TR Scan No. 5 Redacted

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/\ FW: Draft TRRC MOUh Sunimerville, Alan

..

to:-... . Ken Blodgett

09/21/2012 09:23 AMCc:Vicki Rutson, Danielle GosselinHide DetailsFrom: Summerville, Alan @icfi.com>To: Ken Blodgett Cc: Vicki Rutson , Danielle Gosselin History: This message has been forwarded.

1 Attachment

Draft TRRC MOU.DOC

Ken,

Following-up on our call this morning, heres the email with the draft MOU.

Alan.

From: Coburn, David [mailto: [email protected]: Thursday, September 20, 2012 5:19 PMTo: Vicki Rutson ([email protected]); Summerville, AlanCc: Rankin, David T ([email protected]); Kaitala, Dava ([email protected]);[email protected]: Draft TRRC MOUVicki, Alan

Here is the current draft of an MOU for use in connection with the TRRC project.It uses the standard form that we have used in our STB proceedings, modified only to expandthe conflict of interest provisions in Section III to embrace TRRCs indirect owners and toreflect that BNSF will be a co-party to the application given its role as operator of the line.We look forward to your thoughts on this draft.

Vicki, fyi, the business contract between ICE and BNSF (acting on behalf of TRRC to engagethe contractor) has been completed and is awaiting execution.Regards. David

David H. CoburnPartnerDCoburnsteptoe.com

Steptoe+1 202 429 8063 direct Steptoe & Johnson LLP+1 202 262 7306 mobile 1330 Connecticut Avenue, NW

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DRAFT SEPT. 20, 2012

MEMORANDUM OF UNDERSTANDINGAMONG

SURFACE TRANSPORTATION BOARD,TONGUE RIVER RAILROAD COMPANY, INC. AND

ICF INTERNATIONAL

RE: ENVIRONMENTAL ANALYSIS AND PREPARATION OF APPROPRIATEENVIRONMENTAL DOCUMENTS RELATING TO THE CONSTRUCTIONAND OPERATION OF A PROPOSED RAIL LINE BY RAILROAD COMPANYIN

Introduction and Purpose

A. Tongue River Railroad Company, Inc. (TRRC or Applicant) intends to file anApplication in Finance Docket No. 30186 seeking authorization from the Surface

Transportation Board (Board) to construct and operate an approximately 80 milerail line which would have a northern terminus at an existing BNSF Railway

Company (BNSF) line near Miles City, MT and two southern termini, one near thesite of the previously planned Montco mine near Ashland, MT and another at the

proposed Otter Creek mine in the Otter Creek area east of Ashland, MT. BNSF, a

part owner ofTRRCs parent company, Tongue River Holding Company, LLC,will be a co-party to the Application with TRRC by virtue ofthe fact that it

proposes to operate the TRRC line once constructed by TRRC.

B. In considering the Application, theBoard will consider the potential

environmental impacts resulting from construction and operation of the proposed

rail line and any rail-related alternatives. The Board will be the lead agency for

preparing the environmental documentation required for the project, either an

Environmental Impact Statement or Environmental Assessment, as required by

the National Environmental Policy Act of 1969 (NEPA). Pursuant to 40 C.F.R.1506.5(c), 49 C.F.R. 1105.4(j), and 1105.10(d), the Board, through its Office ofEnvironmental Analysis (OEA), has selected and Applicant has agreed to engage,at Applicants expense, ICF International, a

____________

corporation

(Contractor) as the Independent Third Party Contractor for this proposal.Contractor shall assist OEA in conducting the environmental review and

preparing the environmental documentation related to the Applicants proposal.

Contractors scope ofwork, approach, and activities shall be under the sole

supervision, direction, and control of OEA.

C. This Memorandum ofUnderstanding (MOU) summarizes the relationship amongContractor, Applicant, and OEA; as set forth in applicable regulations and Board

policy, regarding the conditions and procedures each party must follow in

preparing all environmental documentation. This MOU does not supersede or

amend, and is made expressly subject to, the requirements ofNEPA, and, to theextent applicable, related environmental laws, and 49 C.F.R. Part 1105 and 40

C.F.R. Part 1500.

D. The Applicant, Contractor, and OEA agree to work within the framework

of this MOU to develop an efficient method to complete the

environmental review for the proposed Application. OEA shall maintain

overall responsibility for the documentation, analysis, methodology,

consultation, and mitigation related to the environmental review process.

OEA shall direct, evaluate, oversee, and approve the environmental review

The terms environmental documentation and environmental document(s embrace draft, supplemental, and final EAs,EISs. and any other reports, studies, surveys, or related documents.

-2-

process.

II. Document Process

OEA will prepare on behalf of the Board, the draft environmental document (EAor EIS) for agency and public review. OEA will independently draft mitigation,based on its review ofpotential environmental impacts ofthe project.

IlL Agreement between Applicant and Contractor

A. Any contract between Applicant and Contractor, and any subcontracts, shall be

consistent with the provisions of this MOU.

B. The terms ofthis MOU shall override any contradictory or conflicting terms

regarding the scope and performance of any work to be conducted under any

contract entered into between Applicant and Contractor; provided, however, that

the foregoing shall not limit the rights of Applicant and Contractor to contract on

terms which require that the work be performed cost-effectively.

C. The contract between Contractor and Applicant shall specifically provide, and

Contractor shall represent, that (1) Contractor and any subcontractors do not andshall not have any financial or economic interest in Applicant or any entity or

person directly or otherwise affiliated with Applicant (including but not limited toany of the three entities that own Applicant s parent) except for payment forservices rendered in connection with the preparation of all required environmental

documentation, and except for services rendered pursuant to other agreements not

prohibited by this MOU, and (2) there is no agreement between Applicant, or anyother person or entity and Contractor regarding future employment that is

contingent upon Contractors performance under this contract. Contractor shall

concurrently execute a disclosure statement as mandated by the regulations of the

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Council on Environmental Quality (CEQ) (40 C.F.R. 1506.5(c)) and submit it toboth OEA and Applicant, before beginning any work under OEAs direction. It is

understood that Contractor and any subcontractors have not done any

environmental analysis related to the Application for Applicant, or for any other

person or entity (including but not limited to any ofthe three entities that ownApplicants parent), and, therefore, can be retained as independent third partycontractor(s).

D. Restrictions on other work:

( 1) No employee of Contractor or employee of any subcontractor, who is apart of Contractors core team committed to the environmental review

process for the Application shall engage in (a) other work for Applicant orany entity or person directly or otherwise affiliated with Applicant

(including but not limited to any ofthe three entities that own Applicantsparent) or (b) any work, relating to the Application, for any other party tothis proceeding during the course ofthis proceeding; and

(2) No other employee of Contractor or other employee of any subcontractorshall, unless OEA is provided prior notice of and approves such work,

engage in (a) other work for Applicant or any entity or person directly orotherwise affiliated with Applicant (including but not limited to any of thethree entities that own Applicants parent), or (b) any work, relating to theApplication before the Board, or any cooperating agencies that may elect

to participate in this process, or any other party to this proceeding during

the course ofthis proceeding.

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E. Applicant shall bear the costs incurred by Contractor, and by any subcontractor

approved by OEA in accordance with Section III.A, in preparing the required

environmental documentation to implement NEPA and related environmental

laws under the direction of OEA. Applicant agrees to hold harmless and

indemnify the United States ofAmerica and the Board with respect to any and all

claims, demands, causes of action, and the like which may arise in performing the

work under the contract between Contractor and Applicant.

F. Any contract between Contractor and Applicant shall specifically limit any

remedies available to Contractor or subcontractors upon termination of thecontract to affirmatively relieve the United States of America, the Board, and any

officer, agent, or employee, from any liability from terminating the contract.

Iv. Contractor Responsibilities

A. Contractor may engage subcontractors to perform work related to environmental

review ofthe Application, subject to the provisions of Sections III.C and III.D.All work performed by Contractor or any subcontractors shall be under the sole

direction, control, supervision, and final approval of OEA. Contractor andsubcontractors, if any, will act as the agent(s) of the Board, not Applicant, inperforming its/their duties.

B. Contractor shall provide:

(1) Appropriate expertise in the areas of environmental concern (including,but not limited to air quality, wetlands, biological resources, geotechnical

resources, hydrology, land use, safety, noise, social and economic, and

cultural/historic resources);(2) A good working knowledge of environmental laws, applicable laws and

regulations (including environmental regulations) administered or-5-

promulgated by the Board, CEQ regulations and guidelines, otherapplicable federal regulations, state laws and regulations, and applicable

local ordinances and regulations;

(3) The capability to perform environmental impact analysis and prepare

appropriate environmental documentation;

(4) Thorough, readable, technically sound, and informative environmentaldocuments, as well as related charts, maps, diagrams, etc.;

(5) Representatives to attend and/or facilitate meetings with Federal, state,regional, and local agencies, other interested parties and Applicant for the

purpose of exchanging and obtaining information, explaining the

Application and related environmental concerns and impacts, and

receiving comments in preparing the required environmental

documentation;

(6) Expertise in data management;

(7) Assistance to OEA in ensuring that the data collection, analyses, andmethodologies for the environmental documents are complete, accurate,

and relevant to OEAs needs for the environmental review of the

Application under NEPA.

C. Contractor shall maintain and provide OEA upon request:

(1) Adequate record-keeping and reporting systems to assure preservation ofall data gathered, including surveys, studies, etc;

(2) Logs summarizing all telephone calls, meetings, document reviews, andother substantive communications with OEA, Applicant, local

governments, governmental agencies, citizens groups, and any other

interested parties; and

(3) Lists of all agencies, other railroads, citizens groups, organizations, and-6-

individuals (including their respective addresses and telephone numbers)contacted in preparing the environmental documentation.

D. Contractor shall perform the work in a timely, responsive, satisfactory, and cost-

effective manner, pursuant to a work schedule developed with OEA in

coordination with Applicant and approved by OEA.

E. Contractor shall assist OEA in coordinating the exchange of all relevant

environmental information and technical data/studies related to the Application

and all required environmental documentation among OEA staff, Applicants staff

and representatives, Contractor, and any subcontractors.

F. Contractor will submit directly to OEA any and all work Contractor performs in

preparing all required environmental documentation, studies, surveys, etc.

Contractor, and any subcontractors, shall not disclose the results oftheir work nor

release any of the underlying work papers, drafts, or other materials prepared

under the contract to anyone, including Applicant, without OEAs express

authorization. In no case shall Applicant be provided the opportunity to modify or

edit Contractors work prior to submission to OEA, without OEAs express

authorization.

G. Contractor shall follow the directions and instructions of OEA, and incorporate

them into the environmental document(s) in a timely and responsive manner.Contractor shall submit preliminary and final drafts of any documents to OEA for

final review and approval.

H. Contractor shall provide OEA access to and the right to review all procedures and

-7-

underlying data used in Contractors development and preparation of any and all

environmental documents. This includes, but is not limited to, field

reports/surveys, technical studies and analyses, subcontractor reports, and

interviews with concerned private and public parties, whether or not such

information may be reflected in draft, supplemental, or fmal environmental

documents submitted to OEA.

Contractor, and any approved subcontractors, shall cooperate fully with OEA in

organizing, participating in, and conducting any public workshops, informational

meetings, and other meetings, as OEA determines are necessary, to foster public

understanding of and/or participation in the environmental review process, and to

assess potential environmental impacts and develop mitigation measures related

to the Application.

J. Contractor will assist OEA in reviewing comments received during the

environmental review process, will draft a summary of rail-related comments, and

will coordinate analysis ofthese comments with OEA.

K. Contractor shall assist OEA in preparing the required environmental

documentation, environmental recommendations, selection of alternatives, and

development of mitigation measures.

L. The Contractors Project Director, Project Manager, and other technical experts,as appropriate, shall be available to attend all meetings, briefings, consultations,

and site visits as OEA deems necessary. The Project Director and the ProjectManager shall devote as much time to environmental review of the Application as

is necessary to assure Contractors performance of its responsibilities under this

MOU. This work commitment will extend for the entire time necessary to

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complete the environmental review for the Application.

M. Except as specifically authorized by OEA, Contractor and any of its

subcontractors shall refer all media/press inquiries directly to OEA.

N. As needed, Contractor will provide technical expertise and administrative support. to OEA during preparation ofthe Boards decision and in addressing any

. environmental issues arising in the Boards considerationofthis proceeding. In

the event of any appeal from a Board decision in this proceeding, the parties

hereto shall at that time determine the need for and terms of Contractors services

in connection with judicial review of that decision.

0. Contractor shall provide any administrative and technical support that may be

needed to assist OEA in reviewing, summarizing, and responding to

environmental issues arising after issuance of the final environmental

documentation, including in connection with Board decisions, correspondence,

filings before the Board and by the Board in court in connection with any judicialreview ofthe Boards decisions, and other inquiries involving environmental

issues associated with the Applicants proposal.

V. Applicant Responsibilities

A. Applicant shall retain Contractor to assist OEA in preparing all required

environmental documentation and services, as that assistance and its costs are

defined by a contract to be negotiated and executed by Applicant and Contractor,

and in the Work Plan described in Section VII.

B. Applicant, including its staff and representatives, shall provide to OEA and

-9-

Contractor any requested supportive expertise, resources, data, and technical

capabilities necessary to undertake the environmental analysis, subject to the rightof Applicant to advise OEA of any request received from OEA or Contractor that

Applicant believes either is not germane to matters appropriately reviewed in the

environmental review process, is contrary to applicable statutes and regulations,

would impose an extraordinary burden on Applicant, or is subject to the right ofApplicant to maintain confidentiality as to proprietary, privileged, or other

information which is not otherwise subject to disclosure. In the event thatApplicant so advises OEA, OEA shall determine whether the request is

appropriate and shall so advise Applicant and Contractor of its determination.

OEA, shall, to the extent possible, maintain the confidentiality of any information

if so requested by Applicant.

C. Applicant shall cooperate fully with OEA in organizing and participating in any

public workshops, hearings, and meetings, as OEA determines are necessary (1)to foster public understanding and/or participation in the environmental review

process, and (2) to assess potential environmental impacts and mitigationmeasures related to the Application.

D. With respect to all reports, analyses, and documents, including drafts,

supplements, and final copies ofthe environmental documents, Applicant shall be

responsible for Contractors administrative and clerical costs, as well as the costs

of graphics, maps, layout, mailing, and printing, as those costs are defined by a

contract to be negotiated and executed by Applicant and Contractor. However,

Applicant shall have the option of directing that the printing of the environmental

documentation be performed by a private entity, rather than OEA. Applicant shall

be solely responsible for the cost ofpreparing and providing to OEA the

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appropriate number of copies of all required environmental documentation.

E. Applicant shall provide complete, accurate, relevant, and timely responses to all

reasonable requests for information pertaining to the Application to the Board, the

Operating Plan, and the environmental aspects and effects ofthe proposed rail

construction and operation.

F. In the event of any litigation resulting from the environmental analysis in this

proceeding OEA shall at that time determine the need for and terms of

Contractors services in connection with any litigation.

VI. Board/OEA Responsibilities

A. The Board is responsible for ensuring compliance with the requirements of NEPA

and other applicable environmental statutes and regulations by preparing

appropriate environmental documentation.

B. OEA shall:

(1) Direct, review, and approve all phases ofpreparing all requiredenvironmental documentation, including the work of Contractor, using

OEAs best efforts to ensure that the work is reasonably necessary to

conduct the environmental review process regarding the Application and

the work is within the scope ofNEPA requirements. For example, OEA

shall ensure that Contractor considers existing data and environmental

analyses available from the Applicant, OEA, and other sources, and that

Contractor does not duplicate work already done, unless OEA determines

that the existing data is not adequate for use in preparing the

11

environmental documentation;

(2) Designate appropriate staffto review and approve all work as it isdeveloped and completed;

(3) Ensure that its representatives attend meetings, as needed, with Federal,state, regional, and local agencies, and other interested parties, as well as

any public hearings or meetings, to exchange information, explain the

Application and related environmental concerns and impacts, obtain

technical input, and receive comments in preparing all required

environmental documentation; and

(4) Coordinate, with Contracto?s assistance, the exchange of informationamong any planning, design, or construction engineers or technical staff

employed by Applicant and Contractor.

C. OEA will periodically review the work of Contractor to ensure that the Boards

responsibilities under NEPA and related environmental laws and regulations are

being satisfied. As each portion of any draft or final document is completed,

OEA staff shall review and approve that portion and those tasks completed,

and/or direct further work with regard to that portion or task.

D. OEA will monitor Contractor to ensure that Contractor is making adequate

progress toward meeting specific time frames established in the Work Plan

described in Section VII. If OEA determines these commitments are not being

met, it will notify Applicant of its findings. It will be the responsibility of OEA to

recommend any necessary corrective action to be taken under this MOU.

E. In all instances involving questions concerning the content or relevance of any

material (including all data, analyses, charts, and conclusions) prepared by-12-

Contractor, OEA shall make the final determination on including, deleting, or

revising any such material in the environmental documents.

F. To coordinate the preparation of all required environmental documentation, and to

verify Application-related data, OEA may hold joint. meetings with Applicant andContractor. As necessary, OEA may exclude Applicant from participation. OEA

may also consult directly with appropriate Federal, state, and local officials, and

other interested parties. Applicant shall provide complete, accurate, relevant, and

timely responses to all reasonable requests for information pertaining to the

Application to the Board and the environmental aspects and effects of the

proposed rail construction and operation.

G. OEA, with the assistance of Contractor, will be responsible for organizing and

conducting any public workshops or meetings that may be necessary in preparing

environmental documents during the environmental review process.

H. OEA, with the assistance of Contractor, will receive all relevant comments

submitted during the environmental review process and comment period. At the

close of any public review and comment period, OEA, in consultation with

Contractor, shall identify the issues and comments that will require a response

from the Board. OEA may direct these comments to Applicant and to Contractor,

as appropriate, to be included in the final environmental document. OEA may

modify these responses as appropriate.

OEA, with the assistance of Contractor, shall prepare final recommendations for

the Board.

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J. OEA shall retain responsibility for deciding the environmentally preferable

alternative, and any mitigation measures to be included in the fmal environmental

document.

VII. Work Plan ..

A. Contractor, in consultation with OEA and Applicant, shall submit a draft Work

Plan to OEA for preparing the required environmental documentation within

thirty (30) days after all parties have signed this MOU. The draft Work Plan shallcontain at least the following elements:

(1) A description of all work to be performed (including preparing andsending consultation letters; participating in public and agency meetings;

outlining and drafting environmental documents; reviewing, analyzing,

and summarizing public comments; conducting analyses, etc.);(2) The projected schedule for completing the various tasks described;

. . (3) Identification of Contractors staff members who will be responsible forpreparing, analyzing, and reviewing the work; and

(4) An outline of the environmental analysis.

B. Following receipt of the draft Work Plan, OEA, in consultation with Contractor

and Applicant, shall finalize the Work Plan in a timely manner.

C. Subsequent to consultation with Contractor and Applicant, OEA may amend theWork Plan from time to time as the environmental review of the Application may

necessitate. The parties hereto shall consult at least once every two weeks to

confirm that the work is being performed in the most efficient and cost-effective

manner and to consider possible measures to improve the efficiency and cost-

effectiveness of performance of the work.

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VIII. Disputes

Disputes between the parties may arise regarding the environmental review process,

including approach, methodology, analysis, conclusions, and performance ofthe

obligations of the parties to this MOU. The parties agree to seek resolution of disputes

among the individuals or parties directly involved.. In the event that resolution is not

achieved, the parties agree to make further attempts at resolution before bringing the

dispute to the next supervisory level, and all individuals or parties directly involved shall

be notified in the case of such a referral to the next supervisory level. In addition, the

parties may seek independent facilitation or mediation to assist in resolving disputes in

the event that resolution is not achieved.

Ix. Nonperformance and TerminationA. Applicant or Contractor shall notify OEA of any concerns either party might have

with respect to the other partys performance under the contract between

Applicant and Contractor or this MOU. All parties will attempt to resolve, in

good faith, any disputes or disagreements..

B. If OEA determines that either Contractor or Applicant is not adequately

performing its responsibilities and duties in accordance with this MOU, OEA will

discuss its concerns with Contractor and Applicant. If OEAs concerns cannot be

satisfactorily resolved, OEA will notify Applicant that OEA is removing

Contractor for cause, or direct Applicant to comply with the MOU. Upon

removal of Contractor, OEA shall endeavor to replace Contractor with anotherqualified Contractor as soon as practicable.

C. Both Applicant and Contractor shall immediately notify OEA of any attempt by

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either party to modify or terminate the contract between Applicant and

Contractor. Termination ofthe Contract shall be subject to OEAs prior approval,

after consultation with Applicant and Contractor. Upon approving termination of

the contract, OEA shall endeavor to replace Contrator with another qualified

Contractor as soon as practicable. Notwithstanding the foregoing, Applicant may

terminate the contract without OEAs approval in the event that it withdraws its

notice of intent or the Application.

x. Modification

This MOU may be modified only by written amendment executed by OEA, Applicant,

and Contractor.

TONGUE RIVER RAILROAD COMPANY, INC.

By:

______________________

Title:

Date:

_____________________________

SURFACE TRANSPORTATION BOARD ICF INTERNATIONAL

By:

_________________________

By:

Title:

_______________________________________

Title:

Date:. Date:

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. Pagelofi

Re: Draft Whereas Clauses for Tongue River PAVicki Rutsonto:Coburn, David06/24/2014 11:43 PMHide DetailsFrom: Vicki RutsonISTBTo: Coburn, David Received, David. There is a reason for including the reference to 4(f). Ill add it to our agenda fortomorrows budget call.

Sent from my BlackBerry 10 smartphone on the Verizon Wireless 4G LTE network.From: Coburn, David .Sent: Tuesday, June 24, 2014 10:03 PMTo: Vicki Rutson ([email protected]); [email protected]: Starzak, Richard; Summerville, AlanSubject: Draft Whereas Clauses for Tongue River PA

Vicki and Cathy Please find attached some very modest suggested changes proposed by the applicantTongue River Railroad to the draft Whereas clauses for the PA. As you will see, we have proposedelimination of the reference to section 4(f) of the DOT Act because, as you know, this does not apply to STBrail projects. It was also not referenced in the prior PA. If you believe that there is some reason why thisreference belongs in the PA, I would appreciate speaking with you about that.

While I believe that the Whereas clauses were generally fine (subject to the very few edits shown in trackon the attached), I understand that other edits have since been offered by the ACHP and possibly otherparties. I also know that some edits were offered during the last Section 106 consulting party call. I trustthat we and other consulting parties will have an opportunity to review an updated draft of the clauses atsome point in the near future and we will of course offer you our thoughts on that updated draft when it ismade available. Of course, we also look forward to actively participating in offering our thoughts on thesubstantive terms of the PA when these are made available.

Thank you for this opportunity. Regards. David Coburn/Attorney for Tongue River Railroad Company, Inc.

David H. [email protected]

Steptoe.

.

+1 202 429 8063 direct Steptoe & Johnson LLP+1 202 262 7306 mobile 1330 ConnecticutAvenue, NW

.

+1 202 261 0565 fax Washington, DC 20036www.stertoe.com

This message and any attached documents contain information from the law firm Steptoe & Johnson LLP that may be confidential and/or privileged.If you are not the intended recipient, please do not read, copy, distribute, or use this information. If you have received this transmission in error,please notify the sender immediately by reply e-mail and thendelete this message.

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i . RE:TRRCMOU( ICobum, DavId z: DanieNe.GosseNnstb.dot.gov 11/15/2012 02:00 PM

-

Vicki.Rutsonstb.dot.gov, Taub, Cynthia , Kenneth, -, Blodgett, Diller, Elizabeth

:s:c:7: This message has been replied to.1 attachment

20121 1 15105452825.pdf

Here is the MOU, executed by TRRC. David

Original MessageFrom: Summerville, Alan @icfi.com]Sent : Friday, November 02 , 2012 3 : 11 PMTo: [email protected]: [email protected]; Taub, Cynthia; Kenneth Blodgett; Coburn, David;Diller, ElizabethSubject: RE: TRRC MOU

Danielle,

Attached is our signed MOU.

Thanks,Alan

Original MessageFrom: [email protected] [mailto:[email protected]]Sent: Wednesday, October 24, 2012 9:50 AMTo: Coburn, David; Summerville, AlanCc : Vicki . Rutson@stb . dot . gov; Cynthia L . Taub; Kenneth BlodgettSubject: TRRC MOU

Hi David & Alan,Attached please find the MOU for the TRRC project. If you have any

questions or comments, please let me know. Otherwise, please sign it andreturn the original to my attention as soon as possible.

(See attached file: TRRC MOU.doc)

Danielle

Danielle GosselinAttorney AdvisorOffice of Environmental AnalysisSurface Transportation BoardTel: (202) 245

.1 . :

. . .I

.

MEMORANIMJM OF UNDERSTANDINGAMONG

. .

.. . SURFACE TRANSPORTATION BOARD,TONGUE RIVER 1AILROAD COMPANY, INC. AND

ICF JONES & STOKES, INC..

RE: ENVIRONMENTAL ANALYSIS AND PREPARATION OF APPROPRIATEENVIRONMENTAL DOCUMENTS RELATING TO TIlE CONSTRUCTIONAND OPERATION OF A PROPOSED RAIL LINE BY THE TONGUE RIVERRAILROAD COMPANY, INC. IN CUSTER, POWDER RWER AND ROSEBUD,COUNTIES, MONTANA

Introduction and Purpose.

A. On October 16, 2012, Tongue River Railroad Company, Inc. (TRRC or Applicant)filed an application in Finance Docket No. 30 1 86 seeking authorization from theSurface Transportation Board (Board) to construct and operate an approximately80 mile rail line which would have a northern terminus at an existing BNSF

Railway Company (BNSF) line near Miles City, MT, and two southern termini,one near the site of the previously planned Montco mine near Ashland, MT. and

another at the proposed Otter Creek mine in the Otter Creek area east of Ashland,

MT. BNSF, a part owner of TRRCs parent company, Tongue River Holding

Company, LLC,joined the application as the expected operator ofthe proposcdrail line.

.

. B. In considering the application, the Board will consider the potential

environmental impacts resulting from construction and operation ofthe proposed.

rail line and any rail-related alternativcs. The Board will be the lead agency for

preparing the environmental documentation required for the project, either anEnvironmental Impact Statement or Environmental Assessment, as required by

the National Environmental Policy Act of 1969 (NEPA). Pursuant to 40 C.F.R.

. I . I.

1506.5(c), 49 C.F.R. 1 105.4(j), and 1105.10(d), the Board, throughits Office ofEnvironmental Analysis (OEA), has selected .and Applicant has agreed to engage,at ApplicantTsexpense, ICF Jones & Stokes, Inc., a Delaware corporation

(Contractor) as the Independent Third Party Contractor for this proposal.Contractor shall assist OEA in conducting the environmental review and

preparing the environmental documentation related to the Applicants proposal.

Contractors scope of work, approach, and activities shall be under the sole

supervision, direction, and control of OEA.

C. This Memorandum ofUnderstanding (MOU) summarizes the relationship amongContractor, Applicant, and OEA, as set forth in applicable regulations and Board

policy, regarding the conditions and procedures each party must follow in

preparing all environmental documentation. This MOU does not supersede or

amend, and is made expressly subject to, the requirements ofNEPA, and, to theextent applicable, related environmental laws, and 49 C.F.R. Part 1 105 and 40

C.F.R. Part 1500.

D. The Applicant, Contractor, and OEA agree to work within the framework

of this MOU to develop an efficient method to complete the

environmental review for the proposed application. OEA shall maintain

overall responsibility for the documentation, analysis, methodology,

consultation,.and mitigation related to the environmental review process.

OEA shall direct; evaluate, oversee, and approve the environmental review

process.

The terms environmental documentation and environmental document(s) embrace draft, supplemental, and final EAs,EISs, and any other reports, studies, surveys, or related documents.

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1_ ! I

II. Document Process

OEA will prepare on behalf of the Board, the draft environmental document (EA or EIS)for agency and public review. OEA will independently draft mitigation, based on its

review ofpotential environmental impacts ofthe project.

ifi. Agreement between Applicant and Contractor .

A. Any contract between Applicant and Contractor, and any subcontracts, shall be

consistent with the provisions of this MOU.

B. The terms ofthis MOU shall override any contradictory or conflicting terms

regarding the scope and perforMance of any work to be conducted under any

contract entered frito between Applicant and Contractor; provided, however, that

the foregoing shall not limit the rights ofApplicant and Contractor to contract on

terms which require that the work be performed cost-effectively.

C. The contract between Contractor and Applicant shall specifically provide, and

Contractor shall represent, that (1) Contractor and any subcontractors do not andshall not have any fmancial or economic interest inApplicant or any entity or

person directly or otherwise affiliated with Applicant (including but not limited toany ofthe three entities that own Applicants parent) except for payment forservices rendered in connection with the preparation of all required environmental

documentation, and except for services rendered pursuant to other agreements not

prohibited by this MOU, and (2) there is no agreement between Applicant, or any.

other person or entity and Contractor regarding future employment that is

contingent upon Contractors performance under this contract. Contractor shall

concurrently execute a disclosure statement as mandated by the regulations of the

Council on Environmental Quality (CEQ) (40 C.F.R. 1 506.5(c)) and submit it to-3-

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both OEA and Applicant, before beginning any work under OEAs direction. It is

understood that Contractor and any subcontractors have not done any

enviTonmental analysis related to the application for Applicant, or for any other

person or entity (including but not limited to any of the three entities that ownApplicants parent), and, therefore, can be retained as independent third party

.

contractor(s).

D. Restrictions on other work:

(1) No employee of Contractor or employee of any subcontractor, who is apart of Contracto?s core team committed to the environmental review

process for the application, shall engage in (a) other work for Applicant orany entity or person directly or otherwise affiliated with Applicant

(including but not limited to any of the three entities that own Applicantsparent) or (b) any work, relating to the application, for any other party tothis proceeding during the course ofthis proceeding; and

(2) No other employee of Contractor or other employee of any subcontractorshall, unless OEA is provided prior notice of and approves such work,

engage in (a) other work for Applicant or any entity or person directly orotherwise affiliated with Applicant (including but not limited to any of thethree entities that own Applicants parent), or (b) any work, relating to theapplication before the Board, or any cooperating agencies that may elect to

participate in this process, or any other party to this proceeding during the

course ofthis proceeding..

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E. . Applicant shall bear the costs incurred by Contractor, and by any subcontractor

approved by OEA in accordance with Section ffl.A, in preparing the required

environmental documentation to implement NEPA and related environmental

laws under the direction of OEA. Applicant agrees to hold harmless andindemnify the United States ofAmerica and the Board with respect to any and all

claims, demands, causes of action, and the like, which may arise in performing

the work under the contract between Contractor and Applicant.

F. Any contract between Contractor and Applicant shall specifically limit any

remedies available to Contractor or subcontractors upon termination of the

contract to affirmatively relieve the United States ofAmerica, the Board, and any

officer, agent, or employee, from any liability from terminating the contract.

Iv Contractor Responsibilities

A. Contractor may engage subcontractors to perform work related to environmental

review ofthe application, subject to the provisions of Sections III.C and Ill.D.All work performed by Contractor or any subcontractors shall be under the sole

direction, control, supervision, and final approval of OEA. Contractor and

subcontractors, if any, will act as the agent(s) ofthe Board, not Applicant, inperforming its/their duties.

B. Contractor shall provide:

(1) Appropriate expertise in the areas of environmental concern (including,but not limited to air quality, wetlands, biological resources, geotechnial

resources, hydrology, land use, safety, noise, social and economic, and

cultural/historic resources);(2) A good working knowledge of environmental laws, applicable laws and

regulations (including environmental regulations) administered or

II. _ . .. 1. . I

promulgated by the Board, EQ regulations and guidelines, otherapplicable federal regulations, state laws and regulations, and applicable

local ordinances and regulations;

(3) The capability to perform environmental impact analysis and prepareappropriate environmental documentation; . .

(4) Thorough, readable, technically sound, and informative environmentaldocuments, as well as related charts, maps, diagrams, etc.;

(5) Representatives to attend and/or facilitate meetings with federal, state,regional, and local agencies, other interested parties, and Applicant for the

purpose of exchanging and obtaining information, explaining the

application and related environmental concerns and impacts, and receiving

comments in preparing the required environmental documentation;

(6) Expertise in data management;(7) Assistance to OEA in ensuring that the data collection, analyses, and

methodologies for the environmental documents are complete, accurate,

and relevant to OEAs needs for the environmental review of the

application under NEPA.

C. Contractor shall maintain and provide OEA upon request:

(1) Adequate record-keeping and reporting systems to assure preservation ofall data gathered, including surveys, studies, etc.;

(2) Logs summarizing all telephone calls, meetings, document reviews, andother substantive communications with OEA, Applicant, local

. governments, governmental agencies, citizens groups, and any other

interested parties; and

(3) Lists of all agencies, other railroads, citizens groups, organizations, andindividuals (including their respective addresses and telephone numbers)

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contacted in preparing the environmental documentation.

D. Contractor shall perform the work in a timely, responsive, satisfactory, and cost-

effective manner, pursuant to a work schedule developed with OEA in

coordination with Applicant and approved by OEA. (

E. Contractor shall assist OEAin coordinating the exchange ofall relevant

environmental information and technical datalstudies related to the applicatin

.

and all required environmental documentation among OEA staff, Applicants staff

and representatives, Contractor, and any subcontractors.

F. Contractor will submit directly to OEA any and all work Contractor performs in

preparing all required environmental documentation, studies, surveys, etc.

Contractor, and any subcontractors, shall not disclose the results oftheir work nor

release any ofthe underlying work papers, drafts, or other materials prepared

under the contract to anyone, including Applicant, without OEAs express

authorization. In no case shall Applicant be provided the opportunity to modify

or edit Contractors work prior to submission to OEA, without OEAs express

authorization.

G. Contractor shall follow the directions and instructions of OEA, and incorporate

them into the environmental document(s) in a timely and responsive manner.Contractor shall submit preliminary and fmal drafts of any documents to OEA for

fmal review and approval.

H. . Contractor shall provide OEA access to and the right to review all procedures and

underlying data used in Contractors development and preparation of any and all

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environmental documents. This includes, but is not limited to, field

reports/surveys, technical studies and analyses, subcontractor reports, and

interviews with concerned private and public parties, whether or not such

information may be reflected in draft, supplemental, or fmal environmental

documents submitted to OEA.

Contractor, and any approved subcontractors, shalicooperate fully with OEA in

organizing, participating in, and conducting any public workshops, informational

meetings, and other meetings, as OBA determines are necessary, to foster public

understanding of and/or participation in the environmental review process, and to

assess potential environmental impacts and develop mitigation measures related

to the application.

J. Contractor will assist OEA in reviewing comments received during the

environmental review process, will draft a summary ofrail-related comments, and

will coordinate analysis ofthese comments with OEA.

K. Contractor shall assist OEA in preparing the required environmental

documentation, environmental recommendations, selection of alternatives, and

development ofmitigation measures.

L. The Contractors Project Director, Project Manager, and other technical experts,as appropriate, shall be available to attend all meetings, briefings, consultations,

and site visits as OEA deems necessary. The Project Director and the ProjectManager shall devote as much time to environmental review ofthe application as

is necessary to assure Contractors performance of its responsibilities under this

MOU. This work commitment will extend for the entire time necessary to. .

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complete the environmental review for the application.

M. Except as specifically authorized by OEA, Contractor and.any of its

subcontractors shall refer all medialpress inquiries directly to OEA.

N. As needed, Contractor will provide technical expertise and administrative support

to OEA during preparation ofthe Boards decision and in addressing anyenvironmental issues arising in the Boards consideration ofthis proceeding. In

the event of any appeal from a Board decision in this proceeding, the parties

hereto shall at that time determine the need for and terms of Contractors services

in connection with judicial review of that decision.

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p

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0. Contractor shall provide any administrative and technical support that may be

needed to assist OEA in reviewing, summarizing, and responding to

environmental issues arising after issuance ofthe fmal environmental

documentation, including in connection with Board decisions, correspondence,

filings before the Board and by the Board in court in connection with any judicialreview ofthe Boards decisions, and other inquiries involving environmental

issues associated with the Applicants proposal.

V. Applicant Responsibilities

A. Applicant shall retain Contractor to assist OEA in preparing all required

environmental documentation and services, as that assistance and its costs are

defmed by a contract to be negotiated and executed by Applicant and Contractor,

and in the Work Plan described in Section VII.

B. Applicant, including its staffand representatives, shall provide to OEA and

1 . . .

Contractor any requested supportive expertise, resources, data, and technical

capabilities necessary to undertake the environmental analysis, subject to the rightof Applicant to advise OBA of any request received from OEA or Contractor that

Applicant believes either is not germane to matters appropriately reviewed in the

environmental review process, is contrary to applicable statutes and regulations,

would impose an extraordinary burden on Applicant, or is subject to the right ofApplicant to maintain confidentiality as to proprietary, privileged, or other

information which is not otherwise subject to clisdosure. In the event thatApplicant so advises OEA, OEA shall determine whether the request is

appropriate and shall so advise Applicant and Contractor ofits determination.

OEA, shall, to the extent possible, maintain the confidentiality of any information

if so requested by Applicant.

C. Applicant shall cooperate fully with OEA in organizing and participating in any

public workshops, hearings, and meetings, as OEA determines are necessary (1)to foster public understanding and/or participation in the environmental review

process, and (2) to assess potential environmental impacts and mitigationmeasures related to the application.

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D. With respect to all reports, analyses, and documents, including drafts,

supplements, and fmal copies ofthe environmental documents, Applicant shall be

responsible for Contractors administrative and clerical costs, as well as the costs

of graphics, maps, layout, mailing, and printing, as those costs are defined by a

contract to be negotiated and executed by Applicant and Contractor. However,

Applicant shall have the option ofdirecting that the printing ofthe environmental

documentation be performed by a private entity, rather than OEA. Applicant shall

be solely responsible for the cost ofpreparing and providing to OEA the

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appropriate number of copies of all required environmental documentation.

E. Applicant shall provide complete, accurate, relevant, and timely responses to all

reasonable requests for information pertaining to the application to the Board, theOprating.Plan,

and the environmental aspects and effects ofthe proposed rail

construction and operation.

F. In the event of any litigation resulting from the environmental analysis in this

proceeding, OEA shall at that time determine the need for and terms of

Contractors services in connection with any litigation.

VI. Board/OEA Responsibilities

A. The Board is responsible for ensuring compliance with the requirements of NEPA

and other applicable environmental statutes and regulations by preparing

appropriate environmental documentation.

B. OEA shall: .

(1) Direct, review, and approve all phases ofpreparing all requiredenvironmental documentation, including the work of Contractor, using

OEAs best efforts to ensure that the work is reasonably necessary to

conduct the environmental review process regarding the application and

the work is within the scope ofNEPA requirements. For example, OEA

shall ensure that Contractor considers existing data and environmental

analyses available from the Applicant, OEA, and other sources, and that

Contractor does not duplicate work already done, unless OEA determines

that the existing data is not adequate for use in preparing the

environmental documentation;

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(2) Designate appropriate staffto review and approve all work as it is. developed and completed;

(3) Ensure that its representatives attend meetings, as needed, with federal,state, regional, and local agencies, and other interested parties, as well as

any public hearings or meetings, to exchange information, explain the

application and related environmental concerns and impacts, obtain

technical input, and receive comments in preparing all required

environmental documentation; and

(4) Coordinate, with Contractors assistance, the exchange of informationamong any planning, design, or construction engineers or technical staff

employed by Applicant and Contractor.

C. OEA will periodically review the work of Contractor to ensure that the Boards

responsibilities under NEPA and related environmental laws and regulations are

being satisfied. As each portion of any draft or final document is completed,

OEA staff shall review and approve that portion and those tasks completed,

and/or direct further work with regard to that portion or task.

D. OEA will monitor Contractor to ensure that Contractor is making adequate

.

progress toward meeting specific time frames established in the Work Plan

described in Section VII. If OEA determines these commitments are not being

met, it will notify Applicant of its findings. It will be the responsibility of OEA to

recommend any necessary corrective action to be taken under this MOU.

E. In all instances involving questions concerning the content or relevance of any

material (including all data, analyses, charts, and conclusions) prepared byContractor, OEA shall make the final determination on including, deleting, or

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revising any such material in the environmental documents.

F. To coordinate the preparation of all required environmental documentation, and to

verify application-related data, OEA may hoidjoint meetings with Applicant andContractor. As necessary, OEA may exclude Applicant fromparticipation. OEA

may also consult directly with appropriate federal, state, and local officials, and. other interested parties. Applicant shall provide complete, accurite, relevant,

and timely responses to all reasonable requests for information pertaining to the

application to the Board and the environmental aspects and effects of the

proposed rail construction and operation.

0. OEA, with the assistance of Contractor, will be responsible for organizing and

conducting any public workshops or meetings that may be necessary in preparing

environmental documents during the environmental review process.

H. OEA, with the assistance of Contractor, will receive all relevant comments

submitted during the environmental review process and comment period. At the

close of any public review and comment period, OEA, in consultation with

Contractor, shall identify the issues and comments that will require a response

from the Board. OEA may direct these comments to Applicant and to Contractor,

as appropriate, to be included in the final environmental document. OEA may

modify these responses as appropriate.

OEA, with the assistance of Contractor, shall prepare final recommendations for

the Board. :

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J. OEA shall retain responsibility for deciding the environmentally preferable

alternative, and any mitigation measures to be included in the final environmental

document.

VII Work Plan

A. Contractor, in consultation with OEA and Applicant, shall submit a draft WorkPlan to OEA for preparing the required environmental documentation within

thirty (30) days after all parties have signed this MOU. The draft Work Plan shallcontain at least the following elements:

(1) A description ofall work to be performed (including preparing andsending consultation letters; participating in public and agency meetings;

outlining and drafting environmental documents; reviewing, analyzing,

and summarizing public comments; conducting analyses, etc.);(2) The projected schedule for completing the various tasks described;(3) Identification of Contracto?s staffmembers who will be responsible for

preparing, analyzing, and reviewing the work; and

(4) An outline ofthe environmental analysis.

B. Following receipt of the draft Work Plan, OEA, in consultation with Contractor

and Applicant, shall finalize the Work Plan in a timely manner.

C. Subsequent to consultation with Contractor and Applicant, OEA may amend the

Work Plan from time to time as the environmental review ofthe application may

necessitate. The parties hereto shall consult at least once every two weeks to

confirm that the work is being performed in the most efficient and cost-effective

manner and to consider possible measures to improve the efficiency and cost-

effectiveness ofperformance ofthe work,.

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Ylil. Disputes

Disputes between the parties may arise regarding the environmental review process,

including approach, methodology, analysis, conclusions, and performance of the

obligations ofthe parties to this MOU. The parties agree to seek resolution of disputes

among the individuals or parties directly involved. In the event that resolution is not

achieved, the parties agree to make further attempts at resolution before bringing the

dispute to the next supervisory level, and all individuals or parties directly involved shall

be notified in the case of such a referral to the next supervisory level. In addition, the

parties may seek independent facilitation or mediation to assist in resolving disputes in

the event that resolution is not achieved.

:i:x. Nonperformance and TerminationA. Applicant or Contractor shall notify OEA of any concerns either party might have

with respect to the other partys performance under the contract between

Applicant and Contractor or this MOU. All parties will attempt to resolve, in

. good faith, any disputes or disagreements.

B. If OEA determines that either Contractor or Applicant is not adequately

performing its responsibilities and duties in accordance with this MOU, OEA will

discuss its concerns with Contractor and Applicant. If OEAs concerns cannot be

satisfactorily resolved, OEA will notifj Applicant that OEA is removingContractor for cause, or direct Applicant to comply with the MOU. Upon

removal of Contractor, OEA shall endeavor to replace Contractor with another

qualified Contractor as soon as practicable.

C. Both Applicant and Contractor shall immediately notify OEA of any attempt by

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either party to modify or terminate the contract between Applicant and

Contractor. Termination ofthe Contract shall be subject to OEAs prior approval,after consultation with Applicant and Contractor. Upon approving termination of

the cOntract, OEA shall endeavor to replace Contractor with another qualified. Contractor as soon as practicable. Notwithstanding the foregoing, Applicant may

terminate the contract without OEAs approval in the event that it withdraws its

notice of intent or the application.

x. Modification

This MOU may be modified only by written amendment executed by OEA, Applicant,

and Contractor.

TONGUE RIVER RAILROAD COMPANY, INC.

By: .. Title:

Date: /,- / ,.. - ,24,

SURFACE TRANSPORTATION BOARD ICF JONES & STOKES, INC.

By: By:

______________________

Title:-

. Title: Sr. ktat.ar Contracts

Date:-

- Date: November Z2012

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