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June 14, 2018 RTC Meeting Handout for Item 22

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Agron Bioenergy 860 West Beach Street Watsonville CA 95076 Office 831 383 1300: Fax 831 786 8508 George Dondero Executive Director Santa Cruz County Regional Transportation Commission 1523 Pacific Ave Santa Cruz, CA 95060 6/7/2018 Dear Mr Dondero, We are writing to you to express our serious concern about the status of the short rail line from Santa Cruz to Watsonville. The rail line is out of service as the operator cannot afford to inspect nor repair it. Rail is essential to our business, so we urge you to support the Sant Cruz RTC in approving Progressive Rail as the new operator of the short line so normal rail service can resume. Agron Bioenergy owns a multi-million-dollar Biodiesel plant on West Beach street in the disadvantaged city of Watsonville. The plant processes waste animal fats into fuel. Agron’s business plan relies on moving large amounts of freight by rail; the Agron site was purchased with the ability to spot 6 railcars for offload in mind. The anticipated rail traffic by late Q3 is around 20 railcars of raw materials a week. Agron’s plant is one of the largest biodiesel plants in California, and as such it supports both the reductions in criteria emissions and the reduction in greenhouse gases that are central to California’s emissions strategy for community and environmental health. Agron will reduce the overall carbon dioxide emissions in California by over 10000 metric tons in 2019. Agron anticipates producing 12m gallons of fuel; to be sold Watsonville. The fuel sales will bring extensive tax revenue to the city. The plant will have 18 full time specialized workers, and bring in close to $60m in revenue, supporting local businesses; general contractors, electricians, and plumbers to name but a few. It’s essential for the business to have rail transit to survive, and, imperative for Watsonville to have a working rail service to support Agron as well as other businesses. To this end I urge you to do all you can to support the approval of Progressive Rail as the new operator of the Santa Cruz short line. Sincerely, Roxby Hartley Operations Director, Agron Bioenergy Bradley Wilson President of Western Iowa Energy and Agron Bioenergy Agron Bioenergy 860 West Beach Street Watsonville CA 95076 Office 831 728 1300: Fax 831 786 8508 6 June 2018 Dear RTC Commissioner and Watsonville Mayor Lowell Hurst, As Watsonville residents, we are asking for your support for rail transit along the Santa Cruz Branch Line. South County residents need you to keep this as a viable option along the coastal corridor. Since the current operator, Iowa Pacific, is no longer a good fit, we urge you to expedite the agreement with Progressive Rail as the operator along this corridor. We know that the negotiation process with various rail companies has been comprehensive, taking in the needs of the Santa Cruz County community as a whole. Progressive Rail seems to be a good fit for our county. Expediting the agreement with Progressive Rail as the operator along this corridor, will allow businesses to keep freight transit running along this corridor, and bring us closer to the vision of healthier, more efficient and more cost effective transportation choices! The Santa Cruz Branch Line is a very valuable public resource. Please work to bring Progressive Rail under contract as soon as possible. Moving this process forward in a timely manner will give us the transit options we need for building a future of multiple transportation alternatives in Santa Cruz County. We thank you for your time and consideration of this matter. Sincerely, Anna Kammer and Dan Fallorina Watsonville Residents June 8, 2018 Chair John Leopold and Commissioners Santa Cruz County Regional Transportation Commission 1523 Pacific Avenue Santa Cruz, CA 95060 Re: Approve the Proposed Contract with Progressive Rail Dear Chair Leopold and Commissioners: I am writing on behalf of the Santa Cruz Area Chamber of Commerce regarding the process for selecting a replacement rail operator for the Santa Cruz Branch Line (SCBL). From all that I have read and reviewed this process was initiated when the current freight rail line operator, Iowa Pacific notified the Commission that it could not meet its obligation last December. During the past six months, I have inquired with your staff to fully understand the process and to ensure that there is an active operator on the line as soon as possible. The staff has completed their due diligence process and negotiated what appears to be a fair and mutually beneficial contract with Progressive Rail. The Chamber would like to see the proposed agreement be finalized now which would be in the best interests of our community for many reasons including the following: 1. Current RTC policy is to keep the track in place and pursue development of passenger rail, while building the trail. 2. RTC must have an operator on the line to serve freight customers. 3. The current operator is in financial straits and wants to end their obligations on this line. 4. RTC staff’s evaluation of Progressive Rail and concluded that they are capable, and sound business people. They have integrity, are good neighbors in the communities they serve, and they treat their employees well. 5. RTC is committed to the California Transportation Commission (CTC), the federal Surface Transportation Board (STB) and the Federal Railway Administration (FRA) to provide continuous freight service. 6. RTC is also committed to the CTC to provide excursion service. 7. After the RTC completes the Unified Corridor Investment Study, you will make a decision on future use of the rail corridor. 8. If they decide to keep the tracks in place, and authorize Progressive Rail to run excursion service, the agreement continues for ten years. 9. If the RTC decides to remove the tracks and only build a trail, then PGR may end the agreement. This would be a reversal of current RTC policy, delay building of the trail and likely lose grant funds already secured. 10.The most cost effective and efficient path forward is to keep the rail and build the trail, and approve the agreement with Progressive. Santa Cruz Area Chamber of Commerce * 725 Front Street, Suite 401 * Santa Cruz, CA 95060 831-457-3713 Phone * 831-423-1847 Fax The SCACoC is a 501c (6) non-profit corporation * Employer ID 94-0841660 You will receive cries to delay the execution of this contract, that the new proposed operator is not a ‘match’ for our community. Please do not put our community, our businesses, our workers, nor the SCBL at any further risk. Please execute the proposed contract with Progressive Rail. Thank you in advance for considering the view of the Santa Cruz Area Chamber and our 600 plus members who strive to promote economic vitality for our region. Respectfully yours, Casey Beyer Chief Executive Officer cc: George Dondero, RTC Executive Director Santa Cruz Area Chamber of Commerce * 725 Front Street, Suite 401 * Santa Cruz, CA 95060 831-457-3713 Phone * 831-423-1847 Fax The SCACoC is a 501c (6) non-profit corporation * Employer ID 94-0841660 June 8, 2018 To: Regional Transportation Commission From: George Dondero, Executive Director Re: Response to Greenway’s Six Stories Recently, Santa Cruz County Greenway posted a series of six stories on the “Case Against Progressive Rail” providing reasons why they think the Santa Cruz County Regional Transportation Commission should not approve the operating agreement with Progressive Rail. The material contains many factual errors, exaggerations and distortions that, if true, would deserve concern. This memorandum will provide some clarity on the facts. 1. Progressive Rail Execs Sued for Fraud RTC Response: There are two lawsuits – one filed by the U.S. Government, and another filed as a class action suit. According to Progressive Rail, their executives are not named individually in the government suit, and “The class action suit alleges that we were complicit in a cover-up, which is meritless and without fact. The notion that we were protectors of the founders could not be further from the truth. We upheld our fiduciary responsibilities to the shareholders.” Class action suits typically name as many people as possible, knowing full well that only a few may be actually held accountable for the named actions. 2. Stories from Progressive’s Midwest Towns RTC Response: • Minnesota Pollution Control Agency Fine – The Minnesota Pollution Control Agency did fine Progressive Rail $75,000. However, this fine was issued due to a trucking company employee spilling much of the contents of one rail car during transloading at a property owned by Progressive Rail. While Progressive Rail was assessed the fine because it occurred on company property, the railroad’s personnel did not cause the spill. • Bridgewater Township, MN – Proposed Ethanol Facility – Dave Fellon and other advocates did pursue construction of an ethanol plant in Bridgewater Township, MN, even appearing regularly on a radio show to discuss the proposed development with the public. While the ethanol plant wasn’t constructed there, others have been constructed in southern Minnesota, taking advantage of the local corn supply. According to the Minnesota Bio-Fuels Association, the state hosts 19 such plants and is the fourth largest ethanol producer in the country. Please see: https://www.mnbiofuels.org/resources/production-in-minnesota. • Eagle Point, WI – Proposed Road Closure – Due to a spike in train traffic on the Wisconsin Northern Railroad (owned by Progressive Rail), Progressive Rail has pursued a petition to close a lightly-travelled town road in an effort to reduce train blockages at a rail crossing on a busy county road one mile south.
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