McFarland_dh2.doc

March 1, 2000

FED EX

Thomas F. McFarland, Jr.
McFarland & Herman
20 North Wacker Drive, Suite 1330
Chicago, IL 60606-2902

Re: Abandonment of the Camas Prairie Spalding-Grangeville Branch

Dear Tom,

Pursuant to our telephone conversation today, I have enclosed additional material for your review. Most of this material was acquired from the UP-BNSF bid pack dated August 1, 1997. This material includes general background information, a (then) current timetable, an engineering report discussing in particular two or three bridges on the branch in question, and several pictures of the second subdivision (one showing the Craigmont Grain Elevator and high speed loading shoot). All of this material had previously been provided to Peabody.

As you will note on the first page of the “Design Nine, Inc” engineering report on the Camas Prairie bridges, you will see that bridges 17, 22 and 48 are prominently mentioned. It is my understanding that these three bridges are located on the second subdivision. In my informal discussions with the general manager of the Camas Prairie, Kevin C. Spradlin, he indicated that either UP-BNSF or Camas Prairie was required by the FRA to rehabilitate these structures as part of the sale or shortly thereafter. In other words, the deficiencies noted in the report regarding these three structures have been corrected. Needless to say, other problems may have arisen which I hope that Peabody will be able to verify or discover.

I have also included the two 1899 right-of-way statutes. Sources in the Attorney General’s Natural Resource Division tell me the original treaty creating a reservation is dated 1855. There are two subsequent treaties (1863 and 1893) which in large part diminish Indian ownership of the reservation by allowing non-Indians to acquire property on the reservation. Without examining the 1899 statutes in great detail, the issue of reversionary ownership of right-of-way located within the boundaries of the reservation may not be so clear cut.

Turning to another interesting development, the former president of the Camas Prairie, Jerry Heavin, contacted me expressing an interest in providing us with an evaluation of the track and structures on the second subdivision. In addition to being the former president of the Camas Prairie, Jerry was a Division Superintendent for various divisions of the UP and was at one time headquartered in Boise. The Commission and I defer hiring Jerry because Peabody could perform both the inspections and cost analysis while Jerry could only do the track and structure inspections. We may want to discuss in the future whether it would be advantageous to utilize Jerry not as a track and bridge expert but maybe as an “operations” expert on the line. I would appreciate your thoughts on the matter.

Finally, I have placed a call to the Chairman of the NezPerce Tribe, Michael J. Penney. I wanted to inquire whether the Tribe has a position regarding the abandonment. More specifically, I was wondering whether the Tribe believes that continuation of the rail line is important for economic development or other purposes. I will let you know the results of our conversation when I talk to Chairman Penney.

Sincerely,

Donald L. Howell, II
Deputy Attorney General

Enclosures

Vld/L:McFarland_dh2W
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Thomas McFarland
March 1, 2000
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