From memo to the SMART Board from Lillian Hames, SMART GM

SMART staff has the following recommendations regarding the proposed board actions:

1. Recommendation: Do not approve NWPCo as the freight operator at this time, until a new
Operating Agreement is negotiated and executed and until NCRA certifies a final EIR.
Caveat: Staff recommends that a new Operating Agreement and the approval of NWPCo. as
the freight operator, should be conditioned on the following �]�] Should a court find that the
EIR is deficient in any respects, then the approval of the Operating Agreement and the
approval of NWPCo. is void.

2. Recommendation: SMART should not sign a joint application to the FRA to lift Emergency
Order No. 21 unless it is satisfied that safety and liability concerns are addressed, as well as
other necessary responsibilities required for the safe and efficient operation of passenger
and freight service. Staff believes that a new Operating Agreement would address safety
and liability concerns.