Austin-San Antonio Intermunicipal Commuter Rail District Board Meeting

Friday, June 5, 2009
10:00 a.m.

San Marcos Activity Center
501 E. Hopkins
San Marcos, Texas

1. Call to Order

   Notice was duly posted and a meeting of the Austin-San Antonio Rail District was held on Friday,
   June 5, 2009. Vice Chairman Tullos Wells called the meeting to order at 10:10 a.m.

   Participants:

   • Tullos Wells, Vice Chair
   • Tommy Adkisson
   • Gloria Arriaga
   • Jeff Barton
   • Mary Briseño
   • Mariano Camarillo
   • Sheryl Cole
   • Will Conley
   • John Cowman
   • Patty Eason
   • Dan A. Gattis
   • Karen Huber
   • Debbie Ingalsbe
   • Carroll Schubert
   • John Thomaides
   • Jeff Wentworth
   • Pat Wiggins

   Other participants included Ross Milloy, Bill Bingham, Alison Schulze, Mike Marler, and Don
   Karban.

2. Chairman and Member Comments

   Vice Chairman Wells presided over the meeting in Chairman Covington’s absence. Vice Chair Wells
   recognized Board member Pat Wiggins for his outstanding service to the Rail District.
   Councilmember Wiggins did not seek reelection and reported that next week the New Braunfels City
   Council would appoint his replacement on the Board.

   Vice Chair Wells reported on his March 6 meeting in San Antonio with Union Pacific Board
   members and leadership including Jim Young, CEO for UP. Mr. Young complimented the Rail
   District’s approach and the relationship between the Rail District and UP.

   There were no other comments.

3. Consider Approval of March 6, 2009 Board Meeting Minutes

   Upon a motion by Gloria Arriaga and second by Councilmember Pat Wiggins, the Board
   unanimously approved the March 6 meeting minutes.

4. Consider and Take Appropriate Action on Status of Appointments to Board, and
   Administration of Oath of Office to Newly Appointed Board Members

   Bill Bingham, Rail District General Counsel, reported that all Board members have taken the oath of
   office and filed the necessary paperwork.

5. Consider and Take Appropriate Action on Election of Board Officers
   

   Vice Chair Wells turned the gavel over to Mariano Camarillo for item 5 since Mr. Wells was up for
   reelection. Mr. Camarillo noted the election of officers occurs in odd-numbered years and in March
   the Board deferred the election of officers to the June meeting. Mr. Camarillo asked Alison Schulze
   to introduce the agenda item.

   Alison Schulze directed the Board’s attention to the memo and resolution in the agenda packet. She
   noted that current Board officers are Chairman Sid Covington, elected in 2005 and 2007; Vice
   Chairman Tullos Wells, elected in 2005 and 2007; and Secretary John Thomaides, elected in 2007.
   In 2007 the Board chose not to elect a Treasurer until the Rail District became an operating agency.
   The treasurer’s duties are currently handled by the Board Chairman and the Finance Committee.

   Ms. Schulze recommended the Board elect a Chairman, Vice Chairman, and Secretary. Only one
   office—the office of Board Chairman—carries a term limit. The bylaws state that a member may
   only be elected to two successive terms as Board Chair unless the term limit is waived by a resolution
   passed by two-thirds of the Board stating that there is a compelling reason for the Chairman to remain
   in office. Staff recommended that the Board waive the term limit and allow Sid Covington to remain
   as Chairman due to his significant involvement in state legislation, federal legislation, Union Pacific
   discussions, TxDOT freight studies, and the operations and financial management of the Rail District.
   Ms. Schulze stated that a resolution waiving the two-term limit for Chairman Covington was included
   in the agenda packet for the Board’s consideration and action. Ms. Schulze further stated that Tullos
   Wells and Councilmember Thomaides each indicated they were willing to serve another term as Vice
   Chair and Secretary, respectively, and neither office carries a term limit.

   VIA Board Director Mary Briseño noted that continuity in leadership is critical for the Rail District at
   this time and moved that the Board approve the resolution to waive the two-term limit for Board
   Chair and elect Mr. Covington to another term. Upon a second by Councilmember Pat Wiggins, the
   Board unanimously approved the resolution waiving the term limit and reelected Sid Covington as
   Board Chairman. Upon a motion by Carroll Schubert and second by Commissioner Karen Huber, the
   Board unanimously reelected Tullos Wells as Board Vice Chairman. Upon a motion by
   Councilmember Patty Eason and second by Commissioner Will Conley, the Board unanimously
   reelected Councilmember John Thomaides as Board Secretary.

6. Committee Reports

   A. Public Information Committee Meeting March 16, 2009
   B. Public Information Committee Meeting April 6, 2009
   C. Public Information Committee Meeting May 4, 2009
   D. Public Information Committee Meeting May 20, 2009

   Public Information Committee Chair Mary Briseño summarized the four Committee meetings and directed the Board’s attention to the detailed meeting summaries included in the agenda packet. In each of the meetings the branding team, lead by TateAustinHahn took the PI Committee through the steps of the branding process. The branding team will describe the branding process and the results under agenda item 7. Chair Briseño thanked the Committee for their active participation throughout the branding process. Vice Chair Wells thanked Committee Chair Mary Briseño for her leadership on the PI Committee.

7. Consider and Take Appropriate Action on Branding the Rail District

   Public Information Committee Chair Mary Briseño noted that the branding team would present the
   results of many months of work and the PI Committee’s recommendation for the Board’s
   consideration and action. Jeff Hahn, principal of TateAustinHahn—the lead agency on the branding
   team, briefed the Board on the importance of a good brand and key considerations when choosing a
   brand, such as keeping an eye to the future and branding the Rail District and the service together.

   Jessica Schenk, TateAustinHahn project manager, reported on the project imperatives which guided
   the branding process: responsible use of time and funds, draw upon best ideas and best practices,
   inclusive and thoughtful outreach, brand must speak to a large and diverse community, research is a
   critical part of the process. Ms. Schenk then guided the Board through the steps of the brand
   development process: research (including in-depth interviews with 33 key community leaders and 11
   focus groups with 117 participants), messaging and engagement, creative strategy, and development
   of brand elements (name, logo, tagline, original photography, messaging platform).

   Mike Clark-Madison briefed the Board on the purpose and findings of the research effort. The
   research yielded important information on customer preferences and stakeholder and opinion-leader
   perceptions, which serves as the first step of the Rail District’s long-term communication program.
   The resulting brand message and positioning statement is that the Rail District offers Texas-style
   independence by providing a convenient, cost-effective and intelligent transportation choice. The
   core of the creative brief is “Texas-style independence,” and “rail gets you there, I-35 doesn’t.”

   Greg Barton presented the recommended brand—Lone Star Rail—and tagline—Catch It. PI
   Committee Chair Briseño reiterated that the Committee’s unanimous recommendation to the Board is
   to select the name Lone Star Rail and the associated brand elements. Board discussion followed on
   the importance of the decision and the broad appeal of LStar and Lone Star Rail. Upon the motion by
   the PI Committee and second by Councilmember John Thomaides, the Board unanimously approved
   the new name, the brand, and the creative components of the brand identity system. At the
   conclusion of the item, the branding team distributed research binders and brand style guides to the
   Board members.

8. Consider and Take Appropriate Action on Amendment to Branding Contract
   

   Alison Schulze directed the Board’s attention to the branding contract amendment in the agenda
   packet that the Public Information Committee has recommended for Board approval. The scope of the current contract is the creative development of the brand, name, logo, and tagline, which is only the first step in building a brand identity. Additional steps are required to implement the brand and build support for the rail project. The contract amendment authorizes TateAustinHahn and the branding team to trademark the new assets and revamp the Rail District’s existing communications tools—brochure, website, project map, and PowerPoint presentation. The total cost of the additional services is $55,000. Upon the motion by the PI Committee and a second by Councilmember Pat Wiggins, the Board voted unanimously to approve the contract amendment.

9. Consider and Take Appropriate Action on Resolution to Enter into Agreement with
   TxDOT for CAMPO FY09 and FY10 STP-MM Funds

   Alison Schulze directed the Board’s attention to the resolution in the agenda packet that would
   approve entering into an agreement with TxDOT to spend the FY09 and FY10 Surface
   Transportation Program Metropolitan Mobility (STP-MM) funds awarded by the Capital Area
   Metropolitan Planning Organization (CAMPO). In May 2008 CAMPO awarded the Rail District $10
   million in STP-MM funds to be used for studies required to implement the rail project. To access the
   funds the Rail District must enter into an Advanced Funding Agreement (AFA) with TxDOT, and
   part of the agreement is a Board resolution approving the action. Upon Board approval, the
   resolution will become part of the AFA document. Upon a motion by Councilmember Pat Wiggins
   and second by Commissioner Karen Huber, the Board unanimously approved the resolution.

10. Consider and Take Appropriate Action on Report on 81st Texas Legislature and Report
    on Federal Initiatives
    

    Chris Shields briefed the Board on recent legislative action on the Rail Relocation and Improvement
    Fund. Mr. Shields praised the efforts of Rep. Ruth McClendon and Ross Milloy on rail relocation
    funding, which was ultimately included as a contingent rider in the appropriations bill. The Rail
    Relocation and Improvement Fund will be funded with $182 million from Fund 6—the highway fund
    supported by gas taxes—at a level of $91 million per year for the biennium if the State Comptroller
    certifies that there is more money in Fund 6 than was available in the previous biennium. In addition,
    $8.7 million was specifically designated for the Austin-San Antonio rail corridor. The appropriations
    bill, including the line item for rail relocation, must still be approved by the Governor. In response to
    questions, Mr. Milloy clarified that our lawyer and legislative consultants believe the funds are
    bondable and will be distributed by the Texas Transportation Commission. Vice Chair Wells thanked
    Board members for their support and the support of each of their communities and agencies, which
    was key to the success of the rail relocation funding effort.

    Bill Bingham briefed the Board on other legislation of interest to the Rail District—amendments to
    the statute that governs the Rail District. As authorized by the Board, Senator Jeff Wentworth
    sponsored legislation that allows other entities to join the Rail District, allows the Rail District to
    adopt a different name, and clarifies the types of rail—passenger rail or intercity rail—that may be
    operated by the Rail District. The bill was approved and is awaiting the Governor’s signature. Vice
    Chair Wells thanked Senator Wentworth for his efforts on behalf of the Rail District.

11. Consider and Take Appropriate Action on Potential Strategies and Opportunities for
    Project Development
    

    Ross Milloy recapped federal, state and MPO funding already awarded to or available to the Rail
    District. Mr. Milloy then presented potential federal funding scenarios, which include federal
    stimulus funds, high speed rail program, intercity passenger rail program, federal appropriations (the
    Rail District will request $14 million in FY10), reauthorization of the federal transportation funding
    bill, and other programs. Several project development tracks are available including high speed
    rail/intercity rail, traditional Amtrak/intercity rail, and private sector development—a private partner
    is required for Federal Railroad Administration (FRA) funding programs. In all cases, state and local funding will continue to be part of the Rail District’s funding package, and no matter which track the
    Rail District chooses to pursue, all require environmental clearance on the project.

    The next steps for the Rail District are to launch environmental and engineering studies on both the
    freight rail relocation route and the passenger rail route, solicit interest from private sector partners,
    apply for FRA high speed rail funding, prepare the FY10 federal appropriations request, execute local
    funding agreements for TIF-based revenue and long-term funding, and prepare for the federal
    reauthorization bill in 2011-2012.

    Board discussion followed. In response to questions, Mr. Milloy noted that, with Union Pacific’s
    cooperation, passenger rail service could begin in 2012.

12. Consider and Take Appropriate Action on Authorizing the Program Management
    Oversight Committee to Request Expressions of Interest and Proposals, Perform
    Appropriate Investigations, and Make Recommendations to the Board of Directors for
    One or More Private Entities to Associate with the District in the Application for
    Federal Funding and Development of Passenger Rail and Related Projects

    Ross Milloy asked the Board to authorize the Program Management Oversight Committee to develop
    and manage a process to request expressions of interest from the private sector. Bill Bingham noted
    that the federal process requires that applicants partner with a private sector entity; therefore, the Rail
    District will have to develop a process to solicit expressions of interest and select a private sector
    partner. To meet the September deadline the Rail District must start immediately. The PMO
    Committee would manage the process and ultimately recommend a partner to the Board for approval.
    Upon a motion by Gloria Arriaga and a second by Commissioner Jeff Barton, the Board unanimously
    authorized the PMO Committee to develop and manage a process to select a private sector partner
    and bring a recommendation to the Board on the partnership in order to move forward with the
    application for federal funding.

13. Financial Report

    Ross Milloy directed the Board’s attention to the 2 quarter financial statement included in the
    agenda packet. Although the statement shows some overages in the quarter relative to legal and
    legislative services, the Rail District is on schedule and on budget for the year.

14. Concluding Board Member Comments (no action)
    

    Vice Chair Wells commended Board members for the relationships and credibility they have with
    their constituents, which has made intercity passenger rail so popular with the public. There were no
    additional Board comments.

15. Public Comment

    There were no public comments.

16. Adjourn

    There being no further items, Vice Chairman Wells adjourned the meeting at 11:59 a.m.