 5 j President, Freight Services, Incorporated P_0_ Box 908 Eugene, OR 97402 Ph: (541)484-2302,. (541) 343-8847 Fax: (541) 343-8847 9) Section 6(c)(1): (p9: "(1) BNSF's General Liability and IndgMnily, Except as provided in Paragraph 6(d) of this Agreement, BNSF shall be responsible for, and shall indemnify, defend and hold harmless City fully against, [regardless of any negligence of City,] all Losses which: (i) arise out of BNSF's ownership or operation of the Rail bine, prior to the date of Closing; or(ii) result from any breach by BNSF of any representations or warranties that are set forth in [paragraph 4(b) of] this Agreement, or any failure by BNSF to perforin any obligations of BNSF under this Agreement." Comments: We suggest that City request that BNSF insert the bolded language, above. This will make BNSF's liability provision more closely mirror the language of City's Liability provision, infra. We suggest the following language in a letter to BNSF: "City respectfully requests that the words `regardless of any negligence of City,' be inserted in Section 6(c)(1) of the Agreement after the words `hold harmless City fully against,' and before the words `all Losses which.' City further respectfully requests that the words `paragraph 4(b) of be inserted in Section 6(c)(1) of the Agreement after the words `warranties that arc set forth in' and before the words `this Agreement, or any failure by BNSF."' 10) Section 6(c)(2); i "(2) City's i it and Indemnity, _ _ _City shall he responsible for, . . .all losses which: . . .(iii) result from claims of third parties caused by City's non performance or required performance under any contract, lease, permit, license, easement or commitment relating to the Rail Line, where (if] that contract, lease, permit, license, easement or commitment is j identified in Exhibit C, or City has speeif're-know edge [Notice by 13NSF1 of it I 81754/0628W 1711V57H21H1111 S JUN. 28. 2000 5:34PM BETTS PATTERSON N0. 1710 P. 7 j i Ms. Shelly A_ Badger June 28, 2000 Page 6 and such contract, lease, permit, license, easement or commitment was intended to be assigned to, and assumed by, City at Closing. Comments We suggest the following language in a letter to BNSF: "As relates to Section 6(c)(2), City respectfully requests that the word `where' be replaced with the word `if for clarification, and that the words `specific knowledge' be replaced with the words `Notice by BNSI~."' 11) Section 6(d)(2); (p,11): "(2) BNSF's Environmental. Liability and Indemnity. Notwithstanding any other liability or indemnification provision in this Agreement, BNSF shall be responsible for, and shall indemnify, defend and hold han-rtless City (including its successors and assignees) fully against, Losses j incurred due to any claim. . _ based on any violation or requirement of any applicable. . . "Environmental Laws," and the Losses arise from. . . "Hazardous Materials". . . to the extent that such Losses: (A) were caused by one or more acts or omissions of BNSF that occurred prior to the date of Closing, and that could not have been discovered by City in a reasonable inspection of the Rail Line; and (B) result from any written claim made by a party other than City, ("Claims") that is delivered to BNSF within one year following the date of j Closing; and i (C) exceed $10,000 in the aggregate in that year." Commentse BNSF will indemnify City from third party environmental claims under this provision only if i) BNSF's act or omission occurred prior to Closing, ii) it could not have been discovered by City in a reasonable inspection, iii) and the claim is made within one year of closing. Even then, BNSF will only indemnify City after City has paid the initial $10,000 in damages. City should be prepared to pay the first$10,000 with self-insured retention funds, or a similar plan. 1 12) Section 60131: ln.l 1-12) i i "(3) City's Environmental Liability and Indemnity. 81754/0oAX)171019782M)1 6 JUN, 28. 2000 5:34PM BETTS PATTERSON NO, 1710 P. 8 i r Ms. Shelly A. Badger June 28, 2000 Page 7 I i I I . . .City shall be responsible for, and shall indemnify, defend, and hold harmless BNSF fully against, regardless of any negligence of BNSF, Losses incurred to any claim, demand or litigation, to the extent it is based on any I violation or requirement of any applicable environmental statute, ordinance, rule, regulation, order or decision, and the Losses arise from any Hazardous Materials located on, under or near the rail line to the extent that such Losses either: (A). . . (B)_ . . (C) do not result from a Claim that is delivered to BNSF within one year following the date of Closing." Comments: Note: There are multiple causes of action that can be brought as an "environmental claire" under this Section_ In particular is a violation of the Washington Model Toxic Control Act(MTCA), which we believe, has a 3 year statute of limitations. However, there is a "discovery rule" granting three years from the time the basis of the claim was discovered, or should have been discovered_ This has created situations where environmental claims are brought i /20 years after a hazardous material spill. In short, it must be pointed out that there exists the possibility that an environmental claim may arise years down the line. i 13) Section 6(d)(4): (p,12:13):. "(4) Arbitration of Allocation of Liability Between City and BNSF. Any dispute between City and BNSF as to allocation between them of Losses for which both City and BNSF are responsible under the terms of this Paragraph 6 shall be settled by binding arbitration in according with the rules of the American Arbitration Association." Comments: Because of the high cost of service and the general rigidity of the American Arbitration Association ("AAA"), the City should suggest to BNSF that an alternative means of Alternative Dispute Resolution("ADR") be added to this provision. We suggest the following language in a letter to BNSF: "City respectfully requests that Section 6(d)(4) of the Agreement be amended to read `, or with the rules of such other alternative dispute resolution service as BNSF and City agree to at a later date' after the words `American Arbitration Association,' and before the period ending that section." 14) Section 6,d)(5). (p.13); i 81754 OoM w 1710/578^_0001 7 JUN, 28. 2000 5:35PM BETTS PATTERSON N0. 1710 P. 9 i ' Ms. Shelly A. Badger June 28, 2000 Page 8 "(5) City to Comply With Hazardous Materials Laws. City agrees to comply with all [applicable] federal, state and local laws, regulations and rules. . .." Commence We suggest the following language in a letter to BNSF: "City respectfully requests the insertion of the word `applicable' into the first sentence of Section 6(d)(5) of the Agreement, after the word `all' and before the word `federal,' for clarification." 15) Section 6(�); (p.13): "(e) BNSF jo DeliverRecords- BNSF shall make good faith efforts to deliver to City, within 30 days following the date of Closing, originals or copies of whatever records, prints, archival information, or other evidence that BNSF locates in a reasonable search of BNSF's records, which bears upon the use of, or title to the real estate comprising the Rail Line. If, at any tame after Closing,BNSF locates any other documents which bear upon the use of, maintenance,or title to any such real estate, BNSF promptly shall provide originals or copies of those documents to City." Cominents: The above provision is troublesome. It in effect allows BNSF to hand over to City, documents which the city may want to know about before Closing, up to 30 days i AFTER CLOSING. Unfortunately, given the timing of this transaction, it may be unrealistic for City to demand that BNSF hand the documents over to City before Closing. A more realistic solution.may be to seek the inclusion of a remedy provision. As a result, we suggest the following language in a letter to BNSF: "City respectfully requests that BNSF insert the following language into Section 6(e) of the Agreement: `BNSF indemnifies City against any and all losses that City incurs that result from BNSF not having delivered any relevant and necessary documents which bear upon the use of, maintenance, or title to any such real estate, before Closing."' 16) Section 7; (p.13-.L4 "7. Assigmtpent. Any assignee, including any successor in interest, of City's rights under or property acquired by this Agreement, must first assume in writing delivered to BNSF all of City's continuing and existing, or thereafter ansing, obligations under this Agreement, and under any then effective contract signed by BNSF to City, in whole or in part, in accordance with the terms of this Agreement." i Comments: The above provision does not state that the City is assigning its rights under this Agreement. Under this provision, an operator would need to enter into a working 81754/062800 1710/57820(N)i 8 JUN. 28. 2000 5:35PM BETTS PATTERSON N0. 1710 P. 10 Ms. Shelly A. Badger June 28, 2000 Page 9 agreement with BNSF; however, we would recommend not assigning the City's contractual rights to the operator. 17) Scction 9: (p,14-5)_ "9. Liens and Encumbrances . . _. BNSF represents and warrants that, to BNSF's knowledge, except for: (i) [Lien 1). and(ii) [Lien 2], BNSF has not caused or suffered any lien or encumbrance to secure the payment of a debt of BNSF to be filed against BNSF's ownership interest in the Rail Line, and BNSF does not believe the liens of the Mortgages will materially adversely affect City." Comments: This provision states that while the rail line at issue is currently encumbered by two liens securing repayment of debts by BNSF, BNSF"does not believe"that the liens will affect City. The weakness of the word"believe," above, is particularly troublesome. As a result, we suggest the following language in a letter to BNSF: "City respectfully requests that BNSF replace the phrase `BNSF does not believe the liens of the Mortgagees will materially adversely affect City,' in Section 9, with the phrase `BNSF warrants that the liens of the Mortgagees will not materially adversely affect City.' in the alternative, City respectfully requests a formal opinion by BNSF to that effect." i 18) Section 11; (n.151: "11. City to Offer to Hire BNSF's Qualified Emnloyees. City shall consider for initial employment in operating and maintaining the Rail Linc any of BNSF''s employees who are eligible to work on the Rail Line on the date of this Agreement. City shall give priority hiring consideration for any such positions to such employees of BNSF who are represented by the Brotherhood Maintenance of Way Employees. . . .." Comments: We believe that BNSF has entered into an agreement with the Brotherhood of Maintenance of Ways Employees. This agreement provides for the priority hiring provision, above. A "shortline"(as owned by City), is statutorily exempt from this union obligation. However, if by agreement, BNSF is required to insert such a provision into this Agreement with City, and will not remove it, BNSF should be required to identify any and all known BNSF employees affected by this obligation_ As such, we suggest the 1 following language in a letter to BNSF: "If BNSF has a contractual obligation to the Brotherhood Maintenance of Way Employees to establish priority hiring consideration for 81754/002800 1710rt782000) JUN, 28. 2000 5:35PM BETTS PATTERSON N0. 1710 P. 11 Ms. Shelly A. Badger June 28, 2000 Page 10 Brotherhood workers in the Agreement(Section 11), City respectfully requests that BNSF identify any and all known BNSF employees affected by this obligation." 19) Section 12(c) (12.16) "(c) At or before Closing, Shortline shall deliver to BNSF copy of City's City Charter." Comments: "Shortline" is a reference to the specific type of rail line being donated to the City. As a result, in this context, Shortline simply means "City." The City is to deliver its Charter. Since Yelm is a non-charter code city, we suggest the following language in a letter to BNSF: "As a non-charter code city, City does not have a charter_ As such, City respectfully requests that the word `Charter' in Section 12(c)be replaced with the following: `Code, and any applicable sections from the Revised Code of Washington, as adopted by reference by the City in the City Code."' 20) Segtion 13: .16-17): "13. ProfAUQn. Prepaid rentals, utilities, and other income or fees attributable to the Rail Line interests to be transferred by BNSF to City, under the terms of this Agreement shall be prorated between BNSF and City in such a manner as to allocate to BNSF all income and expenses attributable to the Rail Line that has been received, or for which bills have been received, on or prior to the date of Closing; and to allocate to City all income and expenses [after Closing]. . . .." Commentsl We suggest the following language in a letter to BNSF: "City respectfully requests that BNSF specifically identify any and all income and expenses attributable to the Rail Line, as discussed in Section 13 of the Agreement_" 21) Section 14(an 17); "(a) City and Railway shi& ]may] interchange rail freight traffic, cars and locomotives to and from each other on tracks on the northeastern end of the Rail Line, at Roy, Washington. Comments; "Railway," in this situation, refers to BNSF. We suggest the following language in a letter to BNSF: "City respectfully requests that the word `shall' in the first sentence of Section 14(a) be replaced with the word `may'; as use of the word `shall' x nsac�628o0 17�u/578eaiu i 10 JUN, 28. 2000 5:36PM BETTS PATTERSON N0, 1710 P. 12 Ms. Shelly A. Badger June 28, 2000 Page I 1 would mandate that the City interchange rail traffic at said point, while `may' would i make said interchange permissive." 22) Section 16, 1718 "16. City and BNSF to Publish Combination Rates to and From Roy, Washington. BNSF shA (may] establish combination rates to and/or from Roy, Washington, as appropriate, to handle rail freight traffic interchanged between BNSF and City at Roy, Washington. City shag [may] establish combination rates to and/or from Roy, Washington, as appropriate, to handle the rail freight traffic that originates or terminates on the Rail Line." Comments: We suggest the following language in a letter to BNSF: "City respectfully requests that the word `shall' in both sentences of Section 16 be replaced with the word `may'; as use of the word `shall' would mandate the City's establishment of combination rates, while `may' would make said establishment permissive." 23) Section 19: (12 1.8): 19. Transfer of Liabilities: Payment of Charges. For the period before and including the day of Closing, BNSF shall be responsible for [liabilities, payment of charges relating to rail operations over the Rail Line]. At and after 12:01 a-m- on the day following the date of Closing, City shall be responsible for [liabilities, payment of charges relating to rail operations over the Rail Line]." Comments: You indicated a concern as to whether there are any current users who could encounter service disruprion as a result of the transfer. City,through Charlie Burnham, should contact BNSF for specific answers on this issue. 24) Section 20; (p,18-19): "20. Electronic Data Interchange. Within saw fneaths [one year] following the month in which City and BNSF interchange any freight cars at Roy, Washington, City must have the ability to send and receive electronically waybills, advanced consists, and bills of lading. . .." X175-011629001710/57920001 1 1 I JUN, 28. 2000 5:36PM BETTS PATTERSON N0, 1710 P. 13 Ms. Shelly A. Badger June 28, 2000 Page 12 i I Comments: We suggest the following language in a letter to BNSF: "City respectfully requests that the words `six months' be replaced by the words `one year' in Section 20, allowing City sufficient opportunity to detain an operator or to acquire the software necessary to comply with this section." 25) Section 21: 1,p.19- "21. Applicable Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Texas." Comments: Burlington Northern typically selects Texas as its choice of applicable law. This is not new. At this point, we should point out that we are unfortunately, not experts in Texas law and that our advice here is limited to federal and Washington law. 26) Section 23: (p,19-20); "Ms. Shelly Badger City Administrator, City of Yelm 105 Yelm Avenue West P.O. Box 479 Yelm, Washington 98597" Comments: These are the changes you requested. We suggest the following language in a letter to BNSF: "in Section 23, please replace the word `Shelley' with `Shelly,' and insert `P.O. Box 479' between the lines `105 Yelm Avenue West' and `Yelm, Washington 98597,' identifying the City's addressee and address for notice purposes." 27) Exhibit ". . .which real estate and improvements are situated in [Pierce and Thurston] Counties, Washington, the boundaries of which are more particularly described in Comments: We suggest the following language in a letter to BNSF: "City respectfully requests that BNSF insert the words `Pierce and Thurston,' and replace the word `County' H1754t062m)171015762V001 12 JUN. 28. 2000 5:36PM BETTS PATTERSON N0, 1710 P. 14 Ms. Shelly A_ Badger June 28, 2000 Page 13 with `Counties' immediately after said insertion, identifying the location of the Rail Line in the quitclaim deed in Exhibit A." 28) Section.Exhibit-13: i "BILL OF SALE THE BURLINGTON NORTHERN AND SANTA FE RAILWAY COMPANY ("BNSF") hereby donates and conveys to CITY OF YELM all of BNSF's rights, title and interest to the following unaffixed personal property located on BNSF's rail corridor between Milepost 20.99 in Roy, Washington and, the end of this rail line at or near Milepost 25.56 in Yelm, Washington." Comments: Although there appears to be some discrepancy between documents as to the correct Mileposts for the Rail Line, 1 spoke to Charlie Burnham on Monday, June 26, and he stated that the correct Mileposts are in fact 20.99 and 25.56. 29) Section Exhibit C ("AGREEMENTS ASSIGNED TO CITY OF YELM IN WHOLE OR IN PART"(Email_from_ShellyRadm-to_Steve.Day(June 20. 2000)1: You wrote: "it appears that no reference in the assigned contracts/easements is made to the fiber optic lines that run in the rail ROW. Does this mean that BNSF is holding those franchises along with the franchise revenue?" QQMMents: City should seek a specific answer regarding BNSF's stance on,this issue. We believe that BNSF intends to keep any fiber optic casement; but it is important that BNSF be specific in letting City know whether or not they will transfer these valuable rights. We suggest the following language: "It appears that no reference is made in Exhibit C to the fiber optic easements that run in the rail right of way. City respectfully requests that BNSF clarify as to whether BNSF intends to assign such fiber optic easement rights to City." Please feel free to contact me if you have any questions or concerns. I K1754/06280U 17t0o,#2oa01 13 I JUN, 28. 2000 5:36PM BETTS PATTERSON N0. 1710 P. 15 Ms. Shelly A_ Badger ( June 28,2000 Page 14 Very truly yours, Taro Kusurnose TK:tk i ( 01754/062800 1710/37820001 14 Page 1 of 1 From: Steve Day <sday@bpmlaw.com> To: 'Shelly Badger' <shelly@yelmtel.com> Date: Tuesday, June 20, 2000 9:12 AM Subject: RE: Add comments on draft BNSF contract The railroad usually retains the fiber optic rights... and other ROW rights. And yes, they usually keep any revenue and you have to accommodate entry for repair and maintenance, etc. This may be negotiable, I'll give you a more definitive answer after reviewing it. If you want to pursue this item, 1 would suggest letting Joe call Batie - its best to keep a single negotiator in place. As to the code city issue - 1 believe Ken checked this out with Sandy Mackey- I will check the Ne when I get back tomorrow to see if I have a note on this issue. I have to go to Olympia today to meet with WUTC staff on a dispute. -----Original Message----- From: Shelly Badger[mailto:shelly@yelmtel.com] Sent: Tuesday,June 20,2000 8:04 AM To: sday@bpmlaw.com Cc: willgrpjsw@aol.com;ceb@deaina.com Subject: Addt comments on draft BNSF contract Steve, A couple comments/? prior to your receipt of the draft contract that came up at our RAC meeting yesterday.... *It appears that no reference in the assigned contracts/easements is made to the fiber optic lines that run in the rail ROW. Does this mean BNSF is holding those franchises along with the franchise revenue? *Yelm is a non-charter Code City, is the authority to acquire a railroad in the statutes for Code cities? I am assuming it is or we wouldn't have gone this far, but just wanted to double check in reference to page 6, part(b)of the draft contract. Thanks, have a good trip! Shelly 09/13/2000 BNSF RICHARD A. BATIE Burlington Northern Santa Fe Title:Manager, Shortline Development 2600 Lou Menk Drive 19- �h Fort Worth,Texas 76131 Phone 817-352-6432 1W FAX 817-352-7938 June 15, 2000 Shelly Badger, City Administrator City of Yelm 105 Yelm Avenue West Yelm, Washington 98597 Dear Shelly, Attached is a draft contract for the transfer of the Roy to Yelm, Washington line from BNSF to the city of Yelm. The contract allows for a donation of the line to the city following a sale of a parcel of property at Yelm for $300,000. This transaction will allow the city of Yelm to acquire the Roy to Yelm line and preserve it for future industrial growth or other purposes. When the need for freight service on the line is realized the city may choose to operate the line itself, have a contractor operate the line on behalf of the city, or discuss the possibility of BNSF operating the line. If the city is interested in BNSF operating the line it must be rehabilitated to BNSF standards and BNSF must be able to provide train service on the line without incurring unreasonable added operating expenses. Please review the draft contract. When the city is ready to move forward with this transaction, I will forward two original contracts which the city can sign and return. BNSF will then execute the agreements and set a closing date which may be shortly after July 17, 2000. Seven days prior to closing the city will need to file with the Surface Transportation Board (STB) in Washington, DC for acquisition of the line. If the city wishes to use the services of Karl Morrell of the law firm of Ball Janik LLP in Washington, DC for the STB filing, his phone number is 202-466-6533. This offer to transfer the Roy to Yelm line under these conditions will expire on September 1, 2000. Please contact myself if you have any questions or comments concerning this proposed transaction. Sincerely, Richard A. Batie BNSFlh l.sty June 12, 2000 Draft AGREEMENT FOR DONATION OF CERTAIN ASSETS, RIGHTS AND OBLIGATIONS OF THE BURLINGTON NORTHERN AND SANTA FE RAILWAY COMPANY TO CITY OF YELM AGREEMENT FOR DONATION OF CERTAIN ASSETS, RIGHTS AND OBLIGATIONS OF THE BURLINGTON NORTHERN AND SANTA FE RAILWAY COMPANY TO CITY OF YELM,WASHINGTON TABLE OF CONTENTS PARAGRAPH 1 -DONATION CONVEYANCES AND ASSIGNMENTS 2 PARAGRAPH 2-CONDITIONS OF DONATION 4 PARAGRAPH 3 - GOVERNMENT APPROVAL 5 PARAGRAPH 4-REPRESENTATIONS AND WARRANTIES 5 PARAGRAPH 5-INSPECTION AND CONDITION OF RAIL LINE 7 PARAGRAPH 6-LIABILITY AND INDEMNITY g PARAGRAPH 7-ASSIGNMENT 13 PARAGRAPH S-OBLIGATIONS ARE CONTINUING 14 PARAGRAPH 9-LIENS AND ENCUMBRANCES 14 PARAGRAPH 10-PENDING PUBLIC WORKS PROJECTS 15 PARAGRAPH 11 -CITY TO OFFER TO HIRE BNSF'S QUALIFIED EMPLOYEES 15 PARAGRAPH 12-CLOSING 16 PARAGRAPH 13-PRORATION 16 PARAGRAPH 14-INTERCHANGE 17 PARAGRAPH 15-CAR HIRE COSTS 17 N:\law.mkg\dww\contracts\yelm toc i PARAGRAPH 16—CITY AND BNSF TO PUBLISH COMBINATION RATES TO AND FROM ROY,WASHINGTON 17 PARAGRAPH 17—TIME IS OF THE ESSENCE 18 PARAGRAPH 18—TRANSFER OF OPERATIONS 18 PARAGRAPH 19—TRANSFER OF LIABILITIES; PAYMENT OF CHARGES 18 PARAGRAPH 20—ELECTRONIC DATA INTERCHANGE 18 PARAGRAPH 21 —APPLICABLE LAW 19 PARAGRAPH 22—EFFECT OF WAIVER 19 PARAGRAPH 23—NOTICES 19 PARAGRAPH 24—CONFIDENTIALITY 20 PARAGRAPH 25—ENTIRE AGREEMENT; INTEGRATION OF AGREEMENT 21 EXHIBIT A - Quitclaim Deed EXHIBIT B -Bill of Sale EXHIBIT C - Agreement Assigned by BNSF NA1aw.mkg\dww\contracts\ye1m toc 11 AGREEMENT FOR DONATION OF CERTAIN ASSETS, RIGHTS AND OBLIGATIONS OF THE BURLINGTON NORTHERN AND SANTA FE RAILWAY COMPANY TO CITY OF YELM THIS AGREEMENT ("Agreement") is entered into as of this day of June, 2000, between THE BURLINGTON NORTHERN AND SANTA FE RAILWAY COMPANY, a Delaware corporation ("BNSF"), and The City of Yelm, a municipality in the the State of Washington("City"). WHEREAS, BNSF desires to donate and convey to City, on the terms and conditions set forth in this Agreement,BNSF's rail line and rail corridor ownership interests in its rail line segment between Milepost 20.99 in Roy,Washington, and Milepost 25.56 in Yelm, Washington(collectively, "Rail Line"),together with BNSF's rights to conduct rail freight transportation business on the Rail Line, and certain other rights and obligations as specified in this Agreement; and WHEREAS, City desires to accept this donation from BNSF, and to acquire the Rail Line, BNSF's rights to conduct rail freight transportation business on the Rail Line, and certain other rights and obligations as specified in this Agreement, pursuant to the terms and conditions set forth in this Agreement; 1 NOW, THEREFORE, City and, BNSF agree as follows: 1. Donation Conveyances and Assignments. (a) BNSF shall donate and convey to City, on the date of Closing (as defined later herein), by Quitclaim Deed delivered by BNSF to City on that date, all of BNSF's ownership interest in BNSF's Rail Line (except a retained license to operate over such portion of the track at and near Roy, Washington as is necessary or convenient to interchange rail traffic between City and BNSF at Roy, Washington), which shall include all rail corridor land between the endpoint Mileposts of the Rail Line and all improvements that are located thereon. The Rail Line is described specifically in Attachment 1 to the Quitclaim Deed set forth as Exhibit A attached hereto,and made a part hereof. BNSF and City acknowledge that the Rail Line does not include the parcel of land in Yelm, Washington that is being conveyed by BNSF to City in a separate transaction following the date of this Agreement. (b) BNSF shall convey to City, effective on the date of Closing,BNSF's right to conduct rail transportation business on the Rail Line, subject to the terms and conditions set forth in this Agreement,the Quitclaim Deed,the Bill of Sale and/or any agreement assigned by BNSF to City by the terms of this Agreement. (c) BNSF shall convey to City, on the date of Closing, by delivering to City on the date of Closing a Bill of Sale identical in form to the Bill of Sale set forth as Exhibit B attached hereto,and made a part hereof,all of BNSF's ownership interest in all personal property that, on the date of the Closing, does not constitute improvements on the Rail Line,but which then are present on the real property comprising the Rail Line. This conveyance shall be subject to the terms and conditions set forth in this Agreement, the Bill of Sale, the Quitclaim Deed and/or any agreement 2 assigned by BNSF to City by the terms of this Agreement. (d) BNSF hereby assigns to City, effective on the date of Closing, subject to all terms and conditions set forth in this Agreement, the Quitclaim Deed, the Bill of Sale and/or any agreement assigned by BNSF to City by the terms of this Agreement, all assignable rights and obligations of BNSF to the extent such rights and obligations are effective after Closing, to the extent that they are related to the Rail Line and are set forth in any agreement identified on Exhibit C attached hereto and made a part hereof. City hereby accepts the assignment of all such rights and obligations of BNSF, effective on the date of Closing, in accordance with the terms of each applicable agreement and the terms of this Agreement. BNSF,and not City, shall be responsible for performing all of BNSF's duties in assigned agreements which are required to be performed on or before the date of Closing. City, and not BNSF, shall be responsible for performing all assigned duties in assigned agreements which are required to be performed after the date of Closing. City acknowledges that BNSF reserves, and City does not acquire, all rights and obligations set forth in any agreement identified in Exhibit C to the extent those rights or obligations are related to property owned by BNSF after Closing. If any contract is related to the Rail Line and is intended to be assigned by BNSF to City, in whole or in part,but inadvertently is not identified in Exhibit C,BNSF promptly shall provide to City a copy of any such contract immediately upon locating it, and City, as of the date of its receipt of such copy, shall assume the rights and obligations in such contract to the extent they are related to the Rail Line. City shall make no claim against BNSF arising out of any failure to obtain a consent to assignment from any party to any agreement assigned by BNSF to City, in whole or in part. 3 2. Conditions of Donation. City hereby accepts the following conditions to BNSF's donation of the Rail Line, and it's conveyance and assignment to City of other rights and obligations as described in Paragraph 1: (a) City accepts all transferred real property and personal property "AS IS, WHERE IS" and "with all faults." City acknowledges that certain track materials are missing from the Rail Line and that it cannot support train operations until certain repairs are made. (b) Commencing at 12:01 a.m. on the date following Closing, and continuing thereafter, City shall assume all common carrier obligations related to the Rail Line. (c) City shall take all actions and execute all documents that may be necessary or helpful in connection with BNSF's charitable donation tax deduction for donation of the Rail Line, including City executing the Donee Acknowledgment section of Internal Revenue Service Form 8283. (d) City shall pay all costs of Closing (except BNSF's cost of preparation of documents to be delivered at Closing), including, but not limited to, any escrow and service fees,real estate transfer taxes,excise taxes,recording fees and sales taxes associated with this Agreement or any of the conveyances governed by this Agreement. 4 3. Government Approval. City, at its sole expense, shall prepare and file such documents as may be required to secure approval, or exemption from approval, of this transaction by the federal Surface Transportation Board ("STB"). City shall make all reasonable efforts to obtain this approval or exemption in time for this transaction to close on July 2000. City shall permit BNSF to review prior to filing all documents proposed by City to be filed with the STB or any court to secure legal approval or exemption of this transaction. 4. Representations and Warranties. (a) BNSF hereby represents and warrants to City, and City's successors and assignees, the following facts, as of the date of this Agreement and as of the date of Closing: (1) BNSF is a corporation duly organized, validly existing,and in good standing under the laws of the State of Delaware, and is qualified to do business as a foreign corporation in the State of Washington. (2) BNSF has the corporate power and authority to enter into this Agreement and carry out its obligations under this Agreement; (3) The execution, delivery and performance of this Agreement have been duly authorized and approved by all necessary corporate actions of BNSF,and no further corporate proceedings of BNSF are required to complete the transactions covered by this Agreement; (4) All of BNSF's obligations set forth in this Agreement constitute legal,valid 5 and binding obligations of BNSF which are enforceable against BNSF in accordance with their terms, except to the extent enforcement may be limited by bankruptcy, insolvency or reorganization law; (5) There is no provision in the Certificate of Incorporation or By-Laws of BNSF which prohibits the execution of this Agreement or consummation of the transactions covered by this Agreement; and (6) No representation or warranty by BNSF in this Agreement contains any untrue statement of a material fact, nor omits any material fact that is necessary to make any representation or warranty not materially misleading. (b) City hereby represents and warrants to BNSF, and all successors and assignees of BNSF, the following facts, as of the date of this Agreement and as of the date of Closing, except where specifically noted to be as of the date of Closing only: (1) City is municipality duly organized, validly existing and in good standing under the laws of the State of Washington; (2) City is a qualified donee within the meaning of Section 501(c)(3) of the Internal Revenue Code of 1986, as amended; (3) City has all requisite business authority to purchase BNSF's rights and properties which are conveyed to City by this Agreement; to enter into this Agreement; to conduct rail freight transportation business on the Rail Line (as of the date of Closing only);and to perform all of City's obligations under this Agreement; (4) The execution of this Agreement and consummation of the transactions which 6 are a part of this Agreement have been duly authorized and approved by all necessary actions by City, and immediately upon execution of this Agreement by City's authorized representative, all of City's obligations set forth in or referenced in this Agreement shall constitute legal, valid and binding obligations of City, or City's successors or assignees, which obligations are enforceable against City in accordance with their terms, except to the extent enforcement may be limited by applicable bankruptcy, insolvency, reorganization or other laws affecting the enforcement of creditors' rights generally and the application of general principles of equity; (5) There is no provision in the Charter of City,or any applicable law,ordinance or regulation, that prohibits the City's execution of this Agreement or it's consummation of the transactions covered by this Agreement; (6) As of the date of Closing only, City shall have obtained all legal authority which is necessary to enable City lawfully to conduct rail freight transportation operations over the Rail Line as a common carrier, commencing at 12:01 a.m. on the day following the date of Closing; and (7) No representation or warranty by City in this Agreement contains any untrue statement of a material fact, nor omits any material fact that is necessary to make any representation or warranty not materially misleading. 5. Inspection and Condition of the Rail Line. (a) By signing this Agreement, City acknowledges that City has inspected the 7 Rail Line, including all improvements and structures on the Rail Line, and all land to be conveyed as part of this transaction. City further acknowledges that: (i)except as set forth in this Agreement, no representation has been made by BNSF to City concerning the state or condition of the Rail Line, or the age of any improvements on the Rail Line; (ii) City has not relied upon any statement or declaration of BNSF,oral or in writing,as an inducement to entering into this Agreement,other than as stated in this Agreement; and (iii) all terms of this transaction are set forth in this Agreement. (b) BNSF HEREBY DISCLAIMS ANY REPRESENTATION OR WARRANTY, WHETHER EXPRESS OR IMPLIED, AS TO THE DESIGN OR CONDITION OF THE RAIL LINE, ITS MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE, THE QUALITY OF THE MATERIAL OR WORKMANSHIP OF THE RAIL LINE, OR THE CONFORMITY OF THE RAIL LINE TO ITS INTENDED USES. BNSF SHALL NOT BE LIABLE TO CITY FOR ANY INCIDENTAL OR CONSEQUENTIAL DAMAGES (INCLUDING STRICT LIABILITY IN TORT) WITH RESPECT TO THE DESIGN, CONDITION, QUALITY, SAFETY,MERCHANTABILITY, OR FITNESS FOR ANY PARTICULAR PURPOSE, OF THE RAIL LINE, OR THE CONFORMITY OF THE RAIL LINE TO ITS INTENDED USES. BNSF DONATES AND CONVEYS, AND CITY ACCEPTS, THE RAIL LINE IN "AS IS, WHERE IS" AND "WITH ALL FAULTS" CONDITION, AND SUBJECT TO ALL LIMITATIONS ON THE RIGHTS, INTEREST AND TITLE OF BNSF TO THE PROPERTY COMPRISING THE RAIL LINE. 6. Liability and Indemnity. (a) Cooperation in Defense. City and BNSF agree that, following the date of Closing, 8 they will cooperate as necessary in defense of any claim,demand, investigation or litigation arising out of the ownership or operation of the Rail Line. (b) Definition of Losses. In this Agreement, the term "Losses" shall include all costs, expenses, fees or liabilities of, or in any way related to: (i) any violation of law or regulation, (ii) any damage to property,the environment or natural resources, (iii)any bodily injury or death of any person, or (iv) the breach of any contract, including this Agreement to the extent set forth in this Agreement. "Losses" shall include,but not be limited to, all costs of claims, activities in response to enforcement,costs of investigation and remediation,damages,judgments, awards,orders,decrees, payments, fines,penalties,assessments, court costs,and attorney, consultant and expert witness fees, and shall include cost recovery or contribution claims made pursuant to CERCLA or similar federal or state laws. (c) General Liability and Indemnity. (1) BNSF's General Liability and Indemnity. Except as provided in Paragraph 6(d)of this Agreement, BNSF shall be responsible for, and shall indemnify, defend and hold harmless City fully against, all Losses which: (i) arise out of BNSF's ownership or operation of the Rail Line, prior to the date of Closing; or (ii) result from any breach by BNSF of any representations or warranties of BNSF that are set forth in this Agreement, or any failure by BNSF to perform any obligations of BNSF under this Agreement. (2) City's General Liability and Indemnity. Except as provided in Paragraph 6(d) of this Agreement, and further except for Losses resulting from one or more representations or warranties of BNSF as set forth in this Agreement 9 containing any untrue or materially misleading statement of a material fact, or omitting any material fact that is necessary to prevent that representation or warranty from being materially misleading, City shall be responsible for, and shall indemnify, defend and hold harmless BNSF fully against, regardless of any negligence of BNSF, all Losses which: (i) arise out of City's ownership or operation of the Rail Line after 12:01 a.m. on the day following the date of Closing; (ii)result from any breach by City of any of its representations or warranties set forth in Paragraph 4(b) of this Agreement, or any failure by City to perform any of its obligations under this Agreement; (iii) result from claims of third parties caused by City's nonperformance or required performance under any contract, lease, permit, license, easement or commitment relating to the Rail Line, where that contract, lease, permit, license, easement or commitment is identified in Exhibit C, or City has specific knowledge of it and such contract, lease, permit,license,easement or commitment was intended to be assigned to,and assumed by, City at Closing; and(iv) are proximately caused,to any extent, by the activities, operations or presence of City or any of its agents, contractors,representatives,permittees or invitees, or any of their employees, who are on or near the Rail Line. (d) Environmental Liability and Indemnity. (1) City's Acknowledgments with Respect to the Rail Line. City acknowledges that BNSF has provided City with full access to inspect the Rail Line. 10 (2) BNSF's Environmental Liability and Indemnity. Notwithstanding any other liability or indemnification provision in this Agreement, BNSF shall be responsible for, and shall indemnify, defend and hold harmless City (including its successors and assignees)fully against,Losses incurred due to any claim, demand or litigation,to the extent it is based on any violation or requirement of any applicable environmental statute, ordinance, rule, regulation, order or decision(collectively, "Environmental Laws"), and the Losses arise from: (i) any chemical, material or substance that is now, or at the time in question is, regulated or governed by any law, the release of which creates any liability under any applicable law;or(ii)any other material which, when released, would cause ecological damage in violation of any applicable Environmental Laws (items described by (i) or (ii) above are referenced hereinafter as "Hazardous Materials")located on,under or near the Rail Line, to the extent that such Losses: (A) were caused by one or more acts or omissions of BNSF that occurred prior to the date of Closing, and that could not have been discovered by City in a reasonable inspection of the Rail Line; and (B) result from any written claim made by a party other than City, ("Claims") that is delivered to BNSF within one year following the date of Closing; and (C) exceed$10,000 in the aggregate in that year. (3) City's Environmental Liability and Indemnity. As a condition of BNSF's 11 donation of the Rail Line, and notwithstanding the liability and indemnity provisions set forth in Paragraph 6(c) of this Agreement, City shall be responsible for,and shall indemnify,defend,and hold harmless BNSF fully against, regardless of any negligence of BNSF, Losses incurred due to any claim, demand or litigation, to the extent it is based on any violation or requirement of any applicable environmental statute, ordinance, rule, regulation, order or decision, and the Losses arise from any Hazardous Materials located on, under or near the Rail Line, to the extent that such Losses either: (A) resulted from any cause or causes that were not the result of one or more acts of BNSF that occurred prior to the date of Closing which could not have been discovered by City in a reasonable inspection of the Rail Line; or (B) were caused by one or more acts of BNSF that occurred prior to the date of Closing which could not have been discovered by City in a reasonable inspection of the Rail Line, and result from a Claim delivered to BNSF within one year following the date of Closing,but only up to $10,000 in the aggregate in that year; or (C) do not result from a Claim that is delivered to BNSF within one year following the date of Closing. (4) Arbitration of Allocation of Liability Between City and BNSF. Any dispute between City and BNSF as to allocation between them of Losses for which 12 both City and BNSF are responsible under the terms of this Paragraph 6 shall be settled by binding arbitration in accordance with the rules of the American Arbitration Association. (5) City To Comply With Hazardous Materials Laws. City agrees to comply with all federal, state and local laws, regulations and rules concerning handling and disposal of Hazardous Materials in connection with City's ownership of, and activities on and near,the Rail Line. (6) Liability Remedies and Obligations Are Exclusive. City and BNSF agree that the remedies and obligations set forth in this Paragraph 6 shall be exclusive remedies and obligations of each one to the other with respect to any Losses relating to the release or existence of Hazardous Materials on or near the Rail Line. (e) BNSF to Deliver Certain Property Records to City. BNSF shall make good faith efforts to deliver to City, within 30 days following the date of Closing, originals or copies of whatever records,prints, archival information, or other evidence that BNSF locates in a reasonable search of BNSF's records, which bears upon the use of, maintenance, or title to the real estate comprising the Rail Line. If, at any time after Closing, BNSF locates any other documents which bear upon the use of, maintenance, or title to any such real estate, BNSF promptly shall provide originals or copies of those documents to City. 7. Assignment. Any assignee, including any successor in interest, of City's rights under or property acquired 13 by this Agreement, must first assume in writing delivered to BNSF all of City's continuing and existing, or thereafter arising, obligations under this Agreement, and under any then effective contract assigned by BNSF to City, in whole or in part, in accordance with the terms of this Agreement. 8. Obligations are Continuing. The representations,warranties and obligations of BNSF and City in this Agreement are continuing and survive the Closing and delivery of the Quitclaim Deed. Terms of continuing obligations in this Agreement are subject to amendment only by a written contract signed by City and BNSF, or their respective successors or assignees. 9. Liens and Encumbrances. BNSF represents and warrants that,to BNSF's knowledge,BNSF has not caused or suffered, and will not cause or suffer prior to the date of Closing, any liens or encumbrances to secure the payment of a debt of BNSF to be filed against the Rail Line which would materially adversely affect City. BNSF represents and warrants that,to BNSF's knowledge, except for: (i)the lien of BNSF's General Lien Mortgage, dated November 10, 1896, between BNSF's predecessor, Northern Pacific Railway, and the Mercantile Trust Company, as supplemented, and (ii)the lien of BNSF's Consolidated Mortgage, dated March 3, 1970, between BNSF's predecessor, Burlington Northern, Inc., and Morgan Guaranty Trust Company of New York, as supplemented(collectively, "Mortgages"), BNSF has not caused or suffered any lien or encumbrance to secure the payment of a debt of BNSF to be filed against BNSF's ownership interest in the Rail Line, and BNSF does not 14 believe the liens of the Mortgages will materially adversely affect City. BNSF will deliver to City, within a year following Closing, an executed release of BNSF's ownership interest in the Rail Line from the liens of the Mortgages. Until such releases are delivered to City, BNSF shall indemnify City against any Losses that City incurs after Closing that result from BNSF not having delivered such executed releases to City. City agrees to take title to the Rail Line assets and ownership interests conveyed by the terms of this Agreement subject to all liens and encumbrances on those assets and ownership interests. 10. Pending Public Works Projects. BNSF has no knowledge of any pending government funded public works projects on the Rail Line. 11. City to Offer to Hire BNSF's Qualified Employees. City shall consider for initial employment in operating and maintaining the Rail Line any of BNSF's employees who are eligible to work on the Rail Line on the date of this Agreement. City shall give priority hiring consideration for any such positions to such employees of BNSF who are represented by the Brotherhood of Maintenance of Way Employees. City shall offer to hire for any such positions at salary levels and other terms and conditions of employment that are determined by City to be appropriate, all of those employees who City, in its sole discretion, determines to be best qualified and needed. City promptly shall notify BNSF of the name of each of BNSF's current employees who City offers to hire, and also the name of each of these employees who City actually hires. City shall assume a neutral stance in any Brotherhood of Maintenance of Way Employees 15 union organizing effort. 12. Closing. (a) The closing ("Closing") of this transaction shall occur on July_, 2000, or another date mutually agreed by the parties in writing. (b) At Closing, BNSF shall deliver to City the following documents: (1) An original executed, attested and notarized Quitclaim Deed to the Rail Line in exact form as the Quitclaim Deed attached hereto as Exhibit A; and (2) An executed Bill of Sale in exact form as the Bill of Sale attached hereto as Exhibit B. (c) At or before Closing, Shortline shall deliver to BNSF copy of City's City Charter. 13. Proration. Prepaid rentals, utilities, and other income or fees attributable to the Rail Line interests to be transferred by BNSF to City, under the terms of this Agreement shall be prorated between BNSF and City in such manner as to allocate to BNSF all income and expenses attributable to the Rail Line that has been received, or for which bills have been received, on or prior to the date of Closing; and to allocate to City all income and expenses attributable to the Rail Line that is received, or for which bills are received, after the date of Closing. BNSF shall be responsible for all real estate taxes applicable to the Rail Line through the date of Closing. City shall be responsible 16 for any taxes applicable to City as owner of the Rail Line after the date of Closing. 14. Interchange. (a) City and Railway shall interchange rail freight traffic, cars and locomotives to and from each other on tracks on the northeastern end of the Rail Line, at Roy, Washington. The track or tracks used for this interchange shall be known as the"Interchange Track." (b) Cars and their contents that are delivered by one party to the other on the Interchange Track shall be deemed to be in the possession of the receiving party as of the time they are placed on the Interchange Track and uncoupled from the delivering party's train or engine,except that if any such car is rejected by the receiving party under the Interchange Rules of the Association of American Railroads ("AAR")or any successor rules, the refused car shall be deemed to remain in the possession of the delivering party until that car is accepted by the receiving party. 15. Car Hire Costs. The party in possession of any car shall be responsible for all car hire costs,per diem expenses and mileage allowances payable with respect to such car, for any per diem charges for trailers or containers carried by such car, or for any equipment use charges applicable to any RoadRailer equipment or similar carless intermodal technology. 16. City and BNSF to Publish Combination Rates to and From Roy, Washington. BNSF shall establish combination rates to and/or from Roy, Washington, as appropriate,to handle rail freight traffic interchanged between BNSF and City at Roy, Washington. 17 City shall establish combination rates to and/or from Roy, Washington, as appropriate, to handle the rail freight traffic that originates or terminates on the Rail Line. 17. Time is of the Essence. Time is of the essence in this Agreement. 18. Transfer of Operations. All responsibility and authority for conducting rail operations on the Rail Line shall be transferred from BNSF to City at 12:01 a.m. on the day following the date of Closing. 19. Transfer of Liabilities; Payment of Charges. For the period before and including the day of Closing, BNSF shall be responsible for: (a)all common carrier rail operations, including car supply,on the Rail Line; (b)any freight loss and damage claims attributable to rail operations over the Rail Line; and(c) all car accounting and all car hire and car mileage allowance payments relating to rail operations over the Rail Line. At and after 12:01 a.m. on the day following the date of Closing, City shall be responsible for: (d) all common carrier rail operations, including car supply, on the Rail Line; (e) any freight loss and damage claims attributable to rail operations over the Rail Line; and (f) all car accounting and all car hire and car mileage allowance payments relating to rail operations over the Rail Line. 20. Electronic Data Interchange. Within six months following the month in which City and BNSF interchange any 18 freight cars at Roy, Washington, City must have the ability to send and receive electronically waybills, advanced consists, and bills of lading; as well as Train II reports and passing/placement reportings for performance purposes. Transaction reporting should be at industry standard levels or one level behind. 21. Applicable Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Texas. 22. Effect of Waiver. Any waiver by any party to this Agreement, or failure by any such party to insist upon full and complete performance by any other party to this Agreement of its obligations set forth in this Agreement, shall not constitute a waiver or release of such party's right to insist upon full and complete performance of any other obligations in this Agreement, or a waiver or release of such party's right to insist upon full and complete performance of the obligations that were waived or not enforced for periods prior to, or following, the waiver or failure to insist upon full and complete performance. This Agreement shall be amended or modified only by written agreement signed by all three parties hereto. 23. Notices. All notices and other communications under this Agreement shall be in writing and deemed properly served if delivered by hand to the party addressed or, if mailed, when received by 19 the United States Postal Service in registered or certified mail, postage prepaid, or, if sent by a national overnight service, when received by the carrier service in a prepaid mailer, return receipt requested, addressed as follows: BNSF: Mr. Jerome M. Johnson Assistant Vice President Shortline Development The Burlington Northern and Santa Fe Railway Company 2600 Lou Menk Drive Fort Worth, Texas 76131 City: Ms. Shelley Badger City Administrator, City of Yelm 105 Yelm Avenue West Yelm, Washington 98597 Either party hereto may change its address or addressee to which notices are to be given by providing written notice of the change to the other party. 24. Confidentiality. Except to the extent that the terms of this Agreement are required to be disclosed by the STB,by order of any court of competent jurisdiction or any governmental agency, or by laws or regulations applicable to the City entering into this transaction, each party to this Agreement shall not disclose the contents of this Agreement to any other party, without the prior written consent of the other parties to this Agreement. Any party who learns of any of the terms of this Agreement shall be required by the party to this Agreement who is disclosing the information not to disclose those terms to any other party without the prior written consent of both parties to this Agreement. 20 25. Entire Agreement; Integration of Agreement. This document, together with all Exhibits attached hereto, constitutes the entire agreement between City, BNSF and Railway relating to this transaction. Any other prior or contemporaneous agreements,understandings,representations or statements,whether oral or written, relating to this transaction are merged herein. The headings and titles to provisions in this Agreement are for convenience only, and shall not be deemed to modify or affect the rights or duties of City or BNSF. All rights and obligations of City and BNSF set forth in this Agreement,or in any Exhibit attached hereto, are integral parts of this Agreement. The parties agree that the terms herein have been arrived at by mutual negotiation and that no terms herein shall be presumptively construed against either party regardless of who drafted it in the first instance. IN WITNESS WHEREOF, authorized representatives of City and BNSF have executed this Agreement as of this day of June, 2000. THE BURLINGTON NORTHERN AND CITY OF YELM SANTA FE RAILWAY COMPANY By: By: Peter J. Rickershauser Vice President Network Development NA1aw.mkg\dww\co twU\yelm donationl 21 EXHIBIT A QUITCLAIM DEED THE BURLINGTON NORHTERN AND SANTA FE RAILWAY COMPANY,a Delaware corporation, Grantor, hereby donates, conveys and quitclaims to Grantee, CITY OF YELM, a municipality in the State of Washington,without any covenants of warranty whatsoever and without recourse to Grantor, its successors or assignees, all of Grantor's rights, title and interest, if any, in real estate and improvements constituting Grantor's rail corridor and rail line between Milepost 20.99, in Roy, Washington, and the southwestern end of this rail line corridor at or near Milepost 25.56, in Yelm, Washington, which real estate and improvements are situated in County, Washington, the boundaries of which are more particularly described in Attachment 1, attached hereto (hereinafter"Premises"). SUBJECT,however,to all existing interests in the Premises, including but not limited to all reservations, easements and other encumbrances, of record or otherwise. EXCEPTING AND RESERVING unto Grantor, its successors and assignees, a license for 99 years (or until any earlier date on which all rail service is abandoned on the rail line on the Premises), to operate over such portion of track on the Premises at or near Roy, Washington as is necessary or convenient to interchange rail traffic between Grantor and Grantee, or Grantee's successor or assignee. 1 IN WITNESS WHEREOF,Grantor has caused this instrument to be signed by its authorized representative, and its corporate seal to be affixed hereto, on the day of July,2000. THE BURLINGTON NORTHERN AND SANTA FE RAILWAY COMPANY By: Peter J. Rickershauser Vice President—Network Development ATTEST: By: Assistant Secretary Iwcont\wp\dww\agrccmcn\yaldma.a 1 2 STATE OF TEXAS ) ) ss. COUNTY OF TARRANT ) On this day of July, 2000 before me, the undersigned, a Notary Public in and for the State of Texas, duly commissioned and sworn, personally appeared Peter J. Rickershauser, Vice President, Network Development, and an Assistant Secretary, respectively, of The Burlington Northern and Santa Fe Railway Company,the corporation that executed the foregoing instrument, and acknowledged the execution thereof to be the free and voluntary act and deed of such officer and the voluntary act and deed of such corporation, for the uses and purposes therein mentioned, and on oath stated that he is authorized to execute the foregoing instrument and that the seal affixed in the corporate seal of such corporation. Witness my hand and official seal affixed the day and year first above written. Notary Public My commission expires: EXHIBIT B BILL OF SALE THE BURLINGTON NORTHERN AND SANTA FE RAILWAY COMPANY ("BNSF')hereby donates and conveys to CITY OF YELM all of BNSF's rights,title and interest to the following unaffixed personal property located on BNSF's rail corridor between Milepost 20.99 in Roy, Washington and,the end of this rail line at or near Milepost 25.56 in Yelm, Washington. BNSF HEREBY DISCLAIMS ANY REPRESENTATION OR WARRANTY, WHETHER EXPRESS OR IMPLIED,AS TO THE DESIGN OR CONDITION OF ANY SUCH PERSONAL PROPERTY HEREBY CONVEYED, ITS MERCHANTABLITIY, OR ITS FITNESS FOR ANY PARTICULAR PURPOSE. BNSF SHALL NOT BE LIABLE TO CITY OF YELM FOR ANY INCIDENTAL OR CONSQUENTIAL DAMAGES WITH RESPECT TO THE DESIGN, CONTIDTION, QUALITY, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF ANY OF THE PERSONAL PROPERTY CONVEYED HEREBY. IN WITNESS WHEREOF, BNSF has caused this Bill of Sale to be executed by its duly authorized representative this day of July, 2000. THE BURLINGTON NORTHERN AND SANTA FE RAILWAY COMPANY By: Peter J. Rickershauser Vice President—Network Development EXHIBIT C AGREEMENTS ASSIGNED TO CITY OF YELM IN WHOLE OR IN PART [List to be supplied by BNSF] PAGE: 1 KEYWORD SEARCH RESULTS REPORT DATE: 06/13/00 SRESULT.FMT BURLINGTON NORTHERN & SANTA FE RWY. CO. TIME: 12:30:24 EXPIRATION OR CONTRACT TERMINATION TYPE CONTRACT NO. CONTRACTOR / DESCRIPTION DATE DATE LOCATION CODE BF 00010856.00 PUGET SOUND ENERGY, INC. 06/15/1999 WA, YELM PR-PW/BNSF ELECTRIC WIRE LINE, LS. 52, MP. 23; ASSIGNED TO THE CITY OF YELM, WA; -CAT-NO.: 501101 BN 00002044.00 WASHINGTON, STATE OF 06/16/1972 WA, YELM GV-XS/BNRR IMPROVE CROSSING SIGNALS, MP. 25+2973; ASSIGNED TO THE CITY OF YELM, WA; BN 00003302.00 MCLINS, INC. 06/11/1973 WA, YELM ID-IT/BNRR CMO&O INDUSTRIAL TRACK & CROSSING, MP. 25+723; ASSIGNED TO THE CITY OF YELM, WA; BN 00007218.00 HARSCO CORP. 12/30/1976 WA, YELM ID-IT/BNRR M&O INDUSTRIAL SPUR TRACK, MP. 24+4010; ASSIGNED TO THE CITY OF YELM, WA; CX 85016001.00 SILVASEED CO. 03/20/1985 WA, ROY PR-PC/BNRR PRIVATE ROAD CROSSING, MP. 21+150; ASSIGNED TO THE CITY OF YELM, WA; CX 86016044.00 PAISLEY, PATRICIA ANN & MARKUS, LEWIS H. 06/16/1986 WA, YELM PR-PC/BNRR M&0 ROAD CROSSING UNDER RR. BRIDGE NO. 22.1, CANCELS LC #205343; ASSIGNED TO THE CITY OF YELM, WA; CX 90016022.00 DROBOT, STEVE & DOROTHY M.; REEDER, RICHARD & LINDA L. 12/03/1993 WA, ROY PR-PC/BNRR PRIVATE ROAD CROSSING; I.S. 400, MP. 21.03; CANCELS LC #237576; ASSIGNED TO THE CITY OF YELM, WA; LC 00210734.00 YELM TELEPHONE CO. 06/01/1973 WA, YELM PR-PW/BNRR OHD TELEPHONE WIRE CROSSING, MP. 25+854; ASSIGNED TO THE CITY OF YELM, WA; LC 00216559.00 STRINGHAM, H. R. 12/16/1974 WA, ROY PR-PC/BNRR PRIVATE CROSSING, MP. 21+150; ASSIGNED TO THE CITY OF YELM, WA; LC 00221899.00 YELM, CITY OF 06/16/1976 WA, YELM PR-PL/BNRR WATER PIPELINE CROSSING, MP. 25+917; ASSIGNED TO THE CITY OF YELM, WA; LC 00238157.00 CABLE TV PUDGET SOUND, INC.; 07/01/1981 WA, YELM PR-PW/BNRR ASSIGNED TO VIACOM CABLEVISION, INC.; OHD TV CABLE CROSSING, MP. 25+3002; ASSIGNED TO THE CITY OF YELM, WA; NP 00007349.00 CENTRALIA, CITY OF 06/23/1929 WA, YELM GV-GN/BNRR PERMANENT SIPHON UNDERCROSSING, MP. 24+716; ASSIGNED TO THE CITY OF YELM, WA; -LAW-NO.: #15024 PAGE: 2 KEYWORD SEARCH RESULTS REPORT DATE: 06/13/00 SRESULT.FMT BURLINGTON NORTHERN & SANTA FE RWY. CO. TIME: 12:30:26 EXPIRATION OR CONTRACT TERMINATION TYPE CONTRACT NO. CONTRACTOR / DESCRIPTION DATE DATE LOCATION CODE NP 00013981.00 MURRAY, NELSON 07/22/1904 WA, RPY PR-PL/BNRR 3/4 INCH WATER PIPELINE; ASSIGNED TO THE CITY OF YELM, WA; NP 00019290.00 PACIFIC TELEPHONE & TELEGRAPH CO.; 06/15/1914 SYSTEM PR-PW/BNRR ASSIGNED TO PACIFIC NORTHWEST BELL TELEPHONE CO.; ASSIGNED TO US WEST COMMUNICATIONS, INC.; MASTER GENERAL CROSSING AGMT., SUPPLEMENT NO. 660, OHD TELEPHONE WIRE LINE CROSSING, MP. 21+548; ASSIGNED TO THE CITY OF YELM, WA; -LAW-NO.: #27737 NP 00038623.00 AVERY, G. A. 05/05/1922 WA, ROY PR-PW/BNRR ELECTRIC WIRE LINE CROSSING; ASSIGNED TO THE CITY OF YELM, WA; NP 00040855.00 THURSTON COUNTY UTILITIES CO. 12/20/1923 WA, YELM PR-PW/BNRR OHD ELECTRIC WIRE LINE CROSSING, MP. 25+900; ASSIGNED TO THE CITY OF YELM, WA; NP 00066454.00 PUGET SOUND POWER & LIGHT CO. 11/15/1946 WA, YELM PR-PW/BNRR ELECTRIC WIRE LINE, MP. 25+1705; ASSIGNED TO THE CITY OF YELM, WA; NP 00095881.00 OLYMPIC PIPELINE CO. 05/01/1965 WA, ROY PR-PL/BNRR PETROLEUM PIPELINE CROSSING, MP. 21+607; ASSIGNED TO THE CITY OF YELM, WA; NP 00095882.00 OLYMPIC PIPELINE CO. 05/01/1965 WA, YELM PR-PL/BNRR LONGITUDINAL PETROLEUM PIPELINE; PARTITAL ASSIGNMENT TO THE CITY OF YELM, WA; NP 00096020.00 PUGET SOUND POWER & LIGHT CO. 07/01/1965 WA, ROY PR-PW/BNRR OHD ELECTRIC WIRE LINE CROSSING, MP. 21+548; ASSIGNED TO THE CITY OF YELM, WA; NP 00097220.00 YELM, TOWN OF 06/01/1966 WA, YELM PR-PL/BNRR 2 WATER PIPELINE CROSSINGS, MP. 25+917 & MP. 25+3965; ASSIGNED TO THE CITY OF YELM, WA; NP 00097261.00 WASHINGTON NATURAL GAS CO. 07/01/1966 WA, YELM PR-PL/BNRR NATURAL GAS PIPELINE CROSSING, MP. 25+875; ASSIGNED TO THE CITY OF YELM, WA; NP 00098040.00 PUGET SOUND POWER & LIGHT CO. 01/15/1967 WA, YELM PR-PW/BNRR OHD ELECTRIC WIRE LINE CROSSING, 25+178; ASSIGNED TO THE CITY OF YELM, WA; PAGE: 3 KEYWORD SEARCH RESULTS REPORT DATE: 06/13/00 SRESULT.FMT BURLINGTON NORTHERN & SANTA FE RWY. CO. TIME: 12:30:29 EXPIRATION OR CONTRACT TERMINATION TYPE CONTRACT NO. CONTRACTOR / DESCRIPTION DATE DATE LOCATION CODE PX 85016048.00 YELM TELEPHONE CO. 07/08/1985 WA, YELM PR-PW/BNRR UGD LONGITUDINAL TELEPHONE CABLE, MP. 24+4235 & MP. 25+743; PARTIAL ASSIGNMENT TO THE CITY OF YELM, WA; PX 92016225.00 YELM, CITY OF 12/01/1992 WA, YELM PR-PL/BNRR PIPELINE CROSSING, LS. 400, MP. 24.14; ASSIGNED TO THE CITY OF YELM, WA; PX 92016226.00 YELM, CITY OF 12/01/1992 WA, YELM PR-PL/BNRR SEWER PIPELINE CROSSING, LS. 400, MP. 25.16; ASSIGNED TO THE CITY OF YELM, WA; PX 93016233.00 PUGET SOUND POWER & LIGHT 11/16/1993 WA, YELM PR-PW/BNRR OHD ELECTRIC WIRE LINE, LS. 400, MP. 24.97; CANCELS PX #93016150; ASSIGNED TO THE CITY OF YELM, WA; PX 94020688.00 YELM TELEPHONE CO. 12/23/1994 WA, YELM PR-PW/BNRR UGD CABLE CROSSING, LS. 400, MP. 24.98; ASSIGNED TO THE CITY OF YELM, WA; PX 95021190.00 VIACOM CABLE 11/08/1995 WA, YELM PR-PW/BNRR UGD WIRE LINE CROSSING, LS. 400, MP. 25.15; ASSIGNED TO THE CITY OF YELM, WA; I/ �F ?Hep�Q� 9V 9r C l of Yelm a, in 105 Yelm Avenue West P.O. Box 479 YELMOTON Yelm, Washington 98597 (360) 458-3244 March 1, 2000 l I ��✓ Rich Batie Burlington Northern Sante Fe 3017 Lou Menk Drive P.O. Box 961039 Fort Worth, TX 76161-0039 Re: Acquisition of the "Prairie Line" Dear Mr. Batie: At your suggestion, the City of Yelm has moved forward with formulating a formal offer to purchase the Prairie Line. Since the City is proposing to spend public funds, it was necessary for us to obtain support for the expenditure of these funds. We hired a professional firm with railroad property experience to conduct an appraisal of the line. We rely on this appraisal, in part,to make this formal offer. Based upon this appraisal, and the limited amount of fee simply property in the subject right-of- way, the City of Yelm hereby offers Burlington Northern Santa Fe $300,000 for the purchase of the Prairie Line. A detailed description of the Prairie Line, as that term is used in this offer, is attached as Appendix "A". We anticipate that Burlington Northern Sante Fe Railway Company may have a different valuation of this property. Without disagreeing with that valuation, we suggest that Burlington Northern Santa Fe consider making a gift to the City of that portion of your line valuation constituting the difference between our$300,000 and the valuation your company places upon the line. The tax benefit attendant with a gift to the City would increase the value of the overall transfer for Burlington Northern Sante Fe. We are most anxious to conclude this transaction. Please let us know as soon as possible whether or not Burlington Northern Santa Fe accepts this offer. As usual, if you have any questions, please call me directly. 67017/030200 1513/57820001 dL Rich Batie March 2, 2000 Page 2 Sincerely, City of Yelm Ken Garmann Public Works Director KG:kt 67017/030200 1513/57820001 LIMITING CONDITIONS AND ASSUMPTIONS This appraisal is subject to the following limiting conditions and assumptions: Special Limiting Conditions and Assumptions The appraisers assume BNSF has good and clear title to the entire length of the subject property for all corridor uses and that these uses can be legally transferred. Size and length of the subject property is assumed to be 71.51 acres and 4.55 miles. Corridor extends from mile post 21, adjacent to the southern boundary of Roy, Pierce County, city limits to mile 25.55 abutting the northern boundary of the SR 510/Yelm Avenue right-of-way in Yelm, Thurston County. No legal description or preliminary title reports of the subject were available at the time of the appraisal. The appraisers did have access to railroad right-of-way maps of the subject property and copies of deeds of the subject. The appraisers are aware of the following easements which may impact the subject; A power transmission line easement in favor of the Bonneville Power Administration, crossing the subject at approximately mile 23.75. A power canal easement in favor of the City of Centralia crossing the subject at approximately mile 24.25. A fiber optic line easement in favor of World Com along all or part of the subject. There may also be a sewer line easement over part of the subject in favor of the City of Yelm or Thurston County. On the Pierce County portion of the subject there are some private road crossings. It is assumed these roads have easements, licenses or agreements to cross the subject property. On the Thurston County portion two public roads, Canal and Rhoton Roads cross the subject. There are also two spur lines of the subjects rail line in the City of Yelm. General Limiting Conditions and Assumptions All matters of a legal nature or facts which might be revealed by a survey are excluded from the opinion of value herein. That title to the property is assumed to be good and merchantable for the highest and best use. Possession of this appraisal report does not include the right of publication. This report shall be used for its intended purpose only, and by the parties to whom it is addressed. The liability of the appraisers, David Evans and Associates Inc., and employees is limited to the client only. There is no accountability, obligation, or liability to any third party. If this appraisal report is placed in the hands of anyone other than the client, the client shall make such party aware of all limiting conditions and assumptions of the assignment and related discussions. YELM0003 David Evans and Associates,Inc. Page 7 �pF THE Ci of Yelm d M 105 Yelm Avenue West P.O. Box 479 YEL6MoTON Yelm, Washington 98597 (360) 458-3244 March 26, 1999 Mr. Richard A. Batie, Project Manager Short-Line and Inter-Line Development BNSF Railway Co. 2650 Lou Menk Drive P.O. Box 961052 Fort Worth TX 76161-0052 RE: "Prairie Line" — Yelm to Lakeview Dear Mr. Batie, Thank you for your efforts organizing our conference call with Mr. Johnson on February 26th of this year. I felt the dialogue was encouraging as we continue to structure the "Prairie Line" Yelm to Lakeview shortline package. As I understood our conversation, the BNSF would like to file with the Surface Transportation Board (STB) for abandonment of the segment from Yelm to Roy. Under this scenario you suggest that the two cities as the "Prairie Line" could then file an offer of financial assistance (OFA) and purchase the line at "net liquidation value" (NLV). Since our conversation I have taken the opportunity to research the abandonment process and find that an abandonment would be a costly, risky and time-consuming process which ultimately would not be in the best interest of the City of Yelm, City of Roy or the "Prairie Line". Additionally, because we intend to continue service and actively attract new business on the"Prairie Line" an abandonment process would be an inappropriate transfer process. As I indicated during our conference call, shortline viability for the"Prairie Line" will require an interchange at Lakeview. The Cities of Yelm and Roy have (by Ordinance) created a rail operating agreement, and our short term and long-range planning and marketing efforts are contingent on having a connection at Lakeview. Based on recent findings, the City of Yelm "Prairie Line" will cover its operating costs with approximately 353 cars per mile/year consisting of local traffic, and 35 cars per mile/year through the Lakeview interchange. Future interchange traffic will be expected I to grow once the short line is in place. As you know, we plan to engage a shortline operator with proven operational and marketing experience, and these numbers may be on the conservative side, as a result. To expedite our discussions on the matter of a Yelm to Lakeview "Prairie Line" shortline, the City of Yelm proposes the following: 1. Combine all the BSNF assets including right of way, physical improvements, real estate, etc. of the Yelm, Roy, Lakeview segment of the "Prairie Line" into a short- line package. 2. Directly transfer the BNSF assets of the"Prairie Line" to the operating partnership established by ordinance between the Cities of Yelm and Roy. 3. Value the transferred assets at fair market value as a"going concern railroad" for donation purposes. The BNSF could then treat the transferred assets to the Cities as a donation in order to take advantage of a tax deduction, as has been done in other recent governmental transfers. 4. Include BNSF unit train operating rights to Ft. Lewis on a wheelage basis. The ownership and operation of the"Prairie Line" by the City of Yelm will regionally benefit rail users, increase cost-free traffic to BNSF, and meet our"Growth Management Plan" objectives of providing multi-modal transport opportunities along the corridor. Feel free to call my office if you have any questions. I can be reached at (360)458- 8499. Sincerely, City of Yelm Ken Garmar Public Works Director cc: Kathryn M. Wolf, Mayor Shelly Badger, CAO 99-bnsf5b 2 / SOF tHF A�Q9� ity aCof Yelm IM& 105 Yelm Avenue West P.O. Box 479 PYRE;LMGTON Yelm, Washington 98597 (360) 458-3244 March 16, 1999 /7 S , ux ,r4- Mr. Joe Williams Yelm Prairie -`eo�Development d- " p 6Q ccc. b � P.O. Box 5210 Yelm, WA 98597 C Re: TRPC/STP TEA-21 Grant Yelm To Lakeview BNSF Branch Line Acquisition Dear Joe, As you recall, the City of Yelm was awarded a Thurston Regional Planning Council STP TEA-21 grant to assist in the acquisition of the Yelm to Lakeview BNSF Branch Line acquisition. We are currently in the process of obligating (securing) the federal funds allocated by the Thurston Regional Planning Council. To complete the funding package, we are now requesting the match funding your organization committed to the Yelm to Lakeview BNSF Branch Line Acquisition. For your convenience, we have attached an invoice in the amount of the match funds committed. We have begun negotiations with the BNSF on the acquisition of the"Prairie Line" and I can assure you, "it is like wrestling a hippo in a mud bog". We have made some points with the BNSF these past two month and I am certain our objective will be met. If you have any questions or comments, feel free to call my office at (360) 458-8499. Sincerely, City of Yelm [�-Ken Gar m nn Public Works Director cc: Kathy Wolf, Mayor Shelly Badger, CAO CF THF p� Cityof Yelm d M 105 Yelm Avenue West P.O. Box 479 YELM WASHINGTON Yelm, Washington 98597 (360) 458-3244 February 2, 1999 Mr. Richard A. Batie, Project Manager Short-Line and Inter-Line Development BNSF Railway Co. 2650 Lou Menk Drive P.O. Box 961052 Fort Worth TX 76161-0052 RE: "Prairie Line" —Yelm to Lakeview Dear Mr. Batie, Thank you for returning my phone call January 7t'of this year, regarding the BNSF "Prairie Line" —Yelm to Lakeview. As I understand our conversation regarding our letter to Mr. Jerry Johnson, the BNSF is not interested in conveying the"Prairie Line" to the City of Yelm, at this time. Specifically as outlined in our letter: • The BNSF will not grant a"first right of refusal" for the right of way improvements or traffic on the"Nisqually Line" as this may become part of the Amtrak route south of Tacoma. • The BNSF will not grant interchange rights at the Tacoma Yard due to the potential of conflicts with existing labor agreements. • The BNSF will not grant, nor create any short line operations between Roy and Lakeview including Ft. Lewis traffic, Roy traffic nor Wilcox traffic at this time. Additionally, the BNSF will not allow any interchange at Roy from the Yelm to Roy segment. • The BNSF will consider the transfer of the Yelm to Roy segment to the City in the'near future. Naturally, we are disappointed that the BNSF is not more receptive to our proposal. The community involvement and efforts put forth to develop and fund our plan have been 1 enormous, and the sense of community pride in this project has had significant local and regional support as well. We are also disappointed that we did not receive a reply from Mr. Johnson, as at our June 26`h meeting he seemed receptive to the idea of developing a"short line" from Yelm to Lakeview. It was this seed that encouraged the Cities of Yelm and Roy, the Yelm Chamber of Commerce and business leaders in both communities to expend substantial time and energy pursuing this idea. Based on this encouragement from Mr. Johnson we have all carefully developed what we view as a practical a meaningful multi-community consensus on strategies to both preserve current rail use and expand future service over the"Prairie Line". In fact, as we stated in our original letter, it is our strong desire to dramatically increase the traffic on this line, allowing the BNSF to enjoy additional revenues without increased cost. The ownership and operation of the"Prairie Line" by the City of Yelm will regionally benefit local rail users and meet our "Growth Management Plan" objectives of providing multi-modal transport opportunities along the corridor. We request the BNSF reconsider its position on the development of the"Prairie Line" Yelm to Lakeview as a short line and work with the City of Yelm to realize this goal. It should be apparent that Mr. Johnson's initial encouragement created broad community support and positive hope for BNSF's partnership in fostering our community's economic growth. It would be most unfortunate to see all this positive community effort come to an untimely and unfortunate conclusion. Perhaps it would be beneficial for a representative of the BNSF to meet with our group to discuss these issues and explore avenues available to make the Prairie Line a reality for the City of Yelm. We await your favorable reply. Please direct your correspondence to my attention. If you have any questions, feel free to call my office at (360) 458-8499. Sincerely, City of Yelm Ken Garmann Public Works Director cc: Kathryn M. Wolf, Mayor Shelly Badger, CAO Jerry Johnson, BNSF 2 n�7 Ci o Yelm 105 Yelm Avenue West P.O. Box 479YYelm, Washington 98597 WASHMMr ON (360) 458-3244 MEMO TO : Harold Robertson FROM :: KEN GARMANN ) RE : Yelm to Lakeview BNSF DATE : 7-29-98 1995 BNSF Railroad runs public notice and issues a SYSTEMS DIAGRAM MAP which includes the Roy to Yelm segment . The Public Notice indicates that within three years the BNSF may abandon the line . 1996 Conversations with the BNSF via telephone indicates the City of Yelm will be "in the loop" on any issues regarding the proposed line abandonment . 1997 In a chance follow up phone conversation, my office is informed the BNSF has sold the line to a scrap dealer. City Council gives approval to begin campaign to "stop the sale" . Rail Committee is formed which includes City officials, Chamber of Commerce, EDC, Port of Olympia, wSDOT Rail to mount a concerted campaign to secure the operating rights to the "Roy to Yelm" segment . page 1 Recycled paper 1998 Letter writing campaign to targeted BNSF Officials as well as to Surface Transportation Board begins . Participants includes Dennis Matson @ EDC, Nick Handy @ Port of Olympia, Kathryn Wolf, Mayor of Yelm, Dick Nichols, Judy Wilson, Diane Oberquill, Thurston County Board of Commissioners, Marilyn Rasmussen, State Senator, Joel Derefield, Mayor of Roy, Karen Fraser, State Senator, Sandra Romero, State Representative, Adam Smith, U. S. House of Representatives, Cathy Wolfe, State Representative. Railroad consultant Charlie Burnham of David Evans & Associates is retained to conduct two studies for the Rail Committee. One is a physical condition report of the existing equipment (rails, ties, bridges) , the other an economic forecast of potential traffic on the line . The rail is given a positive health certification by the consultant . DOT - Rail conducts a second opinion review and concurs . Economic report indicates there is a potential immediate market for 10 , 000 cars per year. This includes Wilcox Farms, Miles Sand and Gravel, Fort Lewis, Cenex, Lasco, and Amtech. June 26th meet with Mr. Jerry Johnson, BNSF V.P. Asset Rationalization to discuss the creation of a Yelm to Lakeview Short Line and the transfer of assets to the City of Yelm. Mr. Johnson expressed confidence in the plan but has to check with legal counsel . Review options and equipment cost for potential commute rail to the pending RTA facility in Tacoma. Waiting ! ! 98-bnsf4 CF THF p•�'9� • Crty of Yelm 4 M 105 Yelm Avenue West P.O. Boz 479 YELM WpgMINOTON Yelm, Washington 98597 (360) 458-3244 July 10, 1998 Mr. Jerry M. Johnson Assistant Vice President Asset Rationalization Burlington Northern Santa Fe 2650 Lou Menk Drive P.O. Box 961052 Fort Worth, TX 76161-0052 RE: Yelm to Lakeview short line Dear Mr. Johnson, Thank you for the opportunity to meet this past month to discuss the Yelm to Lakeview short line issues . The City' s Steering Committee, as well as the elected officials, remain committed to the preservation of rail service along the rail corridor. If you have any questions or require additional information that my office can provide, feel free to call anytime at (360) 458- 8499 . Sincerely, City of Yelm Ken Garm n Public Works Director CC : Kathy Wolf, Mayor Shelly Badger, CAO Charlie Burnham P.E . Joe Williams, Williams Broadcasting R-ycW rax► V GUEST SPEAKER > V 1998 EDC KEY OBJECTIVES > MAYOR BRIAN EBERSOLE 0Update & implement marketing initiative products that will generate 275 CITY OF TACOMA new targeted company contacts • Successfully site 4 new targeted sector companies In 1995,the citizens of Tacoma elected Brian Ebersole to his first term as mayor. Previously, he served as speaker of the Washington State 0 Provide technical assistance to companies that will create 100 new jobs House of Representatives and as the State House Majority Leader. paying an average of$11.20 per hour + medical benefits Under Mayor Eberso 2's leadership,the City Council has established a 0 Add 20 targeted companies to caseload new vision for Tacoma and revised both the mission and strategic focus of city government. 0 Identify&contact 5 new businesses that provide markets for the Port's Ebersole worked with the City Council to identify public safety,economic marine terminal services development, neighborhood improvements, and government performance improvements as the strategic focus for city government. Technical assistance to 1,450 Business Resource Center (BRC) users He is currently preparing athree-part bond issue that will raise critical funds to build community police stations, invest in the redevelopment Education training to 300 local existing businesses entrepreneurs of the downtown waterfront, and pay for capital projects that will improve neighborhood life throughout the city. • Provide assistance &referral services to local at-risk businesses A native of Tennessee,Mayor Ebersole worked as a teacher,counselor, 0 Organize efforts to undertake an objective economic assessment of and administrator in the Tacoma Public Schools for 17 years. He was Thurston County an administrator at Tacoma Community College from 1989 to 1991. He has a BA from the University of Tennessee and a master's degree • Assist in developing the preferred direction for long-term wastewater in educational psychology from the University of Connecticut. treatment During his tenure in the Legislature, Mayor Ebersole chaired the House 0 Assist the City of Yelm &light industrial property owners in retaining Education Committee from 1985- 1987 and was the prime sponsor of the Burlington Northern Santa Fe rail line serving the Yelm industrial both the Omnibus School Finance Reform Act of 1987 and the Omnibus Drug Bill of 1989. His dedication to education earned his Legislator of area the Year honors for six consecutive years from the Association of Vocational Education. Both the Washington State Firefighters The EDC will sponsor four quarterly membership meetings focusing on Association and the Washington State Council of Policy Officers also hey economic development issues affecting Thurston County honored him by naming him as their Legislator of the Year. 0 The EDC will encourage more student participation in EDC activities V 1998 MARKETING INITIATIVE UPDATE > V 1998 EDC BOARD OF DIRECTORS > Proactive marketing plan initiated in 1996 Mike Williams, President Mike Kennedy The Williams Group Pacific Mountain Private Funded by businesses and organizations that benefit directly Industry Council from economic development Bob Jones, Past-President Amtech Corporation Anne McMullen Corporate Trustees meet quarterly for updates and are TO Cablevision recognized at other EDC events Rob Kildow, Pres. Elect Hodges Commercial Dan Neuhauser Access to up-to-date information & marketing products L& E Bottling Councilmember Stan Biles City of Olympia Gary Nomensen 1 MARKETING INITIATIVE PRODUCTS > Steve Chamberlain Puget Sound Energy SCA Engineering Nancie Payne Electronic Community Profile (SiteDisk) Mike Edwards Payne&Associates Home Page upgrade with SiteDisk download M.D. Edwards & Assoc. Commissioner Steve Pottle Port of Olympia Kevin Ekar New collateral materials Centennial Bank Rob Rice Direct mail campaigns Brian Fluetsch Gemini Development Corp. Councilmember Earlyse Swift Participation in International Development Research Council & City Sunset Air Councici Lacey National Association of Office Properties Satoshi Ichita Local meetings with prospective client CEO's & corporate real Coast Office Equipment Mayor Kathy WolfCity of Yelm estate officials Doug Jenkins Jenkins Business Services Councilmember Bruce Zeller City of Tumwater V AGENDA > 1998 �2CAnnual Meeling &Rwinejb Pecogn.ifion./dwardi C,eUrafion 11:30 - Noon Registration & Social n �).e 9 W 11:30 - 1:00 W At/ha Summer 12:00 - 12:10 Welcome & Introductions Mike Williams The EDC is currently accepting nominations for the 1997 The Williams Group Small Business of the Year, New Business of the Year and Corporate Employer of the Year. 12:10 - 12:15 1998 EDC Update To nominate a company, complete the nomination form and 12:15 - 12:35 Mayor Brian Ebersole return to the EDC by May 19, 1998. City of Tacoma 1997 FwAusTs AND WINNERS: 12:35 - 12:40 Questions & Answers New Business of the Year: ASKA Company(winner) 12:40 - 12:55 Marketing Initiative Rendova Boats Bagel Brothers 12:50 - 1:00 Student Jennifer Warren Small Business of the Year: North Thurston School Batdorl& Bronson (winner) District Payne &Associates 1:00 Adjourn The BJSS Group Corporate Employer of the Year: Sunset Air(winner) CNC Containers Corporation Illuminet LLI z ® W Z C 3 W Eta, CID W modJ O z Z A OCo \ ca O` 0 �t /—t ♦-t /---< /---< /—< ♦—t Qi W a1i J_ CC a Q r Q OF t H Z A�9� Cityo Yelm 4 � 105 Yelm Avenue West P.O. Box 479 YELM WASMINOTON Yelm, Washington 98597 (360) 458-3244 December 24, 1997 U. S . Department of Transportation Surface Transportation Board 12th & Constitution Ave. N.W. Washington D. C. 20423 RE: BN/SFRR - Roy to Yelm Short Line Dear Board Members, Over the past several years, the Burlington Northern/Santa Fe Railroad has been in the process of discontinuing and/or abandoning the Roy to Yelm Short Line, a segment of rail 4 . 51 miles in length. Historically, this line provided a link between the local communities of Roy, Yelm, Rainier, Tenino to the north/south mainline network. Over the years, the Yelm to Tenino segment has been abandoned to the "Rail to Trails" program, leaving only the Yelm to Roy segment to link with current mainline networks near Tacoma, Washington. The City of Yelm' s 1995 Transportation Comprehensive Plan has identified rail transport as a key component to multi-modal freight traffic in order to reduce current highway congestion. In order to meet the goals of our plan it is imperative to keep the Roy to Yelm Short Line functional . The City in conjunction with local business and area agencies has formed a task force to develop a plan to re-establish rail service to Yelm and to promote economic development associated with such service . We have notified BN/SFRR via letter (see attached) regarding our interest in securing the inventory and operating rights to this section of rail . page 1 of 2 R-ycW pap- page 2 of 2 The City and business community feel it is imperative that an operational rail link be preserved between Yelm and Roy, on to Lakewood to enable the development of alternative multi-modal freight transport as a regional link to larger markets . If your department has any questions or comments feel free to contact my office at (360) 458-8499 . Sincerely, l Ken Garmann Public Works Director CC : Kathy Wolf, Mayor Shelly Badger, City Administrator Joe Williams, Williams Broadcasting Company Gary Beck, Yelm Chamber of Commerce Dennis Mattson, Thurston County Economic Development Council Nick Handy, Port of Olympia Ray Allred, WSDOT-Rail Shuming Yan, Thurston Regional Planning Council tft pCity 4 M of Yelm 105 Yelm Avenue West P.O. Box 479 YELM Yelm, Washington 98597 WABMINQTON (360) 458-3244 December 10; 1997 Mr. Richard A. Batie Burlington Northern/Santa Fe 2650 Lou Menk.Drive Fort Worth Texas- 76131-2830 ►-lllJ J(/A�\ Re: Roy to Yelm Short Line -Dear.-Mr. Batie, As per our phone conversations these past.'several years, railroad service is a major ,component to freight mobility in and out of..the. Yelm- community. , Prior, -as well as current-,City planning efforts have identified rail service as an integral feature to .. our' industrially zoned land especially the. Roy to ,Yelm Short,Line; whi h bisects . this property. The announcement, that Burlington Northern/Santa Fe is going to discontinue use of and surplus this segment of rail is of concern to the City and, the business community -as the potential to market and develop viable business 'is dependent on an efficient transportation network. Due to the separation from the I-5 corridor (the states major north/South interstate highway) rail service is an attractive multi-modal. freight alternative that fits ,well with our regional transportation plan: After meeting with a group of local business owners interested in insuring continuance of the Royto Yelm rail corridor the City at this time wishes to inform Burlington Northern/Santa Fe of our, interest in securing the inventory and operation rights and other rights ` required to accommodate continued rail service 'in -conformance with our economic development and transportation plans . We request the right of first refusal to enable the development of a plan to accomplish the goal of operating the Roy to .Yelm Short Line. We would also like to request at this time any records related to past maintenance on the Roy to Yelm Short Line. page 1 of 2 RftyeW p*- page 2 of 2 Please let me know at your earl i.est,• 'convenience ` _the process requilred to begin completion of the 'Roy:'; to Yelm Short Line acquisition, Thank -you.' Sincerely. , City of ,Yelm Ren Ga Public Works Director cc c : Kathy :Wolf, Mayor,: Shelly Badger, City Administrator joe Willi4ms, Williams. "Broadcasting company Gary Beck;`zYelm Chamber .of.-Commerce Dennis' Mattson,: Thurston County Economic Development Council Nick,Handy,: Port of Qiy np a : . Ray,;All red, WSDOT=Rai l Economic Development Council of Thurston County 721 Columbia SW / Olympia, WA 98501 (360) 754 6320 AM FAX(360)586-5493 http://www.orcolink.com/-edc edc@orcalink.com December 15, 1997 F. E. Kalb Assistant Vice President Industrial Development and James J. O'Neil Vice President Property and Facility Management Burlington Northern Santa Fe P. O. Box 961058 Fort Worth TX 76161-0058 Dear Messrs. Kalb and O'Neil: The Economic Development Council of Thurston County is an Associate IDRC member, and attended the latest IDRC World Congress in San Diego where I saw your names listed in the preregistration pamphlet. I'm sorry I was not able to meet with you during the conference, but I did want to write and ask for your guidance on a railroad issue here in Thurston County, Washington. The light industrial area in the City of Yelm, Washington is currently served by Burlington Northern with a line that comes through the City of Roy, Washington and terminates in Yelm. There are no rail users currently in the Yelm industrial area, but our experience over the last couple years indicates that more and more companies seeking light industrial sites for new business operations are looking for locations in Western Washington that provide rail access. It is fifteen miles from Yelm to the I-5 Interstate freeway, and the availability of rail service will probably play a key role in attracting new family-wage jobs and investment to that community. We understand that Burlington Northern has offered to sell that portion of their line from Roy to Yelm, and that at least one prospective buyer did have plans to take up the line and sell it for scrap. A group of local interested parties including the City of Yelm, the Yelm Chamber of Commerce, various local businesses, and the Economic Development Council is interested in doing everything possible to retain rail service to the industrial area while working hard to attract rail users to the community. There has even been a discussion with Richard Batie w ^ from your company about the possibility of the City of Yelm purchasing the section of line in question. The group mentioned above has asked the City to continue to pursue that option. The Yelm City Council has instructed its Public Works Director to take the initial steps necessary to initiate a purchase, and a formal letter to that effect has been sent to Mr. Batie. My purpose in writing to you is to ask for your advice on whether or not there are other people in Burlington Northern that we should be having a dialogue with about this situation. Also, we would be very interested in any other options you might suggest that would result in Burlington Northern retention of the line until new users come forward. Are there key issues that the community should address with your company that would help reverse the Burlington Northern decision to sell the line? I would appreciate any help and advice you can give us on this matter. Sincerely', i Dennis A. Matson Executive Director cc: Kathy Wolf, Mayor, City of Yelm Shelly Badger, City Administrator, City of Yelm k H; }w " £ V4, 74 � _ i"4,. ;may. `H - � � 4•*. f 2ti ; �• . .l �. Y � ,wt IT- O OF tHF p,�9� Cityo Yelm a � 105 Yelm Avenue West P.O. Box 479 YELMGTON Yelm, Washington 98597 (360) 458-3244 December 10, 1997 Mr. Richard A. Batie Burlington Northern/Santa Fe 2650 Lou Menk Drive Fort Worth Texas 76131-2830 Re: Roy to Yelm Short Line Dear Mr. Batie, As per our phone conversations these past several years, railroad service is a major component to freight mobility in and out of the Yelm community. Prior, as well as current City planning efforts have identified rail service as an integral feature to our industrially zoned land especially the Roy to Yelm Short Line which bisects this property. The announcement that Burlington Northern/Santa Fe is going to discontinue use of and surplus this segment of rail is of concern to the City and the business community as the potential to market and develop viable business is dependent on an efficient transportation network. Due to the separation from the 1-5 corridor ( the states major north/south interstate highway) rail service is an attractive multi-modal freight alternative that fits well with our regional transportation plan. After meeting with a group of local business owners interested in insuring continuance of the Roy to Yelm rail corridor the City at this time wishes to inform Burlington Northern/Santa Fe of our interest in securing the inventory and operation rights and other rights required to accommodate continued rail service in conformance with our economic development and transportation plans . We request the right of first refusal to enable the development of a plan to accomplish the goal of operating the Roy to Yelm Short Line. We would also like to request at this time any records related to past maintenance on the Roy to Yelm Short Line. page 1 of 2 R-ycW Pap- page 2 of 2 Please let me know at your earliest convenience the process .required to begin completion of the Roy to Yelm Short Line acquisition. Thank you. Sincerely, C' ty of Yelm Ken Gar nn Public works Director CC : Kathy Wolf, Mayor Shelly Badger, City Administrator Joe Williams, Williams Broadcasting Company Gary Beck, Yelm Chamber of Commerce Dennis Mattson, Thurston County Economic Development Council Nick Handy, Port of Olympia Ray Allred, WSDOT-Rail